5. To make, amend and repeal by-laws and regulations, not inconsistent with law or its articles of organization, for its own government, for the orderly conducting of its affairs and the management of its property, for determining the manner of calling and conducting its meetings, the manner of appointing and mode of voting by proxy, and the tenure of office of its several officers, and such others as shall be necessary or convenient for the accomplishment of its purposes, and may prescribe suitable penalties for the violation of its by-laws, not exceeding in any one case twenty dollars for any one offense.

6. To take and hold property, both real and personal, to an amount authorized by law, and sell, convey or otherwise dispose of the same.

7. To mortgage all or any of the rights, privileges, authority and franchises, special, exclusive or otherwise, which have heretofore been or may hereafter be granted to or conferred upon it by any law of this state, and also its tolls, revenues and property, both real and personal, to secure the payment of its debts, or to borrow money for the purposes of the corporation, and no other, with the consent of a majority of its stockholders, or, if not a stock corporation, of a majority of its members, and to establish with a like consent, a sinking fund for the payment of its debts."

Subdivision seven of this section does not intend to make it necessary for a majority of the stockholders to give their consent in every case when it is necessary for the corporation to borrow money or give a mortgage. Such power exists impliedly, independently of this subdivision. "It becomes necessary to inquire what are the objects and purposes of the corporation, and from such objects and purposes to determine whether it is consistent with and reasonably necessary, under certain circumstances, for the corporation to borrow money to accomplish the purposes of the organization; and if it be found that, under some circumstances, the purposes of the corporation can only be conveniently and reasonably carried out by borrowing money, then, under the adjudicated cases, in the absence of any express provision forbidding the corporation from borrowing, the corporation may do so. . . . . It is a universally accepted principle that corporations organized generally to engage in a particular business have, as incident to such authority, the power to contract debts, in the legiti

mate transaction of such business, unless they are restrained by their charters or by the statute from doing so. It is likewise an equally well acknowledged rule that the right to contract debts carries with it the power to give negotiable notes or bills in payment of or security for such debts, unless the corporations are in like manner prohibited." As will be seen by reference to the section on Officers in this chapter, a corporation may allow its officers to exercise very extensive powers by implication, and will be estopped to deny their authority in appropriate cases. A corporation which has received a benefit under a contract which it claims to have had no authority to make, or that its officers had no authority to make, must return or account for such benefit before it will be heard to set up such want of authority.

General Powers.-The statute provides: "Every such corporation, when so organized, shall be a body corporate by the name designated in its articles, and shall have the powers of a corporation conferred by these statutes necessary or proper to conduct the business or accomplish the purposes prescribed by its articles, but no other or greater; and may take by gift, devise, purchase or otherwise, and manage and hold, and may, by a vote of a majority of the stock given at any regular meeting or at any special meeting duly called for the purpose, sell and convey or authorize to be conveyed all or any portion of the property owned by it, whether real, personal or mixed, and may, by a similar vote, mortgage or lease any such property whenever it shall be necessary for its business purposes or the protection or benefit of its property held or used for the corporate business, however the same may have been acquired. But no such corporation shall take or hold stock in any other corporation except upon and with the assent of the holders of three-fourths of the capital stock of both the corporation proposing to take such stock and the corporation in which it is proposed to be taken; . . . provided, also, that any corporation formed or organized or which may be formed or organized under or in pursuance of any law of this state for the purpose of mining, smelting, quarrying or any mechanical or manufacturing purpose, upon and with the assent of three-fourths of its capital stock, may, in its corporate capacity, subscribe for, purchase, take and hold stock in any corporation, foreign or domestic, formed for the purpose of manufacturing, creating or generating

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any kind of power or light to be used as a mechanical agency, when such power or light is to be used wholly or in part in facilitating the operations of such mining, smelting, quarrying or other mechanical or manufacturing company or the transaction of its business; . . . . . provided further that any corporation organized for the purpose of locating, building, encouraging and establishing manufactories and manufacturing establishments in this state, upon the assent of the holders of three-fourths of the capital stock thereof, may purchase, take and hold stock in and in its corporate capacity become a subscriber to the capital stock of any corporation so aided or encouraged to the amount of the actual cash paid or other property contributed to any such manufacturing corporation." Provision is also made for logging or lumbering corporations, street railway and electric light corporations to hold stock in other corporations, on certain terms.

