and French opinions are collected; and for modern German theories on the subject Vangerow, Pand. § 603, Windscheid, Pand. § 306. The German writers are driven to strange shifts to find semblances of authority in the Quellen on these modern controversies. where it is There seems to be a fair consensus of authority, such as there is, Place of for holding that the place to which a contract made by correspondence contract should be referred is that whence the acceptance is despatched. made by Savigny, Syst. 8, 253, 257. Newcomb v. De Roos, 2 E. & E. 270, 29 correL. J. Q. B. 4. Conversely, where an offer to buy goods is made by a spondence. letter posted in the city of London, and accepted by sending the goods to the writer's place of business in the city, the whole cause of action arises in the city. Taylor v. Jones, 1 C. P. D. 87. The German Commercial Code has the following provisions on this German Commersubject:cial Code. 318. When a commercial contract is proposed between parties present at the same time, the acceptance must be immediate; otherwise the proposer is no longer bound to his proposal.+ 319. When a proposal is on foot between parties at a distance, the proposer remains bound until the time at which he may fairly expect an answer to reach him if despatched in ordinary course and in due time. In estimating this time he may assume that his proposal was duly received [surely not if, as in Adams v. Lindsell (a), it was delayed by his own negligence?] In the event of an acceptance despatched in due time not arriving till after such time as aforesaid, no contract is concluded if the proposer has given notice of revocation in the meantime, or gives it forthwith (ohne Verzug) on receiving the acceptance. [The clauses marked† seem only to say in a rather elaborate way that a proposal is revoked by the lapse of a reasonable time without acceptance; s. 319, however, tacitly involves the important proposition-now negatived, as we saw in the text, by English law— that an answer which never arrives, whether sent by post or otherwise, cannot conclude a contract.] 320. When the revocation of a proposal reaches the other party before or at the same time with the proposal itself, the proposal is deemed null and void (ist für nicht geschehen zu erachten). In like manner the acceptance is deemed null and void if the revocation has been communicated to the proposer before the acceptance or at the same time with it. 321. Where an agreement has been concluded between parties at a distance, the conclusion of the agreement is to be dated from the time at which the communication of the acceptance was delivered for (a) 1 B. & Ald. 681. despatch [out of the acceptor's control?] (in welchem die Erklärung der Annahme Behufs der Absendung abgegeben ist). 322. An acceptance subject to conditions or reservations is equivalent to a refusal coupled with a new proposal. The rules proposed by the draft of a new Italian Commercial Code on this point may be seen in the Revue de Droit International, 1880, No. 1, p. 79. Capacities tion. Sut NOTE C. (p. 139 above). Authorities on limits of corporate powers. The citations here given are intended to show how the three distinct topics of the powers of corporations as such (a), and the application to them of (3) the rules of partnership and (2) the principles of public policy, have been treated by our Courts, sometimes together and sometimes separately. They are arranged in an order approximately following that in which these topics have been mentioned, according as one or the other is most prominent: a precise division would be impossible without breaking up passages from the same judgment into many fragments, but the indicating letters (a B) are used to call attention to the presence of the abovementioned special classes of considerations respectively. It may be observed that some of those dicta which seem most strongly to adopt on the first head the theory of limited special capacities occur in the immediate neighbourhood of statements coming under one or both of the other heads, which in all probability have had an appreciable, though it may be an undesigned operation in modifying the form of their expression. ton's Hos- annexed pital case. Capacities incident to incorporation generally. Resolution of Ex. incident to Ch. in the case of Sutton's Hospital, 10 Co. Rep. 30b:— incorpora- "When a corporation is duly created all other incidents are tacite and therefore divers clauses subsequent in the charter are not of necessity, but only declaratory, and might well have been left out. As, 1. by the same to have authority, ability, and capacity to purchase; but no clause is added that they may alien, &c., and it need not, for it is incident. 2. To sue and be sued, implead and be impleaded. 3. To have a seal, &c.; that is also declaratory, for when they are incorporated they may make or use what seal they will. [So Shepp. Touchst. 57: although it be a cor poration that doth make the deed, yet they may seal with any other seal besides their common seal, and the deed never the worse.'] 4. To restrain them from aliening or demising, but in a certain form; that is an ordinance testifying the King's desire, but it is but a precept and doth not bind in law." This resolution does not seem to have been very material to the decision of the case, but anything reported by Coke is by inveterate custom exempt from criticism of this kind; moreover it is supported by the opinion of Hobart, C. J., who says that a power to make bylaws, though given by a special clause in all incorporations, is needless; "for I hold it to be included by law in the very act of incorporating, as is also the power to sue, to purchase, and the like.” (Hob. 211, pl. 268.) This very positive statement was all but lost sight of in modern cases (a) till it was cited by Blackburn, J. in Riche v. Ashbury Ry. Carriage Co. L. R. 9 Ex. 263–4:— "This seems to me an express authority that at common law it is an incident to a corporation to use its common seal for the purpose of binding itself to anything to which a natural person could bind himself, and to deal with its property as a natural person might deal with his own. And further that an attempt to forbid this on the part of the King, even by express negative words, does not bind at law (b). Nor am I aware of any authority in conflict with this case. .. I take it that the true rule of law is that a corporation at Common Law has, as an incident given by law, the same power to contract, and subject to the same restrictions, that a natural person has. And this is important when we come to construe