Quinby v. Consumers' Gas Trust Co.

Citations

• 140 F. 362
• 1905 U.S. App. LEXIS 4796

Syllabus

<p>1. Corporations — Contracts Ultra Vires — Estoppel.</p> <p>A public service corporation cannot be estopped from setting up the invalidity of a contract on the ground that it was without power to make it, if the subject-matter of the contract is in violation of a statute or a declared rule of public policy.</p> <p>[Ed. Note. — For cases in point, see vol. 12, Cent. Dig. Corporations, §§ 1554^1557.]</p> <p>2. Same — Quasi Public Corporations — Natural Gas Companies.</p> <p>A company organized under Burns’ Rev. St. Ind. 1901, c. 38, providing for the organization of manufacturing and mining companies, for the purpose of supplying natural gas to consumers, is engaged in performing a public service, and is a quasi public corporation under the decisions of the state courts, and can exercise no powers not granted by its charter or by some other act of the Legislature.</p> <p>[Ed. Note. — For cases in point, see vol. 24, Cent. Dig. Gas, §' 1.]</p> <p>3. Same — Contracts Ultra Vires — Sale oe Entibe Property.</p> <p>An agreement by such a company in a franchise contract with a city, giving the city an option to purchase all of its property, is beyond its powers and void, and since its performance by the company would at once incapacitate it from performing the statutory duties for which it was chartered, and, being in violation of the declared public policy of the state, it is not estopped by its acceptance and use of the franchise from asserting the invalidity of the agreement; nor is such contract, invalid when made, rendered valid and enforceable by the fact that when it is sought to be enforced natural gas has failed in the locality where the company has its wells.</p> <p>4. Same — Cancellation oe Void Contract — Riohts oe Stockholders.</p> <p>Where a quasi public corporation has the right to the cancellation of a contract giving an option for the purchase of its property, as ultra vires, to remove the cloud created thereby from its business as a going concern, its st