PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 271. §270. Accordingly, if all the shareholders ratify the con- tract, or impliedly assent to it by not dissenting after they know of it, no shareholder can object, or claim t^nby 3 "" that the contract, being beyond the corporate powers, ^trs. does not bind the corporate funds ; for he can make such claim only in so far as his interests are concerned, and just to that extent is he estopped by his own action. 1 § 271. It does not follow, however, that acquiescence or ratification by all the shareholders will, under all cir- Not always cumstances, validate for all purposes an act which, sufficient, though not illegal, is ultra vires. Other persons besides share- holders possess direct pecuniar}' interests in the corporate enter- prise, or at least in the continuing solvency of the corporation. These are corporate creditors. They have rights, and may not have waived them. that any objection made only on the ground that it affects tbe interests of a shareholder, can only be made by or on behalf of the sharebolders .... The seemingly technical point .... raises the question whether the small- est excess of authority renders the whole contract illegal, and so enti- tles those who have the management of the corporation (and who, there- fore, presumably were, as individuals, consenting parties to the contract) to repudiate the contract in the name of the company, however long it has been acquiesced in, and however se- riously the position of the plaintiff has been altered in consequence of that acquiescence, or whether the objection should be held to lie only in the mouths of those shareholders who were not consenting parties to the contract sought to be set aside, or have not by laches or otherwise rendered it inequitable in them to set it aside. It is obvious that an ad- herence to this distinction will pre- vent those scandalous cases which have rendered the word repudiation a term of opprobrium." Black- burn, J., in Taylor v. Chichester, etc., Ry. Co., L. R. 2 Ex. 356, 380. 1 Branch v. Jesup, 106 U. S. 468; Tyrell ». Cairo, etc., R. R. Co., 7 Mo. App. 294; Taylor v. S. & N. A. R. Co., 13 Fed. Rep. 152; Benseic v. Thomas, 27 IT. S. App. 765. See Peoria & S. R. R. Co. r. Thompson, 103 111. 187; Kelley o. Horse R. R., 141 Mass. 496; Burden v. Burden, 169 N. Y. 287; Heironimus v. Sweeney, 83 Md. 146. Compare Zabriskie v. Cleveland, etc., R. R. Co., 23 How. 381, a case where (semble) a shareholder could have restrained an act beyond the original powers of the corporation, but au- thorized by a statute passed subse- quently to the charter. The proxy of the shareholder, however, had been present at the shareholders' meeting which ratified the act, and did not vote, when his vote in the negative would have controlled. It was held that the shareholder could not dispute the validity of the act under the circumstances, the bonds havingbeen issued and having passed into the hands of outsiders. 233
