charter does not authorize the corporation to execute a mortgage; it therefore could not do so: Commonwealth v. Erie & N E. Railroad Co., 3 Casey, 339. The act under which the second mortgage was made, authorized the borrowing money to improve and develop the lands; the mortgage was authorized by the stockholders to discharge the present indebtedness, and provide for future obligations; it was therefore ultra vires. The lands were conveyed to the corporation under the condition in the charter that there should be an annual dividend; when that failed the land owner had the right to have his stock canceled, and the land reconveyed to him: Pitts. & C. Railroad Co. v. Stewart, 5 Wright, 55; Turnpike Co. v. Wallace, 8 Watts, 316. Neither was there power to sell the lands to the mining companies, and take in payment their stock, and thus deprive themselves of the means of carrying out the objects of their charter: Bedford Railroad Co. v. Bowser, 12 Wright, 30. The plan for the public sale of the lands gave a preference to shareholders who were creditors of the company, and was in violation of the rights of the others: Reese v. Bank, 7 Casey, 79. The directors were liable individually for injurious acts or omissions which they did not labor fairly to avert: Kane v. People, 8 Wend. 203; Robinson v. Smith, 3 Paige, Ch. 222; Koehler v. Iron Co., 2 Black, 715; Percy v. Milander, 3 Louisiana, 568. If the act is clearly ultra vires, the director is liable, though acting honestly: Spering's Appeal, 21 P. F. Smith, 11.

H. G. CLAY, J. G. JOHNSON, G. W. BIDDLE and J. A. CLAY, for appellees.-Directors are liable only where they have been guilty of some fraud on the corporation or connived at it in others: Spering's Appeal, 21 P. F. Smith, 11; Hodges v. N. E. Screw Co., 1 R. I. 312; Calhoun's Estate, 6 Watts, 185; Neff's Appeal, 7 P. F. Smith, 91; Konigmacher v. Kimmer, 1 Penna. R. 215; Eyster's Appeal, 4 Harris, 372; Dundas' Appeal, 14 P. F. Smith, 325; Knight v. Lord Plimouth, 3 Atkyns, 480. The plaintiffs have been guilty of such laches. as prevent them from obtaining relief: Graham v. Birkenhead Railway Co., 2 Maen. & G. 146; Ffooks v. Railway Co., 19 Law & Eq. 7; Cooper v. Hubbook, 30 Beav. 162. Protests alone are not sufficient: Clegg v. Edmondson, 8 DeG.,

Macn. & G. 787; Gr. West. Railway Co. v. Oxford, 3 Id. 318; Peabody v. Flint, 6. Allen, 57; Fuller v. Melrose, 1 Id. 166; Hilton v. Granville, 1 Craig & Phil. 292; Leaming v. Wise, 23 P. F. Smith, 173; Negley v. Lindsay, 17 Id. 226; Ashhurst's Appeal, 10 Id. 290. The primary duty of the company was to sell their lands; unless such road as the Sunbury & Erie Railroad were built this could not be accomplished; the power to subscribe for the stock was necessarily incidental. The act of 1852 gave this power; being an enabling public act, it was not necessary that the stockholders should accept it, and it was a general law when this company was incorporated: Brown v. Commissioners, 9 Harris, 37; Commonwealth v. Slifer, 3 P. F. Smith, 71; Commonwealth v. Montrose, 2 Id. 391. The company having authority to contract debts, the bonds are good, though the mortgages were unauthorized: McMasters v. Reed, 1 Grant, 47; Commonwealth v. Perkins, 7 Wright, 402. A purchaser of a bond has the right to presume that every prerequisite to give it force has been complied with: Commonwealth v. Pittsburg, 10 Casey, 520. A power in a corporation to purchase real estate implies a power to sell and mortgage: Jackson v. Brown, 5 Wend. 590; Angell & Ames on Corp., 200; Barry v. Merchants' Exch. Co., 1 Sandf. Ch. 280; Brady v. Meyer, 1 Barb. 584; Curtis v. Leavitt, 15 N. Y. 9; Leavitt v. Blatchford, 17 Id. 521; Barnes v. Ontario, 19 Id. 152; Fay v. Noble, 12 Cush. 1; Davis v. Meeting House, 8 Metc. 321; White Water Canal Co. v. Vallette, 21 Howard, 414; Strauss v. Eagle Ins. Co., 5 Ohio, 59. A power to borrow implies a power to mortgage: Susquehanna Bridge Co. v. Ins. Co., 3 Md. 305; Richards v. Merrimac Co., 44 N. H. 127; S. P. 4 Metc. (Ky.) 199; Leggitt v. N. J. Bank Co., 1 Saxton, 541; Gordon v. Preston, 1 Watts, 385; Zane v. Kennedy, 23 P. F. Smith, 182. A director or officer of a corporation who is its creditor, may purchase its property: Murray v. Vanderbilt, 39 Barb. 157; Mickles v. Rochester Bank, 11 Paige, 119; Worcester Turnpike Co. v. Willard, 5 Mass. 80; Middlesex Turnpike v. Swan, 10 Id. 384; Ashhurst's Appeal, 10 P. F. Smith, 290.

Mr. Justice GORDON delivered the opinion of the court, October 12, 1874.

