The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1860-09-20

], swing upon It's own hinges.
< If the company can take mortgag
l. in payment for stock, it must have t
It power to dispose of these securities.
+ 1t is not restricted to a cash sale
e them when it does not dispose of the
h 1t may, therefore, exchange them f
Y other securities, or for any article of pc
/ sonal property, or for such parcels
: real estate as it may desire TO obtai
G If it may, in the first instance, exchanl
the stock for mortgages, then it m;
S purchase them with the money paid Q
stock subscriptions. The money recer
t ed for stocks cannot be more sacred, {
: less subject to disposal at lis will, tina
. the stock itself. Every conceiYab
2 trade which it could make must
: traced back to the stock. IT is tn
t primary fund or fountain, from whic
spring all its exchanges. II it has th
5 power to take these mortgages, spring
+ ing out Of the power to dispose of tn
stock, the power to take exists, and i
is not restricted by the charter to th
taking them directly and only whe
stock is directly exchanged therefor
| Could any corporation or set of mel
desire more extensive field for traffic
i speculation, and exciting risks Die
| the legislature, in passing this charter
intend to confer these varied and i'm
portant business powers? The answe
must be in the negative. These powers
not being within the intent Of the act
their exercise was a violation of the
chartor-a violation oflaw.
A violation of the intent of the statue
is violation also, o. its letter. Inten
controls the letter. In this case the
letter is CONSTANT and clear with the
intent. No contract made against OF
in violation of law, can in law, be en-
forced. Every person was, and is
bouud to know, as matter Of law; what
power the company possessed. The
mortgages and accompanying papers,
upon their face, showed for what they
We're given. Every holder. therefore
had the facts before him, showing thai
they were void and not susceptible Of
being enforced by law either by them
or any one else. 44.....
Independently of the position taken
! by the Court, and which have been al
ready considered, an attempt is made
to gather strength from the tact. that
If those mortgagors had subscribed fol
the stock, and agreed to pay thereof in
cash, and had made default in pay
ment, the company could have abtatn~
ed judgment for the amount unpaid,
and have purchased the mortgaged
land on execution sale; that the com,
pany would thus become owner Of the
land the same as it would were it &c
| buy on foreclosure sale. The Court
it seems, can not see any difference
between acquiring the title under sucE
execut, on sale and that of the foreclo
sure.
| The difference is that Of authorized
and unauthorized acquisition OF title tc
real estate. The cash subscription
contract being valid in law, would BE
A BASIS for judgment and execution
sale. The law in the latter case al
lowed the contract, the Judgment, the
execution, the sale, and the purchase
ny the corporation plaintiff. The Law
allows all plaintiffs to become purchas
ers Of any property that may be sold
for the purpose of obtaining satisfac
ton of judgments rendered in their ia
vor. This is too plain to require further
examination.
Another matter requires passing no
tice. The Court says that there are
cases where it has been held that {
railway corporation might with it,
stock pay for rolling stock, tor right o
way, and for construction Of the road
This is not denied. 1t is asserted
however, that Courts have not only
mad few, but many erroneous de
cisions. In this age we hardly expec
to get volume Of Reports withou
finding a page or more of the index
devoted to cases ''oyer ruled, doubt
ed committed upon,', explained
and 'slimited." When Courts con
stantly treat their own opinions in this
way, other tribunals should be careful
how they adopt any decision. NJ
opinion should be followed or taken as
precedent, until it Is thoroughly ex
amined, aud found to be well based il
reason and sustainable upon princi
pie.
In the cases adyerted to, it is safe
to remark that they depart from cor
rect principles In all such transac
tons, Courts should pronounce against
their validity, unless 1t is made 10 APP
pear, by satisfactory evidence, that
the company received as much for the
stock, as is would have obtained for the
! same amount of money. When this
appears, stock answers the purpose OF
money. And if first converted into
money, at par, no greater considera-
TONS could be ATTAINED than those the
stock brings by direct exchange.
1t is PLAN thatinsoly ency must ensue
is it be law that that the company may
with stock, at ANY price, pay for right
] of way, rolling stock etc. Cash prices
should be the standard prices for the
thing obtained for stock at par. De
partures from this should never be sus-
tanned by the Courts, unless express
statue authority is conferred so to de-
part.
| Had the rule here contended Tor al
ways been adhered to we could not
name so many directors who roll in
wealth acquired in few years, as we
now can, nor would all this class Of cor
porations have become hopelessly in,
solvent. ACKNOWLEDGEMENT of the few,
ruin of the many, and insolvency Of
corporations are the results Of latitud-
in arian construction. The sooner re-
turn is made to the only correct rule
strict construction of charters delegat-
ing powers to corporations-the soon
er will healthy corporate existence
be existing fact.
10 the objection, that taking mort