the state requires that certain corporate contracts shall be executed in a particular way, the method prescribed must of course be followed, but ordinarily a corporation may contract in the same way that an individual contracts through an agent. In order that a contract may bind a corporation, the officer or agent making it must have express or implied authority to make it. This matter is discussed in the section on Corporate Officers. In the chapter on Real Property will be found directions for the proper method of the execution of corporate deeds. "The old doctrine that corporations can act only by deed or instrument under seal has been very much modified. It has given way to the pressure put upon it by the great growth of corporate transactions, and the necessity for greater freedom in their operations, for the convenience of business. Such bodies may now act without a seal, very much as individuals can, except when otherwise provided by statute or their articles of organization." "The president of a corporation does not, by virtue of his office, possess authority to bind his company by contract. A corporation can only contract by authority of its board of directors in the absence of extraordinary powers given to some officer to so bind it, by some general or special law of the corporation; but such authority as regards the public, may be either expressly or impliedly given . . . . . Authority may be vested in the president of a corporation to bind it by contract, though no authority in that regard be given to him by any affirmative act of its board of directors, or any act at all intending to confer such authority, it being subject to be bound by the appearance of authority for which it is responsible, the same as a natural person. A corporation is estopped from denying in any particular instance that its president has the power which it has customarily allowed him to exercise in the face of the public."

Many small corporations do not have a seal at all, and in executing formal documents, such as deeds, mortgages, powers of attorney, etc. such corporations may dispense with the seal.

Ultra vires contracts.-Ultra vires means "beyond the power', and the term is applied in corporation law to the contracts and acts of corporations which it has no power to perform. Formerly a corporation was not bound by any contract which it made in excess of its powers, and could plead

its want of power as a defense to a suit upon it. But under the modern law a corporation cannot take advantage of such a defense, and is bound by such contracts. A stockholder of a corporation which attempts to enter into such a contract may, however, complain of the proposed action in a proper case, and may obtain an injunction against the corporation and its officers from entering into such a contract, and in some cases may prevent the performance of such a contract when already entered into. The tendency of modern law is to hold such contracts good and allow only the state and dissenting stockholders to question them. A corporation exceeding its powers may in a proper case be proceeded against by the state for a violation of its charter, and may be fined for doing so, or in flagrant cases, have its charter annulled.

A corporation organized for the purpose of dealing in dry goods had a claim against a retail dry goods dealer, and alleged that such retail dealer and others had conspired to defraud it and other creditors out of their claims. The corporation thereupon purchased the claims of such other creditors and brought suit on all of such claims, for a conspiracy to defraud. The court says: "It does not appear that such claims were in any way necessary to the preservation or enforcement of plaintiff's original claim or that such purchase was to effect in any way the purposes of its organization, so as to bring its action in that regard within the rules that a corporation may, to preserve its own property and protect its legitimate interests, acquire and enforce liens which would otherwise be outside of the purposes of its organization. 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 particularly specified in its charter, unless prohibited thereby or by some law of the state. From the foregoing, without further discussion, we must hold that plaintiff had no authority to acquire by purchase the various claims for damages on which a recovery was had. But it by no means follows that its want of power can be taken advantage of by the defendants in this action. Formerly want of corporate power was an effective weapon, both for defense and attack, in the hands of private parties; but, without any

change whatever respecting the general doctrine of ultra vires as applied to the acts of corporations acting outside of the purposes of their creation, there has been a gradual development in the direction of holding that none but a person directly interested in the corporation, or the state, can question such authority. Such development from the rigorous rule which anciently obtained was manifested in the adoption of the rule that, where a corporation has violated its charter in the purchase and acquirement of real estate, its title thereto and right to enjoy the same cannot be inquired into collaterally in actions between private parties or between the corporation and private parties--that it can be questioned only by the state."

