16 See Kent v. Wallingford, 42 Vt. 651.

17 Nelson v. Fleming, 56 Ind. 310.

18 Evansville etc. R. R. Co. v. Grady, 6 Bush, 144.

19 Goodwin v. Cin. etc. Canal Co. 18 Ohio St. 169.

20 Rosa v. Mo. etc. R. R. Co. 18 Ka. 124; see Ex parte Winder, Law R. 6 Ch. Div. 696.

21 Matter of Comm'rs, 56 N. Y. 144; and see State v. Hug, 44 Mo. 116; Duncan v. Louisville, 8 Bush, 98; Shaw v. Charlestown, 3 Allen, 538; Johnson v. Almeda, 14 Cal. 106; Rider v. Stryker, 63 N. Y. 136; but compare Walker v. Eastern Counties Railw. 6 Hare, 594; Rex v. Commis'rs etc. 4 Barn. & Adol. 335; Stone v. Commercial Railw. Co. 4 Mylne &C. 122.

22 Leisse r. St. Louis etc. R. R. Co. 2 Mo. App. 105; and see Hullen . Municipality, 11 Rob. (La.) 97; State v. Graves, 19 Md. 351; Re Strathmore Estates, Law R. 13 Eq. 338.

§ 97. What acts, etc., constitute a “taking."-The constitutional prohibition against taking private property for public uses, without just compensation, precludes the acquisition of any title, easement, or permanent appropriation of the land, from the owner, without an actual payment or tender of a just compensation;1 but a survey and other preliminary steps to the acquisition of a title, are not a "taking" within the meaning of the constitution. So, where a corporation, in constructing its works, injuriously affects adjoining land, this is not a "taking" of it for public use, within the purview of the constitution. But a serious interruption to the common and necessary use of property may amount to a "taking";4 as, where lands are actually invaded by additions of water, earth, sand, or other materials,5 or by having any artificial structure placed on them, so as effectually to destroy or impair their usefulness. 6

1 Nichols v. Somerset etc. R. R. Co. 43 Me. 356; Eaton v. Railroad Co. 51 N. H. 504. Compare Eagle v. Charing Cross Railw. Co. Law R. 2 Com. P. 638; Railroad Co. v. Richmond, 96 U. S. 521.

2 Stewart v. City of Baltimore, 7 Md. 500; Polly v. Saratoga etc. R. R Co. 9 Barb. 449; Standish v. Mayor etc. 1 Diew. 1; 15 Eng. L. & Eq. 255* 3 Radcliff r. Mayor etc. 4 N. Y. 195; Vt. 363; Callender v. Marsh, 1 Pick. 418; 14 Barb. 405; Bradley v. New York etc. portation Co. v. Chicago, 99 U. S. 635.

Sabin v. Vt. Cent. R. R. Co. 25
Matter of Hamilton Avenue,
R. R. Co. 21 Conn. 294; Trans

4 Cushman v. Smith, 34 Me. 247; Pumpelly v. Green Bay Co. .3 Wall. 166.

5 Eaton v. Railroad Co. 51 N. H. 504; Arimond v. Green Bay Co. 31 Wis. 316.

6 Pumpelly v. Green Bay Co. 13 Wall. 166.

CHAPTER IX.

ULTRA VIRES.

98. Nature of the doctrine of, in general.

99. Application of the doctrine to contracts, generally. § 100. Contracts in violation of statute, or public policy. § 101. Relation of the doctrine to executed contracts.

§ 102. Instances of the application of the doctrine.

§ 103. Instances of transactions not ultra vires.

§ 104. Effect of estoppel, or ratification, on transactions ultra vires.

§ 98. Nature of the doctrine of, in general.-The expression, "ultra vires," is "the modern technical designation, in the law of corporations, of acts beyond the scope of their powers, as defined by their charters or acts of incorporation." ." The expression also applies to the act of a corporation in exercising its corporate powers in a mode different from that prescribed by the terms of the grant. It is a concise and convenient form by which to indicate the unauthorized action of artificial persons with limited powers. The acts of a corporation may be ultra vires, and yet, not illegal; 4 and generally, when acts of corporations are spoken of as as ultra vires, it is not intended that they are unlawful, or even such as the corporation cannot perform, but merely those which are not within the powers conferred upon the corporation by the art of its creation. The term is, however, used in different senses, and this should be kept in mind, when a question arising out of dealings with a corporation is under consideration. Thus, a corporate act is said to be ultra vires, first, when it is not within the scope of the powers of the corporation to perform it under any circumstances, or for any purpose; or, second, with reference to the rights of certain parties, when the corporation is not authorized

