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Defense of ultra vires - 15 Pa. Cons. Stat. § 1503

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     § 1503.  Defense of ultra vires.
        (a)  General rule.--A limitation upon the business, purposes
     or powers of a business corporation, expressed or implied in its
     articles or bylaws or implied by law, shall not be asserted in
     order to defend any action at law or in equity between the
     corporation and a third person, or between a shareholder and a
     third person, involving any contract to which the corporation is
     a party or any right of property or any alleged liability of
     whatever nature, but the limitation may be asserted:
            (1)  In an action by a shareholder against the
        corporation to enjoin the doing of unauthorized acts or the
        transaction or continuation of unauthorized business. If the
        unauthorized acts or business sought to be enjoined are being
        transacted pursuant to 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 result
        to be equitable, set aside and enjoin the performance of the
        contract, and in so doing shall allow to the corporation, or
        to the other parties to the contract, as the case may be,
        such compensation as may be appropriate for the loss or
        damage sustained by any of them from the action of the court
        in setting aside and enjoining the performance of the
        contract, but 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 any 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 acts.
            (3)  In a proceeding by the Commonwealth under section
        503 (relating to actions to revoke corporate franchises) or
        in a proceeding by the Commonwealth to enjoin the corporation
        from the doing of unauthorized or unlawful business.
        (b)  Conveyances of property by or to a corporation.--A
     conveyance or transfer by or to a business corporation of
     property, real or personal, of any kind or description, shall
     not be invalid or fail because in making the conveyance or
     transfer, or in acquiring the property, real or personal, any
     representative of the corporation acting within the scope of the
     actual or apparent authority given to him by the corporation has
     exceeded any of the purposes or powers of the corporation.
        (c)  Cross reference.--See section 4146 (relating to
     provisions applicable to all foreign corporations).

        Cross References.  Section 1503 is referred to in section
     4146 of this title.

Last modified: November 27, 2007