Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/305

 PART HI.] ACTS BEYOND THE CORPORATE POWERS. [§ 314. is particeps oriminis, may invoke the aid of a court to relieve it from an illegal contract ; for the relief is regarded as given to the public through the party in whose name it is sought. Thus, in a New York case, it was held that a lease taken by a railroad company for the purpose of extending its road beyond its chartered terminus was ultra vires and void, and would be set aside on the application of a party to it. But it was also held that the court would not relieve the parties any further than the public interest required, and accordingly no recovery was permitted for the use of the leased property previous to the time when the lease was declared invalid. 1 § 314. Persons who at the expense of a corporation have received benefit from an ultra vires transaction, even _. ... mj _ m '. Liability of a transaction that is illegal as against public policy, other party may have to refund to the corporation to the extent of the benefit they have received. 2 Where, however, both the corporation and the other contracting party have received bene- fits under a partially executed ultra vires contract, the corpora- tion, it is held, cannot retake its property, which under the contract has passed to the other contracting party, without offering to return the property of the other party, which, through the same contract, has come into the possession of the corporation ; and, at all events, a corporation will be enjoined from taking possession of its former property under such cir- cumstances till a judicial settlement and accounting can be had. 3 The litigation in the cases cited in the note arose from trans- actions which were not only ultra vires, but, on grounds of pub- lic policy, illegal. In one of them, American Union Tel. Co. v. Union Pacific Eailway Co., Judge McCrary said: 4 "Many cases hold that a corporation which has made a contract ultra 1 Union Bridge Co. ». Troy, etc., R. R. Co., 7 Lans. (X. Y.) 240. 2 Briee, Ultra Vires, 2d Eng. ed. p. 814. See Bryson v. Warwick, etc., Canal Co., 1 Sm. & G. 447; S. C, 4 De G. M. & G. 711; Ernest v. Croys- dill, 2 Be G. F. & J. 175; Zulueta's Claim, L. R. 5 Ch. 444; Hardy v. Metropolitan Land Co., L. R. 7 Ch. 427. 3 American Union Tel. Co. v. Union Pac. Ry. Co., 1 McCrary, 188; Atl. & Pac. Tel. Co. v. Union Pac. Ry. Co., ib. 541; Central Branch U. P. R. R. Co. v. West'n Union Tel. Co., ib. 551; West'n Union Tel. Co. v. Burlington, etc., Ry. Co., 3 McCrary, 130. 285
 * 1 McCrary, 188, 201.