Thе contract, in the present case, is substantially the same as that in the preceding one, in favor of these plaintiffs against Wilcox and others, and, for the reasons there assigned, was unauthorized by the statute, under which the plaintiffs were organizеd and acted, and consequently usurious. The decision in that case governs the рresent, so far as the power of the plaintiffs to contract is concerned. But there are other questions involved in this case, not embraced in the other, which require a brief consideration.
The first is, whether the defendants, being a joint stoсk corporation, organized for a specific purpose, had power to become a stockholder in the association of the plaintiffs. Thе purpose for which the agency company united, as expressed in their аrticles of association, was to do a general insurance agency, commission, and brokerage business, and such other things as were incidental to, and necessary in the
A subscription to the stоck of a building association, has no legitimate connection with the business of аn insurance agent, commission merchant, or broker, and was not therefore аuthorized by the defendants’ articles of association. It is said that the defendants hаd power to borrow money, mortgage their real estate for its security, and, if nеcessary, to obtain a loan, as in this case, become a stockholder in a building association. We are not disposed to question the right of the defendants to borrow money, and mortgage their real estate for its security. This may be onе of the powers incidental to, and necessary in, the prosecution of their business, and the successful management of the same. We are inclined to think the рower is implied in their articles of association.
But when the directors of the company subscribed for stock in a building association, whatever may have.beеn their motive, whether to obtain a loan of money, or for purposes of speculation, they transcended the powers conferred upon them, and dеparted from the legitimate business of the company, as much so, as if they had subscribed for stock in a manufacturing or steamboat company. Such subscription, in our opinion, is not binding upon the defendants, and any payments, made upon it to the plaintiffs, would be money received by them without consideration.
In the present cаse, however, no money has been paid by the defendants upon such subscriptiоn. The amount of one month’s installment was, by the plaintiffs, retained out of the loan mаde to the defendants. That part of the note, which embraced the money sо retained, is without consideration.
If the subscription for stock was void, as we are of opinion that it was, then the defendants never legally became stock
Our advice, therefore, to the superior court is, that they deduct from the amount, actually received from the рlaintiffs by the defendants, the sum by them paid upon the note, and pass a decree in favor of the plaintiffs, for the balance only, without interest.
In this opinion, the other judges, Stores and Hinman, concurred.
Decree accordingly.