the statutes creating a corporation." We will now shortly trace the growth of the doctrine of special Growth of capacities in Colman v. Eastern Counties Ry. Co., 10 Beav. 1, and the consimilar cases. The subject was novel, many-sided, and embarrassing; trine in trary docParliament was called on to make and the Courts to construe sta- modern tutory powers and provisions the like of which had seldom if ever times. been made or construed in earlier times; and so many new points arose for legislative precaution and judicial discussion, and it took so much time and labour to disentangle them, that it never occurred to anybody to think that the Common Law could have anything of importance to say to the matter. To speak plainly, it is clear enough that Parliament had forgotten all about the Sutton's Hospital (a) It is cited by Erle, J. in Bostock v. N. Staffordshire Ry. Co. 4 E. & B. 798, 819, 24 L. J. Q. B. 225. (b) That is, a corporate act in violation of the conditions of the UU Colman v. Co. and case, and perhaps it is not surprising that the Courts did not re- In Colman v. E. C. Ry. Co. the suit was by a shareholder to E. C. Ry. restrain the company and its directors from applying its funds in other cases promoting a steam-packet company in connexion with the railway. in equity. Injunction granted. Lord Langdale in the course of his judgment spoke of the exercise of a railway company's powers as a matter affecting public rights and interests, and therefore to be looked into with more vigilance than the conduct of an ordinary partnership, and observed how desirable it was that the property of railway companies should be secure from being pledged to unauthorized speenlations, so that investment in them might be prudent [] He further expressed his clear opinion "that the powers which are given by an Act of Parliament, like that now in question, extend no farther than is expressly stated in the Act, or is necessarily and properly required for carrying into effect the undertaking and works which the Act has expressly sanctioned. . . They [the company] have the power to do all such things as are necessary and proper for the purpose of carrying out the intention of the Act of Parliament, but they have no power of doing anything beyond it." Salomons v. Laing, 12 Beav. 339, also before Lord Langdale, was a suit by a shareholder to restrain the London, Brighton, and South Coast Ry. Co., which was already lawfully possessed of many shares in the Direct London and Portsmouth Co., from taking up more shares in that company and otherwise assisting it out of the South Coast Co.'s funds. The M.R. said: "A railway company incorporated by Act of Parliament is bound to apply all the moneys and property of the company for the purposes directed and provided for by the Act, and for no other purpose whatever." He went on to say that any surplus after the purposes of the Act are fulfilled belongs to the shareholders as dividend and cannot be disposed of against the will of any shareholder [3]. "Any application of or dealing with . . any funds or money of the company. . in any manner not distinctly authorized by the Act, is in my opinion an illegal application or dealing" (p. 352). In a later stage of the case (pp. 377, 382) he spoke of the arrangement between the two companies as "fraud against the Legislature, who gave them their powers for purposes entirely different" [7]. The case of Cohen v. Wilkinson (12 Beav. 125, 138, 1 Mac. & G. 481), which arose out of the same series of transactions, decided that a railway company is bound not only to make nothing different from what Parliament intended it to make, but to make nothing less than the whole: abandoning a material part of the scheme is in fact equivalent to substituting a different scheme (ep. Hodgson v. Earl of Powis, 1 D M. G. 6). ། In Bagshaw v. East Union Ry. Co. (7 Ha. 114) it was laid down that capital raised under an Act of Parliament for a specific purpose defined by the Act cannot be applied by directors (and probably not by the unanimous assent of the shareholders) to any other purpose than such as the company's general funds might be applied to [y]: in the Court of Appeal (2 Mac. & G. 389) the case was put more on the ground of the individual shareholder's right to have his money applied only to the specific purpose for which he advanced it [3]. 66 In the subsequent cases of Beman v. Rufford, 1 Sim. N. S. 550 (Lord Cranworth, V.-C.) and G. N. Railway Co. v. E. C. Railway Co. 9 Ha. 306 (Turner, V.-C.), the point is that the statutory incorporation of a railway company imposes on it, with reference to the interests of the public [7], a positive duty of maintaining and working its line, and it must not enter into any agreement that amounts to a delegation or abandonment of this duty (a); in Beman v. Rufford, however, the strong expression occurs that, on the principle that has been so often laid down, this Court will not tolerate that parties having the enormous powers which railway companies obtain [7] should apply one farthing of their funds in a way which differs in the slightest degree from that in which the Legislature has provided that they shall be applied" (p. 565). The remarks of the Lord Justice Turner in the later case of Shrewsbury & Birmingham Ry. Co. v. L. & N. W. Ry. Co., 4 D. M. G. 115, 132, are less strong; in Simpson v. Westminster Palace Hotel Co., 2 D. F. J. 141, a dissenting shareholders' suit, he seems to confine himself to the power of a meeting to bind the minority on partnership principles [3]. ways case, We have dwelt so far on these decisions in this place (though one East Anor two of them do not even in their language really postulate the glian Raildoctrine of limited special capacities) because they had much weight &c. at comin East Anglian Railways Co. v. E. C. Railway Co., 11 C. B. 775, mon law. 21 L. J. C. P. 23, which for some time was treated as a leading case, and was the chief obstacle to the restoration of the common law doctrine of "general capacity." Bramwell, L. J. has now expressed a distinct opinion that it was wrongly decided: 11 Ch. D., at p. 501: it is here cited, however, for its importance in the history of the subject. It was in effect the case of an agreement by one railway company to promote the undertaking of another. The Court said: "It is clear that the Defendants have a limited authority only, and are a corporation only for the purpose of making and maintaining the railway sanctioned by the Act, and that their funds can (a) As a lease of the undertaking, or grant of exclusive running powers and control of the line to another |