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a corporation cannot exercise a power in another State prohibited by its own charter, yet if its charter contains no prohibition, but there is a prohibition in the statute of wills of the State of its creation, that prohibition is not operative outside of that State, but has merely a local operation; so that, if there is no prohibition in the foreign State, the power may be there exercised. “There being no prohibition in the charter," said the Supreme Court of Connecticut, in' considering this question with reference to a New York corporation, "and the power to hold and convey real estate being expressly given, we must look to our own statute and laws, and not to those of New York, to determine whether or not this corporation can take by devise in Connecticut.” And the court held that it could take by devise in Connecticut, although it had been established by judicial decision that it could not take by devise in New York, because of the prohibition in the statute of wills of that State against corporations taking by devise. So, the Supreme Court of Ohio held that, although a corporation, here the American Bible Society, existing under the laws of New York, could not take by devise in that State by reason of the prohibition in the statute of wills of that State, yet this did not prevent it from taking by devise in Ohio, since the statute of wills of New York was not operative in Ohio, and since the corporation had a charter capacity to take and hold land other than by devise.?

§ 7920. Power Limited by Charter of Corporation. — All the preceding cases either state in terms or proceed upon the assumption that a corporation has no power to acquire, hold, or convey lands situated in another State, unless the power is, either in express terms or by necessary implication, conferred on it by its own charter or governing statute. In all these cases two sources of power are to be considered: 1.

1 White v. Howard, 38 Conn. 342, 361.

· American Bible Society v. Marshall, 15 Ohio St. 537. Upon the gen

eral question of the power of corporations to take by devise, see McCartee v. Orphan Asylum, 9 Cow. (N. Y.) 437; 8. c. 18 Am. Dec. 516.

The charter or governing statute of the foreign corporation. 2. The restrictions imposed by the local law. If the first source of power fails, the other need not be considered, but there is an end of the question.'

8 7921. Such Charter Construed According to the Lex Rei Sitæ. - It is a principle of universal application, to which no exceptions are admitted, that the validity of every disposi. tion of lands, whether the disposition be absolute or qualified, whether it passes an estate or merely imposes a charge, de. pends exclusively upon the municipal law of the country or State in which the lands are situate. It is a part of this principle that every instrument conveying land, whether in respect of the power of the grantor to make the conveyance, or in respect of the manner in which the power is executed, is governed by the law of the situs, and that all questions relating to the validity of the conveyance are determined according to that law, and not according to the law of the place of contract, or of the domicile of the contracting parties. Ap

I Starkweather •. American Bible out the State which creates it, except Society, 72 Ill. 50; 8. C. 22 Am. Rep. such as are authorized by its charter; 133; Boyce v. St. Louis, 29 Barb. and those acts must be done by such (N. Y.) 650; Talmadge v. North Amer. officers and agents, and in such manican Coal &c. Co., 3 Head (Tenn.), ner as the charter authorizes.” Bank 337. It was reasoned in this last case of Kentucky v. Schuylkill Bank, 1 Par. that if ere was any prohibition in Sel. Cas. (Pa.) 180, 225; opinion by the charter or governing statute of a King, Pres.; citing Bank of Augusta foreign corporation against mortgag- v. Earle, 13 Pet.(U. S.) 519, 577, ing its real and personal estate, there * Story Conf. Laws, 8 428. was nothing in the policy of the laws . Thus, it is said by a very able of Tennessee to authorize the courts judge: “It is of no consequence where of Tennessee to relieve it of that re- the instrument containing the dispostriction. Upon this theory one judge sition is made or delivered, nor where has reasoned that if “the law creat- the parties reside; since in all cases ing such a corporation does not, by it is neither the lex loci contractus nor the true construction of the words the lex domicilii, but solely the lex loci used in the charter, give it the right rei sitä that governs the construction; to exercise its powers beyond the and so universal is the rule, that limits of the State, all contracts made neither in the law of England, nor in by it in other States would be void; our own (although it seems to be othfor a corporation can make no con- erwise in some foreign countries), has tracts and do no acts within or with- & solitary exception ever been ad

plying this principle, it has been held that, when the question arises whether a foreign corporation has the power to acquire real estate situated in New York, the decision of the highest court of the State in which the foreign corporation exists will not be conclusive as to its power under its charter, but it will be for the courts of New York to construe the charter and to determine whether, under it, such a power exists; in which case a holding of the highest court of the State creating the corporation, in affirmation of the power, will be persuasive authority merely.'

§ 7922. Power to Take and Foreclose Mortgages. — The power to take mortgages of real estate as a security for debts due, and to foreclose the same, is generally conceded by the American courts to corporations created under the laws of other States. This power has been conceded to corporations

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mitted. It is a necessary consequence city of St. Louis, under its charter, to that no court of law or equity can take as devisee lands situated in the found a judgment or decree upon the State of New York; and this for two construction that it may give to a reasons: 1. Because, by the charter grant or conveyance of lands not of the city of St. Louis, it was not within its own jurisdiction, unless authorized to take or hold such real upon positive evidence that the con- estate either upon the trust, or for struction which it adopts is in entire the use and purposes mentioned in conformity to the local law upon which the will, or for any other use or purthe validity and effect of the instru- pose. 2. Because, by the law of New ment depend.” Nicholson v. Leavitt, York in force when the testator died, 4 Sandf. (N. Y.) 252, 276, per Duer, j. and when his will took effect, and

Boyce v. St. Louis, 29 Barb. (N. still in force, no devise to a foreign Y.) 650. In this case Bryan Mullan- corporation could be valid unless such phy, a wealthy citizen of St. Louis, corporation was expressly authorized Mo., made a devise to that city for by its charter or governing statute to certain charitable purposes.

