by the terms of the general incorporation act, and those purposes which are forbidden by express statute, civil or penal. In the latter case it seems clear that even the approval by a State official of such unlawful purposes as evidenced by the issuance by them of certificates of due incorporation, do not forbid collateral attack thereon in any suit whereby the corporation seeks to benefit by the insertion of such unlawful purposes in its articles.1 The rule might be still further extended so as to apply to purposes which may be lawful in a general way, yet which may be deemed unlawful on account of the limitations inserted in the articles upon the means by which such purposes are to be carried out.2 The same principle would apply where the purposes are clearly contrary to the public policy of the State.3 But if purposes are lawful on their face, they will, as against all but the State, be presumed to be such. Where some of the purposes are merely unauthorized, while others are valid and proper, the insertion of the unauthorized purposes will not vitiate the incorporation. But where any of the purposes are illegal per se, the State officials would be clearly justified in refusing to allow the articles to be filed, though some of them are lawful." § 8. Corporate Powers, Classification of. By "corporate powers" is meant the right or authority of a corporation to act along certain lines prescribed for it in the instrument whereby it was created. The tendency of modern decisions is to assimilate the powers of private corporations to those of individuals and copartnerships. It is unnecessary to say that a corporation cannot assume for itself powers of action, irrespective of statute, by the mere declaration thereof in its articles of incorporation.8 Neither can they be created by by-law.9 The Supreme Court of the United States 10 has observed that 1 F. N. Bank v. Company, 59 Ohio St. 316; 52 N. E. 834; In re DuQuesne College, 2 Pa. Dist. Ct. Rep. 555; Matter of Agudath Hakehiloth, 18 N. Y. Mis. Rep. 717; 42 N. Y. Sup. 985; State v. Company, 29 Neb. 700; 46 N. W. 155. 2 Or. Ry. & Nav. Co. v. Or. Ry. Co., 130 U. S. 1; 9 S. Ct. 409. 3 Scheutzen Bund v. Agitations Verein, 44 Mich. 313; 6 N. W. 675; McGrew v. C. P. Ex., 85 Tenn. 572; 4 S. W. 38; In re Benefit Society, 10 Phil. 19; People v. Company, 130 Ill. 268; 22 N. E. 798. 4 U. S. Vinegar Co. v. Foehrenbach, 148 N. Y. 58; 42 N. E. 403. 5 Skick v. Company, 15 Ind. Ap. 310; 44 N. E. 48. 6 State v. Company, 88 Wis. 512; 60 N. W. 796. 7 Fink v. Company, 5 Ore. 301. 8 People v. Green, 116 Mich. 505; 74 N. W. 714. 9 Andrews v. Company, 37 Me. 256. 10 Thomas v. Company, 101 U. S. 71. "we take the general doctrine to be that the powers of corporations organized under general statutes are such and such only as are conferred by statute. Conceding the rule applicable to all statutes, that what is fairly implied is as much granted as what is expressed, it remains that the charter of the corporation is the measure of its powers, and that the enumeration of these powers implies the exclusion of all others." The foregoing is true only as to certain classes of powers which are hereinafter referred to as "express powers." The rule is not applicable either to what are known as "common law papers" or to the "incidental powers" of corporations. Corporate powers may properly be divided into three general classes, to wit: (1) Common Law Powers; (2) Express Powers; (3) Incidental Powers. Generally speaking, there is no existing rule or principle by which corporations created for a certain specific object or to carry on a particular trade or business are to be held to be prohibited from all other dealings or transactions not coming within the exact scope of those designated. Undoubtedly the main business of a corporation is to be confined to that class of operations which properly appertains to the general purposes for which this charter was granted. But it may also enter into contracts and engage in transactions which are incidental or auxiliary to the main business, or which may become necessary or profitable in the care and management of the property which it