Page:Harvard Law Review Volume 9.djvu/293

265 EXERCISE OF CORPORATE POWER. 265 The second legal obstacle which the courts must meet and over- come, if the view in question is to prevail, is the resulting difficulty of maintaining any theory whatever which places limitations upon the corporate power to contract. It will be observed that the exi- gencies of the policy under discussion require the courts to enforce ultra vires contracts as between the parties, leaving the State to institute proceedings, by quo zvarranto or otherwise, to deprive the offending body of its charter. But in point of fact, in ninty- nine cases out of a hundred the State has no real interest in the matter. Even in those cases in which we lawyers are accustomed to speak most glibly of '* public interest," it often happens that the conventional conception of the interest of the community is just the reverse of its interest in fact. Take the case of a railway lease which has not been specifically authorized. The lessor refuses to perform certain covenants, and an effort is made to compel specific performance. In no jurisdiction will the desired decree be made, because it is the conventional view that the public is interested in seeing to it that no one but the original grantee of the franchise shall exercise it. Suppose the offer is made to prove by affidavit, or otherwise, that the entire community affected is anxious that the lease should be enforced. The offer is of course rejected by the court. It may be assumed to be clear that, upon submitting the documents in the case to the legislature, an enabling act authorizing the lease could have been had for the asking. The fact remains that corporations are driven to the legislature in these cases to seek protection from the courts.^ The reason for the per- sistence of the theory that a franchise of a pubHc nature is inalien- able without the consent of the sovereign is not altogether clear. As yet no court has been found so iconoclastic as to shatter the venerable doctrine.^ But, as has been said, the cases in which the public and the State have a direct interest, even by convention, are far from numerous. In the absence of direct interest there is no reason to expect active interference with corporate activity in any considerable number of cases. There is even a decision in the books in which the right of the State to forfeit a charter ^ Central Transportation Co. v. Pullman's Palace Car Co. is a striking illustration of this. There the legislature had passed an act specially enabling the lessor corporation to make the lease in question, but the court nevertheless held that the authority was not sufficiently explicit. R. R., 118 U. S. 290. 35
 * See the dissent of Mr. Justice Bradley in Penna., &c. R. R. v. St. L. A. & T. H.