Coleman v. Hotel de France, G.R. No. L-9185, Jan.

25, 1915 (29 Phil 323)

Doctrine:
A corporation cannot invoke ultra vires an act to claim that a contract it entered into is void for its benefit,
especially when such contract appears to be valid and is based on powers incidental to the corporations
express powers.
Facts:
Geraldine Coleman, an acrobat and gymnast, was engaged by Hotel de France to entertain its patrons in
its hotel in Manila. Hotel de France agreed to pay her a monthly salary, furnish her board, lodging, and
laundry expenses and to pay for her passage from Australia to Manila and return. The contract was then
cancelled by Hotel de France which prompted Coleman to file an action for damages for breach of
contract. As a defense, Hotel de France argued that the contract was, nonetheless, void because it
exceeded their corporate capacity.
Issue:
Whether or not the contract between Coleman and Hotel de France was void because it is ultra vires?
Held:
NO. The contract is valid.
Hotel de Frances contention that the articles of incorporation, which provides for a primary purpose of
operation of hotels and weekend resorts, makes the contract void for being ultra vires is incorrect. The
Court ruled that the employment of vaudeville artists, bands, orchestras, and the like may fairly be held to
be included within the powers incidental to the express powers for which the defendant corporation
engaged. Colemans employment clearly was for the purpose of entertaining Hotel de Frances guests,
which is an activity considered part of Hotel de Frances incidental powers.
Further, the court reminds the defendant that, The doctrine of ultra vires, when invoked for or against a
corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal
wrong.