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corporated society claiming to be a church, and engaged in the lawful promotion or defense of religion, is a church whose deacons may be a corporation under the law. It has been held however in Massachusetts that the title to land which has been conveyed to unincorporated trustees of a religious society of the Methodist Episcopal Church and their successors, in trust for the use and benefit of the society, does not rest in new trustees who may be elected from time to time, but remains in the grantees named in the deed, or the survivor of them. And the conveyance of land to such trustees, for the use of such a society, constitutes the members of the society cestui que trusts. A bequest of land and a fund to trustees for the use of and to sustain a church, the whole to be transferred to the church when incorporated, is held void.

And

a bequest to an unincorporated missionary society, which after the death of the testator was merged into the defendant society and incorporated, is invalid. A statute which provides for the conveyance by the proper church officers of land held for the purpose of public worship, does not enlarge the capacity of an unincorporated local religious association to take personal property under a will probated before the section was enacted. But, generally, it has been decided that a private corporation may take a bequest in trust for religious uses; and the common law, so far as it relates to churches in this country of the Episcopal persuasion, the right to present to such churches, and the corporate capacity of the parsons thereof to take in succession, has been expressly recognized by the highest authority. Under laws restricting the amount of land which religious corporations may hold, only corporations formed for the purpose of religious worship, and not benevolent or missionary societies, are intended to be restricted in their ownership of real es

1 Holt v. Downs, (1877) 58 N. H. 170; N. H. Gen. Stat. ch. 139, § 6. 2 Peabody v. Eastern Meth. Soc., (1863) 87 Mass. 540.

3 Peabody v. Eastern Meth. Soc., (1863) 87 Mass. 540.

332.

Holmes v. Mead, (1873) 52 N. Y.

5 Owens v. Missionary Soc., (1856) 52 N. Y. 380.

Rhodes v. Rhodes, (1890) 88 Tenn. 537; Code Tenn. § 2008.

7 Protestant Episcopal Education Society v. Churchman, 80 Va. 718.

8 Angell & Ames on Corporations, (11th ed.) § 70; Pawlett v. Clark, 9 Cranch, 294.

tate. Where the general act restricts religious corporations to ten acres of land, while another act provides that Roman Catholic societies may hold property, but specifies no limitation, upon ejectment brought by such a society, the limitation imposed by the general law is applicable, and it, having ten acres, is unable to acquire additional land by devise. A late case made numerous important rulings upon this subject, based upon the Declaration of Rights of Maryland, which declared that every sale of land to a religious body, without leave of the legislature, should be void, except sales of not more than two acres, to be used for a meeting-house or burial ground. It imposed no restriction on the power of the legisla ture in granting such leave, but authorized it to declare limitations or not, in its discretion, both as to the extent and quality of the estate to be purchased, and the purposes for which it should be used. The court held that thereunder the legislature could not only grant leave to a religious body to make a future purchase, but could also, by subsequent legislation, ratify and sanction a void purchase previously made. It also held that where such power was granted to a religious corporation without restricting it as to the quality of the estate to be acquired, but limiting the purposes for which it shall be used, a fee-simple estate may be acquired and held; and that when a fee-simple estate is so acquired, a subsequent legisla ture has power, with consent of the corporation, to change or abrogate altogether the restrictions as to the use of the land."

1 Gilmer v. Stone, (1887) 120 U. S. 586.

2 St. Peter's Roman Catholic Congregation v. Germain, 104 Ill. 440. [Craig and Dickey, JJ., dissenting, on the ground that the question is one between the corporation and the State, alone, in which individuals have no concern.]

3 Trustees ". Manning, (Md. 1890) 19 Atlan. Rep. 599. The facts in this case were as follows: A religious corporation, having with leave of the legislature acquired six acres of land for use as a burial ground, afterwards purchased six and one-half

acres additional, but the latter purchase was void, because not made with legislative sanction. Subsequently, by Acts Md. 1845, ch. 284, the corporation was authorized, by purchase, to enlarge, to the extent of twenty-five acres, the burial ground then owned by them, which included the six and one-half acres. And it was held that the act was a ratification and sanction of the six and one-half acre purchase, though it did not expressly refer to it. Further, Acts Md. 1814, ch. 2, authorizing a religious corporation to purchase land. without other limitation ex

A statute which limits the amount of land that can be held by any "corporation formed for religious purposes," does not apply to a "Young Men's Christian Association," although its articles show that it was organized as a corporation "not for pecuniary profit;" such association not being under the control of any one religious denomination, and not being formed for the purpose of religious worship.'

