Bradley v. Ballard

Citations

• 55 Ill. 413

Syllabus

<p>1. Contracts—by -private corporations—whether enforcible, when not within their proper powers to malee them. While it is true, that so long as the terms of a contract remain unexecuted on both sides, a private corporation is not estopped to say in its defense that it had not the power to make the contract sought to be enforced against it, for the reason, that if thus estopped, its powers might be indefinitely enlarged; yet such a corporation can not, under cover of this principle, evade the payment of borrowed money, on the ground that, although it had power to borrow money, it expended the money borrowed in prosecuting a business which it was not authorized to prosecute, even though the lender of the money knew that the corporation was transacting a business beyond its chartered powers, and tiiat his money would be used in such business, provided the business itself was free from any intrinsic immorality or illegality.</p> <p>2. While a contract remains executory, not only is it true the powers of tile corporation can not be extended beyond its proper limits for the purpose of enforcing the contract, but on the application of a stockholder or of any other person authorized to make the application, a court of chancery would interfere and forbid the execution of a contract ultra vires.</p> <p>3. So, too, if a contract ultra vires is made between the corporation and another person, and while it is yet wholly unexecuted, the corporation recedes, the other contracting party would, probably, have no claim for damages.</p> <p>4. But if such other party proceeds in the performance of the contract, expending his money and his labor in the production of values which the corporation appropriates, the corporation can never be excused from payment on the plea that the contract was beyond its power.</p> <p>5. While courts are inclined to maintain with vigor the limitations of corporate action, whenever it is a question of restraining the corporation in advance, from passing b