enabling act, there neither is, nor could be, a corporation, either de jure or de facto, the validity of the existence of the corporation may be attacked by any one, except the purported corporation and such other persons as are estopped by force of irresistible equities38.

§12. Construction of Charter.

The purpose of construction is to arrive at the true intent of the lawmaker, and is not merely to ascertain the abstract meaning of the words employed. In construing a charter, the following rules, so far as they are applicable, control:

(a) Words are to be given their usual and ordinary meaning-39

(b) When the words used are inexplicit, the legislative intent may be gathered from the general scope and purpose of the act, the objects sought to be accomplished, and the settled policy, il any, of the State10.

(c) Every provision of an act must be presumed to have a purpose, and every word a meaning, and, if possible, the construction should be such as to make each provision operative and each word effective11.

perpetrating a fraud, it was held that those who dealt with the organization, even though it had a de facto existence, were not estopped from denying the validity of its organization.

38. Eaton v. Walker, 76 Mich. 579-590; Green v. Graves, 1 Doug. (Mich.) 351-372; Hurlbut v. Britain, 2 Doug. (Mich.) 191-195; Burton v. Schildbach, 45 Mich. 504-510; Mok v. Detroit etc. Ass'n, 30 Mich. 511. See also State v. How, 1 Mich. 512; Wheeler v. Clinton Canal Bank, Har. Chan. 449. See also Doyle v. Mizner, 42 Mich. 332337. In the case last cited, Chief Justice Campbell states the doctrine as follows: "There are certainly many cases in which a recognition of corporate existence by dealing with the corporation will estop from questioning it. But this doctrine rests on the ground that such action creates relations and encourages conduct which there

may be difficulty in undoing. In ordinary cases such recognitions have been considered as binding, but this rule is one originating in equitable principles, and can not be applied universally. There would be no sense in applying it where no new rights have intervened, and where such recognition has itself been brought about by fraudulent dealings carried on for the very purpose of entrapping a party into the action upon which such recognition is rested. If there was no corporation in fact, and if there are no facts which make it legally unjust to forbid its denial, it is difficult to understand what room there is for an estoppel."

39. Green v. Graves, 1 Doug. (Mich.) 351-354.

40. People v. Michigan Central R. Co., 145 Mich. 140.

41. Attorney General v. Detroit & E. P. R. Co., 2 Mich. 138.

(d) Where the legislative intent is in doubt, a construction repugnant to, or inconsistent with, the language of the act, cannot be adopted for the purpose of giving effect to the supposed legislative intent42.

(e) When the legislative intent clearly appears from the language of the act itself, the intent must prevail regardless of other rules of construction43.

(f) Whatever is excluded from the grant by exception or reservation, remains in the grantor**.

(g) The express terms of the grant will not be enlarged by construction to include purposes not reasonably within the meaning of the grant45.

(h) Where the court is in doubt as to the construction of a charter, the doubt will be resolved in favor of the State46.

(i) Where a charter has been enjoyed without question for a long period of time, the practical construction placed upon it by the State and the people will be adopted by the courts, unless clearly violative of some constitutional provision17.

42. Green v. Graves, 1 Doug. (Mich.) 354; People v. Crucible Steel Co., 150 Mich. 563-567; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 44 L. ed. 657.

43. Mich Cent. R. Co. v State, 148 Mich. 151-156.

44. Negaunee Iron Co. v. Iron Cliff Co., 134 Mich. 264-280.

45. Stewart v. Father Matthew Society, 41 Mich. 67.

46. Detroit v. Detroit & Howell P. R. Co., 43 Mich. 140. The construction most favorable to the State will always be adopted when it appears that the corporation is endeavoring to exceed its charter powers or to evade its chartered duties or liabilities. In the lan

guage of Chief Justice Marston: "Corporations like individuals, should observe in good faith the letter and spirit of their agreement, and of the accepted terms and conditions imposed upon them, and they should not be permitted, while exercising the right conferred, to make a careful study and effort to evade the responsibilities and restrictions imposed upon them; and if any doubt exists as to the right claimed by the corporation, that doubt should be solved in favor of the public."-Detroit V. Detroit Mutual Gas Light Co., 43 Mich. 594-607.

47. Detroit City R. Co. v. Mills, 85 Mich. 634-646; Frey v. Michie, 68 Mich. 323-327.

CHAPTER III.

POWERS AND FRANCHISES.

$13. Scope of Corporate Powers.

$14. Power to Contract.

$15. Power to Acquire, Hold and Transfer Property.

