(l) Koehler v. Iron Co. 2 Black, 715.

(ll) Gashwiler v. Willis, 33 Cal. 11.

(lm) Chamberlain v. Chamberlain, 43 N. Y 424; In re McGraw, 111 N. Y. 66.

A corporation is the creature of the law, and is only what the act of incorporation has made it, and derives all its powers from that act. (no) Nevertheless, corporations authorized by their charter to act in a prescribed manner may to some extent by practice and usage make themselves liable on contracts entered into in a different way. (o) But it has been decided that corporations cannot exceed the powers given in their charters and make contracts not incidental or ancillary to the exercise of those powers, and that they are not estopped from setting up their own want of authority to make such contracts by the fact that they have been in the habit of entering into and fulfilling similar engagements, for a long period. (p)2 This question may be regarded, however,

(m) Stoddert v. Vestry of Port Tobacco Parish, 2 G. & J. 227.

(n) Koehler v. Iron Co. 2 Black, 715.

(nn) Stratton v. Allen, 1 Green, 229. See Hill v. Nisbet, 100 Ind. 341; Baker v. Harpster, 42 Kan. 511;Battelle v. Northwestern, etc. Co. 37 Minn. 89.

(no) Baltimore v. Baltimore, etc. R. Co. 21 Md. 50.

(o) Witte v. Derby Fishing Company, 2 Conn. 260; Bulkier v. Derby Fishing Company, 2 id. 252; Le Couteulx v. Buffalo, 33 N. Y. 333.

(p) Governor, etc. of Miners v. Fox, 16 Q. B. 229; Hood v. New York, etc. R. Co. 22 Conn. 502.

1 Thus the directors of a railroad cannot secure, at its expense, undue advantages to themselves, by the formation of a new company as an auxiliary to the original one, with an understanding that they, or some of them, shall take stock in it, and then that valuable contracts shall be given to it by the railroad, in the profits of which they are to share as stockholders of the new company. Wardell v. Railroad Co. 103 U. S. 651. Nor can an officer of a corporation, which he knows to be insolvent, discharge a debt which he owes it with stock of the corporation. Quein v. Smith, 108 Pa. 325. Nor buy at a discount claims against the corporation and enforce their face value. Ex parte Larking, 4 Ch. D. 566; Thomas v. Sweet, 37 Kan. 183. See Hammond's Appeal, 123 Pa. 503. Nor make any kind of secret profit. Liquidators of Imperial, etc. Assoc. L. R. 6 H. L. 189; European, etc. Ry. Co. v. Poor, 59 Me. 277; Greenfield Savings Bank v. Simons, 133 Mass. 415; Keokuk, etc. Co. v. Davidson. 95 Mo. 467; Duncomb v. N. Y., etc. R. Co. 84 N. Y. 190. See Gamble v. Queen's County Water Co. 123 N. Y. 91. As to the validity of a contract between two corporations, when some of the directors of one corporation are also directors in the other, see Metropolitan Telephone Co. v. Domestic Telegraph Co. 44 N. J. Eq. 568.

2 A railroad corporation, authorized to build between certain points and pay interest on instalments on stock until its completion, cannot, on the extension of the road to other points, continue to pay such interest until the extension is completed, Pittsburg, etc. R. Co. v. Allegheny, 63 Penn. St. 126; equally a lease by a railroad of its road, rolling-stock, and franchises, for which no authority is given in its charter, is ultra vires and void, Thomas v. Railroad Co. 101 U. S. 71; Troy, etc. R. Co. v. Boston, etc. R. Co. 86 N. Y. 107. On the same principle, neither a railroad corporation, nor one to make and sell musical instruments, can guarantee the expenses of a musical as not yet fully determined. The plea of ultra vires as defined by Comstock, J., imports, not that the corporation could not, and did not in fact, make the authorized contract, but that it ought not * to have been made.1 The acquiescence of the shareholders in the abuse will prevent the interposition of such a plea. (q)

A corporation expressly authorized to transact business in which it is customary to use negotiable paper, or receiving or using negotiable paper in the proper transaction of business of any kind, has, as a general rule, power to make, indorse, or otherwise dispose of negotiable paper in any way not in itself objectionable. (qq)

No stockholder has any claim to a dividend until it be declared. And when the distribution is ordered, it would seem that it should be distributed among those who were stockholders at the time of the order. (qr)2 It is very common to create by will or otherwise a trust, whereby the income and dividends of certain stock are payable to a person during his life, the principal going elsewhere at his death. If extra dividends are earned and declared, the general rule must be that they belong to the party entitled to the dividends. (qs) But it has been held in Massachusetts, that if festival in expectation of an increase of traffic or business, Davis v. Old Colony R. Co. 131 Mass. 258; Davis v. Smith Organ Co. 131 Mass. 258; but a glass manufacturing corporation may contract to buy glassware for its trade while repairing its works, Lyndeborough Glass Co. v. Mass. Glass Co. 111 Mass. 315; a water-power company, after the extinguishment of its water-power, may sell and agree to regrade its land, Dupee v. Boston Water Power Co. 114 Mass. 37; and a tract society with the chartered right to hold property for investment, may receive money on lawful conditions securing it the income, failing the performance of which it must return it, Morville v. Am. Tract Soc. 123 Mass. 129. In New York a distinction is made between an executory and an executed contract of a corporation ultra vires, the latter of which only will be enforced. Whitney Arms Co. v. Barlow, 63 N. Y. 62. - K.

(q) Bissell v. The M. R. Co. 22 N. Y. 258.

(qq) Farmers' Bank v. Maxwell, 32 N. Y. 579; Same v. Ellis, id. 583; Same v. Watson, id. 583; Wood v. Wellington, 30

N. Y. 218; Brookman v. Metcalf, 32 N. Y. 591.

(qr) Goodwin v. Hardy, 57 Me. 143.

(qs) Woodruff's Estate, 1 Tuck. 58. The authorities are fully examined in this case.