§ 381. Power to borrow money. The weight of modern authority supports the conclusion that private corporations, organized for pecuniary profit, may, like individuals, borrow money whenever the nature of their business renders it proper or expedient that they should do so. And where there are no special restraints in their charters, they take the power as natural persons enjoy it, with all its incidents and accessories; they may borrow money to attain their legitimate objects precisely as an individual, and bind themselves by any form of obligation not forbidden. A railroad company has the right, by virtue of its powers, and without direct authority being given it in its charter, to borrow money and issue obligations therefor. Where, however, a corporation is authorized to

cept as to its use as a burial ground, and Acts Md. 1886, ch. 280, providing for opening streets through the burial ground so purchased, gave the corporation leave to remove the bodies, and declared that it should acquire the full ownership in feesimple of the land, and might sell and convey the same. And upon this point it was decided that, under leave given by the act of 1814, the corporation could acquire a feesimple estate in land, subject only to the restriction as to its use, which was removed by the act of 1856.

1 Hamsher v. Hamsher, (Ill. 1890) 23 N. E. Rep. 1123; Rev. Stat. Ill. ch. 32, § 42.

2 Wright v. Hughes, (1889) 119 Ind. 528, citing New England &c. Ins. Co. v. Robinson, 25 Ind. 536; Jones v. Guaranty &c. Co., 101 U. S. 622; Reich wa 1 v. Commercial Hotel Co.,

108 Ill. 439; Booth v. Robinson, 55 Md. 419; Hays v. Galion Gas Light Co., 29 Ohio St. 330; Memphis &c. R. Co. v. Dow, 19 Fed. Rep. 388; Green's Brice's Ultra Vires, 223; 1 Morawetz Corp. § 342, 343. In the principal case the money was borrowed in furtherance of a plan to wind up the affairs of a life insurance company by buying up the outstanding policies, and after all the borrowed money had been used many policies were left outstanding with almost no assets to take them up. This plan of buying up the policies was inaugurated for the purpose of changing the business of the company to that of accident insurance: and it was held that the illegality of that scheme did not help the outstanding policy holders in their attack upon the securities for the loan.

3 Philadelphia &c. R. Co. v.

incur indebtedness to a specified amount, borrowing in excess of that amount is unauthorized.' And it is so in the case of a corporation borrowing a sum of money less than the amount authorized by its charter but which added to amounts previously borrowed makes the total amount of indebtedness greater than that it is authorized to contract. Under an act incorporating a railway company, and providing that the company "shall have the power and authority to borrow money in any sum or sums not exceeding in amount one-half of the par value of the capital stock," the par value of the capital stock is the amount of paid-up capital only, and not the full amount of authorized capital.

Stichter, (1882) 21 Am. L. Reg. 713. In this case where a railroad company, without any direct authority by the terms of its charter to borrow money, proposed to raise funds by issuing irredeemable bonds at a large discount which were not entitled to interest until after the common stock had received a dividend of six per cent., were then to take all revenues up to six per cent., and were then to rank pari passu with the common shares for further dividends, it was held that the right to issue such bonds was within the implied powers of the corporation. Adelbert Hamilton in his note to this case, 21 Am. L. Reg. 720, to the power generally to borrow money, cites the following cases: Beers v. Phoenix Glass Co., 14 Barb. 358; Partridge v. Badger, 25 Barb. 358; Clark v. Titcomb, 42 Barb. 122; Commissioners v. Atlantic & N. C. R. Co., 77 N. C. 289; Tucker v. City of Raleigh, 75 N. C. 267; Barry v. Merchants' Exchange Bank, 1 Sandf. Ch. 294; Barnes v. Ontario Bank, 19 N. Y. 152; Smith v. Law, 21 N. Y. 296; Nelson v. Eaton, 26 N. Y. 410; Bradley v. Ballard, 55 Ill. 413; Lucas v. Pitney, 27 N. J. L. 221; Mobile &c. R. Co. v. Talman, 15 Ala. 474; Moss v. Harpeth Acad., 7 Heisk. 283; Oxford

