organized under the Act of 1875. Therefore, when the statute reads "in "addition to the powers enumerated in the first section of this act and "the powers specified in its charter" it includes companies created by special charters granted by the Legislature prior to 1875. At common law a corporation created by charter could do any act that an individual could do, whether expressly empowered by its charter to do such act or not. For an abuse of its powers it was amenable to the sovereign alone. (Riche v. Ashoury Co., L. R., 9 Exch., 224, 262.) A corporation created by statute, however, is precisely what the organic act makes it. For every function it claims to exercise and for every power it assumes to possess it must find authority in legislative grant. (Watson v. Acquackanonck Water Co., 36 N. J. Law, 195; Stockton v. Central R. R. Co., 50 N. J. Eq., 52.) When we seek to ascertain the powers of a corporation under this act we find that there are two sources from which its express powers are derived. These are (1) The "Act Concerning Corporations." (2) The certificate of incorporation. I. The "Act Concerning Corporations." It should be borne in mind that this act has a twofold scope. It contains (a) A code of general rules of law applicable to all corporations. may be formed. (See Section 6.) In its first aspect it declares the fundamental powers which shall be possessed by every corporation. These are set forth in Section 1. These are, with some slight modifications, declaratory of the common law attributes of corporate existence, as stated by Coke and Blackstone. These are basic and inherent powers, pertaining to a corporation as such without regard to the object of its creation. In the next place, it confers certain additional general powers and privileges on all corporations, however organized, but only “so far as the same are necessary or convenient "to the objects set forth in such charter or certificate of incorporation." (Ellerman v. Chicago Junction Rys., &c., Co., 49 N. J. Eq., 217.) It confers also certain express powers on condition that they are inserted in the certificate of incorporation. Such, for instance, as the power to issue preferred stock (Sec. 18); to transact business outside of New Jersey (Sec. 7) In the third place it prescribes that every corporation "shall be gov"erned by the provisions and be subject to the restrictions and liabilities "in this act contained, so far as the same are appropriate to and not "inconsistent with such charter or the act under which such corporation "was formed." This clause is applicable to corporations organized otherwise than § 2 §2 under this act. As to corporations organized under this act, it is pro vided that the certificate of incorporation must be consistent with the act (Sec. 8), and Section 5 provides "this act and all amendments thereof "shall be a part of the charter of every corporation heretofore or here"after formed hereunder, except as far as the same are inapplicable and "inappropriate to the objects of such corporation." In its second aspect the act enumerates the kinds of corporations that may be organized under it, prescribes the procedure for their organization, confers upon them certain powers and privileges, and imposes certain regulations as to their conduct and management. II. The certificate of incorporation.-The second source from which a corporation derives its express powers is its Certificate of Incorporation, and in the discussion which follows reference is had only to corporations formed under the "Act Concerning Corporations." 44 "The general act gives to all corporations general corporate powers and all others necessary to their exercise. "If these were not sufficient to effect the objects of the corporation recourse was formerly had to the Legislature for a specific grant of "power. The Constitution providing that the Legislature shall pass no "'special act conferring corporate powers, but shall pass general laws "under which corporations may be organized and corporate powers of "'every nature obtained,' and the general corporation act being as it now "stands passed in obedience to the mandate of the Constitution, the cer"tificate required by that act becomes the charter of the company, and "the equivalent of the former special act of the Legislature." (Ellerman v. Chicago Junction Ry., &c., Co., 49 N. J. Eq., 217, 240, 241.) As though to carry this idea to its logical conclusion, by an amendment to Section 8 passed in 1898 (Chap. 172) corporations are now authorized to insert in their certificate of incorporation provisions "creating "and defining the powers of the corporation." This is perhaps an innovation in general enabling acts, and if the word "create" is to be given its usual and ordinary meaning it is as though the Legislature has endowed the corporators with a lawmaking power, enabling them to give the corporation such powers as they see fit, provided only that such powers are not inconsistent with the act itself. In other words, unless a power is expressly or impliedly forbidden by the statute it may be created under this section. These words may also be taken in a second and additional meaning, that outside of the express powers granted by Section 1, and the powers directly incidental to these powers, all others are lying dormant and not available to any other corporation under the act, until called into being and made applicable to the charter by being specified among the objects and purposes and powers of the corporation. It is apparent that in the State of New Jersey special opportunity is $2 given for the skill of counsel in drawing a certificate of incorporation. It is as though the Legislature had laid out, first, seven express powers which all corporations should possess, and then had defined certain limits beyond which corporate powers could not go, and then provided a method of obtaining the equivalent to a special charter containing any and every other power which should be desired, not inconsistent with the provisions of the act itself. Implied powers.