to perform it without their consent; or, third, with reference to some specific purpose, when it is not authorized to perform it for that purpose, although fully within the scope of the general powers of the corporation, with the consent of the parties interested, or for some other purpose. In general, if a corporate act can be shown to be ultra vires in the sense first mentioned, the plea of ultra vires is available, even to the corporation itself, without regard to the circumstances under which the alleged performance took place; 8 but when it is objected that the act is ultra rires in the second or third sense, special facts may exist which meet and overthrow the defense.9 The doctrine of ultra vires is of modern growth, and is the creature purely of judicial decision. 10 In England, the doctrine has been carried farther than the courts in this country have been disposed to extend it; 11 and the latter courts now favor a far more liberal rule in regard to transactions ultra vires than formerly.12

12 Rouv. Dict. 620; and see Grigg v. Foote, 4 Allen, 195; Bissell v. Mich. etc. R. R. Co. 22 N. Y. 258; East Anglian Railw. Co. v. Eastern Counties Railw. Co. 11 Com. B. 775; 5 Am. Law Rev. 272.

2 McSpedon v. Mayor etc. 20 How. Pr. 395; 7 Bosw. 601; Matthews v. Skinker, 62 Mo. 329.

3 Nat. Pemberton Bank v. Porter, 125 Mass. 333.

4 Bissell v. Mich. etc. R. R. Co. 22 N. Y. 258; and see Riche v. Ashbury Railw. etc. Co. Law R. 7 H. L. 653.

5 Whitney Arms Co. v. Barlow, 63 N. Y. 62, 68; and compare Taylor v. Chichester etc. Railw. Co. Law R. 2 Ex. 356.

6 See Bissell v. Mich. etc. R. R. Co. 22 N. Y. 258; Farmers' Bank v. Detroit etc. R. R. Co. 17 Wis. 372; Vandall v. South Dock Co. 40 Cal. 83. 7 McPherson v. Foster, 43 Iowa, 48; Miners' Ditch Co. v. Zellerbach, 37 Cal. 543.

8 Miners' Ditch Co. v. Zellerbach, 37 Cal. 543.

9 Monument Nat. Bank v. Globe Works, 101 Mass. 57; 3 Am. R. 322; Toledo etc. R. R. Co. v. Rodrigues, 47 Ill. 188; Milnor v. N. Y. etc. R. R. Co. 53 N. Y. 363; State Board v. Citizens' Street Railw. Co. 47 Ind 407; Southern Life Ins. Co. v. Lanier, 5 Fla. 110; Bank of So. Car. v. Hammond, 1 Rich. 281.

10 See Green's Brice's Ultra Vires, (2nd ed.) vii, ix; Commonw. v. Arrison, 15 Serg. & R. 127; Binney's Case, 2 Bland, 99; Pearce v. Madison etc. R. R. Co. 21 How. 441; Colman v. Eastern Counties Railw. Co. 10 Beav. 1; East Anglian Railw. Co. v. Eastern Counties Railw. Co. 11 Com. B. 775.

11 See Crampton v. Varna Railw. Co. Law R. 7 Ch. 562; Shrewsbury etc. Railw. Co. v. N. W. Railw. Co. 6 H. L. Cas. 113; Richie v. Ashbury Railw. etc. Co. Law R. 7 H. L. 653.

12 See Railway Co. r. McCarthy, 96 U. S. 258; Hurd v. Green, 17 Hun, 327; State Board v. Citizens' Street R. R. Co. 47 Ind. 407; Oil Creek etc. R. R. Co. v. Penn'a Transp. Co. 83 Pa. St. 160.