Although a corporation has

Iron Co. v. Spradley, 46 Ala. 98; Ala. &c. Co. v. Cent. &c. Assoc. 54 Ala. 73; Bank of Chillicothe v. Chillicothe, 70 Ohio, 415; Ridgway v. Farmers' Bank, 12 S. & R. 256; Magee v. Mokelumne &c. Co., 5 Cal. 258; Union M. Co. v. Rocky Mt. Bank, 2 Colo. 256; Hamilton v. New Castle &c. R. Co., 9 Ind. 359; Rockwell v. Elkhorn Bank, 13 Wis. 653; Fay v. Noble, 12 Cush. 1; Commercial Bank v. Newport Manuf. Co., 1 B. Mon. 19; Holbrook v. Basset, 5 Bosw. 147; Furness v. Gilchrist, 1 Sandf. 67; Bank of Australasia, 6 Moo. P. C. 152, 193; Forbes v. Marshall, 24 L. J. Exch. 305; In re International &c. Co., L. R. 10 Eq. Cas. 312; Australia &c. Co. v. Mounsey, 4 K. & J. 783; In re German M. Co., 4 DeG. M. & G. 19.

1 Pool v. West Point &c. Assoc., 30 Fed. Rep. 513; Warfield v. Marshall County &c. Co., 72 Iowa, 666; Ossipee Manuf. Co. v. Canney, 52 N. H. 295; Auerbach v. Le Sueur Mill Co., 28 Minn. 291.

2 Ossipee Manuf. Co. v. Canney, 52 N. H. 295; Auerbach v. Le Sueur Mill Co., 28 Minn. 291.

3 Appeal of Lehigh Ave. Ry. Co., (1889) 129 Pa. St. 405; s. c. 7 Ry. & Corp. L. J. 42.

incurred an indebtedness greater than its authorized limit, the contract is binding upon it whenever it has actually received the money borrowed.1 And extending the principle still further, where the directors of a corporation, acting in good faith, on the reports and representations of its authorized agents, borrow money for the purposes of the corporation, it is not necessary to show that the money so borrowed was actually appropriated to the use of the corporation, in order to establish an indebtedness against it, or a personal liability of its stockholders in favor of the lender of the money, or of the sureties who pay the loan. Under an authority to borrow money a railroad company has no right to raise money by the issue of irredeemable bonds entitling the holder merely to a share of the earnings after payment of a certain dividend to the stockholders. The issue of preferred stock is analogous to this deferred bond scheme and is likewise not within the borrowing power.

§ 382. Exclusive privileges.- Exclusive and irrevocable franchies may be granted to corporations, when there is no constitutional inhibition thereof." Charters with exclusive privileges have been repeatedly granted by the older States. They have been deemed necessary to the promotion of enterprises of public utility, and have in many instances operated greatly to the convenience of the community, as the means of accomplishing public improvements which would not otherwise have been undertaken, or must have been delayed to a much later period. The right to make such exclusive grants has been supported by some of the most eminent counsel in the United States, and has not been contested by others who would not have failed to deny it had it been deemed of ques

shire Bridge, (1834) 7 N. H. 35; Bridge Co. v. Hoboken Land Co., 13 N. J. Eq. 81: The Binghamton Bridge, 3

1 Pool v. West Point &c. Assoc., 30 Fed. Rep. 513; Warfield v. Marshall County &c. Co., 72 Iowa, 666. 2 Borland v. Haven, (1889) 37 Fed. Wall. 51; Bridge Proprietors v. HoRep. 394. boken Land Co., 1 Wall. 116; Che

Taylor v. Philadelphia &c. R. Co., nango Bridge Co. v. Binghamton (1881) 7 Fed. Rep. 386. Bridge Co., 27 N. Y. 87.

4 Kent v. Quicksilver Min. Co., 78 N. Y. 159. But Burt v. Rattle, 31 Ohio St., 116, was different.

Piscataqua Bridge v. New Hamp

6 Parker, J., in Piscataqua Bridge v. New Hampshire Bridge, (1834) 7 N. H. 35, 63, citing Gibbons v. Ogden, 9 Wheat. 97, note a.

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