Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/261

 PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 280. § 280. Take, for instance, the leading case of Bissell v. Rail- road Companies, 1 on which this alleged rule is said to rest. In the first place, not all the judges who concurred in the result based their decision on that rule at all ; and in the second place, it would have been preposterous not to assume that all the share- holders were acquainted with the fact that the corporations were running a railroad where their charters did not authorize them to run one. Or take the leading Illinois case often referred to as establishing this rule, Bradley v. Ballard. 2 There a share- holder sought to restrain the prosecution of a suit against the corporation brought to recover on an ultra vires contract, which had been performed by the plaintiff in the suit against the cor- poration. But the shareholder seeking the injunction was also a director, and, as the court said, had been willing enough that the contracts should be made as long as he expected profits to arise from them. 3 So in other Illinois cases more or less based on Bradley v. Ballard, but in which the corporation itself re- sisted the suit on the plea of ultra vires, it is evident that the decisions proceed on the assumption, and there was no sugges- tion to the contrary, that the contracts sued on, and the trans- has been fully executed, when if the same stockholder had applied in season for an order to restrain the execution of the contract, equity might have felt bound to grant the relief prayed for. Especially is this so where the complainant has stood by and allowed the illegal transac- tion to be consummated, and has allowed and induced others to be- come interested in the corporation on the supposition that the existing state of things is legal and proper." Terry v. Eagle Lock Co., 47 Conn. 141, 161. In St. Louis, etc., R. R. Co. v. Terre Haute, etc., R. R. Co., 145 U. S. 393, the court refused to entertain a bill in equity to set aside an ultra vires lease of a railroad after it had been acted on for seventeen years. 1 §275. See, also, Savings Bank v. Elevator Co., 90 Mich. 550. 2 55 111. 413. 16 3 55 111. 419. For instance, it has been held that the holder of a note for value may enforce it against the maker, a corporation, although it was ultra vires the corporation to pur- chase the property in payment for which the note was given, and the holder knew the consideration of the note. The defendant retained the property, and did not offer to give it up. Wright v. Pipe Line Co., 101 Pa. St. 204. Compare Union Trust Co. v. Library Hall Co., 189 Pa. St. 263. See, also, Pittsburg R. R. Co. v. Altoona Co., 196 Pa. St. 452. The note was given to pay for stock pur- chased by defendant in contravention of a statutory prohibition. The court said this was a matter for the at- torney-general. See, also, Tajdor v. North Star M'g Co., 79 Cal. 285; Woodcock v. Bank, 113 Mich. 236. But see, semble contra, Westinghouse I Machine Co. v. Wilkinson, 79 Ala. 312. 241