Page:Federal Reporter, 1st Series, Volume 7.djvu/409

 TAYLOB V. PHILADELPHU & BEADING E. 00. 397 �Journal for April 29, 1881, (12 Cent. L. J. 386,) I have attemptedto bIiow that the reasons for such a doctrine have passed away, and that the more recent cases have repudiated it. The great increase in their number, and the faciiity with which they are now organized under the general laws existing in most of the states, (taking the place of the former special act,) and many other matters that I have not space to mention, certainly indicate a most important change in the light in which corporations are viewed. And upon the weight of authority it is submitted that there is no implied prohibition of, nor is public policy violated by, corporate acts fiimply ultra vires, and, theref ore, they are not illegal. Union Nat. Bank v. Matthews, 98 U. S. 621 ; OU Oreek, etc., B. Oo. v. lia. Transp. Po. 83 Pa. St. 160 ; WMtney Arms Oo. v. BaHow, 63 N. Y. 62 ; 8tall Bd. ofAgric. v. allizena 8t. B. Oo. 47 Ind. 407; Hays v. OaZion, ete.,Go. 29 Ohio St. 330, 340 ; Darat v. Gale, 83 111. 136 ; and cases cited in Qreen's Brice's Ultra Vires, 2d Ed. 720, note, a, and 12 Cent. L. J. 389, note 29 ; but see Franklin Oo. v. Lew'Mon 8av. Bank, 68 Me. 43. ; Pa., etc,Go. v. Danaridge, 8 Gill. & J. 248. Another question arises as to quasi public corporations, such as railroads, etc. They are invested with important public and gov- ernmental functions, and any attempt to use the i)0Wer of eminent do- main unauthorizedly, or any contract that tPould confliet with the duties that are imposed as the priee of their extraordinary privileges, would violate public policy and be illeg;ai and void. TJiomas v. R. Oo. 101 U^. S, 71, 83, 84; JF. Y., etc., R. Oo. v. ■Winans, 17 How. 30; Blachy/Da., etc., (7ffl«ai Ci>. 22 N; j. Bq. 130; A. e P: Tel. Uo.ir. O.P. KJCo. IFed.'Rep. 746, 747, 782; Bd. of Oorn'rs v,'L., 3r:WS.,etc.,B. Co;' 50 Ind. 85,. 108, 109 ; Pollock, Contracts, ("Wald'S Ed.) 95, 96 ; soe Mahoiieg ^.'Spring Val- ley, etc.,-Wor]cs, 52 Gai. 159. Gontracts ultra vires, which are po^itively prohibited eitherbythe charter or the '^eneral law, or are'agaihst public policy, are illegal and void ; and either party to the contract aay inake the defence. Morris, etc., B. Co. v. 8ussex B. Oo. 20 N. J. Bq. 542 ; W: T., etc., Ins. Oo. v. Ely, 2 Cow. 678 ; Utica Ins. Oo. v. Scott, 19 John! 1 ; Buttand, etc., B. Oo. V. Proetor, 29 Vt. 93, [Bedfidd, J.) But if the prohibition was intended simply as a rule forthe govemment of the corporation, and tlje , legislature did not intehd to avoid the contract as against a party who has performed the contract, the plea of ultra vires cannot be made. Union Bank v. Mattheics, 98 tf. B.' 621; Lake Bank v. North, 4 John. Ghj 370, (Kent, Gh.) Thus, one who has borrowed money from a national bank will not be permitted to def eat an action therefor, on the ground that the loan exceeded the sum it waa permitted to lend. Oold Min. Oo. v. Nat. Bank, 96 U. S. 640 ; O'Harey. Nat. Bank, 77 Pa. St. 96, Contra, Crocker v. Whitney, 71 N. Y. 161. Or that an insurance company had loaned money for a longer time than authorized. Oermantown, etc., Ins. Oo. y. DJiein, 43 Wia.'^O. �III. ExBCUTOKT CoNTKACTS. As to ultra vires contracts, which are wholly unexecuted, or those as to which the parties can be placed in statu quo, the plea of want of power is always available. The right of a stock- holder, or, under certain circumstances, of a crediter, (as in the principal case,) to restrain the corporation or its offlcers from doing acts and enter- ing into contracts ultra vires, is fully established. Dpdge v. Woolsey, 18 liow ��� �