-The above statement outlines the statutory powers possessed by corporations, and which may be designated its express powers. The statute then provides that "No corporation shall possess or exercise "any other corporate powers, except such incidental powers as shall "be necessary to the exercise of the powers given." This is the statement in negative form of the general rule that a corporation has implied power to do any act reasonably necessary to the exercise of its express powers. The courts of New Jersey have placed a liberal construction upon the words " necessary to the exercise” contained in the Act of 1875. "Power "necessary to a corporation does not mean simply power which is indis"pensable a power which is obviously appropriate and con 營 * * * * "venient to carry into effect the franchise granted has always been "The general corporation act confers on the company certain powers, "the certificate contemplates others, and incidental powers follow, not "only with respect of the general but also of the special powers." (Ellerman v. Chicago Junction Ry., &c., Co., 49 N. J. Eq., p. 217 241.) As an example of implied power a corporation is impliedly authorized to borrow money and has the incidental power to give security for its repayment, and to make negotiable notes, and to endorse notes loaned to it for its accommodation. (Lucas v. Pitney, 27 N. J. Law, 221; Fifth Ward Sav. Bk. v. First Nat. Bank, 48 N. J. Law, 513; Blake v. Domestic Mfg. Co., 38 Atl. Rep. 241. See also Savage v. Ball, 17 N. J. Eq., 142; Montague v. Church District, 34 N. J. Law, 218; Hackensack Water Co. v. De Kay, 36 N. J. Eq., 548.) A corporation has no power to become a party to bills or notes for the accommodation of others. When, however, a corporation has power, under any circumstances, to issue negotiable paper, a bona fide holder has 82 the right to presume that it was issued under the circumstances which give the requisite authority, and such paper is no more liable to be impeached for any infirmity in the hands of such a holder than any other commercial paper. (Id.) Bond issue.-There is no statutory limitation cn the power of a corporation organized under this act to issue bonds or debentures, whether secured by mortgage or otherwise. The powers of a corporation organized under this act may be summarized as follows: I. Express powers-directly or indirectly given by statute and de rived from (1) "Act Concerning Corporations": (a) Fundamental and inherent (Sec. 1). (b) Incidental; dependent upon objects of company. (c) Special; peculiar to corporations organized under act. (d) Special; must be stated in certificate of incorporation. (2) Certificate of incorporation. 11. Implied powers. ULTRA VIRES.-It was formerly the rule in this State that acts of a corporation in excess of its express powers, or those necessarily implied, were void, and contracts which were ultra vires the corporation were incapable of enforcement or ratification. Such acts or contracts could not become the foundation of a right of action either by or against the corporation. (Trenton Mut. L. Ins. Co. v. McKelway, 12 N. J. Eq., 133; Nat'l Trust Co. v. Miller, 33 N. J. Eq., 163; Black v. Delaware & Raritan Canal Co., 24 N. J. Eq., 455; Leggett v. N. J. Mfg. & Bkg. Co., 1 N. J. Eq., 541; State v. Mansfield, 23 N. J. Law, 510.) This rule no longer obtains. The present rule is that an ultra vires contract which has been performed on one side will be enforced in all those cases where the party performing cannot, upon rescission, be restored to his former status. The company is deemed to have acquiesced in the ultra vires act, and is precluded from interposing its own infirmity to the injury of the other party. An executory contract, ultra vires, however, cannot be enforced, even though acquiesced in by every stockholder, and an ultra vires contract, fully executed, cannot be receded from. (Camden & Atl. R. R. Co. v. Mays Landing, &c, R. R. Co., 48 N. J. Law, 530; Ellerman v. Chicago Junc. Ry., &c., Co., 49 N. J. Eq.. 242; Chapman v. Ironclad Rheostat Co. 41 Atl. Rep., 690.) Remedies.-1. By the stockholders and third persons. The Court of Chancery will interfere by injunction, at the instance of a stockholder, to restrain the corporation from using the corporate funds in the exercise of unauthorized powers. (Gifford v. N. J. R& Transportation Co., 10 N. J. Eq., 171.) And in Del. & Rar. Canal v. $ 3 Rar. & Del. Bay R. Co., 16 N. J. Eq., 321; aff'd 18 N. J. Eq., 546, it was held that equity will restrain a corporation from exercising powers with which the Legislature has not invested it if those powers interfere with the rights or property of others, whether such exercise is mistaken or fraudulent. 2. Proceedings by the Attorney-General to forfeit the charter of the company. "The State may interpose its authority at any time and compel "an abandonment of the act in excess of power, and, if need be, revoke "the charter of the company for its usurpation. "When the State challenges the legality of the transaction, the para"mount and only question is whether it has bestowed upon the company "the requisite authority to engage in it. When the question arises "between the company and the other party to the contract, other legal principles apply in determining whether the contract shall be observed." (Camden & Atl. R. R. Co. v. Mays Landing, &c., R. R. Co., 48 N. J. Law, 567.) The Court of Chancery is not the proper tribunal for calling in question the rights of a corporation, as such, for the purpose of declaring its franchises forfeited and lost. Such power is of right to be exercised by a court of law. (Society for Establishing Useful Manufactures v. · Morris Canal & Bkg. Co., 1 N. J. Eq., 157; Stockton v. American Tobacco Co., 55 N. J. Eq., 352.) 3. Banking powers prohibited to corporations organized under this act. No corporation created or to be created under the provisions of this act shall, by any implication or construction, be deemed to possess the power of carrying on the business of discounting bills, notes or other evidences of debt or of receiving deposits of money, of buying gold or silver bullion or foreign coins, or of buying and selling bills of exchange, or of issuing bills, notes or other evidences of debt, upon loan or for circulation as money. (As amended by Chap. 176, Laws of 1899; P. L. 1899, p. 473-) P. L. 1846, p. 16; Act of 1875, § 4. The general prohibition against the exercise of unauthorized banking powers is contained in the "Act concerning banks and banking (Revision of 1899)." Banking corporations must now be formed under "An Act concerning banks and banking (Revision of 1899)." This section affects in no way the power of a corporation to issue and receive negotiable paper in the usual course of business, or for any pur |