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company would be entitled to let such rolling-stock when it is not wanted for the working of its own line. Where the lines of two companies are continuous, and the traffic of the one can be profitably worked only in connection with the other, it would seem that the latter may agree to supply the former with such rolling-stock as it may require, though this may involve the manufacture of rolling-stock in excess of its own wants.3 A railway company

may charge for the use of weighing machines for goods at its stations. A railway company bound to supply boats for a ferry may employ the boats when not wanted for the ferry in excursions to places not mentioned in its acts of incorporation. But when the special act of incorporation provided that lands purchased by the company should vest in them for the use of a certain navigation, but for no other use or purpose whatever, it was held that the company could be restrained at the suit of a neighboring land-owner from using a reservoir constructed upon the purchased lands for the purpose of letting boats for hire."

1 Mallet v. Simpson, 94 N. C. 37; 55 Am. Rep. 595.

2 Brown & Theobald's Railway Law, 96; citing Attorney-General v. Great Eastern R'y Co. 11 Ch. Div. 449; 48 Law J. Ch. 428; 5 App. C. 473.

3 Attorney-General v. Great Eastern R'y Co. 11 Ch. Div. 449; S. C. 48 Law J. Ch. 428; 5 App. C. 473; Browne & Theobald's Railway Law, 97. 4 London etc. R'y Co. v. Price, 11 Q. B. Div. 485; Browne & Theobald's Railway Law, 97.

5 Forest v. Manchester etc. R'y Co. 30 Beav. 40; Browne & Theobald's Railway Law, 96.

6 Bostock v. North Staffordshire R'y Co. 5 De Gex & S. 584; 4 El. & B. 798; 3 Smale & G. 283; Browne & Theobald's Railway Law, 96.

§ 510. Additional examples-Of fostering other enterprises.—Whatever be a company's legitimate business, it may foster it by all the usual means, provid

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ed it do not entangle itself in affairs with which it has no legitimate concern.' It is not essentially ultra vires of a corporation to purchase stock in another corporation. Thus, a railway company may lawfully make advances of money or supplies to another railway corporation to enable it to complete its line, when the latter is to operate as a natural feeder to the former, taking the bonds or stock of the latter as collateral security. And unless precluded by its charter, a corporation may acquire a joint interest in the ownership of a ferry, and may enforce an accounting for its proportion of the profits. In New York authority is conferred by statute upon any railroad company, created under and by the laws of that State or of any adjoining State, to subscribe for, take and hold the stock of union depot companies created under that act, in such amounts as the directors of the subscribing company may, from time to time, deem best for its interests.5

1 Green's Brice's Ultra Vires, 88.

2 Hill v. Nisbet, 100 Ind. 311; Evans v. Bailey, 66 Cal. 112. Salmons v. Laing, 12 Beav. 339. Vide supra, § 81.

Contra,

3 Taylor County v. Baltimore etc. R. R. Co. 35 Fed. Rep. 161; 4 R'y & Corp. Law J. 6, 10.

4 Hackett v. Multnomah R'y Co. 12 Or. 124; 53 Am. Rep. 327. 5 N. Y. Laws of 1882, ch. 273.

511. The limit to which fostering other enterprises may extend.—But although a company may foster its legitimate business by all the usual means, yet "it may not go beyond this; it may not, under the pretense of fosterin, entangle itself in proceedings with which it has no legitimate concern. The courts have determined that such means shall be d.rect, and that a company shall not enter into en

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gagements, as, to render assistance to other undertakings, from which it anticipates a benefit to itself, not immediately but mediately, by reaction as it were from the success of the operations thus encouraged, and that all such proceedings inevitably tend to breaches of duty on the part of directors, and to an abandonment of its peculiar objects on the part of the corporation. Thus, it is held that a railway may not subscribe to a musical festival even for the ultimate object of increasing travel.2 And a subscription of a railway company to the Imperial Institute has been held ultra vires.3 So, it is said that a railway cannot secure the capital and guaranty the profits of a steamboat company run in connection with its line. So again, in a late case, where a railway corporation, having authority under its charter" to do all lawful acts properly incident to a corporation, and necessary and proper to the transaction of business for which it is incorporated," and possessing "such additional powers as may be convenient for the due and successful execution of the powers granted," attempted, in order to induce an elevator company to subscribe to its stock, to guaranty a certain dividend on the elevator stock, the act was held ultra vires and void.5 Likewise, a railway company may not form a partnership to buy and operate a steamboat on a river not constituting a part of the course of the railway.' Every member of the company having purchased its shares has a right to expect that the conditions upon which the charter was obtained will be performed; and it is no sufficient answer to a shareholder expecting his dividend, that the money has been expended upon an undertaking

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which at some remote period may be highly beneficial to the railway.'

