Parties interested in corporation First, that it is usurious ; and, second, that the transaction is not a borrowing of money, but the issuing of a deferred stock, which is beyond the power of the company.

"It is sufficient to say in regard to the first objection that as the interest on the 'deferred income bonds' is payable only upon a contingency, the contract is not usurious. Non constat that the company will ever pay anything to this class of bondholders. The contingency which will entitle them to interest may never arise, and is reasonably certain to be postponed for a considerable period. There is, therefore, no contract for the payment of more than legal interest. It is settled law that where the promise to pay a sum above legal interest depends upon a contingency and not upon the happening of a certain event, the loan is not usurious. Spain v. Hamilton, 1 Wall. 604; Lloyd v. Scott, 4 Peters, 205. This point does not need elaboration.

"The second objection is equally without merit. The bonds in question are not deferred stock either in form or substance. They are certificates of indebtedness under the seal of the company, with a recital that they are irredeemable; that they are entitled to no interest until after the common stock has received 6 per cent., and after that to come in pari passu with said common stock. They more nearly resemble a perpetual loan, with the interest indefinitely postponed. The holders would certainly have no right as stockholders.

"It is urged, however, that this transaction is not a borrowing of money within the implied powers of the company ; that the meaning of the word ' borrow' as applied to moneyed transactions involves an obligation to return the sum or thing borrowed. This is a narrow view of the subject. It is true we often use this word in the sense of returning the thing borrowed in specie, as to borrow a horse. But it is not limited to this sense.

" Among the definitions given by Webster are the following : First, ' To take or receive from another on trust, with the intention of returning or giving an equivalent for,' and, second, ' to take from another for one's own use; to adopt from a foreign source; to appropriate; to assume.' We need not give the apt illustrations with which the learned lexicographer adorns his text. While the borrowing of money is usually accompanied with a contract for the return of the principal at a stated time, it is not always nor necessarily so. The object of loaning money is to obtain a return in the way of interest. The interest is the consideration for the loan, the hire or price which is paid for the use of it. If I agree to pay $60 for the use of $1000 for one year, it is a borrowing of money. It is equally so if I contract at the same rate for the use of it for ten years. Is it any the less so when the contract is perpetual and the loan irmay enjoin it from acting ultra vires.

1 Lindley on Part. 3d ed. ii. 1059 ; 331; Thomas v. R. R., 101 U. S. 71 ;.

Field, Corp. sec 264-271 ; Salomons v. Colles v. City Directory Co., 18 N. Y.

Laing, 12 Beav. 339 ; Colman v. R. R., Sup. Ct. 397 ; Oil Creek Co. v. Trans.

10 Beav. 1; Beman v. Rufford, 1 Sim. Co., 83 Penn. St. 160. (N. S.) 550 ; Dodge v. Woolsey, 18 How.

"We do not think trading corporations any more than individuals are restricted in their moneyed transactions to the narrow meaning of the word ' borrow.' In its broader sense it implies a contract for the use of money. The terms of the contract are within the control of the contracting parties so long as they keep within the law. I see no legal objection to a contract for a perpetual loan. Such contract implies the voluntary advance of a sum of money, repayment of which is not to be demanded, presumably for some benefit or advantage to the lender. Such transactions are common in England, and are not unknown in this country. They are referred to in Union Canal Company v. Antillo, 4W. & S. 556, and in the appeal of the Zoological Society, 38 Legal Intelligencer, 403; and I am informed that the annuity bonds of the Lehigh Valley his suit, however, that he may have "collateral motives, or is acting on the suggestions of strangers or enemies to the company, or even has acquired his interest for the purpose of instituting the suit."1-A court of equity, therefore, will not only refuse to enforce an executory contract which is ultra vires, and as to which no bona fide third party is interested,2 or which conflicts with limitations of the charter;3 but on application of a stockholder, or any other party interested, such a court will enjoin further proceeding on such a contract.4

Railroad Company are irredeemable. So long as the company pays the interest the principal is not demandable. If the Reading Railroad Company may not accept money from its stockholders as a perpetual loan, I am unable to see how it could accept it as a gift."

That usage may authorize the officers of a corporation to issue notes, without a formal vote, supposing the corporation has power to issue such paper, see Great West. Tel. Co. in re, 5 Biss. 313.

1 Ashbury R. R. v. Riche, L. R. 7 H. L. 653.

2 Cohen v. Wilkinson, 12 Beav. 125.

3 Thomas v. R. R., 101 U. S. 71 ; Middlesex, etc. R. R. v. Boston R. R., 115 Mass. 347.

4 Ashbury R. R. v. Riche, L. R. 7 H. L. 653; Colman v. R. R., 10 Beav. 1.

5 Hart v. R. R., 7 Ex. 246, 8 Ex. 116.

6 Pollock, ut supra, 107; Robson v. Dodds, L. R. 8 Eq. 301; Forrest v. R.

R., 4 DeG. F. & J. 126; Kenton v. R. R., 54Penn. St. 401.

1 Pollock, ut supra, citing Bloxam v. R. R., L. R. 3 Ch. 337. In Pickering v. Stevenson, L. R. 14 Eq. 322, 340, Wickens, V. C, said : " The special powers given either to the directors or to a majority by the statutes or other constituent documents of the association, however absolute in terms, are always to be construed as subject to a paramount and inherent restriction, that they are to be exercised in subjection to the special purposes of the original bond of association.".