The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1906-08-23

pressly given to it by the state Any
contract that it attempts TO make that
Is not within its powers rs determined
by the law under which it was organized,
is null and void or, as the law book
says. ultra wires. 1t cannot be too plain
~ understood that Il corporation has no
powers beyond what are given it by its
charter, or its incorporating act. In
some states the directors are personally
liable as partners on contracts made ultra
wires. Now, the Incorporating act un
der which the corporation is organized
may be general in its terms, specifying
only in broad terms the limits of the
corporations powers and rights 1t viii
be understood, az we will see later, that
corporation has the implied power TO
do any act necessary to the carrying out
of the purpose of its organization as1
provided in its charter. So corporation
has the implied power to hold any pro.
perty necessary to the carrying on of its
business, unless, of course, it is express.
ly forbidden by law. If the property is
to be used for some purpose beyond the
scope of its authority, it has no right to
acquire and hold it, and a contract look
ing to that end would be VOID. A bank,
for instance, incorporated to carry on a
banking business, loaning money on
real estate and taking it on mortgage
might enter into 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 a
bank to buy farm implements for the
purpose of going into the farming bust |
ness in general, would be null and void
and so of bank making contract to
build a railroad such contract would |
be void unless it could be shown that it
was necessarily incident to the carrying
on Of its business as a bank. Corpora
tons may, unless prohibited by the law
under which they are organized, make
paper appoint agents, borrow
money, and mortgage their property.
In some cases the charter provides the
mode of contracting. In such case
made by the corporation by an
other mode than that stated is void; for
instance, if the charter requires the
signature of particular officer, the con
tract is invalid without it.
Where corporation has entered into
RI ultra wires contract and has had the
benefit of the performance of it by the
other party, the corporation cannot go
into the court and claim that the con.
tract was ultra wires and that il is I'M
Ter no obligation to fulfill its part, at
the same time retaining the fruits of its
acts. 1t would be held by
the court liable in equity generally to
restore or pay for what it has received.
A single stock holder in the corpora
ton may restrain the board of directors
Of the corporation from entering into an
ultra wires contract, and usually it is
true that the board of directors is liable
to the share holders for an ultra wires
act. Then, too, the state itself, through
its department of justice may in the
courts restrain an ultra wires act, or
compel the corporation to forfeit its
right to do business.
Contrary to the popular notion, a
organized in one state has
no inherent right to do business in an
other state The privilege it has to do
is merely by courtesy of that other state.
corporation organized under the laws
Of the state of New Jersey has no in
herent right to do business in the state
Of Michigan; that it is permitted to do
so is by the tacit agreement of the latter
state, or by what is known as state
comfy or courtesy. 1t follows, there
fore, that one state may make reasonable
on the right of foreign
to do business within its
borders 1t follows, of course, that a
cannot do in a state other