The articles of the complainant business corporation authorized it "to guarantee interest, dividends, or other returns to the holders of securities or other obligations of other persons or companies in cases wherein it shall be advantageous to this company to do so." The corporation pledged to the defendant bank some of its bonds held in its treasury to secure the previously incurred personal indebtedness of its treasurer. In affirming a decree adjudging that the corporation was complete owner of the bonds, that the bank had no interest therein, and that the guaranty-pledge was ultra vires, the court held, that the advantage to the corporation referred to in the articles could not be dissociated from the furtherance of the business which the corporation was organized to carry on. Fidelity Nat. Bank & Trust Co. v. Southern United Ice Co., (C. C. A. 8th, 1935) 78 F. (2d) 438.
CORPORATIONS-ACCOMMODATION GUARANTY-EFFECT OF CHARTER PROVISION,
Mich. L. Rev.
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