ciples, by natural growth and development, adapt the law and its administration to the ever-changing needs of advancing civilization, so as best to promote justice and the common welfare. When a corporation offends against the law of its creation, such offense is against the sovereignty of the state; hence it is most proper that the state should apply the remedy and be charged with the sole responsibility in that regard, and such is the law by the trend of modern authorities, which we approve." (Page 16.) * ** And in Security Nat. Bank v. St. Croix Power Co., 117 Wis. 211, 94 N. W. 74. "This court, by a series of decisions, has held that, when a corporation enters into business relations not authorized by its corporate grant of power, the doctrine of ultra vires can not be used by it or by the person with whom it assumes to deal as a means of defeating the obligations assumed. The state alone can take advantage of the abuse. * The fact that this court has adopted the principle that the question can not be litigated by private parties, a principle with which we are entirely satisfied, relieves us from further consideration of the question." (Pages 217, 218.) None of these cases arose upon an executory contract, and in John V. Farwell Co. v. Wolf and others, supra, that consideration was referred to, the decision being expressly limited to the question before the court. But in Security Nat. Bank v. St. Croix Power Co., supra, although the contract involved was in fact executed, the principle was broadly stated without reference to that matter, as shown by the quotation made from the opinion. The principle referred to is closely allied to, if indeed it is not substantially identical with, that which forbids the regularity or validity of the organization of a corporation to be inquired into except at the instance of the state. (10 Cyc. 256.) The reason for such rule is thus stated in Pape v. Capitol Bank, 20 Kan. 440, 27 Am. Rep. 183: "This is not upon the ground of equitable estoppel, but upon grounds of public policy. If the state, which alone can grant the authority to incorporate, remains silent during an open and notorious assertion and exercise of corporate powers, an individual will not, unless there be some powerful equity on his side, be permitted to raise the inquiry. The law holds out no such encouragement to attempt to avoid the payment of contract debts." (Page 445.) The question whether a corporation has a legal existence is a question whether it has capacity to act at all. This is essentially of the same character as the question whether it has capacity to enter into a particular contract-in other words, whether it has a legal existence for that purpose. The state grants the corporation the right to do business under limitations expressed in language to which both agree. Whether the language of the charter shall be interpreted to authorize a given act is a matter between the parties to it. If the state is satisfied with the construction upon which the corporation acts no reason is apparent why it should be open to question by a stranger, much less by one who has recognized it as valid by contracting with the corporation upon that basis. This court has already held that a contract made by a corporation without authority may be rendered enforceable by estoppel. (Town Co. v. Morris, 43 Kan. 282, 23 Pac. 569.) It was there said that the rule did not apply to executory contracts, but that question was not involved. In Morisette v. Howard, 62 Kan. 463, 63 Pac. 756, other Kansas cases to the same effect are collected. The court there refers to the matter of collateral attack, saying: "Aside from these considerations, the transaction had been completed, the money had been paid, the property had changed hands; all having been done with the knowledge and consent of those in whom the ultimate authority rested, and from whom the board of directors derived its power, the transaction, however irregular, is not open to attack by anyone other than the state." (Page 467.) * * * A section of the corporation act reads: "No corporation created under the provisions of this act shall employ its stock, means, assets, or other property, directly or indirectly, for any other purpose whatever than to accomplish the legitimate objects of its creation." (Gen. Stat. 1901, § 1285.) Such provisions are regarded, however, as merely declaratory and do not affect the ordinary rule as to the enforceability of contracts. "A provision in a general corporation law that no corporation created thereunder shall employ its assets for any other purpose than to accomplish the legitimate objects of its creation is merely declaratory of the common-law rule by which corporations are confined in their powers to the purposes for which they are created, and does not amount to such an express statutory prohibition of ultra vires loans and other transactions as to render them illegal instead of ultra vires merely." (1 Clark & Marshall, Priv. Corp., § 225b.) No Kansas statute declares that a contract made by a corporation in excess of its legitimate powers shall be void, or in terms permits the question of corporate capacity to be raised by one of the