Alabama & Chattanooga R. R. Company v. Jones. clothed with power to do so, for the sake of gain, is clearly a business corporation and amenable to the provisions of the brnkrupt act. Rankin & Pullan v. Florida, Atlantic & G. C. R. R. Co., 1 N. B. R. 196. The petitioner is authorized by its charter to construct a railroad and to convey thereon, for gain, passengers and freight. Its main and primary object is to do these things for gain. It is, therefore, a business corporation, as the term business is popularly understood. It seems to be the clear intent of the thirty-seventh section to bring within the scope of the bankrupt act all corporations, except those organized for religious, charitable, social, literary, educational, municipal or political purposes. These may all be in one sense, moneyed or business corporations, for they must all have and use money and transact business, to some extent, in order to carry out their objects. But we do not call them moneyed corporations as we would a bank, nor do we call them business corporations, as we would a manufacturing or mining company or express company, because their chief and primary object is not to transact business or make gain. They necessarily transact business in order to accomplish other ends than the mere doing of business and making profit. The building of a railroad is certainly carrying on a business. The transporting of passengers, mails and freight for hire is certainly a business, and a company organized to make gain from these pursuits as its chief and ultimate purpose is clearly a business corporation. The voluntary application of a railroad company to be adjudged a bankrupt would hardly be dismissed on the ground that it was not a business corporation. Adams v. Boston, Hartford & Erie Railroad Company, 4 N. B. R. 99. But the petitioner says that admitting it to be a business corporation, it cannot be forced into involuntary bankruptcy on the ground that it has fraudulently stopped payment of its commercial paper, unless it is also averred and shown to be a banker, broker, merchant, trader, manufacturer or miner. Alabama & Chattanooga R. R. Company v. Jones. In order to compel a corporation into involuntary bankruptcy under the clause of the thirty-ninth section, which this proceeding in bankruptcy is based upon, three things are necessary to be averred and proven. 1. That the corporation is a moneyed, business or commercial corporation. 2. That it is a banker, broker, merchant, trader, manufacturer or miner. 3. That it has fraudulently stopped payment, or has stopped and not resumed payment of its commercial paper for a period of fourteen days. be A moneyed, business or commercial corporation may forced into bankruptcy under the fifth clause of the twentyninth section, if it makes any assignment, gift, sale or conveyance, with intent to delay, defraud or hinder its creditors; or under the eighth clause, if guilty of any of the acts therein specified, without being shown to be either a banker, broker, merchant, trader, manufacturer or miner. But where the proceeding is based on the ninth clause, as in this case, it is indispensable to aver and prove that the debtor sustained one of these charactors. Has this been averred or proved in this case? The petition does not make any such averment, and is, therefore, fatally defective. Has this necessary fact been made out by the proof? The characters and powers of a corporation must be determined by its charter. A corporation authorized to carry on a banking business cannot construct or operate a railroad or carry on the business of a manufacturer or common carrier. A municipal corporation cannot, unless expressly authorized by its charter, carry on the business of a banker, miner or manufacturer. A corporation is an artificial person, the creature of law. It has no powers except what are given by its incorporating act, either expressly or as incidental to its existence and its express powers. Beatty v. Knowler, 4 Peters, 152; Perrine v. Chesapeake & Delaware Canal Company, 9 Howard, 172; Russell v. Topping, 5 McLean, 194; Straus v. Eagle Insurance Company, 5 Ohio State, 59; City Council of Montgomery, v. Plank Road Company, 31 Ala. 76; Brady v. Mayor of New Alabama & Chattanooga R. R. Company v. Jones. York, 20 N. Y. 312; New London v. Brainard, 22 Conn., 522; Commonwealth v. Erie & Northeastern Railroad Company, 27 Pa. State, 339; Caldwell v. City of Alton, 33 Ill. 416; Smith v. Morse, 2 Cal. 524. No vote or act of a corporation can enlarge its chartered authority, either as to the subjects on which it is intended to operate or the persons or property of the corporators. Salem Milldam Corporation v. Roper, 6 Pick. 23. A body corporate can only act in the mode prescribed by the law creating it. To enable its agents to bind the company, they must act pursuant to the incorporating act. 2 Cranch. 