In the absence of a demurrer, we treat as waived those objections to the bill which are urged on the ground of multifariousness, both as to the parties and the relief prayed for.

Exceptions of this kind are but technical, and if brought to the notice of the court in a formal manner, and at a proper time, opportunity is furnished to the plaintiff to meet them by amendment. If, however, the defendant does not see proper thus to bring them to the notice of the court, it will be presumed that he elects to proceed with the case on its merits.

Besides this, the court generally has power, by its decree, to meet and obviate any difficulties that may arise from causes of this kind. We therefore proceed, at once, to the investigation of the charges made against the directors of the McKean and Elk Land and Improvement Company, who are the real defendants in this case.

The plaintiffs, shareholders of the stock of this company, charge the directors with a mismanagement of the affairs of this corporation, so obvious and gross, and so willfully perversive of the charter thereof, as to amount to a fraud upon their rights and interests. It is for cause of this kind that our intervention as a court of equity is demanded.

That a bill may be maintained against directors personally, under circumstances such as above alleged, is well established by many authorities. Among the most recent we cite the case of Spering's Appeal, 21 P. F. Smith, 24.

Not only may the shareholder thus call the directors to a formal account where he has been fraudulently deprived of money justly belonging to him, but he may also, under proper circumstances, interpose for the protection of the company itself: Gravenstine's Appeal, 13 Wright, 310, THOMPSON, J.

Having thus disposed of the technicalities incumbering the cise, we proceed to examine the specific charges brought by the plaintiffs against the defendants, and upon the truth or falsehood of which this case must be determined.

The directors, defendants, are charged with the commission of the following acts, either wholly without warrant or in excess of the powers vested in them by the charter of incorporation, viz.:

1. Subscribing for sixteen hundred and twenty-five shares

of the Sunbury and Erie Railroad Company's stock, to be paid for by one hundred thousand dollars in cash, and five thousand acres of land.

2. Executing two mortgages upon the land of the company, one dated February 1, 1863, and the other June 22, 1867; the first to secure the payment of bonds, therein recited, to the amount of two hundred thousand dollars, and the second to secure the payment of like bonds to the amount of two hundred and sixty-seven thousand dollars.

3. Executing, in the year 1865, deeds for a large body of the company's land, to the New York and Erie and the Erie Mining Companies, and taking in exchange therefor 11,750 shares of their stock.

4. Selling 35,600 acres of the company's land to the stockholders, including themselves, to be paid for in the manner following, viz.: sixty-two per cent. in the stock of the corporation, thirty-six per cent. in the bonds thereof, and but two per cent. in cash.

5. Erecting saw mills, a hotel and other buildings upon the corporate property.

In this brief of the plaintiff's specifications of the misdeeds of the defendants we have not included one or two of minor import, which we may now notice and dispose of.

It is alleged that Mr. Watts has persistently since November, 1859, endeavored to purchase from the directors so much of the lands of said company as he might justly be entitled to, offering to pay for the same in shares of its stock, and that they have as persistently refused to accede to his offers.

It is further alleged that they refused a bid of twenty-five dollars per acre from one Mr. Putman for four thousand acres of said lands.

In the first of these alleged cases, we are not sufficiently informed, from the evidence, to determine whether the directors did well or ill in rejecting these offers.

In the second case, the evidence leaves it very doubtful whether any such offer was made with the bona fide intent to purchase.

Admit, however, that this offer was made in good faith, and that in both cases the propositions were imprudently rejected, yet, as they were matters resting wholly in the judg

ment and discretion of the directors, they are beyond our power of review. Their conduct in the premises may have been unwise, but it was not legally reprehensible.

Without regard to the order of the charges as contained in the bill, we proceed to discuss the items thereof as they present themselves to our mind in apparent legal sequence. First, then, had the directors power to contract debts for the company, and to execute bonds and mortgages to secure the payment thereof? In the case of the Commonwealth ex rel. Reinboth v. The Councils of Pittsburg, 5 Wright, 281, Justice STRONG says: "The power to execute and issue bonds, contracts or other certificates of indebtedness, belongs to all corporations, public as well as private, and is inseparable from their existence." If this be good law, and we think it is, the question as to the power of the directors of the McKean and Elk Land and Improvement Company to contract debts and issue the bonds of the corporation therefor, would seem to be settled. The very power to contract necessarily involves the cognate power to create debt; and a corporation without such power would be a body without life, utterly effete and worthless. If, however, it be objected that one may have the power to contract debts binding upon his principal, and yet not have the power to bind him by deed, it is answered, these directors have such power under the charter. They have the power to d spose of the whole of the company's lands, by deed or lease, and as they possess this superior power, the minor one of the mortgaging those lands upon a proper occasion, and for a proper debt, may be inferred: Lancaster v. Dolan, 1 Rawle, 231; Gordon v. Preston, 1 Watts, 385.

The inquiry, then, is not as to the general authority of these men to contract debts on the credit of the company, and to provide for their payment by issuing of bonds secured by mortgage, but it is rather, had they the power to contract the specific debts complained of? If not, was the contracting thereof so clearly beyond their powers that we must impute to them the commission of a willful wrong or a carelessness so obvious to ordinary discretion that it amounts to the same thing?

There is nothing in the evidence which tends to show that what these directors did in the premises was intended to