2006 Ohio Revised Code - 1702.36. Corporate mortgages.

§ 1702.36. Corporate mortgages.
 

The directors may authorize any mortgage, pledge, or deed of trust of all or any of the property of the corporation of any description, or any interest therein, for the purpose of securing the payment or performance of any obligation or contract. Unless the articles or the regulations, or the terms of any trust on which the corporation holds any particular property, otherwise provide, no vote or consent of members or authorization from the court under section 1715.39 of the Revised Code is necessary for such action. 
 

HISTORY: 126 v 432(511), § 2 (Eff 10-11-55); 148 v H 597. Eff 4-10-2001.
 

Not analogous to former RC § 1702.36 (GC § 8623-128; 112 v 9(55), § 128; 114 v 59; Bureau of Code Revision, 10-1-53), repealed 126 v 432, § 5, eff 10-11-55.

 

19xx Committee Report or Comment.
 

1955 COMMITTEE COMMENT

Based on new Sec. 1701.65 and changing the rule now set forth in present Sec. 1702.22 which states that, unless otherwise provided in the articles or the regulations, a nonprofit corporation shall not mortgage any real property except when authorized by a majority vote of the members. This rule has proved awkward in practice. In the case of a corporation having many members, it is often difficult to arrange a meeting of the members for such purpose, and in the case of a religious or charitable corporation with many members, the attendance at such meeting is usually not representative. Generally speaking, the trustees of a nonprofit corporation should have more discretion and authority than do the directors of a corporation for profit and yet in the latter case the directors, without any vote by shareholders, may mortgage the property of the corporation, unless otherwise provided in the articles. Furthermore, the above redraft makes it clear that no court order is necessary to mortgage property unless the terms of trust of property held in trust otherwise require, which is seldom the case, thus making present Sec. 1715.39 inapplicable. 

This section changes the rule set out in former RC § 1702.22. See RC § 1701.65 for similar provisions.