is authorized to hold. The same is true as to certain powers which are held to exist at common law even in the absence of any specific reference to such powers in the articles of incorporation. § 9. Common Law Powers, Definition of; Enumeration of. Common law powers are those which the law bestows upon corporations irrespective of statute or charter provisions, as being necessary for the carrying out of the purposes for which it was created.1 The common law gives to corporations the powers belonging to corporations of their class, unless there is something in the nature of the corporation or in the terms of its charter, or in the act under which it was incorporated inconsistent with the exercise of the powers, or there is some general statute restricting the same.2 1 Falconer v. Campbell, 8 Fed. Cases, 4620; 2 McLean, 195; C. O. N. G. & F. Co. v. C. D. Co., 60 Ohio, 96; 53 N. E. 711; State v. Company, 144 Mo. 562; 46 S. W. 593; Knowles ". Beatty, 1 McLean, 41; Leg- The common law powers here referred to may be enumerated as follows: (1) the right to the use of a corporate name; (2) the right to perpetual succession; (3) the right to acquire, hold, and dispose of corporate property; (4) the right to appoint corporate officers and agents; (5) the right to establish by-laws for the government of the corporation, its officers and members; (6) the right to sue and be sued. An examination of the various corporate acts in force in the several States and Territories will serve to show that without exception they contain an enumeration more or less full of the common law powers above referred to. In Indiana the statute refers to them as common law powers, and proceeds to enumerate them.1 § 10. Right to a Corporate Name. The right to the use of a corporate name is a power well recognized both at common law and by statute. Corporations have a property right to the use of such name in the transaction of their business which the courts will always protect.2 They are recognized in law only by their corporate name.3 The name is said "to be the very being of their constitution; the knot of their combination; without which they could not do their corporate acts; for it is unable to implead and be impleaded, to take any action until it hath gotten a name." 4 The action of State officials in granting the use of a name, it may be observed, is not conclusive, for courts of equity will nevertheless protect corporations in the use of their name.5 State officials have, however, the power to protect the use of corporate names when applications are made for charters, even when the proposed name is not exactly similar to that of existing corporations.6 The right to have a corporate name is in itself a common law power; but it is one which is not alienable.7 § 11. Right of Perpetual Succession. The "right of perpetual succession" under a designated corporate name is one of the common law powers of a corporation. The words "perpetual 6 State ex rel. v. McGrath, 92 Mo. 355; 5 S. W. 29. 1 Ind. Session Laws, 1901, ch. 127, § 28. 2 L. D. Co. v. Massachusetts, 10 Wall. (U. S.) 566; see also ante, § 3. 3 Curtiss v. Murry, 26 Cal. 633. 4 Smith v. Company, 30 Ala. 650. 7 State v. Company, 40 Kan. 96; 19 Pac. 349; Detroit Citizens' Street Ry. Co. v. Common Council, 125 Mich. 673; 85 5 Grand Lodge, etc. v. Graham, 96 N. W. 96. Ia. 592; 65 N. W. 837. succession" do not refer to the duration of the life of the corporation, where this is specifically limited either by statute or by the articles of incorporation, but merely operates to grant the continuation of corporate life during the period so prescribed.1 Perpetual succession ordinarily merely conveys the right of continued unbroken succession for the period of time limited for the corporate existence.2 - § 12. Right to adopt and use a Corporate Seal. It is an inseparable incident to every corporation that it may have a common seal, and make, alter, and renew the same at pleasure. The doctrine of the common law requiring the use of a corporate seal in the execution of corporate contracts is practically obsolete, and the seal is now required, in the absence of express