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gress of the action out of which the present is properly used.

is properly used. Thus understood, the docappeal arises, is not, I must say, creditable to trine of ultra vires is of very modern date, and our legal proceedings. There was not in the entirely the creation of the courts. There is case any fact in dispute; and the only ques- no such thing as ultra vires in the case of a tions which arose were questions of law, or common law corporation (Case of Sutton's questions, perhaps, as to the proper inferences Hospital, 10 Coke, 30 C.), and it is not enacted to be drawn from facts as to which there was in any statute. It affords, perhaps, the most no dispute. The litigation appears to have remarkable instance in the history of English been active and continuing, yet seven years

jurisprudence of the making of law by the have been consumed, and the result of all, up judges; and having once been created, it is to the present time, is this, that in the Court of now probably saddled onto the backs of the Exchequer, two out of the three judges were of courts, like Sinbad's Old Man of the Sea, not the opinion that the plaintiff should have judg- to be shaken off. ment; and when the case came before the Ex- The doctrine was announced from the bench chequer Chamber, it was heard before six in America much sooner than in England, and judges, three of whom were of opinion that the view of it taken here was at first adopted the plaintiff was entitled to judgment, the other there. As first announced, it was drawn from three thinking that the defendant was entitled the artificial nature of corporations, being based to judgment." The only doctrine of law in- upon the supposed axiom, that, as a corporavolved in the case was that of ultra vires, and tion is an artificial creature of the law, it has there is probably none more difficult of appli- no existence except for the purposes for which cation to the decision of cases, or more uncer- it was created.

Hence, an act by the directain and undefined. The phrase ultra vires, is tors of a corporation, though done with the conused in the law in at least two different senses, sent of all the stockholders, if not within the as applied to two entirely distinct kinds of purposes for which it was created, was held to acts. One embraces the acts of the directors be not the act of the corporation, and thereof joint stock companies, who are the agents of fore not binding on it. Head y. Providence the shareholders, ultra the deed of settlement. Ins. Co., 2 Cranch, 150; People v. Utica Ins. Properly, these are only acts of agents in ex- Co., 15 Johns, 358; N. Y. Fire Ins. Co. v. cess of their powers as such, and it only leads Sturges, 2 Cowen, 664; Bank of U. S. v. Danto confusion to call them “ acts ultra vires." dridge, 12 Wheaton, 64; Dartmouth College The deed of settlement is a publicly recorded v. Woodward, 4 Wheaton, 518. This conclucontract between the shareholders and direc- sion is inevitable from the premise ; but is not tors, and every one dealing with the company the view of the nature of a corporation implied is bound to take notice of its terms. If the in that premise fallacious? It savors much of directors make a contract beyond their powers metaphysics, and of that kind of logic for as conferred by the deed of settlement, all the which the schoolmen of the middle ages were shareholders, or any one of them, may refuse famed, in which indeed it seems to be founded. to be bound by it. However, they may assent Thus, about the earliest use of the phrase ultra to it, or ratify it after execution, or by their vires occurs in Lord Kame's Principles of acts estop themselves from objecting, and in Equity, 3d Ed., p. 309, where it is said, “A such case it is binding on them. But there is principle in logics, that will without power can here no question of ultra vires as between the not produce any effect, is applicable to matters company and the public; the question is always of law, and is thus expressed, that a deed ultra of ultra vires as between the directors and vires is null and void.” Take, again, the lanshareholders. Questions of ultra vires, in this guage of Marshall, C. J., in Bank of U. S. v. sense, are mere questions of agency, and are Dandridge, 12 Wheat., at p. 92, where, speaktherefore governed by old and well-settled ing of corporations, he says: “Can such a berules of law.

ing speak, or act otherwise than in writing? The other sense of the phrase applies to acts Being destitute of the natural organs of man, of a corporation, which it is, regardless of any being distinct from all its members, can it question of assent or dissent of its members, communicate its resolution, or declare its will forbidden or not authorized to do, and it is in without the aid of some adequate substitute this sense only that the expression ultra vires for those organs?" Or that of Ranney, J., in

