A.P. Smith Mfg. Co. v. Barlow,

13 N.J.145, 98 A.2d 581, appeal dismissed, 346 U.S. 861, 74 S.Ct. 107, 98 L.Ed. 373 (1953)


P was incorporated in 1896 and is engaged in the manufacture and sale of valves, fire hydrants, and special equipment, mainly for water and gas industries. P has contributed regularly to the local community and on occasions to Upsala College in East Orange and Newark University. The board of directors adopted a resolution to donate to Princeton University. It gave the sum of $1,500. Ds questioned the action and P instituted a declaratory judgment action in the Chancery Division. At trial the party line from the board members was that 'Capitalism and free enterprise owe their survival in no small degree to the existence of our private, independent universities' and that if American business does not aid in their maintenance it is not 'properly protecting the long-range interest of its stockholders, its employees and its customers.' This evidence was not disputed. Ds also acknowledged that for over two decades there has been state legislation which expresses a strong public policy in favor of corporate contributions such as that being questioned by them. D took the position that P's certificate of incorporation does not expressly authorize the contribution, and under common-law principles, the company does not possess any implied or incidental power to make it and that the statutes which expressly authorize the contribution cannot be applied as P's charter was created long before their enactment.