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tionable character. It has received the sanction of some of the most learned tribunals in the union and we see no reason to doubt the soundness of the principle. But such grants are seldom now made, there being contrary provisions or reservations of power in general laws or in the special laws or charters, almost invariably. And articles of association, under a general act of incorporation, are a part of the law under which a company is organized, and subject to alteration or repeal, the same as any other part of the general system.3 Such a grant is to be construed most strictly against the grantee and in favor of the State; nothing passes by implication, especially where it would be in derogation of the sovereign power; and if the grant does not, in clear and explicit language, make the franchise exclusive, it will not be so understood. The exercise of the corporate franchise, being exclusive of individual. rights, can not be extended beyond the letter and spirit of the act of incorporation. And exclusive privileges of supplying water to the public or of manufacturing gas, or of supplying light and heat to the public by any other means, do not extend to companies formed for the purpose of furnishing light by electricity. Powers, however, that are clearly implied with those incidental to the corporation are as much beyond the control of subsequent legislation, as those expressly

1 Parker, J., in Piscataqua Bridge v. New Hampshire Bridge, (1834) 7 N. H. 35, 63, citing Charles River Bridge v. Warren Bridge, 7 Pick. 393, 440; Livingston v. Van Ingen, 9 Johns. 525, 551; Ogden v. Gibbons, 4 Johns. Ch. 150; Gibbons v. Ogden, 17 Johns. 488; s. c. 9 Wheat. 74, 143.

2 For example, the right of the legislature, under the code of Georgia, S$ 1651, 1682, reserving to the State the right to modify or withdraw the charter of any private corporation created by it, and to amend the charter of a railroad company before the road is built, is not affected by executory contracts that may have been made for the construction of the road, and performance of such con

tracts, so far as they are rendered impossible by such amendment, will be excused, as such impossibility results from the act of the law. Macon & B. R. Co. v. Stamps, (Ga. 1890) 11 S. E. Rep. 442.

3 Sherman v. Smith, 1 Black, 587. 4 Charles River Bridge v. Warren Bridge, 11 Pet. 420; Gaines v. Coates, 51 Miss. 335; Delancy v. Ins. Co., 52 N. Y. 581; Lehigh Water Co.'s Appeal, 102 Pa. St. 515.

5 Beaty v. Knowler, (1830) 4 Pet. 162; Appeal of Scranton Electric Light & Heat Co., (1888) 122 Pa. St. 154; s. c. 9 Am. St. Rep. 79.

6 Appeal of Scranton Electric Light & Heat Co., (1888) 122 Pa. St. 154; s. c. 9 Am. St. Rep. 79, citing Emerson v. Commonwealth, 108 Pa. St. 111.

granted. These questions, however, are to be found more fully treated in the chapter upon the amendment and repeal of corporate charters.

$ 383. Notice of corporate powers.-The constitution of a corporation, and consequently the corporate powers, are presumed to be known as matters of law to all persons interested in the corporate enterprise or dealing with the corporation.2 Every person who enters into a contract with a corporation is bound at his peril to take notice of the legal limits of its capacity. And all persons dealing with a corporation are bound to take notice of its charter, constitution, by-laws, and manner of doing business. But if a contract would under ordinary circumstances be within the corporate powers, and the other party, exercising reasonable care, does not discover that by reason of the particular circumstances of the case the corporation is in that instance exceeding its charter privileges, it can not plead its want of authority as a ground upon which to avoid liability. There is much authority in favor of the

1 People v. Manhattan Co., 9 Wend. 351; People v. Marshall, 1 Gilman, 672.

2 Taylor on Corporations, § 264; Davis v. Old Colony R. Co., 131 Mass. 258; Relfe v. Rundle, 103 U. S. 222; Salt Lake City v. Hollister, 118 U. S. 256, 263; Bohmer v. City Bank, 77 Va. 445; Leonard v. American Ins. Co., 97 Ind. 299; Haden v. Farmers' &c. Assoc., 80 Va. 683; Spence v. Mobile &c. Ry. Co., 79 Ala. 576.

Pearce v. Madison &c. R. Co., 21 How. 441; Davis v. Old Colony R. Co., 131 Mass. 258; s. c. 41 Am. Rep. 221; Ashbury Ry. &c. Co. v. Riche, L. R. 7 H. L. 653; East Anglian Ry. Co. v. Eastern Counties Ry. Co., 11 C. B. 775.

4 Bocock v. Alleghany Coal & Iron Co., (1887) 82 Va. 913; s. c. 3 Am. St. Rep. 128; Elevator Co. v. Memphis &c. R. Co., (1887) 85 Tenn. 703.

