137; Hall v. Mut. Fire Ins. Co., 32 N. H., 297; Railroad Company v. Howard, 7 Wall., 413.

If the complainant in this case had, as a stockholder, asked a court of chancery to enjoin this corporation from mining in Colorado, it would have examined the charter, and if it had arrived at the conclusion that such mining was beyond the powers derived from filing the certificate in question, under our statute, would have issued the injunction. But this he did not do. On the contrary, he has participated in the work, and so long as there was hope of gain, he was willing the money should be borrowed by which the work was to be carried forward. The borrowing of the money was not, in itself, an act ultra vires, nor was the giving of the notes. Money was not borrowed to be used for an illegal or immoral purpose. The lenders have been guilty of no violation of law, nor wrong of any kind. The corporation has received their money and used it for a purpose, which, whether ultra vires or not, was unquestionably the sole purpose for which the corporators associated themselves together, and for which this complainant became a stockholder. Justice requires the corporation to repay the money it has thus borrowed and expended.

What we have said applies only to private corporations, organized for pecuniary gain. If, to increase their profits, they embark in enterprises not authorized by their charter, still, as to third persons, and when necessary for the advancement of justice, the stockholders will be presumed to have assented, since it is in their power to restrain their officers where they transgress the limits of their chartered authority. But municipal corporations stand upon a different ground. They are not organized for gain, but for the purpose of government, and debts illegally contracted by their officers cannot be made binding upon the tax-payers, from the presumed assent of the latter.

There are some vague charges in the bill of a conspiracy between the holders of the notes upon which the suit has been brought and some of the directors, but no facts are alleged showing, or tending to show, any wrongful or fraudulent intent. The alleged conspiracy seems merely to an be understanding between the holders of the notes and the majority of

the directors, by which the latter will allow the former to obtain a judgment on their notes, and we do not perceive why they should not. If the complainant has had the misfortune to associate himself with persons of less pecuniary responsibility than himself, for the purpose of carrying on a hazardous business in which heavy debts have been incurred, it is a misfortune of which the courts cannot relieve him, merely on a vague and general charge of conspiracy against his fellow stockholders or directors. No facts are alleged in this bill which can be made the foundation of relief.

As before remarked, the counsel of appellant has presented his case simply on the question of corporate power. We are of opinion the demurrer was properly sustained to the bill. DECREE AFFIRMED.

Mr. Justice SCOTT dissents.

LIABILITY FOR MONEY EXPENDED IN THE EXECUTION OF ULTRA VIRES CONTRACTS.

NINTH SELECTED CASE.

THE STATE BOARD OF AGRICULTURE V. CITIZENS' STREET RAILWAY COMPANY.*

It is the general doctrine that corporations possess the powers expressly conferred by law, and such implied powers as are necessary to enable them to exercise the powers expressly granted, and no others; yet although there may be a defect of power in a corporation to make a contract, if a contract made by it is not in violation of the charter of the corporation, or of any statutes prohibiting it, and the corporation has, by its promise, induced a party relying upon such promise and in execution of such contract to expend money and preform his part of the contract the corporation is liable on the contract.

From the Marion Common Pleas.

DOWNEY, J.-The question presented for our consideration and decision in this case is, whether the complaint to which

*Reported in 47 Ind., 407 (1874).

the demurrer was sustained in the court below is sufficient or not. The action was commenced November 21, 1868.

The complaint alleges that the Citizens' Street Railway Company was, and is, a corporation owning and running a street railway in the city of Indianapolis, Indiana, and to Crown Hill, etc.; that two of the streets on which cars are run extend to near the north boundary of the city, and one of the routes three miles beyond and near the grounds set apart for the holding of state fairs by the said State Board of Agriculture, a corporation having its principal office in Indianapolis; that the holding of said fairs is a source of great profit to the said street railway company; to-wit., to the amount of six thousand dollars at each fair, etc.; that, for the purpose of increasing the profits of said street railway company, and to further its interest the said company desired to procure the said State Board of Agriculture to hold state fairs upon the ground near the northern boundary of the said city, although it would occasion expense to the said Board of Agriculture; and for that purpose the said company, with the approval of the stockholders, in March, 1868, entered into an agreement with the plaintiffs, in writing, etc., as follows:

