its transactions.'

The charter being the instrument

2

of the company's creation and embodying the limitations of its legal existence, exerts the most obvious influence upon its transactions, and whether abroad or at home it can do nothing which does not fairly fall within the scope of that instrument. It cannot engage in its new home in a business which was beyond the scope of its powers in the domicile of its creation.' And the powers granted must be exercised in accordance with the terms of the grant. Thus, where the charter of a bank gives it no power to take title of real estate to itself, but directs that the corporation shall indicate some one of its officers in whose name and to whom all conveyances of real estate shall be executed for it, a conveyance to the bank directly will be held void. An express grant in its charter of authority to do business and acquire interests beyond the territorial limits of the sovereign creating it, is not essential to its recognition as a legal corporation. In the absence of restraining provisions such power will be presumed."

1 Hoyt v. Thompson, 19 N. Y. 207; Canada Southern R. Co. v. Gebhard, 109 U. S. 527, 537; Relfe v. Rundle, 103 U. S. 222, 226, 12 Cent. L. J. 130.

2 For an example of charter provisions which do not follow the company into the foreign jurisdiction, see the cases on contracts, usurious within the terms of the charter, post, § 19.

Blair v. Perpetual Ins. Co., 10 Mo. 559, 47 Am. Dec. 129, where a Missouri insurance company, authorized to make all kinds of insurances, to lend money on respondentia and bottomry, to lend its surplus and unemployed capital, and to reinsure its risks, was held incapable of conducting a banking business in New Orleans. See also Ohio L. Ins. & Tr. Co. v. Merchants' Ins. & Tr. Co., 11 Humph. 1, 53 Am. Dec. 742. 4 Metropolitan Bank v. Godfrey, 23 Ill. 579, 609. Compare Matthews v. Skinker, 62 Mo. 329.

5 Dodge v. Council Bluffs, 57 Iowa, 560. It was there held that the grant of authority in the charter of a New York corporation "to supply water for municipal and other purposes," would not be restricted to

§ 10. Same-Presumption of Notice of Charter Provisions. How far the rule, that persons dealing with a corporation are bound at their peril to take notice of its charter or articles of association,' is to be applied to foreign corporations is a question about which there seems to be some difference of opinion. Some of the cases make no distinction between foreign and domestic companies.' But there is, however, a manifest inconvenience, if not an impropriety, in this rule. To require parties dealing with such companies to take notice of the provisions of their charters, which are frequently contained in the private and special legislation of distant States, cannot fail in many instances to work gross injustice. Consequently we find that when the corporation has urged its want of power to make contract sued on, the defense has met with little favor. Thus, the New York Court of Appeals, in an action on certain railroad bonds, where the defendant contended that the plaintiff could not be regarded as a bona fide holder, for the reason that he was the first taker of the bonds and chargeable with notice of a restriction in the charter as to the price at which the bonds might be sold, the court said that the contract was, in all respects, a New York contract; the bonds were issued and sold in New York, and the interest and principal were both payable in that city; that there was nothing in the laws of New York which rendered the contract illegal; and that even if the

the supplying of water in the State of New York, merely for the want of a New York statute specially authorizing the company to do business beyond the limits of the State.

1 Mor. Corp. §§ 591, 595.

2 Thompson v. Hoyt, 19 N. Y. 207; Bank of United States v. Owens, 2 Pet. 527; Suydam v. Morris Canal and Banking Co., 5 Hill, 491. n.

FOREIGN STATUTES.

