The People ex rel. Jenkins, &c. agt. The Parker Vein Coal Co., &c.

defendants. And as the 222d section of the Code prescribes that the judge issuing the injunction shall require an undertak-. ing from the plaintiff, I am bound to presume that an undertaking was given, and in such amount, and with such sureties as, in the exercise of a sound discretion, he deemed proper. The motion to dissolve must, therefore, be denied with

costs.

SUPREME COURT.

THE PEOPLE ex rel. JAMES E. JENKINS and JOHN A. CONDIT agt. THE PARKER VEIN COAL COMPANY and others.

A corporation has no more power than is conferred upon it by the act of incorporation.

The officers, directors, and stockholders of an incorporated company cannot, even by an unanimous agreement made under an honest misapprehension of their powers, increase the capital of the company, or give to the corporation any increased power bevond that which has been conferred upon it by the law of the legislature.

If the officers and directors of an incorporation, with even the unanimous consent of the stockholders, should, without legislative sanction, increase the capital of the company, or issue certificates of stock beyond the amount of capital, or assume to exercise other powers not given to the corporation by the legislature, such unauthorized acts would be good cause to cancel its charter.

It cannot be, therefore, that an officer of a corporation, by a secret and fraudulent act of issuing certificates of stock beyond the amount of the capital, can make such an act legal and binding, when the unanimous action of the whole corporate body could not do it.

Nor can the courts, whose duty it is to sustain the law in its integrity, to punish fraud and crime, declare that such fraudulent act of the officer is legal and binding.

Nor can a court declare these false and fraudulent certificates of over issues of stock, to be genuine, as between the holders of them and the stockholders of the company, because the stockholders elected the directors and appointed the officers, gave them credit in the community, and that the community could not tell whether the official was acting illegally or not; and that, as the officer was the agent of the stockholders, they are responsible for his acts, because he was authorized by them to issue stock. Such a principle would entirely

The People ex rel. Jenkins, &c. agt. The Parker Vein Coal Co., &c.

destroy the business of a commercial community, where, of necessity, business must be transacted by agents.

An agent can only bind his principal when he acts within the power delegated to him.

▲ corporation, being limited in its powers by law, cannot, either expressly or by implication, authorize acts to be performed by its agent not permitted by its charter.

Where it appeared that the relators owned stock in the Parker Vein Coal Company, and had sold shares of it, and had bought other shares; and that the company, having become insolvent, refused to allow them to transfer the shares on the books of the company,

Held, that the remedy of the relators was not by mandamus, but by action. A mandamus partakes of the character of a public writ, and is not allowed, except for the purpose of controlling those who owe a public duty to the state in which it issues.

New-York General Term, Dec., 1854.

MITCHELL, MORRIS, and CLERKE, Justices.

APPEAL from order of special term refusing mandamus. (See ante, page 186.)

The Parker Vein Coal Company is an incorporation of the state of Maryland. Its charter creates it a corporation "for the purpose of working mines of coal and iron, and for vending the proceeds of the same;" gives it power "to make bylaws, and all such rules and regulations as may be necessary for the proper management of its affairs-PROVIDED the same be not repugnant to the laws of the state, or of the United States." The capital stock of the company is not to exceed $3,000,000, to be divided into shares of $100 each-being 30,000 shares.

The officers of this company have issued 150,000 certificates of shares of stock-being 120,000 certificates of shares of stock more than the company, by law, is permitted to issue-purporting to represent $12,000,000 more capital than the company possesses, or can possess, as established and limited by the law of incorporation.

In June, 1854, the company was insolvent, and made an assignment to Romaine & Darrow, of all their property of every description, for the benefit of creditors.

The plaintiffs are partners, engaged as brokers, in the pur

The People ex rel. Jenkins, &c. agt. The Parker Vein Coal Co., &c. chase and sale of stocks, for themselves, and for account of

other persons.

Plaintiffs have standing in their name, upon the books of the company, several hundred shares of the capital stock, of which they are the legal holders and owners; and they also hold stock certificates in the usual form, issued for a large number of its shares of capital stock, signed by its proper officers, of which also they are the legal holders and owners.

One of the by-laws of the company requires a book, or books, to be kept by the company, for the transfer of its stock.

The corporation has a principal office in the city of NewYork, and kept, and now keeps at that office, books for the transfer of its stock.

