The difficulty is partly formal. Partly in the nonapplicability of the ordi nary rules of partnership agency. course that among other things it cannot issue bills or notes without express or implied authority to do so; but we have seen that this ground is now hardly tenable. In order to state what we believe to be the true view we must to some extent anticipate the subject of the following chapter, so far as it relates to the form of corporate contracts. The general rule is that the contracts of a corporation must be made under its common seal, and it follows that a corporation cannot prima facie be bound by negotiable instruments in the ordinary form. The only early authority which is really much to the point was argued and partly decided on this footing (a). Of late years incorporated companies have issued documents under seal purporting to be negotiable; but by the law merchant an instrument under seal cannot be negotiable, and it is the better opinion that the fact of the seal being a corporate one makes no difference; it cannot be taken as merely equivalent to signature because the party sealing is an artificial person and unable to sign (b). Putting this last question aside, however, there are very many matters about which a corporation can contract without seal, and in particular in the case of a trading corporation all things naturally incident to the business it carries on. Why should not the agents who are authorized to contract on behalf of the company in the ordinary course of its business be competent to bind the company by their acceptance or indorsement on its behalf, just as a member of an ordinary trading partnership can bind the firm? There is a twofold answer to this question. First, the extensive implied authority of an ordinary partner to bind his fellows cannot (a) Broughton v. Manchester Waterworks Co. 3 B. & Ald. 1. The chief point was on the statutes giving the Bank of England exclusive rights of issuing notes, &c., within certain limits, as to which see Lindley, 1. 185, note. In Murray v. E. India Co. 5 B. & Ald. 204, the statutory authority to issue bills was not disputed; a difficulty was raised as to the proper remedy, but disposed of in the course of argument (p. 210). Other cases at first sight like these relate to the authority of particular agents to bind a corporate or unincorporated-association irrespective of the theory of corporate liabilities. See the next note but one. (b) Crouch v. Crédit Foncier, L. R. E Q. B. 374. to in the peculiar But character be applied to the case of a numerous association, whether incorporated or not, whose members are personally unknown to each other, and it has been often decided that the managers of such associations cannot bind the individual members or the corporate body, as the case may be, by giving negotiable instruments in the name of the concern, unless the terms of their particular authority enable them to do so by express words or necessary implication (a). In the case of a corporation this authority must be sought in its constitution as set forth in its special Act, articles of association, or the like. Secondly, the power of even a And partly trading corporation to contract without seal is limited things incidental to the usual conduct of its business. as was pointed out by a judge who was certainly not posed to take a narrow view of corporate powers, a nego- exchange. tiable instrument is not merely evidence of a contract, but creates a new contract and a distinct cause of action, and "it would be altogether contrary to the principles of the law which regulates such instruments that they should be valid or not according as the consideration between the original parties was good or bad;" and it would be most inconvenient if one had in the case of a corporation to inquire "whether the consideration in respect of which the acceptance is given is sufficiently connected with the purposes for which the acceptors are incorporated" (b). of the con dis- tract of The result seems to be that a corporation cannot be bound by negotiable instruments except in one of the following cases :— 1. When the negotiation of bills and notes is itself one of the purposes for which the corporation exists-" within (a) As to unincorporated joint stock companies: Neale v. Turton, 4 Bing. 149, Dickinson v. Valpy, 10 B. & C. 128, Bramah v. Roberts, 3 Bing. N. C. 963, Bult v. Morrel, 12 A. & E. 745, Brown v. Byers, 16 M. & W. 252. As to incorporated companies: Stede v. Harmer, 14 M. & W. 831 (in Ex. Ch. 4 Ex. 1, not on this point), Thompson v. Universal Salvage Co. 1 Ex. 694, Re Peruvian (b) Per Erle, C. J., Bateman v. American the very scope and object of their incorporation" (a)—as with the Bank of England and the East India Company, and (it is presumed) financial companies generally, and perhaps even all companies whose business wholly or chiefly consists in buying and selling (a). 2. When the instrument is accepted or made by an agent for the corporation whom its constitution empowers to accept bills, &c., on its behalf either by express words or by necessary implication. The extent of these exceptions cannot be said to be very precisely defined, and in framing articles of association, &c., it is therefore desirable to insert express and clear provisions on this head. In America the Supreme Court has lately decided that decisions. local authorities having the usual powers of administration and local taxation have not any implied power to issue negotiable securities which will be indisputable in the hands of a bona fide holder for value (b), and has been equally divided on the question whether municipal corporations have such power (c). It seems however that in American courts a power to borrow money is held to carry with it as an incident the power of issuing negotiable securities (d). Estoppel and part perform The common law doctrine of estoppel (e), and the kindred equitable doctrine of part performance (ƒ), apply to corporaance apply tions as well as to natural persons. Even when the cortions. porate seal has been improperly affixed to a document by to corpora (a) Per Montague Smith, J., L. R. 1 C. P. 512; Ex parte City Bank, 3 Ch. 758. (b) Police Jury v. Britton, 15 Wallace 566, 572. (c) The Mayor v. Ray, 19 Wallace 466. (d) Police Jury v. Britton, 15 Wallace 566, and Mr. Wald's note here in American ed. (e) Webb v. Herne Bay Commissioners, L. R. 5 Q. B. 642. (f) Wilson v. West Hartlepool Ry. Co., 2 D. J. S. 475, 493, per Turner, L. J.; Crook v. Corporation of Seaford, 6 Ch. 551; Melbourne Banking Corporation v. Brougham, 4 App. Ca. at p. 169. This must be confined however to cases where the corporation is "capable of being bound by the written contract of its directors as an individual is capable of being bound by his own contract in writing:" per Cotton, L. J., Hunt v. Wimbledon Local Board, 4 C. P. D. at p. 62. a person who has the custody of the seal for other purposes, the corporation may be bound by conduct on the part of its governing body which amounts to an estoppel or ratification, but it will not be bound by anything less (a). The principles applied in such cases are in truth independent of contract, and therefore no difficulty arises from the want of a contract under the corporate seal, or noncompliance with statutory forms. But it is conceived that no sort of estoppel, part performance, or ratification, can bind a corporation to a transaction which the legislature has in substance forbidden it to undertake, or made it incapable of undertaking. (a) Bank of Ireland v. Ecans' Charities, 5 H. L. C. 389. 144 Contrast of ancient and modern conceptions of contracts as giving rights of action. CHAPTER III. FORM OF CONTRACT. ACCORDING to the modern conception of contract, all agreements which satisfy certain conditions of a general kind are valid contracts and may be sued upon, in the absence of any special legislation forbidding particular contracts to be made or denying validity to them unless made with particular forms. This theory finds a concise and complete expression in s. 10 of the Indian Contract Act: "All agreements are contracts [i.e., enforceable by law, s. 2, sub.-s. h.] if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void" (then follows a clause saving all formalities required in particular cases by the law of British India). So thoroughly has this conception established itself in recent times that, having made the presence of a consideration one of the general conditions of a valid contract, we are now accustomed to bring contracts under seal within the terms of the condition by saying that where a contract is under seal the consideration is presumed. Historically speaking, this is a transparent fiction. The doctrine of Consideration in its present general form is of comparatively modern origin even if we look to the history of English law alone. If we roughly put it halfway between ourselves and Bracton we shall probably be allowing it as much antiquity as it can fairly claim. The ancient reason why a deed could be sued upon lay not in |