etc., Ry. Co., 2 McN. & G. 146; Great Western Ry. Co. v. Oxford Ry. Co., 3 DeG. M. & G. 341; Samuel v. Holladay, 1 Woolworth C. C. Rep. 400.

A preliminary injunction cannot be granted when the act sought to be restrained has been already done. Salisbury v. The Metropolitan Ry. Co., 39 L. J. Ch. 429; Camblos v. Phila. and Reading R. R. Co., 9 Phila. 411; Lehigh Coal and Nav. Co. v. Lehigh Valley R. R. Co., referred to in Andenreid v. Phila. and Reading R. R. Co., 68 Pa. St. 376; Washington University v. Green, 1 Md. Ch. 97; New York Printing and Dyeing Est. v. Fitch, 1 Paige, 97; Bosley v. Susquehanna Canal, 3 Bland, 65; AttorneyGeneral v. New Jersey R. R. Co., 2 H. W. Green, Ch. R. 136; Attorney-General v. City of Paterson, 1 Stockton, 624.

When the bill in the present case was filed, the contracts, the making of which was sought to be thereby enjoined, had been already completely made with some nineteen hundred different persons, by their acceptance of the offer contained in the prospectus. County of Moultrie v. Rockingham Ten-cent Savings Bank, 2 Otto, 631.

The contracts having been completed, no decree can be made in a proceeding to which the subscribers are not parties. Story's Equity Pl. 76, a; Mallow v. Hinde, 12 Wheaton, 193; Marsh v. Burroughs, 1 Wood's C. C. Rep. 468; Carlisle v. South Eastern Ry. Co., 1 McNaughton & Gordon, 689; Fawcett v. Laurie, 1 Drewry & Smale, 192.

A court of equity cannot interpose at the instance of a stockholder and assume to interfere with the control of the company by the directors, where it is not shown that their acts are ultra vires or fraudulent. Forbes v. R. R. Co., 2 Wood's C. C. Rep. 331; Simpson v. Westminster Palace Hotel Co., 8 H. of L. Ca. 719; Field on Corporations, § 397; Green's Brice's Ultra Vires, p. 614, n. a; High on Injunctions, § 761.

The bonds to be issued are within the power of the company, and therefore within the power of the managers, since all the powers of the company are by the charter and by-laws vested in the managers. The Insurance Bank of Columbus v. Bank of U. S., 4 Clark, 125; Green's Brice's Ultra Vires, 227, 229, 467, n. a; Spain v. Hamilton's Admr., 1 Wall. 626; Lloyd v. Scott, 4 Peters,

205.

This is not an issue of stock. If the bonds were redeemable at any future time, no matter how remote, it could not be contended for an instant that the mere agreement that the interest was dependent upon and payable out of profits constituted the holder a stockholder. Practically, there is no difference whatever between an irredeemable bond and one payable a hundred years off. It being admitted that the payment of interest out of profits does not make the holder a stockholder, what is there in the fact that

the bonds are irredeemable to constitute him one? The two most vital and indeed the distinguishing characteristics of stock are wanting in this case, viz.: the right to control the company's affairs, and a right to share in the property of the company in case of a sale and a balance remaining after payment of debts.

MCKENNAN, C. J.-The present proceeding is twofold; first, to obtain a rescission of an order made November 18, 1880, by one of the judges of this Court at Chambers, touching the issue by the Philadelphia and Reading R. R. Co. of $34,000,000 of "deferred bonds;" and second, to enjoin the issue of such bonds.

Whatever may be the literal import of the order of November 18, 1880, only the significance and effect of an order by consent can be given to it. The petition for it was referred to one of the masters in the cause. His report was favorable; all classes of interest supposed to be affected by it were apparently represented and concurring, and it was, therefore, made without argument and as of course. When it was afterwards challenged by the complainants here, the circumstances under which it was made were fully explained, and its phraseology was so changed as to exclude any inference of authoritative sanction of the plan referred to. The petition for the revocation of the order must then stand upon the same footing as to merit with the motion for the injunction.

