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 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 of 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, 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.

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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 indispensable a power which is obviously appropriate and convenient to carry into effect the franchise granted has always been deemed a necessary one. In short, the term comprises a grant of the right to use all the means suitable and proper to accomplish the end which the Legislature had in view at the time of the enactment of the charter." State R. R. Co. v. Hancock, 35 N. J. Law, 537. See also McCulloch v. Maryland, 4 Wheat, 316, 414; Olmstead v. Morris Aqueduct, 47 N. J. Law, 311; Crawford v. Longstreet, 43 N. J. Law, 325; Morris Canal Co. v. Love, 37 N. J. Law, 60; State v. Mansfield, 23 N. J. Law, 510; Am. Dock & Imp. Co. v. Trustees, 39 N. J. Eq., 409.

"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 special powers. Ellerman v. Chicago Junction Rys., &c., Co., 49 N. J. Eq., pp. 217, 241. No rule of law is better settled than that which declares that a corporation created by statute, either special or general, can exercise no power and has no rights except such as are granted by express words or fair implication, and in the construction of such grants the rule is well settled that it must be held that what is fairly implied is as much granted as what is clearly expressed. Rabe v. Dunlap, 51 N. J. Eq., 40.

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. Bank v. First Natl. 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.

Contracts of a corporation, whether municipal or private, stand on the same footing with contracts of natural persons, and depend on the same circumstances for their validity and effect. Mayor v. Harrison, 71 N. J. Law, 69.

In the absence of express statutory authority a corporation has no power to enter into a partnership. Fechteler v. Palm Bros. & Co., 133 Fed. Rep., 462.

A corporation is not subject to the provisions of the bankruptcy act merely because its charter gives it the power to engage in trading or mercantile pursuits. The test is, did it in fact engage in such pursuit? In re Tontine Co. of New Jersey, 116 Fed. Rep., 401.

A manufacturing corporation has power to execute negotiable paper within the scope of its business, but no power to become accommodation endorser. National Bank of Republic v. Young, 41 N. J. Eq., 531; Blake v. Domestic Mfg. Co., 64 N. J. Eq., 480.

A corporation can exercise no power and has no rights except such as are granted by express words or as are fairly implied. Rabe v. Dunlap, 51 N. J. Eq., 40.

Alternative writ of mandamus allowed when the charter duty of the corporation was to perform certain acts. Lock v. Repaupo Meadow Co., 57 Atl. Rep., 423.

For the construction of this section in connection with the act for the incorporation of railroad companies and in connection with Section 51 of the present corporation act, see State v. Atlantic City & S. R. Co., 72 Atl. Rep., 111.

Power to guarantee.

As to the nature of guarantee by one corporation of dividends on stock of another corporation, see Bijur v. Standard Distilling, &c., Co., 70 Atl. Rep., 934.

Internal management.

The courts of this state cannot exercise visitorial powers over the management of the internal affairs of foreign corporations. Jackson v. Hooper, 76 N. J. Eq., 592.

Ordinarily courts will not interfere with the management of the internal affairs of a corporation, but this rule does not apply to transactions which are ultra vires the company or prohibited by positive law. Siegman v. Electric Vehicle Co., 72 N. J. Eq., 403; aff'd, Id., 435.

Where a corporation is engaged in competition with a rival corporation, and there is nothing to show bad faith or palpably bad judgment on the part of its directors, a court of equity, at the suit of a stockholder, will not enjoin it from selling its products for less than the cost thereof, since it is a question for the corporation and not for the courts. Trimble v. American Sugar Refining Co., 61 N. J. Eq., 340. 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 as to 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., 155; 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 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 rescinded. Camden & Atl. R. R. Co. v. Mays Landing, &c., R. R. Co., 48 N. J. Law, 530; Ellerman v. Chicago Junction Rys., &c., Co., 49 N. J. Eq., 217; Chapman v. Ironclad Rheostat Co., 62 N. J. Law, 497.

In cases where stockholders have all assented to corporate action, and no rights of the state or creditors intervene, the doctrine of estoppel is fully applicable, and the plea of ultra vires is unavailing. Breslin v. Fries-Breslin Co., 70 N. J. Law, 274; Perkins v. Trinity Realty Co., 69 N. J. Eq., 723; aff'd 71 Id., 304.

A mortgage ultra vires the corporation is held valid where the purchaser of bonds secured thereby could not control the application of the proceeds. Camden Safe Deposit & Tr. Co. v. Citizens' Ice & Cold Stor. Co., 69 N. J. Eq., 718; aff'd 71 Id., 221.

Having accepted the benefits of an ultra vires contract, the corporation cannot deny its liability thereunder. Whitehead v. American Lamp & Brass Co., 70 N. J. Eq., 581.