"Corporations may take and acquire by lease, purchase, sale, conveyance or assignment and thereafter own, hold and enjoy any right, privilege or franchise heretofore or hereafter granted to or conferred upon any person or persons whomsoever by any law of this state in all cases where such right, privilege or franchise would be in direct aid of the business for which such corporation so acquiring or purchasing the same was organized." This section enables a corporation to sell a franchise owned by it; for instance, a street railway company may sell its franchise to another street railway company, or similar corporation, and such franchise may be sold on execution, or under foreclosure proceedings.

Decisions.-The following Wisconsin decisions will show the law in regard to corporate powers: "A corporation has only such powers as its organic act, charter, or articles of organization confer. This is elementary, but it includes such powers as are reasonably necessary to effect all the general purposes of the corporate creation, though not particularily specified in its charter, unless prohibited thereby or some law of the state." A corporation organized for the purpose of doing a dry goods business has no authority to purchase claims of others growing out of a conspiracy to defraud them and the corporation, when such purchase is not necessary to preserve the interests of the corporation, but under the doc

trine of ultra vires contracts, hereafter discussed, such want of power cannot be taken advantage of by a person sued on such claims.

A corporation has power to give a note and mortgage to raise money for use in its business. If it gives a note for a purpose not authorized, but might under certain circumstances have given a valid note, such unauthorized note is valid against the corporation if it reaches the hands of a bona fide holder.

A brewing company has power to guarantee the payment of rent by a saloonkeeper who is selling its beer. "They are not limited in law to the use of such means as are usual or necessary to the objects contemplated by their organization, but, where not restricted by law, may choose such means as are convenient and adapted to the end, though they be neither usual means, nor absolutely necessary. ... If the contract is within the general scope of the powers and purposes of the corporation, it will not be void, even if in some particulars it is in excess of those power, unless, by reason of such excess, it is against public policy. The purpose of the defendant's organization was to manufacture and sell beer. Doubtless it was competent to make any contract, which was convenient and adapted to further that purpose, which was not against public policy. No doubt, it was within its competency to rent a place for the sale of its beer by its agents or servants. To rent a place where one of its customers should retail its beer, would seem, in a similar manner, to further the purpose of its incorporation. ... The whole purpose was a scheme to make a market for the defendant's beer. . . . . The scheme was germane to the purpose of the corporation, and not foreign to it."

A corporation organized for the purpose of carrying persons and freight is not authorized to deal in grain or other produce. It probably would be lawful for such a corporation to deal in grain for storage and shipment, however, if necessary to keep ware-houses and boats, owned by the company, employed.

A railroad company cannot engage in any distinct branch of business not authorized by its charter. Thus, it cannot buy and hold lands not situated near its line of road, and which cannot be used in the construction or operation of its road.

A corporation cannot remove one of its officers before

his term of office expires except for good cause. It cannot act arbitrarily. "The power to remove, as an incident, would only be to remove for good cause shown; and that cause must be something affecting the character and qualifications of the incumbent, and showing his unfitness or want of capacity longer to discharge the duties of his position."

The fact that a corporation is authorized by law to borrow money on certain securities, or in a certain manner, does not negative its right to borrow money in other ways which it may adopt under its implied powers.

It should be noted here that although a corporation may make a contract which it has no authority to make, the corporation itself cannot plead its lack of power, nor can the person who makes such contract with it, or third persons. Under the doctrines of law relating to ultra vires contracts, which are of comparatively recent origin, such contracts bind the corporation and others making them, and only the state can proceed against the corporation for a violation of its charter, and the execution of such a contract may also be prevented by a dissenting stockholder of the corporation.

Power to buy own stock.-The question as to whether a corporation may purchase its own stock is one on which the courts are at variance. In Wisconsin, the law is that a corporation when solvent may do so, and it may do so generally when the interests of creditors are not injured by the purchase. The purchase of its own stock by a corporation virtually operates as a reduction of its capital stock, except that it may re-issue such stock. An excessive purchase of its own stock by a solvent corporation without a surplus would practically leave the corporation without capital to do business with, and such a course ordinarily is not advisable. A solvent corporation may also by a vote of its stockholders cancel a stock subscription, and creditors who become such after the time such subscription is cancelled cannot complain. "A corporation, not prohibited by its charter, may purchase its own capital stock, yet such power cannot be exercised by an officer of the corporation without special authorization in that regard by its board of directors."

Execution of corporate contracts.-Formerly is was necessary for a corporation to use a seal in making contracts. But such is not now the law, except in such cases in which the law specifically requires the use of a seal. If the law of