Reports of Cases Decided in the Supreme Court of the State of Indiana Volume 119
This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1889 edition. Excerpt: ...interpose the defence of ultra vires, or, having used the money with the consent or acquiescence of its stockholders, ask that the lender be restrained from collecting it back, on the ground that the money was obtained in violation of the charter of the corporation. Like natural persons, corporations must be held to the observance of the recognized principles of common honesty and good faith, and these principles render the doctrine of ultra vires unavailiug when its application would accomplish an unjust end, or result in the perpetration of a legal fraud. After a corporation has received the fruits which grow out of the performance of an act ultra vires, and the mischief has all been accomplished, it comes with an ill grace then to assert its want of power to do the act or make the contract, in order to escape the performance of an obligation it has assumed. The most that can be said in the present case is, that there was a defect of power to engage iu the transaction in which the money borrowed was used. The power to borrow money was plenary, and subject to no restrictions. In such 51 case, although the lender may know that it is the purpose of the borrower to use the money in an irregular way, yet if the contract between the lender and borrower is not in violation of law, or declared void by statute, the money may be recovered, unless the lender was in some way implicated in furthering the borrower's design, or accessary to the prohibited or illegal act. Sondheim v. Gilbert, 117 Ind. 71; Cummings v. Henry, 10 Ind. 109; Bickel v. Sheets, 24 Ind. 1. Wharton states the rule thus: " It is not enough that the party lending might have foreseen that the money would have been likely to have gone to an illegal object, or that the...
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- 13 Sep 2013
- Illustrations, black and white