Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/116

 § 125.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. § 125. A corporation is impliedly authorized to borrow money, ! and has the incidental power to give se- mg. or co£ curity for its re-payment. 2 As such security a cor- maymort. poration may give its note; 3 may mortgage its gage their property ; 4 and may issue coupon bonds payable to Excep- bearer secured by a mortgage of its property. 5 But a corporation that receives from the state special or extraordinary franchises in order that it may the better serve i Curtis v. Leavitt, 15 N. T. 9; Clark v. Titcomb, 42 Barb. 122; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Oxford Iron Co. v. Spradley, 46 Ala. 98; Burr v. McDonald, 3 Gratt. (Va. ) 215; Union Bank v. Jacobs, 6 Humph. (Tenn. ) 515; Booth v. Rob- insou, 55 Md. 419; Thompson v. Lam- bert, 44 Iowa, 239; Savannah and Memphis R. R. Co. v. Lancaster, 62 Ala. 555 ; Ward v. Johnson, 95 111. 215; Bradley v. Ballard, 55 111. 413; Commissioners of Craven v. Atlantic and N. C. R. R. Co., 77 N. C. 289; Lucas v. Pitney, 27 N. J. L. 221; Phila. and Reading R. R. Co. v. Stich- ter (Sup. Ct. of Penn.), 21 Am. Law Reg. N. S. 713; Wright v. Hughes, 119 Ind. 324; Bank of Australasia v. Breillat, 6 Moo. P. C. 152, 193, etc. ; In re International Life Assurance Soc, L. R. 10 Eq. 312; Australian, etc., Co. v. Mounsey, 4 K. & J. 733. See, also, authorities in succeeding notes. 2 Fifth Ward Savings Bank v. First Nat. Bank, 48 N. J. L. 513. As in- cidental to its implied power to bor- row money, an insurance company has power to transfer its assets in trust for the security of lenders. Nelson v. Eaton, 26 N. Y. 410; see Hope Mut. Life Ins. Co. v. Perkins, 38 N. Y. 404. And a mutual insur- ance company may transfer its pre- mium notes as collateral security for its debts. Brookman v. Metcalf, 32 N. Y. 591. Authority given by the charter of a corporation to its board of directors to execute a mortgage or deed of trust of its property and franchises, in order to secure its bonds, does not negative other meth- ods. Uncas Nat. Bk. v. Rith, 23 Wis. 339. 8 A business corporation has im- plied power to make negotiable notes, and to indorse accommodation notes loaned to it. Auerbach v. La Seur Mill Co., 28 Minn. 291; Rockwell v. Elkhorn Bank, 13 Wis. 653; Lucas v. Pitney, 27 N. J. L. 221; Hamilton v. New Castle, etc., R. R. Co., 9 Ind. 359; Hardy v. Merri weather, 14 Ind. 203; Frye v. Tucker, 24 111. 181. But see James v. Rogers, 23 Ind. 451; Bacon v. Miss. Ins. Co., 31 Miss. 116. The note of a corporation signed by its treasurer may be negotiable al- though the corporate seal is attached. Bank v. Railroad Co., 5 S. C. 156; Clark v. Read, 12 D. C. App. Cas. 343. 4 Savannah and Memphis R. R. Co. 0. Lancaster, 62 Ala. 555; Kelly v. Alabama and Cincinnati R. R. Co., 58 Ala. 489; Elec. Lt. Co. of Mobile v. Rust, 117 Ala. 680; Thompson v. 5 See Commissioners of Craven v. bonds below par. Gamble v. Water Atlantic and N. C. R. R. Co., 77 N. C. 289. A corporation may issue its 96 Co., 122 N. Y. 91. See Nelson v. Hubbard, 96 Ala. 238.