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Strauss v. Eagle Ins. Co., 5 Ohio St. 60, is added that they may alien, etc., and it need where, in the execution of an unauthorized not, for it is incident. To sue and be sued, contract, the corporation had taken, by endorse- implead and be impleaded, to have a seal, etc., ment from the other party to the contract, the that is also declaratory, for when they are inpromissory note of a third person, against corporated they may make or use what seal whom it was then trying to enforce it. He they will. To restrain them from aliening or says, in delivering the opinion of the court demising but in a certain form, that is an against the claim of the corporation, at p. 64: ordinance testifying the King's desire, but it is “ If a fair construction of its charter does not but a precept, and doth not bind in law.” confer the power, it is incompetent to become “ This,” says Blackburn, J., in Riche v. Asha party to the contract of indorsement, and bury Rwy. Car. Co., L. R. 9 Ex. 263, without capacity to take or hold title. As well to me an express authority that, at common might a dead man, by the mere act of the in- law, it is an incident to a corporation to use its dorser, be invested with the legal interest, as common seal for the purpose of binding itself a corporation, which only lives for the purposes to anything to which a natural person could and objects intended by the legislature. Be- bind himself, and to deal with its property as yond these limits it has no existence, and its a natural person might deal with his own. acts are neither more nor less than a mere And further, that an attempt to forbid this, on nullity.”

the part of the King, even by express negative It is true that a corporation is a creature of words, does not bind at law. Nor am I aware the law; but so, too, are all legal rights and of any authority in conflict with this case.” duties creatures of the law; and when the law It is true that all modern corporations are creates a corporation, an artificial being, why created by statute, and that in this country should it not, so far as its nature permits, be they can only be created in that way. U. S. capable of enjoying, and being affected by, all T. Co. v. Brady, 20 Bar!). 119; Penn. R. R. the rights and duties which have been previously Co. v. Commissioners, 21 Penn. St. 9; Frankcreated by the law? Why assume the necessity lin Bridge Co. v. Wood, 14 Ga. 80; but a of an other special creation of rights and duties statutory, and a common law, corporation are for the corporation, supplementary to the crea- both equally artificial beings, alike creatures tion of the corporation, and of rights and duties of the law, and any limitations of their cain general?

pacity, inherent in their nature as such artificial Certain contracts, like that of marriage, for creatures, inhere equally in both. So that if instance, a corporation is, in the nature of a common-law corporation, created for certain things, incapable of entering into ; and it is not purposes, is not, by reason of its being an arclear why the test of the cupacity of a corpora- tificial being, non-existent as to its contracts tion, after it has once been created, to enter made for another purpose, it is clear that a into a given contract, should ever be


other statutory corporation ought not to be; and it than its capacity in the nature of things, with- becomes evident that the theory of ultra vires, out reference to the manner of its creation. based on the want of power incident to the This was certainly the doctrine of the common mode of creation of corporations, besides belaw, as shown by the Case of Sutton's Hos- ing founded in unnecessary metaphysical dispital, 10 Coke, 1, a case which the courts had tinctions, is in conflict with the common law. entirely lost sight of during the years they The theory, as might be expected in the rapid were creating the law of ultra vires, and which, multiplication of corporations in the last forty with but a single exception, was not mentioned years, has not been logically adhered to. in any case until recently re-discovered by Thus, it soon became evident that it was necBlackburn.

essary that corporations should be held liaIt was therein resolved, 10 Coke, 30 B., that ble for their torts, and that such is now the law “when a corporation is duly created, all other in- is too well settled to require any citation of aucidents are tacite annexed, and therefore divers thorities. But if a corporation, because it is an clauses subsequent in the charter are not of artificial being, has no existence, save for the necessity, but only declaratory, and might well purposes for which it was created, then, since no have been left out. As by the same authority, corporation was ever created for the purpose of ability and capacity to purchase; but a clause | committing a tort, it can not, any more than * a dead man,” commit one. Again, it is now tween injustice and an abandonment of prinsettled, both at law and in equity, that a con- ciple. Unlike the other, the theory of ultra tract of a corporation, apparently within the vires, which rests it on statutory illegality, is scope of its powers, though actually beyond consistent with the rule that corporations are them, is bindling on it. Royal Brit. Bank v. liable for their torts, and for contracts apTurquand, 6 E. & B. 327; Re Athanæum L. parently within the purpose of their creation, Ins. Co., 4K. & J. 549. But if a corporation unless impliedly or expressly prohibited by has only such powers as are expressly confer- the charter; in which case, as the prohibition red on it by its charter, and is “ non-existent” is by statute, all men are put upon notice and for all other purposes, it can not increase them act at their peril. by seeming to have greater. Using the same Under the earlier view, the contracts of a kind of logic that underlies the theory itself, it corporation in excess of expressly delegated might even be said that a corporation can not power, must, like those of a married woman, seem to have greater powers than it actually be held absolutely voidl, whether executed or possesses, since the power of so seeming is not executory. On principle there can not, in expressly conferred upon it. The only in- the one case more than in the other, be an stance in our law, outside of corporations, estoppel to set up the legal incapacity. Under where we find a physical capacity, combined the later view, since statutory illegality and with an absolute legal incapacity, to contract, is common law illegality equally affect any conin the case of a married woman; and it is un- tract into the consideration of which they have deniably the law that the contract of a woman entered (White v. Bass, 3 Cush. 491; MCactually covert is absolutely void and not Gregor v. D. & D. Rwy., 18 Q. B. 618; Allbinding on her, though she be apparently sole, bert v. Maze, 2 B. & P. 374; Collins v. Bianand even though she assert herself to be a tern, 2 Wils. 351) the question depends on the feme sole, and the contract is made on the faith application of the rule, in pari delicto potior of that statement and her apparent discov