At the last election of directors, which was since the assignment of June, 1854, the defendants in this cause were elected directors and officers, and now have charge of the books.

About the 3d of June last, (1854,) the officers and directors closed their transfer books; since which they have refused, and still refuse to permit transfers therein, of any of the shares of the capital stock.

It is impossible, from an inspection of the certificates of stock, to designate which are the genuine, and which are the over-issue certificates.

The plaintiffs have applied to the present officers and directors to be permitted to transfer stock to persons to whom they have sold; and have been refused access to the books.

Plaintiffs claim that this refusal to permit transfers upon the books is of great detriment to them and to their business, is injurious to the company and its stockholders, and depresses the market and intrinsic value of the stock; and they ask for a mandamus to compel the defendants to open the transfer books to the plaintiffs, and to all such stockholders as may desire to transfer stock.

The plaintiffs insist, that it is not denied that their certificateз are a portion of the 30,000 genuine certificates; and also suggest that the 120,000 over-issue certificates, having been issued by officers of the incorporation who are authorized to VOL. X. 35

The People ex rel. Jenkins, &c. agt. The Parker Vein Coal Co., &c.

issue certificates of stock, must be deemed genuine certifi

cates.

for plaintiff.
for defendants.

By the court-MORRIS, Justice. The object of incorporating stock companies is to aggregate, from the many, sufficient capital to conduct a business which the fortune of an individual is not sufficient to transact, so that the community may be benefited by the active employment of the capital in business useful to them.

Individuals are induced to invest their moneys in these stock companies, from the fact that, by law, they are not personally responsible (unless declared to be so by the charter) for any debt, obligation, or trespass of the corporation; and because all that the stockholder can lose is the amount of money he voluntarily invests. The stockholder is also protected, as regards the money he invests, by the fact that the charter of the company limits and confines the business to be transacted, in kind and extent-does not permit a majority of stockholders, of directors or officers, to exceed the power given by the statute, or to bind the capital of the company by acts beyond those expressly permitted by the charter.

The individual stockholder sees, in the charter and laws, all the powers given to stockholders, directors, and officers, and for such purposes he confides the amount he invests.

Courts, knowing the language of the act of incorporation, and that no act of directors and officers, not authorized by the charter, can bind the stockholder or his investment, in many instances, direct guardians of infants, and trustees of estates, of idiots, and of the insane, to invest their funds in the stock of incorporated companies.

In this state, certain stocks are made the basis of the circulating medium of our banking institutions, and are by the banks deposited with the comptroller of the state, as security to pay the billholders of the bank. This was done because our legislators had confidence in the laws creating those stocks, and be

The People ex rel. Jenkins, &c. agt. The Parker Vein Coal Co., &c. cause they knew that the fraudulent criminal conduct of the officials empowered to issue such stock, could not, by fraudu lently issuing false certificates, invalidate, or depress in value, the genuine stock issued under such laws.

A corporation has no more power than is conferred upon it by the act of incorporation.

The officers, directors, and stockholders of an incorporated company, cannot, even by an unanimous agreement, made under an honest misapprehension of their powers, increase the capital of the company, or give to the corporation any increased power beyond that which has been conferred upon it by the law of the legislature.

If the officers and directors of an incorporation, with even the unanimous consent of the stockholders, should, without legislative sanction, increase the capital of the company, or issue certificates of stock beyond the amount of capital, or assume to exercise other powers not given to the corporation by the legislature, such unauthorized acts would be good cause to cancel its charter. Can it then be contended that an officer of the company, by a secret and fraudulent act, can make an act legal and binding, which the unanimous action of the whole corporate body could not do? Can the courts, whose duty it is to sustain the law in its integrity, to punish fraud and crime, declare that such fraudulent act of the officer is legal and binding? Can adjudge that the corporation has a capital of $15,000,000, when the legislature, by its charter, said it should not have to exceed $3,000,000? Can decide that the incorporation have 150,000 shares of stock of $100 each, when the legislature have declared, by the charter, that it shall only have 30,000 shares of $100 each? I think not. If such be the law-making effect of fraudulent transactions of an officer of a stock company, then a swindling official has more law-making power, exercised by the commission of a crime, than has the legislature of the state; for his criminal act destroys the restrictive law of the legislature, and creates, where the legislature said there should be no existence.

It is also claimed, that the court must declare these false