Page:Harvard Law Review Volume 9.djvu/298

From Wikisource
Jump to navigation Jump to search
This page needs to be proofread.
270
HARVARD LAW REVIEW.
270

270 HARVARD LAW REVIEW. makes an unauthorized or prohibited contract with a corporation he does it with his eyes open. He takes the risk attendant upon inability to enforce the agreement in a court of justice. It is ac- cordingly somewhat difficult to manipulate the doctrine of equitable estoppel in his favor, in view of the fact that the act of the cor- poration was not the inducing cause of his present position. Nor does it help matters much to discard the theory that the chartered powers of a corporation are included in the citizen's stock of pre- sumptive knowledge. A court must either go further than this, and declare that the public is presumed not to knozv what a cor- poration may lawfully do, or else the judges must prepare to receive proof in a particular case that the limitations of the charter were in fact brought home to the plaintiff. Of course it may be said, and it sometimes is said, that in these cases the term "estoppel " is not used in its technical sense. If this is true, the use of a scientific term in any other than its technical sense is per- haps open to criticism. It is said, for example, that this doctrine is applied " only for the purpose of compelling corporations to be honest in the simplest and commonest sense of honesty." ^ This means, presumably that corporations will not be permitted to do a wrong which would not be sanctioned in the case of an individual. The language just quoted occurs in a case in which a mining cor- poration borrowed money in order to engage in business in a place not authorized by its charter. A bill was filed by a stockholder to enjoin the prosecution of a suit by the lender upon the evidence of indebtedness. But if under similar circumstances an individual were to attempt to enrich himself unjustly under an illegal contract which was malum prohibitum y it would not be upon the basis of estoppel that his attempt would be frustrated by the courts. The contract would not be enforced, but a recovery in quasi contract would be permitted. If the courts which echo the language of Chief Justice Lawrence were strictly logical, they would either assimilate their views to those which the Supreme Court of the United States professes to hold ; or else, at the other extreme, they would discard the view that corporate power is in its nature limited, and would embrace the radical doctrine which was advo- cated above. This tendency to work out results upon the basis of a species of primitive estoppel is, however, a tendency which is not without 1 Chief Justice Lawrence, in Bradley t^. Ballard, 55 111. 413.