est conditio defendentis. When a corporation erture.

makes a prohibited contract, if it has been Besides the theory of ultra vires, based on fully executed, the courts will refuse to disthe limited capacities of corporations, there is turb it. While executory on both sides, it is a more modern one which rests the doctrine binding on neither; and if executed on either on illegality. Att'y-Gen. v. G. N. Rwy. Co., side the courts will refuse to lend any aid to 6 Jur. N. S., 1006; McGregor v. D. & D. the enforcement of performance by the other; Rwy., 18 Q. B. 618; Taylor v. C. & M. Rwy. subject, however, to this just exception, which Co., L. R. 2 Ex. 356. It is thus stated by can have no place under the older theory, that, Blackburn, J., in Riche v. Ashbury Rwy. Car. if the charter clearly intended the contract to Co., L. R. 9 Esch. 214, at p 262: “I do not be illegal as to the corporation only, and not entertain any doubt that, if on the true con- as to the other party, it may be enforced struction of any statute creating a corporation, against, though not by the corporation. it appears to be the intention of the legislature, Oneida Bank v. Ontario Bank, 21 N. Y. 490; express or implied, that the corporation shall Tracy v. Talmage, 14 N. Y. 162. The docnot enter into a particular contract, every

trine of Blackburn, then, which seems now to court, whether of law or equity, is bound to be the prevailing one in England, has this to treat a contract entered into, contrary to the recommend it over the older theory of ultra enactment, as illegal, and, therefore, wholly vires : that it is in harmony with the common void, and to hold that a contract wholly void law, while the other is not; that, resting upon can not be ratified." The test, then, always is, statutory illegality, it can be applied according not, did the legislature expressly enable the to the old and well-settled rules of law, while corporation to make the particular contract, the other, resting on mere metaphysical conbut has it prohibited it, and every act not ceptions, can not; that its source is the legisprohibited by the statute stands.

lative will, as expressed in the statute creating This view of ultit vires is not open to the the corporation, while the source of the other same objections as the earlier one, and does is the will of the court.

G. II. W. not, like it, compel courts, in adjudicating

WANTED.-A judge who, though well able to express his upon contracts of corporations, to choose be

own judgment, has the courage frequently to "
[Solicitor's Journal.


NUISANCE-BAWDY-HOUSE-DAMAGES. not rent it to any decent tenant. On the 4th of

December, 1875, it was sold for $20,000, under a

mortgage given by plaintiff for that amount, and St. Louis Court of AppealsNovember, 1877. at the date of the trial was held by plaintiff as

lessee for a term of six months, at a monthly rent
Hoy. EDWARD A. LEWIS, Chief Justice.
ROBERT A. BAKEWELL, } Associate Justices.

of $150, with the privilege of purchasing at the
expiration of the term, for $24,657 and interest.