parties. Where it is held that no recovery can ever be had upon an ultra vires contract, as such, whatever relief is afforded is logically made to turn upon whether and how far the agreement has been acted upon. Where a recovery is sometimes permitted under the contract itself, upon the principle of estoppel, the question whether it has been carried out is likewise of manifest importance, there being a difference in degree at least between the attitude of one who has merely entered into an engagement in expectation of obtaining an advantage from it and that of one who has actually reaped its benefits in whole or in part. But the doctrine that only the state can challenge the validity of acts done under color of a corporate charter, if accepted, must necessarily protect an executery contract from collateral attack equally with one that has been exe cuted. The court is convinced of the soundness of the view that in the absence of special circumstances affecting the matter neither party to even an executory contract should be allowed to defeat its enforcement by the plea of ultra vires. The doctrine is logical in theory, simple in application, and just in result. It of course does not apply to contracts which are immoral or which are illegal, as distinguished from merely unauthorized, or to those made by public corporations. Nor does it forbid interference by a stock-holder to protect his rights as such. Upon these considerations the judgment is affirmed.27 Section 2.-Ultra Vires Acquisition and Transfer of Property. ST. PETER'S R. C. CONGREGATION v. GERMAIN. 1882. 104 Ill. 440.28 MR. JUSTICE MULKEY delivered the opinion of the court: The St. Peter's Roman Catholic Congregation brought to the February term, 1882, an action of ejectment, against Nicholas Germain, for the recovery of a valuable tract of land, situate in St. Clair county, consisting of about eighty acres. There was a judgment for the defendant in the court below, and the plaintiff brings the case here for review. It appears, from a stipulation of the parties, that Catherine Agnes Germain, being the owner in fee of the premises, on the 2d day of November, 1878, executed and delivered to the plaintiff a deed therefor, properly acknowledged, and purporting to convey the same; that the plaintiff is, and was at the time of the conveyance, a religious corporation, organized and existing under the act of March 8, 1869, entitled "An act to provide for the holding of 27 In Holm v. Claus Lipsius Brewing Co. (1897) 21 App. Div. 204, 47 N. Y. S. 518, in holding that a guarantee of rent given by a brewing corporation to the owner of premises upon which a saloon keeper sold its beer was not ultra vires, Goodrich, P. J., said in part: "The defendant claims that the guaranty is ultra vires. I see no force in this objection. The doctrine of ultra vires originated at a time when nearly all corporations were created for public purposes, and there is no reason why it should ever have been applied to private corporations any more than to the powers of individuals in a partnership." See also, Hennessy v. Muhleman (1899) 40 App. Div. 175, 57 N. Y. S. 854. For further discussion of ultra vires contracts see the following articles: "The Unauthorized or Prohibited Exercise of Corporate Power," by Hon. George Wharton Pepper, 9 Harv. L. R. 255 (1895); "Non-Public Corporations and Ultra Vires," by Jesse W. Lilenthal, 11 Harv. L. R. 387 (1898); "Executed Ultra Vires Transactions," by Prof. E. H. Warren, 23 Harv. L. R. 495 (1910); “Executory Ultra Vires Transactions," by Prof. E. H. Warren, 24 Harv. L. R. 534 (1911); Note 26 Harv. L. R. 540-2 (1913); "Corporate Powers," by Thomas Thatcher, 9 Col. L. R. 243 (1909); "The Power of a Corporation to Acquire Its Own Stock," by Prof. I. Maurice Wormser, 24 Yale L. J. 177 (1915); Note, 15 Col. L. R. 267-9 (1915). 28 Portion of opinion omitted.-Eds. Roman Catholic churches, cemeteries, colleges, and other property;" and that at the time of said conveyance the plaintiff owned and occupied more than ten acres of land in St. Clair county, exclusive of the land described in the deed. Under these facts the question is presented-and indeed this is the only question in the case-whether the title to the land in dispute passed by the deed from Catharine Germain to the plaintiff. No question is raised by counsel for the defendant in error as to the form or sufficiency of the deed, or the manner in which it was obtained, or with respect to the right or power of the grantor to convey, but the only question made is as to the capacity of the plaintiff in error to take under the deed. The determination of this question depends. upon the construction that must be given to the statutes then in force authorizing religious corporations to acquire lands in this state. By the 2d section of the act of 1869, above mentioned, religious societies organized under it are authorized "to receive, hold, dispose of, and convey, any kind of property," and by the 10th section the act is declared to be "subject to any limitation or modification which may hereafter be enacted by general law as to the amount of real estate to be held by the corporations, respectively, provided for