13

charter of the defendant, granted by the States of Illinois and Indiana, should be so construed as to contain prohibitions which would have rendered the contract illegal in those States, they would not have that effect in New York; that they would have no effect there except as restrictions upon the power of the corporation or its officers. And in City Fire Ins. Co. v. Carrugi,' the Supreme Court of Georgia held that provisions in the charter of a foreign fire insurance company, imposing duties. and conditions upon the insured different from those prescribed by general law, and being for the guidance of the company's officers and for the protection of its interests, will not affect the insured, unless it be charged and proven that he had notice of such conditions at the time the contract was made.

can

§ 11. Same-General Regulations.-There be no doubt that statutes of the corporate domicile providing for a winding up of the corporation in case of its insolvency, and for the vesting of all its assets in an official of the State, will be binding upon creditors and assets in the foreign jurisdiction. Such a law is, in effect, a part of the charter. And the American creditors of a Canadian corporation hold their rights subject to the power of the Canadian Parliament to pass laws authorizing a settlement with its mortgage creditors, forcing upon them other securities in place of their bonds, and such a settlement is binding on bondholders who

1 Ellsworth v. St. Louis, etc. R. Co., 98 N. Y. 553. See also Bank v. Dodge, 8 Barb. 233.

241 Ga. 660.

3 Relfe v. Rundle, 103 U. S. 222, 12 Cent. L. J. 130; Bockhover v. Life Association, 77 Va. 85, 6 Am. & Eng. Corp. Cas. 603.

In

are citizens of the United States and who sue in the Federal courts to recover on their bonds.' the case of a Missouri railway corporation operating a railroad in Texas, it was held that, under a statute of Missouri' providing that no officer, agent or employee of any railroad corporation shall be interested in any manner in furnishing materials and supplies to such company or in the business of transportation over the road, a lease of stockyards in Texas to the company's stock agent was invalid.' But in the much earlier case of Hoyt v. Thompson,* the New York Court of Appeals held that, while knowledge of the provisions of the charter of a foreign corporation will be imputed to one purchasing property, the title to which is derived from a conveyance or assignment of such corporation, he is not presumed to know the laws of a general character enacted by the foreign sovereignty; that the title of a citizen of New York to property derived through a conveyance by a New Jersey corporation which was insolvent at the time, cannot be impeached on the ground that a general statute of New Jersey declared transfers of insolvent corporations void as against creditors without showing an actual notice of such law. Such a statute is specifically applicable to the company in its corporate capacity. The application of a general rule of property to which the company may incidentally be subject is, with even more reason, limited to the corporate domicile. Thus, though a provision of

1 Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527.

2 Rev. Stat. Mo. 1879, § 818.

3 Rue v. Missouri Pacific Ry. Co., 74 Tex. 474, 8 S. W. Rep. 533.

4 19 N. Y. 207, s. c., 3 Bosw. 267.

5 American Bible Society v. Marshall, 15 Ohio St. 537; Thompson v. Swoope, 24 Pa. St. 474; O'Brien v. Wetherell, 14 Kan. 616.

the New York statute of wills, that "no devise of real estate to a corporation shall be valid unless. such corporation be expressly authorized by its charter or by statute to take by devise," will incapacitate a New York company, authorized by its charter "to hold, purchase and convey" real estate, from taking by devise in that State, yet such incapacity will not follow the company into another jurisdiction. The statute is a statute of wills, and its primary intent is to limit the capacity of testators to devise. "Its operation and effect upon corporations is measured and limited by the extent of its repugnancy to the claims of power and capacity which, but for its provisions, corporations might well make. And that repugnancy ceases just where the statute creating the repugnancy ceases to operate." Now, the New York statute of wills operates only on property situate in and controlled by the laws of that State. Beyond the limits of that State it can have no effect.' And so, though corporations are prohibited by statute in Pennsylvania from taking conveyances of real estate without legislative license, it has been held that such restriction will not affect the right of a Pennsylvania corporation to acquire real property in Kansas.'

§ 12. Limitations of Extraterritorial Power-Corporate Acts-Organization Meetings.-The recognition of the legal existence and corporate capacity of foreign corporations, which is extended ex comitate, does not vest them with an unrestricted faculty of

1 American Bible Society v. Marshall, 15 Ohio St. 537. See also White v. Howard, 38 Conn. 342; Fellows v. Miner, 119 Mass. 541; Thompson v. Swoope, 24 Pa. St. 474. Contra: Starkweather v. American Bible Society, 72 Ill. 51.

2 O'Brien v. Wetherell, 14 Kam. 616.