1 Green's Brice's Ultra Vires, 88.

2 Davis v. Oll Colony R. R. Co. 131 Mass. 253; 41 Am. Rep. 221. But see State Board of Agriculture v. Citizens' Street R'y Co. 47 Intl. 497, 17 Am. Rep. 702, holding that a railway company may make a subscription to secure the permanent location of a State fair upon its line.

3 Tomkinson v. Southeastern R'y Co. 35 Ch. Div. 675; Browne & Theobald's Railway Law, 97.

4 Macgregor v. Deal etc. R'y Co. 22 Law J. Q. B. 69; 18 Q. B. 618; Colman v. Eastern Counties R'y Co. 10 Beav. 1; Browne & Theobald's Railway Law, 96.

5 Memphis etc. Co. v. Memphis etc. R. R. Co. 1 Pickle, 703.

6 Central R. R. etc. Co. of Georgia v. Smith, 76 Ala. 572: 52 Am. Rep. 353.

7 East Anglian R'y Co. v. Eastern Counties R'y Co. 11 Com. B. 775.

512. Examples of powers held not necessarily incidental. A corporation is not authorized to make a loan to a shareholder by a provision in its charter creating in its favor a lien upon his shares to secure any indebtedness from him to the company. A corporation, authorized by its charter to sell the real estate necessary for the transaction of its business when not required for the uses of the corporation, cannot lease such real estate, nor can it maintain under a lease an action for rent, such lease not being necessary to the exercise of the purposes for which it was chartered. By the constitution of Pennsylvania a company doing business as common carrier cannot engage in mining, nor manufacturing articles for transportation over its works, nor directly or indirectly engage in any other business; nor hold any land except such as is necessary to its business. This is the rule, also, at common law. Thus a railway company has no implied authority to work coal mines, except for its own use, nor to deal in coal for purposes of profit.* But

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where a company has worked collieries, a subsequent act authorizing it to dispose of its collieries within five years will legalize past workings and entitle the company to continue the workings down to the sale.5 A railway company cannot, as incident to powers expressly granted, build a canal; nor improve the navigation of a stream. No action lies for money due under a contract to employ a person for a matter outside of the ordinary business of the company.

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1 Webster v. Home Machine Co. 54 Conn. 394.

2 Metropolitan Concert Co. v. Abbey, 52 N. Y. Super. Ct. 97.

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3 Pa. Const. (1874), art. xvii, § 5. But mining or manufacturing companies may carry their products over their own railways of fifty miles in length.

4 Attorney-General v. Great Northern R'y Co. 8 Week. R. 556; 1 Drew. & S. 151; Browno & Theobald's Railway Law, 96.

5 Eccles Commercial Co. v. North Eastern R'y Co. 4 Ch. Div. 845; Browne & Theobald s Railway Law, 96.

6 Plymouth R. R. Co. v. Colwell, 39 Pa. St. 337; 80 Am. Dec. 526.

7 Munt v. Shrewsbury etc. R'y Co. 13 Beav. 1.

8 Cope v. Thames Haven Dock & R'y Co. 3 Ex. 841; Browne & Theobald's Railway Law, 103.

§ 513. Ultra vires acts apparently infra vires. There is a large class of ultra vires acts which are not per se beyond the corporate powers, but which for some other reason are unauthorized. Thus, a corporation may have authority to perform an act for a purpose designated in its charter, but no authority to do it for a different purpose.1 Again it may be authorized to incur indebtedness to a specified amount, but borrowing in excess of that amount, is ultra vires. Thirdly, where the charter requires corporate acts to be done in a certain manner or prescribes certain preliminaries to the exercise of a power, the disregard of these provisions renders the action of the company ultra vires.3

BEACH ON RAILWAYS-53

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