Case ID: colo-l-rep_1/html/0156-01.html
Source: Caselaw Access Project
Author: {"author": "Mercur, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SPAHR v. FARMERS’ BANK OF CARLISLE.
    
      (Supreme Court of Pennsylvania,
    
    
      May 24, 1880.
    
    
      Legal Intel., Nov. 5.)
    Corporate Powers. A corporation can exercise no powers which are riot expressly conferred or necessarily implied in furtherance of the objects of its creation. When there is a de facto corporation, and the state does not interfere, its corporate existence and its ability to contract cannot be questioned in a suit brought upon an evidence of a debt given to it.
   Mercur, J.

A corporation is the mere creature of the law. It can exercise no powers which are not expressly conferred or necessarily implied in furtherance of the object of its creation. Diligent Fire Co. v. Commonwealth, 25 P. F. Smith, 295. When, however, a charter has actually been granted to certain persons to act as a corporation, and they are actually in the possession and engagement of the corporate rights granted, such possession and enjoyment will be held valid against one who has dealt with them in their corporate character. Angelí & Ames on Corp., Sec. 80. He cannot be permitted to prove in a collateral proceeding, that a condition precedent to its full corporate existence has not been complied with. As against him the charter, and a user of rights claimed to have been conferred by it, are sufficient. When there is a de facto corporation, and the state does not interfere, its corporate existence and its ability to contract cannot be questioned in a suit brought upon an evidence of a debt given to it. Commissioners v. Bolles, 4 Otto, 104. It is well settled that although the charter may be declared null and void by the proper authority, yet the violation thereof cannot be determined in a collateral suit. Irvine v. Lumberman's Bank, 2. W. & S., 109.

The facts show the bank has professed to carry on all its business under the act of 15th of March, 1871. On the first of May, 1871, it reported to the auditor-general that it had ceased to act under its former charter, and continued operations under the act of 15th of March, 1871. It transferted all the stock and assets of the former corporation to the present one. It gave up the exercise of all powers under the old charter, and has continuously used and exercised the powers given by the new charter. Although it has been done in an irregular manner, it lies not in the plaintiff in error to question its powers in this transaction, and in this suit.

Judgment affirmed.