statute, only when it would be required of a natural person under similar circumstances. Ordinarily the exercise of this power is delegated by the stockholders to the directors by means of an appropriate by-law.5 § 13. Power to acquire, hold, and dispose of Real and Personal Property. No doctrine of the common law is more clearly and undeniably established than that which concedes to corporations an inherent right to acquire and hold title to real and personal property, except so far only as they may be restricted by the objects of their creation or the limitations of their charter. The power to acquire such property, when not restricted by statute, is only limited by the rule that it must be such as is reasonably necessary or convenient to enable it to accomplish the purposes for which it was created.7 Formerly the amount of real property which a corporation might purchase and hold was very generally limited by statute in most of the Commonwealths. The existence of such statutes may be traced to the policy of the common law and to the existence in England of statutes known as statutes of mortmain, which prohibited corporations from taking and holding real estate without licenses from the king or Parliament. However, in most of the 1 State v. Payne, 129 Mo. 468; 31 S. W. 797. 2 Scanlon v. Crawshaw, 5 Mo. Ap. 337; see, however, Fairchild v. Association, 71 Mo. 526. 8 Ransom v. Bank, 13 N. J. Eq. 212; Thomas v. Dakin, 22 Wend. 9. 4 Green Co. v. Blodgett, 55 Ill. Ap. 556. 6 Woodman v. Company, 50 Me. 549. Lathrop v. Bank, 8 Dana (Ky.), 114; Thompson v. Waters, 25 Mich. 214. 7 Brown v. Hogg, 14 Ill. 219; Richardson v. Association, 131 Mass. 174. 8 Leazure v. Hillegas, 7 Ser. & R. (Pa.) States such restrictions have been done away with, and corporations may now hold such property, both real and personal, as the attainment of their corporate purposes may require. In any event, the general power of a corporation to hold real estate is primarily a question betwen the corporation and the State, and cannot ordinarily be raised by third parties.1 Where such statutes exist the corporation has of course no power to exceed the statutory limit as against the State.2 The general rule is that corporations, unless forbidden by statute, have implied power to take property by devise. The same rule applies with respect to the power of taking and holding property in trust, provided in so doing it acts within its corporate powers. The power of a corporation to sell and convey is as broad as the power to purchase and hold, and is granted on the same terms.5 § 14. Power to appoint Corporate Officers and Agents. At common law corporations have the inherent power, irrespective of statute or charter provision, to elect directors and executive officers and to appoint such agents as the business of the corporation require.R § 15. Power to establish By-laws. Every corporation has the implied power to enact such by-laws as may be necessary for the proper government of the corporation, its officers, and stockholders.7 Sometimes the statutes prescribe the nature of the by-laws to be adopted and authorize penalties for violation thereof.8 313; White v. Howard, 38 Conn. 342; 1 C. B. & Q. R. R. Co. v. Lewis, 53 Ia. 101; 4 N. W. 842. 2 Market St. Ry. Co. v. Hellman, 109 Cal. 571; 42 Pac. 225; In re McGraw's Estate, 111 N. Y. 66; Andrews v. Andrews, 110 Ill. 223; Graves v. Niles, 1 Walker (Mich.), 332. 3 White v. Howard, 38 Conn. 342; Ravanna Nav. Co. v. Dawsons, 3 Grat. (Va.) 19. 4 Vidal v. Girards Executors, 2 How. (U. S.) 127; Morris v. May, 16 Ohio, 469; F. L. T. Co. v. H. F. N. Co., 41 N. Y. 619; White v. Rice, 112 Mich. 403; 70 N. W. 1024; Greene v. Dennis, 6 Conn. 304. 5 Miners' Ditch Co. v. Zellerbach, 37 Cal. 543; People v. College, 38 Cal. 166. 6 Kearney v. Andrews, 10 N. J. Eq. 70; A. R. R. Co. v. Kidd, 29 Ala. 221. 7 Wells v. Black, 117 Cal. 157; 48 Pac.. 1090; People v. Society, 24 Barb. N. Y. 570; Martin v. Association, 2 Coldw. (Tenn.) 418; Mechanics' Bank v. Smith, 19 Johns. (N. Y.) 115; Steger v. Davis, 8 Tex. Civ. App. 23; 27 S. W. 1068. 8 Cahill v. Company, 2 Doug. (Mich.) 128; Mobile v. Yuille, 3 Ala. 137. |