actions in the course of which the contracts were performed, had been generally acquiesced in.[1]
Darst v. Gale[2] is another case frequently cited in support of the alleged rule—which is indeed stated in so many words in the opinion of the court—"that a private corporation cannot avail of the defence of ultra vires where the contract has been in good faith fully performed by the other party, and the corporation has had the benefit of the contract and the performance." But in this case the defence was not set up by or on behalf of the corporation, nor on behalf of any person interested in it. A subsequent grantee of premises belonging to the corporation attempted to have a prior deed of trust covering the same property set aside, on the ground that such deed was ultra vires the corporation; he having bought with full notice of the prior deed. The ultra vires nature of the prior deed had infringed no right of his ; and, consequently, he had no standing in court to interpose the plea of ultra vires.
§ 281. The decision, if not the reasoning, in this case points to an important principle respecting the plea of ultra vires. According to the rules under discussion, the plea cannot be interposed Ultra vires cannot be pleaded by a person whose rights are not infringed.
by the party contracting with the corporation when the corporation has performed:[3] and the reason for this lies not only in the estoppel with which, under the circumstances, such a person is affected, but in the following reason as well: That the transaction was ultra vires infringed none of his
- ↑ Peoria and Springfield R. R. Co. v. Thompson, 103 111. 187; Ward v. Johnson, 95 111. 215. It is thought that the foregoing remarks will often apply to cases relied on in support of this alleged rule, in some of which, indeed, the rule is stated in so many words. See Oil Creek, etc., R. R. Co. v. Penna. Trans' n Co., 83 Pa. St. 160; State Brd. of Agriculture v. Citz.'s Street R'y Co., 47 Ind. 407. Compare Arnot v. Erie R'y Co., 67 N. Y. 315; Zabriskie v. Cleveland, etc., R. R. Co., 23 How. 381; Main v. Casserly, 67 Cal. 127; Blood v. La Serena, L. & W. Co., 134 Cal. 361.
- ↑ 83 Ill. 136. Since the decision in National Home B'ld'g Ass'n v. Bank, 181 Ill. 35, the cases of Darst v. Gale and Bradley v. Ballard cannot be considered authority for this proposition in support of which they have so often been cited. See also Kadiole v. Loan Ass'n, 151 111. 531. Compare Grant v. Henry Clay Coal Co., 80 Pa. St. 208. And for the validity of unauthorized conveyances of real or personal property to a corporation, see § 303.
- ↑ § 276.