$16. Power to Sue and to be Sued.

$17. Power to Have Perpetual Succession.

$18. Power to Have a Corporate Seal.

$19. Power to Make By-Laws.

$20. Power to Act as a Trustee.

$21.

Power to Incur Partnership Liability.

$22. De Facto Powers.

$23. Corporate Franchises.

§13. Scope of Corporate Powers.

Every corporation has such powers as are expressly conferred by its charter, together with such auxiliary powers as are reasonably necessary to make the express powers effective1. Where a corporation is organized to carry on a certain business, all of the incidents and departments of that business are included. Thus a corporation having general authority to make wire, has authority to make all kinds of wire, including barbed wire2. But a corporation organized for one general purpose has no power to enter upon a different general purpose, in the absence of express legislative authority. For example, a corporation organized to construct and operate a railroad cannot engage in banking, unless authorized3.

1. Thompson V. Waters, 25 Mich. 214-227. In this case Chief Justice Christiancy said: "The act of incorporation, in effect, gives to the corporation substantially the powers and franchises of a natural person, except as they are in some way restricted by the act of incorporation, or some other law of the State creating it." Eureka Iron & Steel Works v. Bresnahan, 60 Mich. 332-338. In this case it was said: "Corporations may transact all such matters as, being auxiliary to their primary

business are transacted by ordinary individuals, under similar circumstances." See also Attorney General v. Oakland County Savings Bank, Walk. Chan. (Mich.) p. 90; People v. Oakland County Svgs. Bank, 1 Doug. (Mich.) 282; Orr v. Lacey, 2 Doug. (Mich.) 230; People v. River Raisin & L. E. R. Co., 12 Mich. 389.

2. Harrison Wire Co., v. Moore, 55 Mich. 610.

3. People v. River Raisin & L. E. R. Co., 12 Mich. 389.

Regardless of charter provisions, a corporation has power to perform all duties imposed upon it by law, and this whether such duties are express or implied. As creatures of the law, corporations must abide by the law of the State creating them. A corporation organized in this State cannot, without legislative authority, subject itself to paramount control by a corporation of another State".

§14. Power to Contract.

The indispensable and most important active power of a corporation is its power to contract. Within the scope of the corporate purposes, this power exists in all corporations as fully as in natural persons. The contracts of corporations are governed by the same general rules of law that apply to contracts of private individuals. It is, however, competent for the legislature to prescribe the form in which future corporate contracts shall be mades.

15. Power to Acquire, Hold and Transfer Property.

The power to hold property, real and personal, is frequently, perhaps usually, conferred in express terms by the general law9. When this power is not expressly granted, it exists nevertheless by implication, to such extent as may be reasonably necessary to enable the corporation to enjoy its franchises and attain its objects. Beyond this it can not go1o.

The power to acquire, hold and deal with property is further limited by statutory restrictions and considerations of public

4. Knight v. Mich. Female Seminary, 152 Mich. 616-618.

5. Lamphere v. United Workmen, 47 Mich. 429. In this case it appeared that Lamphere was a member of a subordinate lodge, under control of a grand lodge incorporated in Michigan. He was suspended by the grand lodge for non-compliance with an order of the supreme lodge, a Kentucky corporation. Held, that the suspension was illegal for want of authority. The Michigan corporation had no power to subject itself, or its members, to the authority of a foreign corporation unless

authorized by law to do so.

6. Cicotte v. St. Anne's Church, 60 Mich. 552; Eureka Iron & Steel Co. v. Bresnahan, 60 Mich. 332-338; McCracken v. Halsey Fire Engine Co., 57 Mich. 361.

7. Eureka Iron & Steel Co., v. Bresnahan, 60 Mich. 332-338.

8. McGannon v. Fire Ins. Co., 127 Mich. 636-643. See also Stimpson v. Muskegon Booming Co., 100 Mich. 347-350; Wellman Railway Co., 83 Mich. 592.

V.

9. C. L. 1897, Sec. 8533; Act 232 of 1903, Sec. 14.

10. Chapman v. Colby, 47 Mich. 46-51; Bank of Michigan v. Niles, 1 Doug. (Mich.) 401-405-410.

policy. Under our Constitution, real estate not occupied by the corporation in the exercise of its franchises, may not be held for a period longer than ten years11. Bulk sales of corporate property should be made in accordance with the Michigan "bulk sales" law12. Public policy forbids that a corporation shall purchase its own shares to the impairment of its capital stock13. In general, a corporation has no power to acquire stock in another corporation11, although there are both practical and