PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 310. plan of a single corporation with enormous issues of stock and bonds. Usually they organized such corporations in the State of New Jersey. Soon it was found that this method might be in- convenient because of the severity of the statutes in many states relating to foreign corporations. 1 Some states even required them to take out charters and become domestic corporations sub- ject to taxes and other burdens like ordinary domestic corpora- tions. To obviate these difficulties the scheme of the so-called " Securities Company " has now been devised. Its legality with respect to the Federal statute referred to in § 309a and similar state statutes is still subjudice. Here the plan is to organize a corporation with comparatively low capitalization, which shall, however, hold enough stock in the various operating corpora- tions to make it the majority stockholder in them all. The funds to carry this out are sometimes raised by a large issue of bonds by the " Securities Company," which are often secured by the pledge of the stocks of the operating corporations ; or, again, those stocks may be pledged to other parties than the bondholders for a like purpose of raising necessary funds. Thus, as majority stockholder, a " Securities Company " may control and manage a number of operating corporations of vast capitalization. Whether such an organization will be held legal is likely to depend in each instance on whether the court regards it as a cloak under which a prohibited combination is achieved, — or takessomeother blinder view. 3 """ §"£ iloTThis examination of Ihe^egarreTatTonslmsing LiabintjTof " from ultra vires transactions may be closed with an corpora- • ; tions to ac- inquiry into the liability of a corporation to account count for for benefits which it has received under an ultra vires ceived un- contract when it is seeking to repudiate the obliga- vfreT n con- tions thereof. tract - Some years ago the New Hampshire court stated the general principle : " However the contractual power of the defendants may be limited under their charter, there is no limitation of their power to make restitution to the other party whose money or property they have obtained through an unauthorized con- 1 Cf. post, §§ 400 et seq. I ney in the Yale Law Journal, June, 2 See a paper by Edward B. Whit- 1 1902. 279
