or control, more able to judge what it is practicable for them to accomplish and to measure any opposition they may encounter, and every one must realize how radically all of these things must modify law.

I have thus far spoken of the evolution of law as possessing numerous analogies, some of which I have pointed out, to the evolution of life: but, in very fact, life and law are but parts of the general frame of things which is all-subject to one law of evolution, and what we see in the parts is not the working of analogous laws, but of the same law.

The history of the law is part of the history of social life and of altruism. Law advances as man progresses. His progress rests on his physical evolution. Thus the ultimate spring of legal progress is physical, and this fact more than anything else, gives security to what has been accomplished and promise of what will be accomplished.

The view of the growth of the law here presented is not novel. It is to be found here and there in the literature of the law. Many of those who oppose the codification of the law, rest their principal objection to it on this view. They fear that the law if codified will become fixed and inexpansive, and that its slow and healthful growth will be checked or stopped. This particular opinion I do not share; but it is interesting as showing the prevalence of the view that the law grows by a process of organic accretion.

I find the following passage in a short tract on the Amendment and Alteration of the Law, by Sir Matthew Hale. He says:

"It is most certain that time and long experience are much more subtle and ingenious than all the wisest and acutest wits co-existing in the world can be. They discover such varieties. of emergencies and cases, and such inconvenience in things that no man would otherwise have imagined. And on the other side, in everything that is new, at least in most things,

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especially relating to law, there are thousands of occurrences and entanglements and coincidences and complications that would not possibly at first be foreseen. And the reason is apparent, because laws concern such multitudes and those of various dispositions, passions, wits, interests, concerns, that it is not possible for any to discover at once or to provide expedients against in the first constitution of a law that in truth ancient laws, especially that have a common concern, are not the issues of the prudence of this or that counsel or senate, but they are the productions of the various experiences of the wisest thing in the inferior world; to wit, time, which, as it discovers day by day new inconveniences, so it doth successfully apply new remedies; and indeed is a kind of aggregation of the discoveries, results and applications of agents and events."

Much that I have said is a mere expansion of this and a translation of it into post-Darwinian language.

ULTRA VIRES CORPORATION LEASES.

BY

EDWARD AVERY HARRIMAN,

OF CHICAGO, ILLINOIS.

I

The title of this paper sufficiently indicates its scope. propose to consider this one question, namely, what is the legal effect of a lease which is ultra rires, or beyond the powers of the corporation executing it? The question appears to be a simple one, and the answer equally simple. In reality there lurks in the question itself a fallacy which renders it impossible to answer the question except by an elaborate explanation. The fallacy lies in the use of the term vires, or powers, which, if not necessarily ambiguous, is almost certain to create an ambiguous impression. A corporation is organized under a special charter or a general act which provides that the corporation may do certain things, and either expressly or by implication that it may not do other things. The corporation executes a lease which is not authorized by the provision of its charter. This lease is said to be ultra vires or beyond the powers of the corporation. What is its legal effect? We are here concerned not with any question as to the construction of corporate charters, but simply with the effect of leases clearly unauthorized by such charters.

It is obvious that there are three possible objections to the validity of any ultra vires act.

The first is that the corporation has no power-that is to say, no legal capacity to produce the intended legal result.

The second is, that the act in question is illegal because forbidden by some rule of law.

The third is, that the act is a violation of the equitable right of the members of the corporation to have the property of the corporation applied exclusively to corporate purposes,

as those purposes are determined by the charter or fundamental law of the corporation.

The third objection clearly has no force where all the members of the corporation assent to or ratify the act in question. The first two objections, however, are equally valid, whether the corporate act is sanctioned by the unanimous vote of the members, or by a mere majority. It is these two objections, then, in so far as they bear upon corporate leases, that it is proposed to consider; leases having been selected for discussion because a lease is an instrument of so complex a character that it illustrates to the best advantage the present condition of the law of ultra vires.

A lease is, in the first place, a bilateral contract, imposing obligations on both lessor and lessee. In the second place, it is a conveyance by which a certain estate is conveyed by the lessor to the lessee. As the rules governing contracts differ in important particulars from those governing conveyances, ultra vires leases will be discussed first, as contracts, and second, as conveyances.

By hypothesis the lease is ultra vires or beyond the powers of the corporation. "It is obvious," says Mr. Morawetz,' that the words powers and vires are here used in the sense of authority or right, and not in the sense of ability." If this were obvious to everybody, the objection that the corporation has no legal capacity to make the lease would be eliminated, and the discussion of our subject simplified. Unfortunately, the word powers may mean either ability or authority, and is therefore ambiguous. The poverty of the vocabulary of our jurisprudence has often been lamented. We have in many cases only one word to express two or more different ideas-a misfortune which is aggravated, rather than mitigated, by the fact that in other cases we have several words to express only one idea. The ambiguity thus arising has been one of the most fruitful sources of uncertainty and confusion in our textbooks and our judicial opinions. There may be some word in Corporations, 648.

1

our legal vocabulary which, while capable of two meanings, is always used by lawyers in only one of those meanings. If there is such a word at the present day, only one thing can be said about it—the first lawyer who finds the other meaning more favorable to his client's case will use the word in that other meaning in his next argument. Inasmuch, then, as the word powers may be used in the sense of ability or capacity as well as in that of authority or right, we are not surprised to find that it has been so used. "To deny," says Mr. Morawetz,' "that corporations are able to enter into contracts and do frequently enter into contracts and do acts in excess of their chartered powers, is to deny an unalterable and self-evident fact." As opposed to this, we have the language of Mr. Justice Gray in Central Transportation Co. vs. Pullman Co.," who says that a contract ultra vires is unlawful and void "because the corporation by the law of its creation is incapable of making it. The objection to the contract is not merely that the corporation ought not to have made it, but that it could not make it." The question is, he continues, "whether the lease sued on is unlawful and void for want of legal capacity in the plaintiff to make it." So also Lord Cairns, in Ashbury Co. rs. Riche: "The question is not as to the legality of the contract; the question is as to the competency and power of the company to make the contract. Such language shows clearly that the question of the legal capacity of the corporation as affecting the validity of its ultra rires acts is not to be determined. simply by saying that corporations do enter into contracts in excess of their chartered powers and that the sole objection to the validity of such contracts is their illegality. A married woman at common law could enter into a contract in one sense; she could sign, seal, and deliver a deed, but the deed was not her legal act, because she lacked legal capacity to contract. The

Corporations, 649.

2 139 U. S. 24 (1891).

3 Ibid. 59, 60.

5

4 L. R. 7 H. L. 653 (1875).

5 Ibid. 672.