Page:Harvard Law Review Volume 9.djvu/574

546 546 HARVARD LAW REVIEW. Corporations — Ultra Vires — Lawful Act for Unlawful Purpose. The receiver of an insolvent national bank sued a State bank for an assessment made upon shares of an insolvent bank owned by the defendant corporation, which pleaded that it did not become possessed of the shares by way of pledge, upon execution, or upon compromise of a debt, the only ways in which it lawfully might ; that its president had bought the stock and caused its transfer to the defendant, against provisions of both Federal and State statutes. Held, that the defendant could not " set up its own violation of law to escape the responsibility resulting from its illegal action." State Bank v. Hawkins, 7 1 Fed. Rep. 369. The court carefully distinguishes between tiltra vires in the sense of a lack of corporate authority to perform the act in question under any circumstances, in which case it is available as a defence to either party to the contract, and ultra vires as applied to an act which the corporation is authorized to perform for a specific pur- pose, and which has been performed for an unauthorized purpose, in which case it is not. The present decision falls within the latter class. On the first point, see C. T. Co. V. Pullman Co.,y) U. S. 24 ; 8 Harv. Law Rev. 506. The principal case cites numerous authorities upon the second point. See especially Bank v. Matthews^ 98 U. S. 621; Fritts V. Palmer, 132 U. S. 282; Ditch Co. v. Zellerbach, 37 Cal. 543. Corporations — Ultra Vires Contract — Surety. — A. contracted with a county to furnish water supply. B. signed A.'s bond as surety. The county paid the contract price in advance and A. refused to perform, on the ground that the contract was ultra vires. Held, (i) A. is liable to the county on a quantum meruit iox the con- sideration so paid ; (2) B, cannot be held as surety for this liability. Edwards County . Jennings, 33 S. W. Rep. 585 (Tex.). It is well settled in many jurisdictions that where one party to a contract has per- formed and the other party repudiates and sets up the defence of ult7-a vires, the party so repudiating is liable on 2i quantujn meruit. See P. P. Co.. Keokuk Co., 131 U. S. 389. The principal case is interesting as bringing out very clearly the nature of this liability. It results from the invalidity of the contract, and is not in any sense grounded on the contract itself. Therefore the surety whose liability was only on the contract was not bound. The rule that a surety will not be held beyond his original liability is elementary. See opinion of Judge Story in Aleller v. Stewart, 9 Wheat. 680. Equity — Conveyance in Fraud of Intended Husband. — A., ten days before her marriage to B., voluntarily conveyed her real estate to C. without the knowledge of B. A child was born and A. died. C. conveyed to D., who conveyed to the child, both deeds reciting a nominal consideration. Held, such conveyances were in fraud of the marital rights of the husband, and void as to him. Therefore he is entitled to his curtesy. Leary v. King, 33 Atl. Rep. 629 (Del.). Before the modern Married Women Acts the doctrine was universal that a voluntary secret conveyance by either husband or wife during the engagement and before marriage was a fraud on the marital rights of the other, and void to that extent. Strathmore v. Bowes, I Ves. Jr. 22 ; see also collection of authorities in i Wh. & T. L. C 317. Under the modern statutes the courts have shown no disposition to alter the doctrine, and the rule remains substantially the same. Duncan^s Appeal, 7 Wright, 67 ; Beere v. Beere, 44 N. W. Rep. 809 (la.) ; Murray v. Murray, 13 S. W. Rep. 244 (Ky.); Ferebee V. Pritchard, 16 S. E. Rep. 903 (N. C). Equity — Unauthorized Use of Public Funds — Attorney General only CAN Enjoin. — By statute an. appropriation was made for the erection of an insane asylum and defendants were thereby appointed as commissioners to locate and build the asylum. One Taylor filed a bill in equity in the name of the State as plaintiff, alleging that this statute was unconstitutional and that the expenditure of the State's money in the erection of the asylum was therefore unauthorized. The bill prayed that defendants be enjoined from expending the appropriation. Held, that equity has no jurisdiction to interfere. State v. Lord, 43 Pac. Rep. 471 (Ore.). The decision is handed down in a lengthy but interesting opinion by Wolverton, J. He supports the result on several distinct grounds. The most satisfactory of these grounds appear to be that the Attorney General does not appear as a party to the bill ; that the bill must- therefore be taken as if filed in the name of Taylor; that on the allegations of the bill no property right of Taylor's will be infringed by the pro- posed expenditure ; that the Attorney General is the only proper party to ask an in- junction against an unauthorized use of public funds ; that the bill does not therefore disclose any ground on which equity can take jurisdiction at the instance of Taylor. The opinion goes on to consider under what circumstances equity will take juris- diction of a bill for an injunction filed by the Attorney General in behalf of the State.