The rental value of the property at the date of
A PERSON renting a house to be used as a bawdy- the trial was $1,800 a year.
house, or who knowingly allows it to be so used, is

The defendant introduced no testimony. At the liable, at the suit of an adjoining owner, for the special damage caused by the depreciation in value of his

close of plaintiff's case, defendant asked an inproperty from the existence of a nuisance, over and

struction in the nature of a demurrer to the eviabove the wrong and injury done to the general public. dence, which was refused, and this action of the.

court was assigned for error. APPEAL from the Circuit Court of St. Louis

We do not think that the trial-court erred in reCounty.

fusing to take the case from the jury. There was W. G. Rainey, for appellant; Slayback & Haeuss- evidence tending to show a nuisance erected on the ler, for respondent.

premises of defendant immediately adjoining and BAKEWELL, J., delivered the opinion of the in full view of the house owned by plaintiff'; that court:

the defendant had notice of its existence, and had This is an action of damages against defendant failed to remove the same, and that it occasioned for permitting a nuisance to be established and special damage to plaintiff. It is true, that the maintained on the premises of defendant adjoin- evidence tended to show that the depreciation in ing those of plaintiff, by which the value of plaintiff's property was attributable, in fact, plaintiff's property, consisting of a valuable resi- to other causes, such as general depreciation in dence, was permanently injured, and the rents value, for which plaintiff was in nowise resporwhich would otherwise have been received from sible. It was, however, for the jury to determine the same were lost. The partienlar nuisance com- from the evidence, under proper directions from plained of is, that the house of defendant was oc- the court, what special damage, if any, was caused cupied by prostitutes who conducted themselves to plaintiff by the nuisance of which he complains. in an indecent manner in the house, in full view of It is claimed by counsel for defendant that the inthe neighborhood. The damages are laid at $25,- jury so far arose from the negligence of plaintiff 000.

himself, that he might by ordinary care and exerThe answer is a general denial. There was a tion have avoided the injury. That would be a verdict found, judgment for defendant, and plaint- good defense, if shown; but it was for defendant ift appealed.

to show it. It does not appear from anything in The testimony of plaintiff's witnesses was to the the testimony introduced by plaintiff. effect that plaintiff purchased, in 1867, a house on At the instance of plaintiff, the court gave inWalnut street, near Sixth street, in St. Louis; that structions to the effect that the keeping of a bawdydefendant owned a house on Sixth street immedi

house is a nuisance for which damages may be ately adjoining; that defendant's house was rented recovered by one suffering a private injury thereto prostitutes in 1872; that plaintiff's tenants com- from; that these damages may be recovered from plained of the nuisance, and plaintiff notified de

the landlord who rents his property for such a purfendant of the nuisance, and asked him to abate pose, or knowingly allows it to be used; that the it, which was not done; that the women in de

fact that other houses in the neighborhood were fendant's house indecently exposed themselves at used for the same purpose, does not justify defendthe windows; that since 1872 the house could be ant in renting his house for purposes of prostiturented to no decent family; that since the date of tion; that, if defendant allowed his house to be so the commencement of the nuisance the neighbor- used, he is liable to plaintifffor all damages caused hood is of bad fame, and many houses of the to plaintiff's property by that circumstance; that neighborhood are occupied by prostitutes; that the measure of damages is the difference between the value of plaintiff's property has depreciated

the value of plaintiff's property, if defendant's from the character of the neighborhood, and property had not been used as a house of ill-fame, from the general depreciation in the value of real and the value of plaintiff's property as depreciated estate throughout the city since the commercial by such use of defendant's house; and that, in aspanic of 1873. One witness, a real estate agent, certaining that fact and assessing damages, the swore that the defendant's house was the first circumstances which might show a depreciation property in the neighborhood rented to prostitutes. in value should be considered. It appeared that plaintiff bought the house in 1867

At the instance of defendant, the court instructed for $29,000 at a trustee's sale, and that he leased the jury: 1st. That if the plaintiff's interest in the it to a railroad company for five years, the term property was worthless, at the time of bringing expiring June, 1873, a month after which they suit, they should find for the defendant, unless moved out. After that, it was vacant for a year;

such condition of the property was in some degree was then rented eighteen months at about brought about by the acts of the defendant. 2d. $2,000, and has since been vacant, except that That plaintiff could not recover unless defendant plaintiff occupied a room there, because he could either rented his house for a bawdy-house or knew