"This and other courts have...often held that a corporation cannot violate its charter for pecuniary gain and retain the benefits of its illegal conduct by putting up the shield of ultra vires, or a person set himself up as the champion of the state in a court of justice to either punish or defend a corporation by an appeal to such doctrine in order to enable him or it to obtain or retain an unconscionable advantage. . . . The doctrine of ultra vires is a most powerful weapon to keep private corporations within their legitimate spheres and to punish them for violations of their corporate charters, and it probably is not invoked too often; but to place that power in the hands of the corporation itself, or a private individual, to be used by it or him as a means of obtaining or retaining something of value which belongs to another, would turn an instrument intended to effect justice between the state and corporations into one of fraud as between the latter and innocent parties. Such is the modern doctrine, evolved and settled in the progress of events, reaching from the time when private corporations were few and the doctrine of ultra vires invoked quite as freely as to them as to public corporations, to a time when substantially all restrictions to the formation of such private bodies were removed, and they were authorized and commenced to exist, great and small, everywhere for the purpose of conducting almost every kind of legitimate business. If such a body transcend its powers it commits a wrong against the state, and ordinarily it is for the state, only, to call it to account for such violation."

Liabilities for tort, etc.--The tendency of courts is to hold corporations liable for their acts in the same way that

individuals are held. There is sometimes difficulty in enforcing the same liability against a corporation on account of the fact that a corporation is an intangible and artificial being. It will therefore never become possible to hold corporations as fully as individuals in some cases. Whenever the commission of an act requires a certain mental attitude, a corporation cannot ordinarily be held. For instance, a corporation cannot be held liable for slander. An offence which is punishable by imprisonment alone cannot obviously be charged against a corporation. However, a corporation may practically be held to answer for any civil wrong as an individual is held, and may be guilty of crime when such crime can be punished by fine. The fact that an officer of a corporation acts for it in committing a civil wrong or crime does not of course excuse him personally from liability, on well known principles. It has been held that a corporation may be liable for conversion of property, assault and battery, infringement of patents and copyrights, for committing a nuisance, may be held for the fraud of its officers committed in its behalf, or conspiracy, for the negligence of its officers resulting in personal injury to person or property, etc. A corporation may be liable for contempt of court and such contempt punished by fine. In case such fine is not paid its property may be seized in satisfaction.

Office in state. -The statutes provide that "every corporation organized under the laws of this state, except such railroad corporations as own or operate railroads in another state as well as in this state in connection with their railroad in this state, shall have its principal office in this state and shall keep in such office its general and principal books of account, including its stock books, and its principal managing officer or superintendent shall reside within this state.......At least once in each year each stock corporation shall make and file in its principal office and keep on file there for the use of its stockholders a statement and abstract of the assets and liabilities of such corporation and of its financial transactions for the previous year, which statement shall be verified by the affidavit of the treasurer or other proper officer of such corporation, and shall contain a brief statement of the sources whence its receipts have been received, stated in classes, and a similar statement of its expenditures, showing the amount disbursed for each class of objects and purposes." Special provision is made for the keeping of the books of railroad corporations, and obtaining copies thereof,

Records to be kept.-"Every corporation shall keep a correct and complete record of all its proceedings, including such as relate to the election of its officers, and such record may be kept in any other than the English language when so provided in its articles of organization. Every corporation shall also keep a book containing the names of all stockholders or members since its organization, showing the place of residence, amount of stock held, time of acquiring stock or becoming a member, time of transfer of stock or cessation of membership of each respectively. If any officer, agent or servant of any corporation shall omit to make any entry in the books or records thereof which it is his duty to make as such officer, agent or servant, he shall forfeit no less than twenty-five nor more than one thousand dollars, and be liable for all damages thereby sustained."

SECTION IV.

STOCK AND STOCKHOLDERS.

Generally.-A person may become a member of a corporation in a number of ways. In corporations with stock, one may become a member by subscribing for a certain number of shares of stock before the corporation is organized, or after it is organized, or he may purchase such stock from the corporation after it is organized. He may also purchase the stock from one who is already a member of a fully incorporated corporation. Stock may also be acquired by gift or bequest, or in any of the other ways recognized by the law for the acquisition of personal property. When a corporation is organized without stock the method of becoming a member is regulated by the articles of incorporation and by-laws. Usually in such cases new members are elected to membership by those already members.

The capital stock of a corporation is the amount of money or other property which the stockholders have paid to the corporation or agreed to pay in; it is the amount which is fixed as the basis for the business operations of the corporation. The capital stock never changes in amount unless it is increased or decreased as provided by law. The "capital" of a corporation is the same thing as the capital of an individual, it includes all the assets of the corporation. The capital of a corporation may therefore vary whereas the capital stock cannot, unless changed as above stated. A corporation may