Page:Harvard Law Review Volume 8.djvu/41

ACQUISITION OF REAL ESTATE BY A CORPORATION. 25 Harbor Protection Company,^ a case in which certain corporations had attempted to form a corporation under the general laws, with- out right, and the supposed new corporation had acquired prop- erty. It was held that this property belonged to the holders of certificates of stock, and that the Court would order it to be sold and the proceeds divided among them. The question under discussion has been decided by a Court of last resort, contrary to the doctrine contended for, in but one case, §0 far as the writer is informed. In a case decided some years ago in Illinois,^ it is held that a conveyance of land to a foreign corpo- ration, not expressly prohibited by statute, but opposed to the settled policy of the State in which the land is situated, is void ; that the corporation takes no title, and is unable to transmit any. In this case, a Connecticut land company had purchased real estate in lUinois, which it subsequently sold and conveyed to the city of St. Louis. The plaintiff, who claimed under the grantor of the land company, brought a suit of ejectment against the city. The Court, by reference to the general course of legislation on the subject, declared it to be against the policy of Illinois to permit a corporation of another State, formed for the sole purpose of buy- ing and selling real estate, to purchase and hold lands in Illinois. The result stated was put on the ground, that a corporation created in one State cannot exercise its functions in another State, with- out the permission of the latter, it being assumed, without reason- ing, that a deed to a corporation acting without such consent is necessarily inoperative. Two of the judges, however, dissented from the opinion so far as it held invalid a transfer of land by the corporation to a purchaser. The cases the other way may be briefly referred to. In a Louisiana case,^ a corporation had made an ultra vires purchase of certain machinery, which was subsequently seized on execution by a creditor of the vendor. The Court said: " If the Company did anything contrary to law, the result might be a forfeiture of its charter. But we do not understand the law to be that if a cor- poration acquires property in a manner even prohibited by law, the property thus acquired still belongs to the vendor who has received his price, and that it can be seized to pay his debts." In the recent case of Carlow v. Aultman,* the defendant cor- poration purchased land in Nebraska, in violation of a statute 1 37 Louisiana Annual Reports, 233. ^ Edwards v. Fairbanks, 27 La Ann. 449. a Carroll v. East St. Louis, 67 111. 568. * Nebraska (1890), 44 N. W. Rep. 873. 4