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it was so used, and consented to such acts of his tenant as made the premises a nuisance. 3d. That to recover, plaintiff must prove that defendant's house was used as a bawdy-house with defendant's knowiedge, and that plaintiff' was injured by the nuisance on defendant's premises, and not by the fact that other houses in the neighborhood were used in like manner; and that plaintiff could recover in this suit only for such damages as were caused alone by the nuisance on defendant's premises. 4th. That if during the time plaintiff and defendant owned adjoining property, the neighborhood was bad, and defendant did not knowingly rent his house for, or permit it to be used as


are occasioned by the nuisance in defendant's premises, and how much by the other brothels, will be no bar to a recovery. For if it is impossible to separate the damages caused by others from those caused by defendant, he is liable for all such damages, if the natural and probable consequence of his illegal act was to cause the injury complained of. The fact that another person contributed, either before defendani's interposition or concurrently with it, in producing such damages, is no defense. Whart. Neg., § 144. So, in a recent case in Ohio, Boyd v. Watt, 27 Ohio State, 3 Cent. L. J. 756, where, under a statute of that state, one was sued for damages for selling liquor to another, whereby he an habitual

advantageously except to bawds, and any loss drunkara, it was welathat it was no defence that

to plaintiff was caused by the general decline in the value of property, or by the character of the neighborhood, and not by the mere fact of the innproper act of defendant's tenant, then plaintiff can not recover.

Instructions as to measure of damages, asked by plaintiff, were refused. It is not necessary to set them out for the purposes of this opinion.

A bawdy-house is a nuisance per se, and a proper subject for public prosecution wherever situated. It may also become a private nuisance; and whatever may have been formerly held as to no private action lying for a public nuisance, it is now well settled that such an action may lie; and it is unquestionable that, if a brothel is kept adjoining the tenement of another, by reason of which his tenants leave and his property is depreciated in value, he may maintain an action for the special damage that is sustained by him over and above the wrong and injury done to the general public. Hamilton v. Whitridge, 12 Mo. 128.

In such a case, a fair means of arriving at the actual damages would be to ascertain the loss of rent and depreciation of the value of the property caused by the nuisance. That is, how much less the property would sell for on account of the existence of the nuisance, and what rent has been lost from the same cause. But, in ascertaining these facts, all circumstances that would show a depreciation in value should be considered.' I. C. R. R. Co. v. Grabill, 50 II. And the damages recovered must be the actual depreciation shown to be caused by the existence of the nuisance. Where property is changing its character, and what has been a good resident neighborhood has been invaded by business establishments which destroy its quiet, it is a matter of common observation that it passes through a period in which it is neither good for business of the better class, nor for residences; and drinking saloons, or other establishments more or less objectionable or disreputable, settle down, for a time, in what were once the residences of wealthy citizens. When a bawdy-house is opened in such a neighborhood, it may be very difficult to say how much any depreciation of value is attributable to that fact alone. But if it be shown that, after the defendant's house was occupied as a bawdy-house, other disreputable houses of the same character sprung up in the neighborhood, the mere fact that it may be impossible to say how much of the damages

others had sold the deceased liquor too: and it was further held, that any one who contributed to the result by illegal sales to the deceased might be held liable for the whole damages, where the damages could not be separated. “ If the defendant," say the court, “is using the means calculated to produce the injury, the law presumes he intended to produce it; if others, with or without concert, were cor.currently co-operating with him, using like means, they are acting under the same common design; and if injury resulted, each is liable, though each were acting without the knowledge of what the other was doing. Such is the uniform rule in this class of cases."

It is manifest from what has been said, that this case was given to the jury on a totally wrong theory of the law, and that the 2d, 3d and 4th instructions for defendant should have been refused. These instructions are further objectionable, because they tell the jury that defendant is not liable for a nuisance created and maintained solely by his tenants, without his knowledge or consent, and in this respect are not warranted by the evidence. Plaintiff swore he told defendant of the existence of the nuisance in 1872, and his testimony in this respect is not contradicted.

The judgment of the circuit court is reversed, and the cause remanded. All the judges concur.



United States Circuit Court, Southern District of

Ohio-December, 1877.

Before Hon. P. D. SWING, District Judge.

THE Act of Congress of June, 1872 section 914, U. S. Rev. Stat., which requires that the practice, pleadings, and forms and modes of proceeding in civil causes, other than equity and admirality causes, in the circuit and district courts of the United States, shall conform, as nearly as may be, to the practice, pleadings, forms and modes of proceeding existing at the time in like causes in the courts of record of the state within which such circuit or district courts are held, has no application to the manner of taking depositions to be used in the federal courts. The requirements which must be followed in taking depositions to be used as evidence in the federal courts are prescribed by $ $ 863, 864 and 865, U. S. Rev. Stat., which have not been repealed by $ 914.

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