the right of eminent domain or to acquire a franchise in a highway is allowed to be formed except by special act." This is an unusual limitation on the power of the legislature to enact general laws for creating corporations. § 3. The powers of a corporation. Since the corporation is a creature of law, and exists as a legal person only so far as the law permits, its capacities and powers are determined by the law which created it. To that law therefore we must go to learn its powers; and when any question arises as to corporate power, it must be determined as the courts of the incorporating State would determine it. "As it was an artificial being, created only by the laws of Indiana, and by them alone endowed with whatever powers and capacities it possesses, it could have no capacities nor exercise any powers anywhere, which were not, expressly or by implication, given by those laws; or, in other words, no powers or capacities which would not be recognized and sustained by the courts of that State had the same question of capacity to take those lands come before them for adjudication." Since this determination of the powers of a corporation is inherent in the very nature of the corporation, its powers cannot be altered by any other State. While the law of another State may permit or forbid the exercise of corporate powers, it cannot increase or diminish the powers themselves, or in any way affect their existence. Thus where a railroad was chartered by the State of Indiana without power to lease another railroad, an act of the Illinois legislature authorizing it to lease a railroad in the latter State could not 7 R. I. Const. (1899) Art. 4, § 15. • Brown v. Phillipps, 16 Ia. 210; Thompson v. Waters, 25 Mich. 214, 12 A. R. 243; Lamb v. Russell, 81 Miss. 382, 32 So. 916; Black v. Delaware & R. C. Co., 22 N. J. Eq. 130, 422; O'Brien v. Chicago R. I. & P. R. R., 53 Barb. 568. But see Milnor v. New York & N. H. R. R., 53 N. Y. 363, 367. Christiancy, J., in Thompson v. Waters, supra. confer upon it the power to do so, and a lease attempted to be made in accordance with the Illinois statute would be void. 10 And a railroad chartered by Kentucky with power merely to operate a railroad could not accept a warehouseman's lease in Louisiana, whatever the law of the latter State." So a telegraph company chartered to maintain telegraph lines only in certain named counties of a State may not enter another State and appropriate property, though permitted to do so by the latter State.12 It follows from this general principle that a corporation which by its charter is allowed to act only in its own State cannot anywhere maintain a suit based on action outside its State.1 13 A national bank is of course subject to this rule and can do only what the act of Congress empowers it to do, no matter what the law of the State in which it is located may be.14 § 4. The extent of powers conferred. Powers may be conferred upon a corporation either expressly or by implication. The charter or articles of incorporation enumerate certain powers which the corporation is to have. The statutes of the State of incorporation are likely to name other powers. It is often permitted a corporation by amendment of its articles of incorporation or its by-laws to extend or alter its powers. In these ways express powers may be conferred. The laws of the various States upon this matter will be found collected in the next Chapter. But in addition to the powers expressly enumerated, every corporation has certain implied powers, conferred by the common law. Thus for instance the power by vote of the 10 St. Louis, V. & T. H. R. R. v. Terre Haute & I. R. R., 145 U. S. 393, 36 L. ed. 748. 11 State v. Southern Pac. Co., 52 La. Ann. 1822, 28 So. 372. 12 Southwestern Tel. Co. v. Kansas City S. & G. Ry., 108 La. 691, 32 So. 958. 13 Baltimore & O. Tel. Co. v. Del. & A. Tel. & Teleph. Co., 7 Houst. 269. 14 Weckler v. First Nat. Bank, 42 Md. 581, 20 A. R. 95; Matthews v. Skinker, 62 Mo. 329, 21 A. R. 425; Fowler v. Scully, 72 Pa. 456, 13 A. R. 699. corporation to create an agent would seem to be inherent in the very nature of a corporation. And so it has been well held that the power of a corporation to act outside the State of incorporation is inherent in the nature of a corporation, and no express power to do so need be shown.15 So a power to make by-laws is inherent in a corporation, “included, by law, in the very act of incorporating, as is also the power to sue, to purchase, and the like. For as reason is given to the natural body for the governing of it, so the body corporate must have laws as a politic reason to govern it . . . and therefore, though there be no proviso for that purpose the law supplies it." 16 § 5. The Limitation of powers conferred. Powers of a corporation may be limited by the express language of the charter or by implication from the language of the charter or of the statutes of the incorporating State. In the first case there is no difficulty; as the power of the corporation is derived from the charter, so any express limitation in the charter must lessen the power. It may, however, be difficult to decide whether a prohibition in a charter is a limitation of power or a prohibition of the exercise of a granted power. If the former is the case, there is no power given, and therefore as has been seen the corporation cannot obtain the power anywhere. If, however, the prohibition is upon the exercise of the power, the prohibition ceases when the law ceases, that is, outside the territory of the charter State, and the power may perhaps be exercised abroad.17 This distinction was taken in the leading case of Hitchcock v. United States Bank.18 The charter given by Pennsyl 15 Dodge v. Council Bluffs, 57 Ia. 560. But see Matthews v. Trustees. 