Leighton v. Knapp

“All corporate acts, which the Legislature has not authorized, remain prohibited by the common law.” Morawetz on Corporations, § 648. The Leighton Lea Association, therefore, had no power or authority to incur indebtedness, except that which was conferred by the act under which it was incorporated. Chapter 122, p. 234, Laws 1851. The only provision of the act which authorized corporations formed under it to create indebtedness is section 5, which reads as follows:

“Sec. 5. All corporations formed under this act shall have power to borrow money for temporary purposes not inconsistent with the…