Commonwealth v. Lehigh Ave. Ry. Co.

Citations

• 129 Pa. 405
• 18 A. 414
• 1889 Pa. LEXIS 965

Syllabus

<p>(а) The Lehigh Ave. By. Co., incorporated by act oí December 18, 1873, P. L. (1874) 458, with an authorized capital of $1,000,000, was given power to borrow money not exceeding in amount “ one half of the par ■ value of the capital stock.” Only ten per cent, or $100,000, of its capital was paid in, when it resolved to issue its bonds for a loan of $250,000.'</p> <p>(б) A bill in equity was filed by the commonwealth to enjoin the issue of said bonds, as contravening § 3, act of May 7, 1887, P. L. 94, enacted to enforce against railroad corporations the provisions of § 7, article XYI. of the constitution, providing that “no corporation shall issue stocks or bonds, except for money, labor done, or property actually received,” etc.</p> <p>1. Inasmuch as there was no pretence that the railroad company did not intend to receive full value for the proposed bonds, if issued, no question was raised as to the applicability of the act of M% 7, 1887, or of the provision of the constitution referred to, which the said act was intended to enforce.</p> <p>2. The words, “ the par value of the capital stock,” used in the incorporating act, however, were to be construed to mean capital actually paid up, and not authorized capital; wherefore, it was not error to enjoin . the issue of bonds to an amount greater than $50,000, the one half of the capital paid in to the company.</p>