Millard County School District v. State Bank of Millard County
In Millard County School District v. State Bank of Millard County, 80 Utah 170, 14 P.2d 967 (Utah 1932) the Court considered whether a contract was void or voidable.
At issue was whether the bank acted in excess of its statutory power by issuing securities that were different from those that the bank was statutorily authorized to issue.
Acknowledging that the bank exceeded its authority by issuing the securities, we disagreed that this ultra vires act rendered the securities void.
"By the great weight of judicial authority it is well recognized that there is a distinction between an illegal or void contract and one merely ultra vires," which could become enforceable by ratification or estoppel.
The Court explained that only "contracts and corporate acts and transactions which are malum in se or malum prohibitum, which contravene some rule of public policy, or violate some public duty . . . are illegal and void."
Although the bank had acted in excess of its authority, its action did not violate the general policy of the state so egregiously that the contract was void.