Grand Lodge v. Waddill

A. J. WALKER, C. J. The defendants and George P. Blevins, as to whom the suit abated in consequence of his death, executed their promissory note for the consideration of money loaned by the plaintiff The recovery of the money was resisted, upon the ground that the plaintiff had no authority to make a loan of money; and the court below, by its charge, sustained the defense. We are constrained by our convictions of the law to approve the charge. The authority of corporations is limited by their chartered powers, and the necessary and proper means of executing those powers. — City Council of Montgomery v. M. & W. P. R. Co., 31 Ala. 76; Ex parte Burnett, 30 Ala. 461; M. & A. v. Allaire, 14 Ala. 400; Smith v. Ala. L. I. & T. Co., 4 Ala. 558; State v. M. & A. of Mobile, 5 P. 279, 309 ; State v. Stebbins, 1 St. 299; Straus v. E. Ins. Co., 5 Ohio, 59; A. & A. on Cor. 270, §256. The second section of the plaintiff’s charter confers authority to take and hold real estate, of value not exceeding twenty thousand dollars, and to sell, lease or exchange the same, to sue and be sued in the corporate name, to make rules for the government of the institution, to constitute subordinate lodges, “and to do all other things concerning the government, the estates, moneys and revenues of said grand lodge and subordinate lodges.” The third section confers authority to take and hold any charitable donation, or devises and bequests of lands, not exceeding ten thousand dollars, and to appropriate tbe same for the benefit of the corporation, in such manner as might be determined [318] by the same. The fourth section bestows a capacity to have, hold and receive, possess'and enjoy, all such estates, real and personal, moneys, goods, chattels and effects, which may be devised or bequeathed thereto, and to receive subscriptions and contributions. The foregoing is an epitome of the grants of power, sq far as it is necessary to consider them in this case. Only two of the grants of power have any relation to money. One of those grants is made in the second section, and confers power “to do all other things concerning” the moneys and revenues of the corporation. The other of those grants, found in the fourth section, empowers the corporation to “ have, hold and receive, possess and enjoy” all moneys which may be bequeathed to it. The former of those grants should not be understood to authorize the corporation to do anything that it might will with its funds. If so understood, avague generality would become the warrant of authority to invest in any business or enterprise known to trade or commerce ; and a corporation, designed to be' one of few and limited powers, might engage in the most extensive and varied operations. Grants of power to corporations, unlike the grants of individuals, are to be strictly construed, in favor of the government, and against the grantee. Corporations can claim nothing that is not clearly given. Ambiguities operate against them. “ In the construction of every charter, to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation.” — Penn. R. R. Co. v. Canal Comm’rs, 21 Penn. 9; Richmond R. R. Co. v. Louisa R. R. Co., 18 Howard, 81; Sedgwick on Stat. & Con. Law, 338-342. The clause granting the powerto do all other things concerning the money and revenues being vague and ambiguous, we must not strive to give it the largest operation, but rather to limit it until there shall be no doubt, lest it may have a lai’ger scope than was intended by the legislature. It must be restricted by the purposes and other powers of the corporation. — City Council of Montgomery v. Wetumpka Plank R. Co., supra; Beatty v. Knowles, 4 Pet. 171. It must be regarded as only conferring an ample [319] ■discretion over the revenue of the corporation, in carrying out the specified powers conferred upon it, and in accomplishing the purposes of its creation. We take a like view of the power to possess and enjoy money bequeathed to the corporation. The money must be enjoyed by the employment of it in exercising the specified powers, and in executing the purposes of the corporation. There is no specified power granted to this corporation, in the exercise of which the loaning of money becomes an appropriate or necessary means. ■ Nor is there any purpose to be accomplished by the corporation, as indicated in the charter, which requires a resort to the loaning ■of money. There is some evidence afforded by the third section, that the purpose of the society is charity; but the loaning of money is by no means a necessary means of accomplishing charitable purposes. Contracts of corporations, which they, have no power to make, are void, and courts of justice will not enforce them. So, also, promissory notes, and other instruments, given to secure the performance of the contract, are void. No action to enforce the contract, whatever form the pleader’s skill may give it, can be maintained. — 3 Wend. 582; 7 Wend. 34; 25 Wend. 648; 5 Barb. 20. It is true, that money loaned may be recovered under a common money count. But then a recovery under a common count, in this case, would be an enforcement of a void contract, as effectually as if it had been under a special count, setting forth the contract. The decision in Waddill v. Ala. & Tenn. Rivers R. R. Co., (35 Ala. 323,) has no pertinency to this case. In that case, the money was loaned without the authority of the corporation. Here, such is not shown to have been the case. The corporation, transcending its powers, made the loan. Judgment affirmed.