§ 99. Application of the doctrine to contracts generally. As a general rule, a contract entered into by a corporation, which is entirely foreign to the objects and purposes of its creation, is void, for want of power over the subject. Such contract, though under the corporate seal, regularly affixed, does not bind the corporation, if it clearly appear that the legislature meant that such a contract should not be made; 2 but the rule is otherwise where the corporation contracts with reference to a subject within its powers, although in so doing it exceeds those powers. A corporation which exceeds its powers in loaning money for two years instead of one, and upon note and mortgage instead of bond and mortgage, may, nevertheless, maintain an action upon the securities.4 So, if a corporation, in excess of its powers, receives money on the condition that it is to be returned unless a certain additional amount is received by it within a certain time, and the condition is broken, an action will lie to recover the money.5 Where a corporation buys more land than the law allows, this is a wrong which can only be inquired into by the state, and the corporation does not thereby lose its rights as against trespassers. Bonds of a railroad company are not rendered void in consequence of being secured by a mortgage which the company may have had no authority to execute." The violation of its charter by an incorporated bank, in circulating as currency notes or bills not payable on demand, does nct invalidate a contract made by the bank with other parties, in which the circulation of such notes or bills is involved. And though a bank violate its charter by taking more than a certain interest, a note securing higher interest is not void as being a contract which the bank had no authority to make.9 But owning and navigating steamships, being a distinct business from docking and repairing such vessels, a corporation formed solely for

the latter business cannot lawfully engage in the former; and a subscription by such a corporation to the stock of a corporation engaged solely in the former business, is not enforceable.10 So, a company incorporated for the purpose of establishing and conducting a line of vessels for the conveyance of passengers between certain places, cannot make a valid contract for the breaking of ice, and the towing of vessels through the track broken, to an other place. Nor can a corporation, authorized by its charter to boom lumber and receive toll therefor, recover toll for driving lumber. 12 So, where two railroad companies, without authority, assumed to consolidate into one, and bought a steamboat to run in connection with their road, notes given for the purchase were declared void, and the holder was not permitted to recover on them against the corporations. 18 And, as a general rule, parties contracting with corporations are chargeable with notice of their powers, and the limitations upon them, and cannot plead ignorance in avoidance of the defense of ultra vires.14

1 Beach v. Fulton Bank, 3 Wend. 573; Rock River Bank v. Sherwood, 10 Wis. 230; Weckler v. First Nat. Bank, 42 Md. 581; Smithy. Buffalo, Sheld. 493; 19 Alb. L. J. 397; Brooklyn Gravel Road Co. Slaughter, 33 Ind. 185; Miners' Ditch Co. v. Zellerbach, 37 Cal. 543; Hattersley v. Earl of Shelburne, 31 Law J. Ch. 875.

2 Bateman v. Mayor etc. 3 Hurl. & N. 323; Mayor etc. v. Norfolk Railw. Co. 4 El. & B. 397; South Yorkshire Kailw. etc. Co. v. Great North. Railw. Co. 9 Ex. 55, 84.

3 Littlewort v. Davis, 50 Miss. 403; Haynes v. Covington, 13 Smedes & M. 408; Monument Nat. Bank v. Globe Works, 10 Mass. 57; Proprietors of City Hotel v. Dickinson, 6 Gray, 586; City Fire Ins. Co. v. Carrugi, 41 Ga. 660; Kilgore v. Bulkley, 14 Conn. 362; State Board v. Citizens' R. R. Co. 47 Ind. 407; Agar v. Athenæum Assoc. Soc. 3 Com. B. N. S. 725; Royal British Bank v. Turquand, 5 El. & B. 248.

4 Germantown etc. Ins. Co. v. Dhein, 43 Wis. 420; 28 Amb. 549; Compare Herzo v. San Francisco, 33 Cal. 134; Life Ins. Co. v. Mechanic Fire Ins. Co. 7 Wend. 31.

5 Morville v. Am. Tract Soc. 123 Mass. 129; 25 Am. R. 40.

6 Whitman Min. Co. v. Baker, 3 Nev. 386; and see South. Life Ins. Co. v. Lanier, 5 Fla. 110; Bank of So. Car. v. Hammond, 1 Rich. 281. 7 Phila. etc. R. R. Co. v. Lewis, 33 Pa. St. 33.

8 Cannon v. McNab, 48 Ala. 99.

9 Rock River Bank v. Sherwood, 10 Wis. 230; and see Fleckner ♥. U. S. Bank, 8 Wheat. 338. But compare Bank of U. S. v. Waggener, 9 Peters, 399; Farmers' etc. Bank v. Harrison, 57 Mo. 503; Farmers' Bank v. Burchard, 33 Vt. 316.