The take the devise. It is thus perceived power of the city to take the devise that the decision, in its nakedness, was contested, but it was finally de- rests on the inability of the city of cided in favor of the city. Subse- St. Louis, under its charter, to take quently, in an action by one of the the devise, and it holds that it had heirs of the decedent in the State of no such power, notwithstanding the New York, for a partition of certain of decision of the Supreme Court of Mishis real estate there situated, it was Bouri to the contrary. held by Sutherland, J., that, notwith- : Christian v. American &c. Co., 89 standing the decision of the Missouri Ala. 198; Farmers' Loan &c. Co. r. court, no power was possessed by the McKinney, 6 McLean (U. S.), 1;

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created under the laws of other States with the power, under their charters, to loan money on mortgages;' to foreign corporations, having demands against domestic citizens upon which actions can be maintained in the domestic forum; and to foreign corporations taking such mortgages by way of additional security for debts lawfully contracted within the domestic jurisdiction, although their charter may not have authorized the taking of such security upon an original investment.' And it has been held that the mortgagor is estopped from setting up a want of power in the foreign corporation to invest its money upon mortgages in the domestic jurisdiction;' and, - what is equivalent to the last holding, -that only the State can set up such a want of power."

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8 7923. Power to Mortgage and Incumber their Lands.The jus disponendi being a universal incident of the beneficial ownership of property, whenever the power of a foreign corporation to acquire land is conceded, the power to dispose of it must also follow; and therefore, it may be concluded from what has preceded, that foreign corporations have the same power to mortgage, or otherwise incumber their property, that domestic corporations or natural persons would have;' though the legislature of the State in which the lands are situated may, and sometimes does, restrain the exercise of the power, whenever to allow its exercise will prejudice the rights of its own citizens as creditors of the corporation. But

American &c. Ins. Co. v. Owen, 15 Gray (Mass.), 491; National Trust Co. v. Murphy, 30 N. J. Eq. 408; Pancoast v. Travelers’ Ins. Co., 79 Ind. 172; Carlow v. Aultman, 28 Neb. 672; 8. C. 44 N. W. Rep. 873.

1 Farmers' Loan and Trust Co. 0. McKinney, 6 McLean (U. S.), 1.

: American &c. Ins. Co. v. Owen, 15 Gray (Mass.), 491.

• National Trust Co. v. Murphy, 30 N. J. Eq. 408.

• Pancoast v. Travelers’ Ins. Co., 79 Ind. 172.

• Carlow v. Aultman, 28 Neb. 672; 8. C. 44 N. W. Rep. 873. To the same effect is National Bank v. Matthews, 98 U. S. 621.

Ante, $ 6466.
• Stevens v. Pratt, 101 ni. 206.

SA decision of one of the State courts of nisi prius in Colorado has been quoted to the proposition that a foreign corporation cannot incumber its property situated in Colorado, under the Colorado Corporation Law, $ 260, to the exclusion of claims agserted by citizens of the State, even

in respect of the mode in which the conveyance is made, the local law governs; though the question whether the directors have received power from the stockholders to authorize the mortgage must be determined by reference to the charter, governing statute, or by-laws of the corporation. For instance, it has been held in Massachusetts that a statute of that State, providing that a corporation shall not convey or mortgage its real estate, or give a lease therefor for more than a year, unless authorized by a vote of the stockholders at a meeting called for the purpose, does not apply to foreign corporations, nor invalidate a mortgage made by a New Hampshire corporation of its lands situated in Massachusetts, where there has been no such vote of the stockholders.' So, the question whether such a mortgage was void by reason of the fact that the meeting of the directors at which it was authorized had been held, not in New Hampshire, the State of the domicile of the corporation, but in Massachusetts, the State of the situs of the land, was determined, with reference to the laws of New Hampshire and the by-laws of the corporation, in favor of the validity of the mortgage.'

though they are not recorded and were clusion changed by the language of unknown to parties advancing money the incorporation law of that State on mortgage of the corporate property, of 1872, that "corporations may be who acted with due diligence. Hol. formed, .... for any lawful purland Trust Co. v. Taos Valley Co., 11 pose, except banking, insurance, real Rail. & Corp. L. J. 74.

estate brokerage, the operation of · Saltmarsh v. Spaulding, 147 Mass. railroads, and the business of loan224; 8. c. 17 N. E. Rep. 316; 4 Rail.

ing money." This statute refers only & Corp. L. J. 151.

to the formation of domestic corpora· Ibid. A foreign corporation called tions, and is held not to indicate a & mortgage company, created for the policy on the part of the legislature sole business of lending money on to exclude foreign corporations from mortgages, might lend its money in the State which are organized for the Illinois on mortgages, notwithstand. prosecution of business for which ing the fact that the laws of Illinois domestic corporations cannot be perdid not provide for the formation of mitted. Stevens v. Pratt, 101 Ill. 206. such companies. Nor is this con

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