Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/582

 § 556.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. sustained, it must be shown either that there is no such power as I have supposed remaining in the proprietors, or at least that all means have been resorted to and found ineffectual to set that body in motion." 1 § 556. The legal effect of ultra vires acts was discussed in a previous chapter. 2 A single shareholder has ample power to restrain the corporation from diverting the corporate funds from the purposes for which they were subscribed, and ordi- narily can prevent the doing of any ultra vires act ; 3 provided, he is not chargeable with acts or omissions by which his rights can be held waived or forfeited. 4 Thus, a shareholder in a railroad corporation may enjoin the carrying out of an ultra vires lease of the road ; 5 or the performance of an illegal con- tract. 6 A minority or a single shareholder may restrain the corpora- tion, or the corporate management, from diverting the corporate funds to unauthorized purposes. 7 Accordingly, a shareholder may enjoin a railroad corporation from using its funds or pledging its credit in order to extend its road beyond the 1 See Railway Co. v. AHerton, 18 Wall. 233; Dimpfell v. Ohio, etc., R. Co., 110 U. S. 209, § 140. 2 Chap. 7, part iii. 3 Natusch v. Irving, Gow on Part., ed. 3, App. 576; Const v. Harris, Turn. & R. 496; Gifford v. New Jer- sey R. R. Co., 10 N. J. Eq. 171; Dodge v. Woolsey, 18 How. 331; Stewart v. Erie, etc., Trans. Co., 17 Minn. 372, 398; Carson v. Gaslight Co., 80 Iowa, 638. See Angell and Ames on Corp., § 398; Coleman v. Eastern Counties R'y Co., 10 Beav. 1; March v. Eastern R. R. Co., 40 N. H. 548; Schwarz- wehler v. German Mut. Ins. Co., 59 N. J. Eq. 589; Ely ton Fund Co. v. Dowdell, 113 Ala. 177 ; Morris v. Elyton Fund Co., 125 Ala. 263. 4 See Dimpfell v. Ohio, etc., R. Co., 110 U. S. 209; Cozart v. Georgia R. R. etc., Co., 54 Ga. 379; Gray v. Chaplin, 2 Russ. 126; Graham r. Bir- kenhead R'y Co., 2 Mac. & G. 140; e. g., laches, see above cases, and 562 Alexander ». Searcy, 81 Ga. 536; Burgess v. St. Louis Ry. Co., 99 Mo. 496; Snow v. Boston Blank Book Co., 158 Mass. 325; Rabe v. Dunlap, 25 Atl. Rep. 959 (N. J.); Willis v. Porter, 132 Cal. 516. Also, § 213. 6 Board, etc., Tippecanoe County v. Lafayette, etc., R. R. Co., 50 Ind. 85; Mills v. Central R. R. Co., 41 N. J. Eq. 1. 6 Morrill v. Boston and Maine R. R., 55 N. H. 531; Sandford v. Railroad Co., 24 Pa. St. 378; Cum- berland Valley R. R. Co.'s Appeal, 62 Pa. St. 218; Charlton v. New- castle, etc., R'y Co., 5 Jur. N. S. 1096. 7 March v. Railroad, 43 N. H. 515; Ashton v. Dashaway Ass'n, 84 Cal. 61; Rothwell v. Robinson, 39 Minn. 1; Simpson v. Westminster Palace Hotel Co., 8 H. L. Cas. 712; Lyde o. Eastern Bengal R'y Co., 36 Beav. 10; State v. Holmes, 60 Neb. 39.