Court Opinions

State Laws

US Code

US Constitution

New York Banking Law Section 9-a - Defense Of Ultra Vires.

Legal Research Home > New York Lawyer > Banking > New York Banking Law Section 9-a - Defense Of Ultra Vires.

    § 9-a.  Defense  of  ultra vires. No act of a corporation formed under
  this chapter, or of a corporation formed  under  any  other  statute  or
  special  act  having  as its purpose or among its purposes a purpose for
  which a corporation may be formed under this chapter, and no transfer of
  real or personal property to or by such a corporation, otherwise lawful,
  shall be invalid by reason of the fact that the corporation was  without
  capacity  or  power  to do such act or to make or receive such transfer,
  but such lack of capacity or power may be asserted:
    1. In an action by a stockholder or member against the corporation  to
  enjoin the doing of any act or the transfer of real or personal property
  by  or to the corporation. If the unauthorized act or transfer sought to
  be enjoined is being, or is to be, performed or made under any  contract
  to  which  the  corporation  is  a  party,  the court may, if all of the
  parties to the contract are parties to the action and if  it  deems  the
  same  to  be  equitable,  set  aside  and enjoin the performance of such
  contract, and in so doing may allow to the corporation or to  the  other
  parties to the contract, as the case may be, such compensation as may be
  equitable  for  the  loss  or  damage  sustained by any of them from the
  action of the court in setting aside and enjoining  the  performance  of
  such  contract; provided that anticipated profits to be derived from the
  performance of the contract shall not be awarded by the court as a  loss
  or damage sustained.
    2.  In  an  action  by or in the right of the corporation to procure a
  judgment in its favor against an incumbent or former officer or director
  of the corporation for loss or damage due to his unauthorized act.
    3. In an action or special proceeding by  the  superintendent  or  the
  attorney-general  to  annul  or dissolve the corporation or to enjoin it
  from the doing of unauthorized business.

Last modified: August 26, 2006