Corporate Liability in Tort and the Doctrine of Ultra Vires

Abstract

The question whether a statutory corporation should be held liable for torts committed in the course of an ultra vires undertaking is one of particular interest to the student of law for two reasons. First, the principle of ultra vires emphasises most clearly what Dr. C. T. Carr-calls “the incidents of corporateness.” “Perhaps, indeed,” as Mr. Brice has written, “the Law of Corporations may be considered for most practical purposes as in reality only the application and development of the doctrine of ultra vires.” Secondly, owing to the fact that there are only a limited number of cases dealing with this question, and that even these are but of doubtful authority, a writer is free to suggest his own solution. This lack of precedent does not, however, mean that the problem is devoid of practical importance, for, with the rapid increase in the number of business companies, it is probablethat the courts will have to deal with it in the near future. THE CAMBRIDGE LAW JOURNAL was, therefore, fortunate when it was able to publish Professor Edward H.Warren's article “Torts by Corporations in Ultra Vires Undertakings,” in the 1925 number. This article is of such interest that the writer of the present paper may be excused for discussing at considerable length some of the points raised by it. Professor Warren quotes Sir John Salmond, and, as the latter's view that a statutory corporation ought to be held liable for torts committed in the course of an ultra vires undertaking is familiar to most English students, it will be convenient to consider Salmond's position first.