herein." It will be perceived this act contains no limitation as to the quantity of lands religious societies incorporated under it may "receive" and "hold", but, as we have just seen, the legislature, by the 10th section, reserves the right to limit and modify the amount "to be held" by them. At the time of the adoption of this act the 44th section of chapter 35, Revised Statutes 1845, entitled "Corporations", was in force, which authorized any religious society or corporation then existing, or which might thereafter be formed, "to receive, by gift, devise or purchase, any quantity of land not exceeding ten acres,' etc. This act continued in force until in 1872, when it was repealed, and section 42, of chapter 32, of the present revision, was adopted in its stead, which provides that "any corporation that may be formed for religious purposes under this act, or under any law of this state, for the incorporation of religious societies, may receive, by gift, devise or purchase, land not exceeding ten acres," etc. By comparing the two sections it will be perceived that so far as the present inquiry is concerned, they are substantially the same, so that the adoption of the latter section was in effect merely continuing in force the former. * * * In the light of judicial history, and the legislation of this country on the subject, we cannot for a moment believe that it was the intention of the legislature to put it in the power of any religious society or corporation to acquire lands to any indefinite extent as is claimed here. It has ever been the policy of this country, including our own state, to keep landed estates as much unfettered as possible, so that their free transfer from one person to another may not be interrupted or hindered, and it will not be denied that to permit corporations to acquire real estate to an unlimited extent would be destructive of this policy. Under the legislation of our state, which we have been considering, a religious corporation is authorized to receive or acquire lands to the extent of ten acres, and no more. Any amount in excess of that is expressly forbidden by the statute, and it follows that all the conveyances, deeds or other contracts made in violation of this prohibition, are absolutely void. It is a well settled rule that where a corporation is forbidden to take or receive lands, such a prohibition goes to its capacity to acquire, and a deed made to it under such circumstances passes no title, such a conveyance being absolutely void; and the correctness of this rule is conceded by the learned counsel for plaintiff in error. It is claimed, however, this rule only applies where the prohibition is total, and not merely partial, as in this case, that where there is a capacity to take to a limited extent, and a conveyance is made for quantity in excess of that which the law permits, the title will nevertheless pass to the whole, subject to the right of the state to interpose for the excess. We cannot give our adhesion to this doctrine, for it would be conceding that a corporate body might clothe itself with the legal title to an estate in contravention of an express provision of the statute, which is inconsistent with well recognized principles. Whether a deed of that kind would be good for the amount of land that might lawfully be conveyed, and inoperative for the residue, or whether it would be regarded as void for uncertainty as to what particular ten acres passed by it, it is not necessary for us to stop to inquire, for whatever might be the rule in such a case, it could have no application to the one before us. Here it is admitted the plaintiff in error had, previous to the conveyance of the land in dispute, already acquired, and was then the owner of ten acres of land, the outside limit it was permitted to take. This being so, it is clear its capacity to acquire other lands was fully exhausted, and there was a total want of power to take the land in question. Moreover, we are of the opinion that conceding the act of 1869 was not adopted subject to the limitation contained in the 44th section of the act of 1845, as we have seen it was, nevertheless, the reservation, in the 10th section of the former act, of the power to regulate by general law the amount or quantity of land which corporations organized under it might hold, fully authorized the legislature-assuming the power did not exist independently of it-to prescribe the amount or quantity of land which such corporations might take or acquire. If the legislature has the power-and this is conceded-to say these organizations shall not hold to exceed a specified number of acres of land, we are of the opinion, as the most effectual way of enforcing such power, it may say they shall only take or acquire the specified quantity. Leaving out of view the legal aspects of the question, it looks like a great hardship that the purposes of the grantor in the deed should be thus thwarted, and that the church should be deprived of the estate so generously attempted to be given to it; yet such considerations must not be permitted to disturb the balance of the scales of legal justice. Ita lex scripta est, and it is the duty of all to submit |