Page:Federal Reporter, 1st Series, Volume 7.djvu/405

 TAYLOa V. PHIIiaDBLPHIA & EBADING B. 00. 393 �is to sell stock, they have no lawful authority to carry it out. ThuB a vital issue of law is sharply defined and presenteii. It is one that neither requires nor admits of extended discus- sion. Every admissible definition of the term borrow or loan, as applied to money and commercial transactions, embraces an obligation to return the property borrowed. A loan of money is universally understood to be the delivery of a certain sum to another, on contract for its return, generally with interest, as compensation for its detention and use. To call the payment of money to another, who is to receive and permanently retain it as his own, in consideration for an annual benefit or profit, a loan, would seem to be a plain misuse of language. �There is no such thing known to commerce or transactions in money as an irredeemable loan in the sense here involved. Governments have issued obligations without provision or stipulation for repayment of the principal borrowed; but such obligations are redeemable at pleasure. Running, how- ever, for an indefinite time, with no power in the holder to exact payment, they have corne to be regarded as irredeem- able, and an investment in them is, therefore, treated and described, not as a loan, but as the purchase of an annuity or stock. Aside, however, from the abstract considerations involved in defining the term borrow or loan, the corporate powers of the defendants to borrow money must be held to apply only to such methods of borrowing as fall within the ordinary sense of the term — as understood by the commu- nity, and illustrated in commercial transactions. Applying this test to the proposition here under consideration, it be- comes plain that the transaction contemplated is not a loan. The certificate proposed to be issued would vest in the owner a joint interest with the common stockholder in the capital or property of the corporation, an interest purchased with hi» money, the eamings of which would be paid to him in divi- dends. �In every essential respect, therefore, he would be a stock- holder. The circumstance that he could not vote for direct- ors would not change the character of his interest, or the ��� �