Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/275

 PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 291. highly beneficial to the line. The public also has an interest in the proper administration of the powers conferred by the act. .... If the contract is illegal, as being contrary to the act of parliament, it is unnecessary to consider the effect of dissentient shareholders, for if the company is a corporation only for a limited purpose, and a contract like that under discussion is not within their authority, the assent of all the shareholders to such a contract, though it may make them all personally liable to perform such contract, would not bind them in their corporate capacity, or render liable their corporate funds." It is submitted, however, that the law is not as clearly stated in this case as in some of the following citations, and that passages in the opinion of the court may be open to the following criti- cism in a remark of Justice Blackburn in Taylor v. Chichester and Midhurst Railway Company : l " I think it very unfortunate that the same phrase of ' ultra vires' 1 has been used to express both an excess of authority as against the shareholders, and the doing of an act illegal as being malum prohibitum, for the two things are substantially different, and I think the use of the same phrase for both has produced confusion." 2 From the following citations it would seem to be the better opinion in England that an act which is ultra vires in the sense of unauthorized, is not necessarily illegal ; but that to render it so it must be ultra vires, meaning by the term that which is forbidden expressly or by implication. 3 " Where a corporation is created by an act of parliament for particular purposes, with special powers .... their deed, though under their corporate seal, does not bind them if it ap- pear by the express provisions of the statute creating the corpo- ration, or by necessary or reasonable inference from its enact- ments, that the deed was ultra vires, that is, that the legislature meant that such a deed should not be made." 4 As used by Baron Parke, the phrase ultra vires means forbidden at least by implication, as is shown by the last line in the citation just made, 1 L. R. 2 Ex. 356, 379. 2 See remark of Vice-Chancellor Kindersley, in Shrewsbury v. North Staffordshire R'y Co., 35 L. J. Ch. 156, 172. 3 This last meaning is not the one in which ultra vires is used by the present writer, § 264, note. 4 Baron Parke in South Yorkshire Ry. Co. v. Great Northern Ry. Co., 9 Ex. 55, 84. 255