Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/115

 PART I.] CONSTRUCTION OF CORPORATE POWERS. [§ 124. Power to raise money. 'I without any supervision of the legislature or of any public au- thority." 1 - C/a+£e«/**~ £/5»*rT^ - - § 123. ^iore definite statements may now be made respect- ing the particular powers of corporations. And first of all as to their implied power to raise money. Un- questionably, in the absence of express restrictions, to carry on its business, i. e., effect the purposes of its incor- poration. 3 But by what means may it raise money ? Certainly not by any means that an -individual might employ, as, for in- stance, by speculating in cotton or in stocks. 4 Rather, the con- • stitution of a corporation being in its general nature enabling - rather tha-n restrictive, the correct rule would seem to be that a corporation may raise money only by the means expressly or impliedly authorized by its constitution. § 12-1. It goes without saying that in order to raise money a _ corporation may issue its own stock to the amount allowed by its charter or articles of association ; and, ^ ( ,^ ssue of ^a u thorized to do so, ti^an issue preferred stock. 5 BuUt canrSft vaiwlyissue its stock below par as full-paid stock. 6 flc* A corporation may also sell its property in order to raise money. 7 ^Wl i 1 Central Transp. Co. v. Pullman's Car Co., 139 U. S. 24, 49, Opiu. of Court per Justice Gray. See Oregon Ry. v. Oregonian Ry., 130 U. S. 26, 27; Rockbold v. Canton Society, 129 111. 440. 2 E. g., in order to raise money, a railroad company may assign its claim for unpaid subscriptions to its stock. Morris v. Cheney, 51 111. 451. 3 But only for purposes properly within the scope of the corporate objects. See In re Durham County Building Society, Davis's and Wil- son's Cases, L. R. 12 Eq. 516; In re National Permanent Benefit Build- ing Society, ex parte Williamson, L. R. 5 Ch. 309. But the lender of money to a corporation is not obliged to see that its officers apply it to proper corporate purposes. Wright v. Hughes, 119 Ind. 324. 4 See Curtis v. Leavitt, 15 N. Y. 9, 268; Jemison v. Citizens' Svgs. Bk., 122 N. Y. 135. But it has been held that a cor- poration is not restricted to means " usual and necessary " in carrying on its business; but may choose among the means convenient and adapted to the end contemplated by its charter. Madison, etc., Plank Road Co. v. Watertown, etc., Plank Road Co., 5 Wis. 173; see Clark v. Farrington, 11 Wis. 306, 324. 5 See §§571, 572. 6 Oliphant v. Woodburn Coal & M'g Co., 63 Iowa, 332; Kimball v. Grate Co., 69 N. H. 485; see Bent v. Underdown, 156 Ind. 516. See §§ 522a, 701, 702. - ' See § 130. 95
 * % Corporation has impliedly the power to raise money 2 in order