Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/209

 PART II.] ACTS WITHIN THE CORPORATE POWERS. [§ 224. action may still be " ordinary " although of great importance, involving a large amount of money. In construing the term "ordinary business," which a by-law empowered a quorum composed of less than a majority of directors to transact, Judge Comstock said, giving the opinion of the New York Court of Appeals in Hoyt v. Thompson's Executor : l " The ordinary business of the corporation had, I think, no limit short of the varied and extensive affairs in which it was author- ized by its charter to engage. It could construct and operate a canal, deal in stocks and in trusts, and it could carry on the business of banking in all its departments. If the due execu- tion of these powers did not constitute the ordinary business of the company, then it seems to me impossible to suggest any definition of the term, and the by-law becomes senseless and un- meaning ; and if these express powers of the corporation were embraced in the terms of the by-law, it must necessarily follow that the quorum designated took all the incidental authority which the whole board would possess in the execution of the same powers. In the operation of banking, which constituted one portion of the ordinary business, it might become necessary to borrow money, and the power to do so existed. As debts could be contracted, the incidental power of paying them can- not be doubted. So, the condition of the company's affairs might require a negotiation with creditors, and the postpone- ment and securing of their demands. To secure a debt, and procure its forbearance in a period of embarrassment, would not by any means be an extraordinary act, in the sense of the by-law, although it might be unusual in the magnitude and im- portance of the transaction." 2 § 224. Accordingly, all business relating to the legitimate objects of incorporation, not involving a departure from the original plan, may be transacted by the directors. 3 They have i 19 N. Y. 206, 217. 2 Compromises to avoid and reduce losses come within the general scope of the powers of a board of directors of a national bank, and are submitted to their discretion, except in so far as there may be restrictions in the charter and by-laws. Banks may do in this behalf whatever natural per- sons could do under like circum- stances. First Nat. Bank v. Nat. Exchange Bank, 92 U. S. 122. See Keyser v. Hitz, 2 Mackey (Dist. of Col.), 513. 3 Wood v. Whelan, 93 111. 153. 189