The deferred bond plan is challenged, for the vital reason that the corporation is legally incompetent to institute it. It is notably peculiar in its features. It is a proposition by the corporation that the stock and bondholders shall subscribe and pay ratably over $10,000,000, to be used in extinguishing the floating debt of the corporation; that to each subscriber shall be issued a writing, the form of which is yet undetermined, entitling him to receive six per cent on the sum of $50 for each $15 paid by him, out of the net earnings of the corporation, after paying all fixed charges and a dividend of six per cent upon the common shares, and that for further interest these subscriptions will rank pari passu with the common shares. Is this proposition then authorized by the charter of the corporation?

The principle by which we must be guided in answering this question has been so often the subject of judicial recognition that it has grown into an axiom of construction. It is this: that the exercise of powers which are not conferred upon a corporation by express concession or clear implication must be taken as denied to it. It is thus comprehensively stated by Mr. Justice Miller, in Thomas et al. v. The West Jersey R. R. Co. (11 Otto, 82): "We take the general doctrine to be in this country, though there may be exceptional cases and some authorities to the contrary, that the powers of corporations organized under legislative statutes are such, and such only, as those statutes confer. Conceding the rule

applicable to all statutes, that what is fairly implied is as much granted as what is expressed, it remains that the charter of a corporation is the measure of its powers, and that the enumeration of these powers implies the exclusion of all others."

Whatever power the defendant has in the premises can only be found in its general authority to borrow money. Neither in the charter of the defendant, nor in the special act which authorizes it to sell bonds which it may issue below par, is anything contained to legalize the contested proposition, unless it can be put on the footing of a loan. Has it then this character? I think plainly not. It does not propose to create the relation of debtor and creditor between the defendant and the subscribers. The money obtained by the defendant could not be regarded as borrowed, because that implies reimbursement, and it is not demandable by the subscribers or payable by the defendant. It has not the essential and distinguishing qualities of a loan. It contemplates a stipulation that the subscribers, in consideration of the sums paid-not lentby them, shall be entitled to receive, in a remote and uncertain contingency, a portion of the defendant's earnings, to be measured by a certain rate per cent upon three times the sums paid by them, and after that shall participate with the common shareholders in the division of the residuary earnings. By what allowable definition of a loan or borrowing such a transaction can be embraced I am at a loss to conceive. Nor will the fact that it is to be evidenced by the sealed writing of the defendant change its inherent character and bring it within the range of a power to which it is not otherwise referable.

In one respect, and in one only, does the plan proposed resemble a loan, and that is in the result to be attained. They are both expedients for raising money, but the method of accomplishing this result is of the essence of the power of the corporation. If its employment has not explicit legal sanction it cannot be made available. If the defendant were offered a rental for its property amply sufficient to relieve it from the burden of embarrassment with which it is now struggling, unless it could show that its legis lative creator had endowed it with a right to make a lease, it could not accept such relief. (Thomas v. West Jersey R. R. Co., ante.) And, although it has power to acquire real estate for all necessary corporate purposes, no one would maintain that it could lawfully enter into a contract for the purchase of real estate merely to resell and thereby realize large gains. Authority to raise money by borrowing does not imply the use of another and different method of raising it, however well adapted to the end it may be. Even in the prospectus issued by the president of the defendant (Exhibit I.) the proposed issue of "deferred bonds" is not in any aspect treated as a loan, and the system is correctly stated to be new in the United States, and to have been frequently adopted in Great

Britain with great benefit to the companies and to subscribers. But we know that in Great Britain this "system" is expressly anthorized by statute, and hence it may be assumed that such legislation was deemed necessary to legalize a resort to it. Is not this suggestive of the inference that, although it has been proved to be of great benefit in Great Britain, it is "new" in this country, because it has been regarded as without necessary legislative au

thorization?