166. Express powers granted a corporation must be exercised in the manner pointed out in the statute. Smith v. Eureka Flour Mills Company, 6 Cal. 1. The corporation in executing a public work cannot substitute its own more convenient mode of proceeding for that pointed out by its constituting statute. Regina v. Manchester & Leeds Railway Company, 3 Queen's Bench, 528. When a specific act is directed to be done by a particular agent of a corporation, it must be done by that agent. Maddox v. Graham, 2 Metcalf, 56. These principles and authorities illustrate the rule applicable to the question in hand. If the Alabama and Chattanooga railroad company is a banker, broker, merchant, trader, manufacturer or miner, it must be made so by its charter. The company derives its powers and franchises from the act to charter the Wills Valley railroad, passed by the general assembly of Alabama, and approved February third, eighteen hundred and fifty-two; the act to incorporate the Northeast and Southwest Alabama railroad company, passed by the same general assembly, and approved December twelfth, eighteen hundred and fifty-three; and an act, also passed by the general assembly of Alabama, relating to the Wills Valley railroad company and the Northeast and Southwest Alabama railroad company, approved November eighteenth, eighteen hundred and sixty-eight; which last named act Alabama & Chattanooga R. R. Company v. Jones. authorized the purchase by the former company of the property and franchises of the latter. Said last named act also authorized the Wills Valley railroad company, after said purchase, to change its name to "The Alabama and Chattanooga railroad company;" and further provides that the Alabama and Chattanooga railroad company should exercise all the corporate authority and functions, rights and privileges of both the Northeast and Southwest Alabama railroad company and the Wills Valley railroad company. Therefore we must consult the charters of the two latter companies to ascertain the powers and franchises of the Alabama and Chattanooga railroad company. An inspection of these charters shows that neither of these companies was authorized to carry on the business of a banker, broker, merchant, trader or miner; and being neither by the law of its creation, it cannot be made such by any act of its officers, agents or employes, or even by a vote of its board of directors. The twenty-second section of the act to incorporate the Northeast and Southwest railroad company provides, however, that "said company shall have power to erect and carry on machine shops, iron furnaces, foundries and rolling mills, and such other mechanical works as may be necessary, and to make, manufacture and furnish iron and other materials for the full equipment of the road, and to continue to make and manufacture the same under the provisions of this charter either for sale or their own use." Clearly this gives authority to the road to become a manufacturer-but this authority does not make the company a manufacturer unless it actually engages in the business of manufacturing. The business must also be carried on for the purpose of selling the products manufactured and not for the exclusive use of the company, to make it a manufacturer within the meaning of the bankrupt act. A planter who manufactures plows and other agricultural implements, or weaves cloth, as many do; for his own use and not for sale cannot be considered a manufacturer, nor can a railroad company that makes iron. Alabama & Chattanooga R. R. Company v. Jones. rails and cars for its own exclusive use, and not for sale, be deemed a manufacturer. It might do this under its general power to construct, equip and operate a railroad without any special grant for that purpose. If no mode is prescribed for the exercise of a power, the grant of which is clearly defined, the corporation may adopt such mode as in its judgment will secure the purpose contemplated. No proof was submitted to the bankrupt court nor has any been submitted to this court to show that the corporation chartered by the state of Alabama as the Alabama and Chattanooga railroad company has ever carried on the business. of a manufacturer. Sonfe proof was submitted to us, that in Chattanooga, Tenn., a railroad corporation known as the Alabama and Chattanooga railroad company has carried on the business of manufacturing iron rails and cars, but no attempt was made to show that the articles manufactured were for sale and not for the exclusive use of the company. The fair presumption is that this corporation is the one chartered by the state of Tennessee. It is not alleged in the petition filed in the district court that the Alabama and Chattanooga railroad company was either banker, broker, merchant, trader, manufacturer or miner, and no proof was offered showing that it was either. The inevitable conclusion is that the petitioner ought not to have been adjudicated a bankrupt upon the petition and proofs submitted to the judge of the district court. We might leave the case here, but an interesting question of practice is raised which we will proceed to notice. The facts touching the charter of this railroad company by the four states of Tennessee, Georgia, Alabama and Mississippi, where its line runs, and where its principal office is, have already been stated. It has also already been stated how the order to show cause, issuing from the bankrupt court, was served. It is objected that this service was defective and void. The bankrupt act, section forty, prescribes how service shall be made in cases of involuntary bankruptcy. A copy |