2 Brewst. 541. 16 Norris v. Staps, Hob. 210b. 17 Ohio Life Ins. & Tr. Co. v. Merchants' Ins. & Tr. Co., 11 Humph. 1, 24, 53 A. D. 742. 18 7 Ala. 386. vania to the Bank of the United States provided that it should be restricted to six per cent. interest on its loans. A loan made by it in Alabama at eight per cent., legal there, was held valid, on the ground that the rate of interest on a loan was not a matter which concerned the legality of the loan, or the power to make it, but was "a mere incident of the power." So a sale of lands in New York by an Illinois corporation at a price forbidden by charter is not illegal, although a statute of Illinois had declared that all such sales should be illegal.10 So it has been held that a provision in the charter of a corporation against parol contracts has no effect in a State where there is no objection to such contracts.20 Nothing but the most positive and explicit expressions in the charter or in a statute could justify the belief that the legislature of the charter State intended to prohibit one of its own corporations from employing its capital in other States on terms less favorable than the laws of such other States allowed as just.21 But this question is one of interpretation merely; if the proper interpretation of the charter finds a limitation of power, there is no room for further argument. The question is a somewhat different one when the alleged limitation of power arises from the general legislation of the State of incorporation, not from a provision in a charter or in the corporation law of the State.22 A typical case of the sort is presented by a statute of New York which forbids corporations to take land by devise unless expressly authorized by their charters. A New York corporation, not expressly au 19 Ellsworth v. St. Louis, A. & T. H. R. R., 98 N. Y. 553. 21 United States Mtg. Co. v. Sperry, 24 Fed. 838. See to the same effect Phila. Loan Co. v. Towner, 13 Conn. 249; Frazier v. Willcox, 4 Rob. (La.) 517; Erwin v. Lowry, 6 Rob. (La.) 28; Depau v. Humphreys, 20 Mart. (La.) 1; Knox v. Bank of U. S., 26 Miss. 655; Bank of Louisville v. Young, 37 Mo. 398; Bard v. Poole, 12 N. Y. 495; Larwell v. Hanover Sav. F. Soc., 40 Oh. St. 274; Bullard v. Thompson, 35 Tex. 313. See however contra, Scammon v. U. S. Mortgage Co., 17 Chic. Legal News, 234. 22 Hoyt v. Shelden, 3 Bosw. 267, 299. thorized by charter, received a devise of land in Connecticut. The Supreme Court of Connecticut held the devise valid.23 The court said: "It is not expressly authorized to take by devise, nor is it prohibited from so taking. Can it then take by devise? Not in New York, as we have seen. Therefore not in Connecticut, say the counsel for the heirs at law, for being a New York corporation, and by the law of that State devoid of power to take by devise, no argument is needed to show its inability to take by devise in Connecticut. This conclusion is too hastily drawn. If the inability to take by devise arose out of a prohibitory clause in the charter, the conclusion would be legal and logical. But the inability does not so arise. There is no prohibition in the charter; the inability is created by the New York Statute of Wills, expressly excepting corporations from taking by devise. Now this corporation brings with it from New York its charter, but it does not bring with it the New York Statute of Wills and cannot bring it to be recognized as law within this jurisdiction. There is an obvious distinction between an incapacity to take created by the statute of a State, which is local, and a prohibitory clause in the charter, which everywhere cleaves to the corporation. The reasoning is fallacious, not recognizing this distinction. There being no prohibition in the charter, and the power to hold and convey real estate being expressly given, we must look to our own statutes and laws, and not to those of New York, to determine whether or not this corporation can take by devise in Connecticut." 24 There can be little doubt that this view is sound. The object of the New York statute was not to prevent corporations from taking land, but to prevent certain devises. New York has no concern with devises of foreign land. In short, it is not a statute passed to affect the powers of New York corporations. And the weight of authority is in accordance 23 White v. Howard, 38 Conn. 342. 24 Foster, J., in White v. Howard, supra. |