5 Express Co. v. Railroad Co., 99 U. S. 191, 199; Zabriskie v. Cleve

land &c. R. Co., 22 How. 381, 398; Bissell v. Michigan &c. R. Co., 23 N. Y. 264; Davis v. Old Colony R., 131 Mass. 258, 260; s. c. 41 Am. Rep. 221; Charleston &c. Turnpike Co. v. Willey, 16 Ind. 34; Eastern Counties Ry. Co. v. Hawkes, 5 H. L. Cas. 331, 338. Cf. Fontaine v. Carmathen Ry. Co., 5 Eq. 322. Thus where directors have power to bind the company on certain conditions, a person dealing with them may assume that the conditions have been fulfilled. Potterdell v. Fareham Brick Co., L. R. 1 C. P. 674; Royal British Bank v. Turquand, 5 El. & B. 248; s. c. 6 Ell. & B. 327. And an innocent holder of negotiable securities which it is in the power of directors to issue is not bound to see that certain preliminaries on the part of the company which ought to have gone through have been gone through. In re Laud Credit Co., Ex parte Iverend & Gurney, 4 Ch. 460.

general rule that outsiders are not charged with knowledge of the by-laws of a corporation. Accordingly, it has been held that it is no defense to an action for breach of a contract by a corporation that, in entering into the contract, it violated its own rules, when that fact was within its knowledge at the time the contract was entered into. But where the want of power is apparent upon comparing the act done with the terms of the charter, the party dealing with the corporation is presumed to have knowledge of the defect and the defense of ultra vires is available against him.3

§ 384. Notice of powers of corporate officers. This doctrine of notice of corporate powers of course includes notice of the authority and powers of the agents and officers by whom only the corporation acts. Therefore persons dealing with the managers of a corporation must take notice of the limitations imposed upon their authority by the act of incorporation. Although a person dealing with a domestic corporation is charged with knowledge of the general law regulating corporations, statutory as well as unwritten, and even when dealing with the agents of a foreign corporation must likewise take notice of every limitation in its charter, yet he is not affected with notice of statutes of a general nature enacted by the foreign State, though they tend to abridge the corporate

1 Fay v. Noble, 12 Cush. 1; Ten Broek v. Boiler &c. Co., 20 Mo. App. 19; Kingsly v. New England Ins. Co., 8 Cush. 403; Mechanics' Bank v. Smith, 19 Johns. 115; AngloCalifornia Bank v. Grangers' Bank, 63 Cal. 359.

2 Samuel v. Fidelity &c. Co., (1888) 49 Hun, 122. Thus in a recent case it was held that parties contracting with a corporation without actual notice of rules adopted by it, by which it exempts itself from liability on contracts unless they are in writing and signed by its president, will not be bound by such rules. Walker v. Wilmington &c. R. Co., (1887) 26 S. C. 80.

Bissell v. Michigan &c. R. R. Co., 22 N. Y. 264.

4 Beatty v. Marine Ins. Co., 2 Johns. 109; Dabney v. Stevens, 2 Sweeney, 415, aff'd 46 N. Y. 681; Silliman v. Fredericksburg &c. R. Co., 27 Gratt. 119; Salem Bank v. Gloucester Bank, 17 Mass. 1, 29; Root v. Wallace, 4 McLean, 8; Zabriskie v. Cleveland &c. R. Co., 23 How. 381, 398; In re County Life Assur. Co., L. R. 5 Ch. 288, 293; Royal British Bank v. Turquand, 6 El. & Bl. 327; Ernest v. Nicholls, 6 H. L. C. 401, 419; Fountaine v. Carmarthen Ry. Co., L. R. 5 Eq. 316, 322. 5 Pearce v. Madison &c. R. Co,: 21 How. 441.

powers. Where certain classes of corporations, for instance banks, have established, recognized and well-known usages, all persons dealing with them through their agents, will be affected with notice of those usages, and the contracts of such corporations will be construed with reference to them. The question whether courts will take judicial notice of the powers of a corporation, is, of course, a totally different subject. It may be said, however, that it depends on whether the corporation is incorporated by special charter or under a general law. For courts will not take judicial notice of a special charter.3

1 Hoyt v. Thompson, 19 N. Y. 207; Bank of Chillicothe v. Dodge, 8 Barb. 233. Contra, City Fire Ins. Co. v. Carriage, 41 Ga. 660.

Taylor on Corporations, § 195; Renner v. Bank of Columbia, 9 Wheat. 581; Lincoln &c. Bank v.

Page, 9 Mass. 155; Whitwell v. Johnson, 17 Mass. 245; City Bank v. Cutter, 3 Pick. 414; Haddock v. Citizens' Nat. Bk. 53 Iowa, 542; J' ckson Ins. Co. v. Cross, 9 Heisk. 283.

3 Kelly v. Alabama &c. R. Co., 58 Ala. 489.

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