"As an inducement to the Indiana State Board of Agriculture to locate the annual state fair upon the State Board of Agriculture's fair ground, north of the city of Indianapolis (Camp Morton), for each of the years 1868, 1869, 1870, each of the undersigned hereby agrees to pay to the said State Board of Agriculture the amount set opposite his name, to be paid in three equal annual payments, on the first day of September, 1868, 1869, 1870, each of the subscribers to be responsible to the amount of his own subscription, but no farther; and subscriptions are upon the express condition that the state fair shall be located and held for the three years above stated. Said amounts to be paid without benefit from valuation laws.

"March 18, 1868.

"Signed: Citizens' Street Railway Company, one thousand dollars."

The said plaintiff, not doubting the power of said railway company to make said subscription and contract, has per

formed all the conditions in said contract to be performed by her up to this time, and on the faith of said subscription by said company and others, expending twenty thousand dollars in fitting up said grounds. Yet the defendant has not paid, but wholly refuses to pay, her one-third of one thousand dollars due September 1, 1868, by the terms of said agreement, although demanded, etc., to the plaintiff's damage six hundred dollars; wherefore, etc.

There are three acts relating to street railways. The act of June 4, 1861, Acts Special Session, p. 75; the act of March, 6, 1865, Acts, 1865, p. 63, and the act of February 28, 1867, Acts, 1867, p. 162.

To these acts we must look to ascertain the extent and powers and capacities of the appellee.

The first section of the act of June 4, 1861, authorizes the formation of a corporation of this character, "for the purpose of constructing, owning, and maintaining street or horse railways, switches, or side-tracks, upon and through the streets of the cities or towns within the State.

The third section provides: "The said company shall be capable of purchasing, holding and conveying any real or personal property whatever necessary for the construction and equipment of the road, switches and side-tracks, and for the erection of all necessary buildings and yards, and may buy, own and sell any kind of property that may be necessary to properly conduct or carry on the business of such road."

Section 6 of the same act authorizes the company to "borrow such sums of money as may be necessary for completing and operating their railroad," and authorizes the corporation to raise the money by issuing bonds, secured by a mortgage of its corporate property and franchises.

The act of March 6, 1865, authorizes such companies to extend their roads beyond town and city limits, and authorizes them to use public highways, upon the conditions and subject to regulations therein prescribed.

The act of February 28th, 1867, authorizes such companies to raise funds to discharge the indebtedness of such companies, by making a pro rata assessment against stockholders, and to make needful rules in relation thereto, etc.

The objection to the complaint urged by counsel for the appellee is, that the contract on which the action is founded is void for the want of power in the street railway company to make the same.

The modern doctrine is to regard corporations as possessing the powers expressly conferred upon them by law, and such implied powers as are necessary to enable them to exercise the powers expressly granted, and no others.

The state fair has generally been held at Indianapolis, though not always. The State Board of Agriculture owned the ground on which the fair was afterwards located under the contract in question. If that place was made the location for the fairs, it was so near the city that the street railway company, by making a short additional line of road, could connect the fair ground with its whole system of roads in the city; could obtain the carrying of passengers from all parts of the city into which its road extended, convey them to the fairs, and return them to the city again, thus making the arrangement one of great profit to the company.

Counsel say: "There is nothing in the charter of the appellee that warrants the assumption that it is authorized to embark in the enterprise, however praiseworthy it may be, of developing the agricultural and mechanical interests of the State by aiding in establishing and maintaining State and county fairs, or any of the other plans that may be suggested by the ingenious and public spirited. It will be difficult to imagine anything more foreign to the objects for which the appellee was incorporated than the exhibition of live stock, agricultural productions, and mechanical implements, and the giving of premiums to successful competitors for excellence."

We hardly think the motive with the street railway company was the development of the agricultural and mechanical interests of the State, so much as it was to build up, increase, and make more profitable the business in which it was engaged; that this latter was the object which it had in view, we think is quite clear.

Counsel for the appellant submit: That the contract on which the action is predicted is within the incidental powers of the corporation; that it has the power to make all contracts