Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/211

 PART IT.] ACTS WITHIN THE CORPORATE POWERS. [§ 225. power to borrow money for the corporation, 1 and in the absence of express restriction on their power in of directors this respect, 2 may secure the corporate indebtedness ° orrow- by a pledge of its personal property or a mortgage of its real estate. 3 Likewise directors may assign any choses in action or transfer any property of the corporation, 4 provided the property transferred be not essential to the carrying out of the objects of incorporation. 5 And authorities hold that the directors of an insolvent corporation may assign all its property for the pay- ment of its debts, when to make such an assignment is within the powers of the corporation. 6 Thus, according to a Massa- 1 Ridgway v. Farmers' Bk., 12 S. & R. 256, and cases in following notes. But a single director has no such power by virtue of being a director. Lawrence p. Gebhard, 41 Barb. 575. 2 See Davis v. Flagstaff Silver Mg. Co., 2 Utah, 74; compare Flagstaff Silver Mg. Co. v. Patrick, ib. 304. An enabling statute may contain a specific restriction on the power of trustees or directors to mortgage the corporate property. Capital not paid up is only sub mo do property of the corporation ; the due makiug of a call being a condition precedent to the absolute proprietary right of the company therein. Con- sequently, a power given to the di- rectors to mortgage the property of a corporation does not authorize them to include in such mortgage future calls, i. e., the unpaid capital of the company. Bank of South Australia v. Abrahams, L. R. 6 P. C. 265. 3 Wood v. Whelen, 93 111. 153; Burrilla. NahantBk.,2 Mete. (Mass.) 163; Hendee v. Pinkerton, 14 Allen, 381; Saltmarsh v. Spaulding, 147 Mass. 224. See Tripp v. Swanzey Paper Co., 13 Pick. 291; Hopson v. Aetna Axle, etc., Co., 50 Conn. 597. The executive committee of the board of directors, having been au- thorized by the board to procure a loan, and possessing according to the constitution of the corporation power to transact "any official busi- ness," may execute a mortgage. Taylor v. Agricultural, etc., Ass'n, 68 Ala. 229. Compare, as to author- ity of the directors of a railroad com- pany to execute a mortgage of its property and franchise, McCurdy's Appeal, 65 Pa. St. 290, which seems to proceed on the assumption that they have such power, at least when the mortgage is not repudiated soon. Directors of a manufacturing com- pany may mortgage practically all its property to enable it to go on. Hopson v. Aetna Axle, etc., Co., 50 Conn. 597. See also, Arms v. Con- ant, 36 Vt. 745, 748. 4 Marvine v. Hymers, 12 N. Y. 223. But power to sell bonds is not in a single director virtute officii. Titus v. Cairo and Fulton R. R. Co., 37 N. J. L. 98. Compare New Haven and Northampton Co. v. Hayden, 107 Mass. 525. 5 See § 229. 6 Chamberlain p. Bromberg, 83 Ala. 576; Descombes v. Wood, 91 Mo. 196 Hutchinson v. Green, 91 Mo. 387 Tripp v. National Bank, 41 Minn 400; Huse v. Ames, 104 Mo. 91 Union Bank i Ellicott, 6 G. & J. 363 Dana o. Bank of U. S.,. 5 W. & S 223, 247; Catlin o. Eagle Bank, 6 Conn. 233; Gibson o. Goldthwaite, 7 191