The Aurora Agricultural v. Paddock
| Decision Date | 30 September 1875 |
| Citation | 80 Ill. 263,1875 WL 8748 |
| Parties | THE AURORA AGRICULTURAL AND HORTICULTURAL SOCIETY OF AURORAv.HENRY C. PADDOCK et al. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
APPEAL from the Circuit Court of Kane county; the Hon. SILVANUS WILCOX, Judge, presiding. This was a bill in equity, by Henry C. Paddock, Thomas B. Coulter and Lucy Coulter, executors of the last will and testament of John R. Coulter, deceased, against the Aurora Agricultural and Horticultural Society of Aurora, Illinois, and various others, to foreclose a mortgage given by the society to John R. Coulter, in his lifetime.
Mr. EUGENE CANFIELD, and Mr. C. D. F. SMITH, for the appellant.
MR. A. G. MCDOLE, and Mr. B. F. PARKS, for the appellees.
This was a bill in equity, brought by appellees, to foreclose a mortgage executed by the Aurora Agricultural and Horticultural Society of Aurora, on the 28th day of December, 1870, to secure the payment of $6000 loaned by John R. Coulter to the society. The court, on a hearing of the cause, rendered a decree directing a sale of the mortgaged premises in satisfaction of the mortgage debt.
The society has prosecuted this appeal, and in order to obtain a reversal of the decree, it is insisted by the counsel for appellant:
First--That the society had no power whatever to mortgage.
Second--That the mortgage in question was wholly unauthorized.
The appellant was organized on the 6th day of March, 1869, under an act approved Feb. 15, 1855, which authorized the incorporation of agricultural societies. (Gross' Statutes, 1869, page 119.) By the third section of the act, the society was made a body corporate, with power to sue and be sued, to acquire and hold real estate not exceeding five hundred acres, to construct the necessary improvements and buildings for its purpose, to have and employ capital, machinery, live stock, etc., not exceeding in value $10,000.
While it is true, no section of the act confers direct authority upon the society to sell or mortgage its property, except upon a dissolution of the corporation, yet the act does not prohibit or restrict the society from selling or giving a mortgage upon its real estate. The power to mortgage, when not expressly given or denied, must be regarded as an incident to the power to acquire and hold real estate and make contracts.
We understand it to be the common law rule, that corporations have an incidental right to alien or dispose of their lands and personal property, unless specially restrained by the act under which they are organized or by statute.
It is said in Angell & Ames on Corporations, p. 153: “Independent of positive law, all corporations have the absolute jus disponendi, neither limited as to objects nor circumscribed as to quantity.” The same doctrine is clearly laid down by Kent, vol. 2, page 280.
We are, therefore, of opinion, as the society was not prohibited from mortgaging its lands, it possessed the power to do so as an incident to the power to purchase and hold real estate and make contracts.
In regard to the second point relied on by appellant, that the directors of the society had no power to authorize its president and secretary to mortgage the premises, such power, if it existed at all, being in the stockholders,--a complete answer to this position is, that the action of the directors was ratified by the stockholders.
It appears, from the evidence, that on the 31st day of October, 1870, a meeting of the directors was held, and a resolution adopted, as follows:
“On motion, the president and secretary were instructed and authorized to borrow $6000 for three years, at ten per cent interest, to be used for paying for fair grounds and other indebtedness of the society, and give a mortgage on said fair grounds for said amount, as security.”
On the 3d day of December following, the stockholders of the society held their annual meeting, and the record of their...
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