I am, therefore, of opinion that the issue of "deferred bonds," as proposed, is without warrant of law, and that the order of November 18, 1880, ought to be revoked and a preliminary injunction granted, and it is so ordered.

Concurring opinion by BUTLER, D. J.

I propose to consider one only of the several aspects in which this case has been presented. Are the contemplated acts charged in the bill ultra vires-in other words, have the defendants lawful authority to do what is proposed by the "deferred bond scheme"? As described in the president's "plan for financial reorganization," in the directors and receivers' petition to the Court, of November, 1880, and in the prospectus subsequently issued, and as illustrated by the sample before us of certificate or bond to be delivered to subscribers, it proposes an issue of $34,300,000 irredeemable income bonds of $50 each, at the price of $15 per bond, with interest at the rate of six per cent on the face value, payable annually out of such surplus earnings as may remain after defraying expenses and affording dividends of six per cent to the common stockholders, with a right to share equally with such stockholders any balance that may remain after six per cent is thus paid. In the language of the president's London address, of December 23, 1880, it proposes to give "to every one who will pay $15 an obligation for the nominal value of $50, which is never to mature— with no liability on the company's part to pay the principal, and which shall entitle the holder, after the common shares have had a dividend of six per cent, to all that is earned up to six per cent, and thereafter to a further dividend pari passu with the common shares."

That the defendants have power to borrow money is not questioned, and could not be. The plaintiffs assert, however, that this is not a proposition to borrow money, but a scheme to sell stock. The defendants claim that it is strictly a proposition to borrowconceding that, if it is not, but virtually is to sell stock, they have no lawful authority to carry it out. Thus a vital issue of law is sharply defined and presented. It is one that neither requires nor admits of extended discussion. Every admissible definition of the term borrow or loan, as applied to money and commercial transactions, embraces an obligation to return the property bor

rowed. A loan of money is universally understood to be the delivery of a certain sum to another, on contract for its return, generally with interest, as compensation for its detention and use. To call the payment of money to another, who is to receive and permanently retain it as his own, in consideration for an annual benefit or profit, a loan would seem to be a plain misuse of language.

There is no such thing known to commerce or transactions in money as an irredeemable loan in the sense here involved. Governments have issued obligations without provision or stipulation for repayment of the principal borrowed; but such obligations are redeemable at pleasure. Running, however, for an indefinite time, with no power in the holder to exact payment, they have come to be regarded as irredeemable, and an investment in them is, therefore, treated and described not as a loan, but as the purchase of an annuity or stock. Aside, however, from the abstract considerations involved in defining the term borrow or loan, the corporate powers of the defendants to borrow money must be held to apply only to such methods of borrowing as fall within the ordinary sense of the term-as understood by the community and illustrated in commercial transactions. Applying this test to the proposition here under consideration, it becomes plain that the transaction. contemplated is not a loan. The certificate proposed to be issued would vest in the owner a joint interest with the common stockholder in the capital or property of the corporation, an interest purchased with his money, the earnings of which would be paid to him in dividends.

In every essential respect, therefore, he would be a stockholder. The circumstance that he could not vote for directors would not change the character of his interest or the nature of his relation to the company and its property. His situation would be similar to that of a silent partner in a commercial firm. The proposition, therefore, is for the sale of interests in the capital of the corporation-a sale of shares, shorn of the privilege of voting, with the right to dividends regulated by contract. It would seem that the defendants contemplated, in the beginning, a sale of stock in the usual form, calling the transaction by its proper name. Testimony taken by the master tends to show this. The absence of power to make such sale, and the apparent impossibility of borrowing money at the usual rates and by the usual methods, and the obstacles interposed by usury laws, doubtless led to the change of plan, which, however, is little, if anything, more than a change in name.

The original thought and purpose have so far remained in the minds of the projectors, that the annual payments contemplated are still called dividends," as appears by the "plan for reorganization," the directors' petition to Court, the "prospectus," and the president's London address, while the scheme itself is described by them as "an issue of stock," and called such in the circular