Where the business of a corporation which it is required to transact is lawful, there is no presumption that a contract made in pursuance of such business is ultra vires. Edwards v. National Window Glass Jobbers' Ass'n, 68 Atl. Rep., 800.

A manufacturing company has implied power to make negotiable paper for use within the scope of its business, but it has no power to become a party to bills or notes for the accommodation of others. R. M. Owen & Co. v. Storms & Co., 72 Atl. Rep., 441; Blake v. Domestic Mfg. Co., 64 N. J. Eq., 480.

Quasi-public corporations. The term discussed and applied. See McCarter, Attorney-General, v. Firemen's Insurance Co., 73 Atl. Rep., 80; Court of Errors and Appeals. Dissenting opinion, 73 Atl. Rep., 414. An act of a corporation, engaged in a business that is affected with a public interest, by which it contracts to enter upon a line of conduct that tends to affect such public interest injuriously, is ultra vires such corporation and may be restrained in equity at the suit of the Attorney-General whether actual injury has resulted to the public or not. Id.

An act which is ultra vires, because it is prohibited by law, cannot be validated either by the corporation or by the stockholders. Siegman v. Electric Vehicle Co., 72 N. J. Eq., 403; aff'd Id., 435.

Since there is no presumption that a contract is ultra vires the acts which constitute an excess of power must be clearly set forth in the complaint. Edwards v. National Window Glass Jobbers' Ass'n, 68 Atl. Rep., 800.

The doctrine of ultra vires when invoked for or against a corporation is not allowed to prevail when it would defeat the ends of justice or work a legal wrong. Earle v. American Sugar Ref. Co., 71 Atl. Rep., 391.

The plea of ultra vires is not admitted except when it is practicable to restore the status quo ante. Rutherford v. Hudson River Traction Co., 73 N. J. Law, 227, 235.

As to estoppel to set up the plea of ultra vires, see Camden and Atl. Ry. Co. v. Mays Landing Ry. Co., 48 N. J. Law, 530, 562.

"It is well settled that an act may be intra vires or ultra vires, according to the purpose which the directors have in view in doing it.' Robotham v. Prudential Ins. Co., 64 N. J. Eq., 701.

The doctrine of ultra vires should be reasonably applied. Ellerman

v. Chicago Junction Ry., &c., Co., 49 N. J. Eq., 217; Rabe v. Dunlap, 51 N. J. Eq., 40.

Whatever may be fairly and reasonably regarded as incidental to, or consequential upon, those things which the Legislature has authorized, ought not, unless expressly prohibited, to be held by judicial construction to be ultra vires. Att'y-General v. Great Eastern Ry. Co., 5 App. Cas. (Eng.), 473; Ellerman v. Chicago Junction Ry. Co., 49 N. J. Eq., 217; Dittman v. Distilling Co., 64 N. J. Eq., 537.

The organization of subsidiary companies for the same purpose and with the same object may be fairly and reasonably regarded as incidental to the business which is expressly authorized, and should not, by judicial construction, be held to be ultra vires. Dittman v. Distilling Co., 64 N. J. Eq., 537.

It is ultra vires for a corporation to secure by mortgage moneys paid by a stockholder for stock. Reed v. Helois Carbide Co., 64 N. J. Eq., 231.

Estoppel.

A stockholder who applies to a court of equity for its summary interference to protect his stock against the consequences of an act not prohibited by law, but in excess of the power of the corporation, must act promptly and three years is not such. Rabe v. Dunlap, 51 N. J. Eq., 40.

See Brady v. Atlantic City, 53 N. J. Eq., 440.

Whatever will estop the corporation will estop the shareholders, and vice versa. Breslin v. Fries-Breslin Co., 70 N. J. Law, 274.

Silence of the stockholders of a corporation for two years, with knowledge of an illegal contract by the directors, is not a ratification. Oliver v. Rahway Ice Co., 64 N. J. Eq., 596; 61 Atl. Rep., 901.

Where the corporation has had the benefit of an ultra vires contract which has been performed by the other party, it is estopped to deny the rights of the other party unless the transaction is contrary to public policy, forbidden by law, or immoral. Camden Trust Co. v. Citizens' Cold Storage Co., 69 N. J. Eq., 718. A corporation cannot complain of a transaction stockholders assent with knowledge of the facts. 73 N. J. Eq., 262.

to which all of its Arnold v. Searing,

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; Elkins v. Camden and Atl. R. R. Co., 36 N. J. Eq., 5. And in Del. & Rar. Canal v. Rar. & Del. Bay R. Co., 16 N. J. Eq., 321; aff'd 18 N. J. Eq., 546, it was held that a court of equity will restrain a corporation from exercising powers with which