1 Monument. Bank v. Globe Works, 101 Mass. 57 ; Mott v. Hicks, 1 Cow. 513 ; Banking Ass. v. White Lead Co., 35 N. Y. 505; Oxford Iron Co. v. Spradley, 46 Ala. 98.

2 Railroad Co. v. Howard, 7 Wall. 412; Olcott v. R. R., 27 N. Y. 546; Lucas v. Pitney, 27 N. J. L. 221; Richmond R. R. v. Sneed, 19 Grat. 354; and other cases cited Morawetz on Corp. sec 178.

In McCalmont v. R. R., U. S. Cir. Ct. Phil. 1881, 10 Weekly Notes, 338, it was held that the power in a charter to borrow money does not include the power to issue irredeemable bonds entitling the holder merely to a contingent share in the profits. " In one respect," it was said by McKenna, J., "and in one only, does the plan proposed resemble a loan, and that is in the result to be attained. They are both expedients for raising money, but the method of accomplishing this result is of the essence of the power of the corporation. If its employment has not explicit legal sanction, it cannot be made available. If the defendant were offered a rental for its property amply sufficient to relieve it from the burden of embarrassment with which it is now struggling, unless it could show that its legislative creator had endowed it with a right to make a lease, it could not accept such relief. Thomas v. West Jersey Railroad Company, 101 U. S. 82. And, although it has power to acquire real estate for all necessary corporate purposes, no one would maintain that it could lawfully enter into a contract for the purchase of real estate merely to resell and thereby realize large gains. Authority to raise money by borrowing does not imply the use of another and different method of raising it, however well adapted to the end it may be. Even in the prospectus issued by the president of the defendant (Exhibit I) the proposed issue of ' deferred bonds' is not in any aspect treated as a loan, and the system is correctly stated to be new in the United States, and to have been frequently adopted in Great Britain with great benefit to the companies and to subscribers. But we know that in Great Britain this ' system' is expressly authorized by statute, and hence it may be assumed that such legislation was deemed necessary to legalize a resort to it. Is not this suggestive of the sec 139. The stockholders of a corporation may enjoin it from entering into operations foreign to the object for which it was inference that, although it has been proved to he of great benefit in Great Britain, it is 'new' in this country because it has been regarded as without necessary legislative authorization?" In Thomas v. R. R., ut supra, Miller, J., said: "We take the general doctrine to be in this country, though there may be exceptional cases and some authorities to the contrary, that the powers of corporations organized under legislative statutes are such, and such only, as those statutes confer. Conceding the rule applicable to all statutes, that what is fairly implied is as much granted as what is expressed, it remains that the charter of a corporation is the measure of its powers, and that the enumeration of these powers implies the exclusion of all others."

The question of the validity of the Reading bonds came before the Supreme Court of Pennsylvania, in March, 1882, and by a majority of four to three it was held that the corporation had power to execute the bonds. From the opinion of the majority of the court by Pax-son, J., the following passages are extracted :-

" We are in no doubt as to the power of the Philadelphia and Reading Railroad Company to issue the ' deferred income bonds' described in this bill. So far as the mere borrowing of money is concerned, it is not necessary to look into the character of the company for a grant of express powers. It exists by necessary implication. 'As a general proposition, the right of private or trading corporations to issue promissory notes, bonds, or other evidences of indebtedness, unless restrained by their charters or the law of the land, may be conceded.

" 'The reason is plain. Such corporations are organized for the purposes of trade and business, and the borrowing of money and issuing of obligations therefor are not only germane to the objects of their organization, but necessary to carry such objects into effect.'

' There being no objection, therefore, on the ground of want of power, is there anything in the form of the transaction to render it ultra vires ? We learn from the pleadings that in May, 1880, the company failed and passed into the hands of receivers ; that at the time of such failure it had a floating or unfunded debt of upward of $10,000,000 ; that a large amount of property, mainly stocks and bonds of great value, had been pledged to secure said debt; and that said stocks and bonds were subject to the risk of being sold at forced sales at a great sacrifice; that the president and managers of the company, in order to pay this floating debt, and thereby regain possession of the collaterals, determined to ask the stockholders to contribute $10,000,000 for such purpose, for which they proposed to give them $34,300,000 of deferred income bonds on which interest is to be deferred to a dividend of 6 per cent. on the common stock of the company, and thereafter to take all revenues up to 6 per cent., and then to rank pari passu with the common shares for further dividend.

"It will thus be seen that the stockholder who advances $15 receives a bond for $50, which is irredeemable, and which is not entitled to interest until after 6 per cent. has been paid upon the common stock.

"The objections that have been made to this scheme are twofold: chartered;1 and it is no defence to such an application that none of the parties owning the stock at the time of the act complained of, objected to its consummation.1 The corporation may not only be compelled to abandon acts which it has no right to do, but it may be compelled to do acts its charter requires.2 These functions it cannot surrender.3 When, also, funds are contributed by stockholders to a corporation, they have a right to insist that these funds shall not be diverted to an object utterly distinct. And even the unanimous consent of the shareholders for the time being will not validate,as against subsequent stockholders without notice, transactions utterly foreign to the object for which the company was chartered.4 But it is not necessary that an authority, to be sustained in execution, should have been expressly given. It is enough if it be implied.5 And a party applying for aid of this class must show that he has a real interest on behalf of which he claims protection. If the application, though nominally from a stockholder, is really to subserve an adverse interest, it will not be regarded as a ground for interference.6 It is no bar to redeemable ? The equivalent is paid annually in the shape of interest.