60 Kan. 474 | Kan. | 1899
The opinion of the court was delivered by
On July 17, 1895, the Parkinson Sugar Company borrowed $10,000 from the Bank of Fort Scott. The debt was represented by two notes
It appears that the sugar company was organized in 1886, and the purpose and powers of the company, as declared in the charter, were these :
“The manufacture of sugar, syrup, starch, grape sugar, glucose and other products from sorghum, cane, cane seed, corn and other saccharine and amylaceous*476 substances ; for the erection and maintenance of factories and the purchase and sale of real estate and plantations therefor ; for the purchase, location and lajdng out of town sites and the sale and conveyance of-the same in town lots and subdivisions or otherwise, and for the transaction of manufacturing, mechanical and mercantile business.”
For a number of years the operations of the company were mainly confined to the manufacture of sugar and syrup, but as this business was necessarily limited to tlie cañé season, only a small part of the year, the extension of their manufacturing operations became a subject of discussion among the stockholders and officers of the company. At the January, 1895, meeting of the stockholders the directors were instructed to examine into the matter of adding a match factory and a veneer wood-working establishment to the company’s plant, and, if it should be deemed desirable that such industry be added to the company’s business, the directors were authorized to borrow $10,000,.and to secure the loan they were authorized to mortgage the real estate of the company. On March 13, 1895, a committee was appointed by the'board óf directors to visit Chicago and investigate the business of making matches, but before the committee had gone, and on March 15, the action of the board in appointing the committee was revoked and the directors determined to proceed at once to construct the match factory and the veneer wood-working establishment, which was done. At the July meeting of the board a resolution was adopted to borrow $10,-000 to pay certain mortgage indebtedness existing against the company and to complete the match and veneer wood-working plant, which was in process of construction. 'In pursuance of this resolution the two notes already mentioned, of $5000 each, dated July
The first attack made upon the judgment of foreclosure is that the charter of the company did not warrant the manufacture of matches and woodenware, and that the obligations created for this purpose were unauthorized, and therefore invalid. The purposes for which a corporation is formed are required to be set forth in its charter, and we look tp this declaration, as well as to the general law under which it was organized, to determine the nature and extent of its corporate powers and privileges. These constitute the measure of its authority, and it can exercise no other powers than those expressly or impliedly conferred by the charter. From the declared purposes
It is next contended that the officers of the company acted fraudulently and in excess of the authority given by the stockholders. In the state of the record, questions of bad faith and fraud are hardly open to review in this court. Much of the testimony tended to show good faith and honesty in the transaction of the busi
There is a claim that more money was expended for the purpose named than was authorized by the stockholders. It is true that the mortgage debt is greater than the amount authorized to be used in establishing the new industry, but the testimony shows that a large part of the money derived from the mortgage was used to pay the ordinary expenses of the company growing out of the manufacture of sugar and syrup, and that much less than $10,000 of the money borrowed from the bank was expended in establishing a factory for making matches and woodenware. In any event, the parties complaining are not in a position to invoke the application of the doctrine of ultra vires. (Town Co. v. Morris, 43 Kan. 282, 23 Pac. 569; Town Co. v. Russell, 46 id. 384, 26 Pac. 715; Railroad Co. v. Johnson, 58 id. 175, 48 Pac. 847.)
The judgment of the district court will be affirmed.