The Chanute times. [volume] (Chanute, Kan.) 1897-1913, 1906-08-17

determined by the law uuuer Wuict
II was organized, is null and void, or
as the law books say, ultra wires. II
cannot be too plainly understood thai
corporation has no powers
beyond what are given 1t oI
| It's charter, or its Incorporating act
In some states the directors are per-
sonally liable as partners on contracts
made ultra wires. Now, the incorpor
ating act under which the corporation
is organized may be general In It's
terms, specifying only in broad terms
the limits OF the corporations powers
aud rights. 1t will be understood, as
we will see later, thata corporation has
the implied power to do any act neces'
sary to the carrying out OF the pur-
pose OF It's organization as provided In
its charter. So corporation has the
implied power TO hold any property
necessary to the carrying on OF It's
business, unless, Of course, it is ex-
pressly forbidden by law. If the pro-
perty is to be used for some purpose
beyond the scope of its authority, 1T
has no right to acquire and hold IL,
and contract looking to that END
would be void. A bank, for instance,
Incorporated TO carry on banking
business, loauing money on real estale
and taking 1t On mortgage, might
enter into "a valid contract for the
purchase of farm implements, these
being necessary to the care Of the farm
until such time as it could be sold and
the loan repaid. But a contract by
bank to buy farm implements for
the purpose of going into the farming
business in general, would be null and
viod; and SO of bank making a con-
tract to build railroad; such con-
tract would be void unless 1t could be
shown that it was necessarily Incident
to the carrying on Of its business as
bank. Corporations may, unless pro-
hibited by the law under which they
are organized, make negotiable paper,
appoint agents, borrow money, and
mortgage their property,
In some cases the charter provides
the mode of contracting. In such a
case a contract made by the corpora
ton by another mode than that stated
is void; for instance, If the charter
requires the signature Of particular
officer, the contract is invalid with
out it.
Where a corporation has entered
into an ultra wires contract and has
had the benefit of the performance OF
it by the other party, the corporation
cannot 20 into court and claim thai
the contract was ultra wires and that
it is under no obligation to fulfill it.
part, at the same time retaining the
fruits of its unauthorized acts, l.
would be held by the court liable il
equity generally to restore or pay for
what 1T received.
A single stakeholder In the corp0r
alton may restrain the board of direc'
tiers OF the corporation from entering
into an ultra wires contract, and US
ually it is true that the board OF d.
rectors Is liable to the share holders
for an ultra wires act. Then, too. I'll,
state Itself, through its department o.
justice. may in the courts restrain ar
ultra wires act, or compel the corpor
alton to forfeit its right to do bust.
ness.
Contrary to the popular notion.
corporation organized In one state ha,
40 inherent right to do business il
another state. The privilege it has ST
to do is merely by courtesy OF tina
other state. A corporation organize
under the laws Of the state OF New |
Jersey has no inherent right to d.
business in the state Of Michigan |
that it is permitted to do so is by the |
tacit agreement Of the latter state, o. |
oy what is known as state comfy or
courtesy. 1t follows, therefore, thai
one state may make reasonable limita |
tions on the right OF foreign corpor
alton to do business within It's border.
1t follows, Of course, that corpora. |
I'll cannot do ia state other thai
It's nome state an act contrary tu th |
law or the policy of that other state
though permitted to do so by the law
under which it is organized within
the boundaries Of its own state,
One state may go so far as to pro-
nibit foreign corporation from doing |
business within its borders. A state
may discriminate against foreign cor.
porations by imposing taxes on them,
or license fees, unless such taxes Oh
license fees be contrary to the inter-
state commerce act.
Most of the states make provision.
requiring foreign corporations to fiji,
reports with their secretaries OF state
at certain intervals. Some require