The kinds of contracts subject to restrictions of form are these: Contracts (1). At common law, the contracts of corporations. The rule subject to special that such contracts must in general be under seal is remarkable forms. as not being an institution of modern positive law but a survival from a time when the modern doctrine of contracts was yet unformed. Of late years great encroachments have been made upon it, which have probably not reached their final limits; as it stands the law is in a state of transition or fluctuation on some points, and demands careful consideration. Both the historical and the practical reason lead us to give this topic the first place. (2). Partly by the law merchant and partly by statute, the peculiar contracts expressed in negotiable instruments. (3). By statute only A. The various contracts within the Statute of Frauds. Certain sales and dispositions of property are regulated by other statutes, but mostly as transfers of ownership or of rights good against third persons rather than as agreements between the parties. B. Marine insurances. C. Transfer of shares in companies (generally). D. Acknowledgment of debts barred by the Statute of Limitation of James I. E. Marriage This, although we do not mean to enter on the subject of the Marriage Acts, must be mentioned here to complete the list. 1. As to Contracts of Corporations. tions. quired. The doctrine of the common law was that corporations could Corporabind themselves only under their common seal, except in small Old rule: matters of daily occurrence, as the appointment of household Seal generally reservants and the like (a). The principle of these exceptions being, in the words of the Court of Exehequer Chamber, "convenience amounting almost to necessity"(), the vast increase in the extent, importance, and variety of corporate dealings which has taken place in modern times has led to a corresponding increase of the exceptions. Before considering these, however, it is well to cite an approved judicial statement of the rule, and of the reasons that may be given for it :- (a) 1 Wms. Saund. 615, 616, and see old authorities collected in notes to Arnold v. Mayor of Poole, 4 M. & Gr. 876, and Fishmongers' Company v. Robertson, 5 M. & Gr. 182. (b) Church v. Imperial Gas, &c., Company, 6 A. & E. 846, 861. "The seal is required as authenticating the concurrence of the whole body corporate. If the legislature, in erecting a body corporate, invest any member of it, either expressly or impliedly, with authority to bind the whole body by his mere signature or otherwise, then undoubtedly the adding a seal would be matter purely of form and not of substance. Everyone becoming a member of such a corporation knows that he is liable to be bound in his corporate character by such an act; and persons dealing with the corporation know that by such an act the body will be bound. But in other cases the seal is the only authentic evidence of what the corporation has done or agreed to do. The resolution of a meeting, however numerously attended, is, after all, not the act of the whole body. Every member knows he is bound by what is done under the corporate seal and by nothing else. It is a great mistake, therefore, to speak of the necessity for a seal as a relic of ignorant times. It is no such thing: either a seal or some substitute for a seal, which by law shall be taken as conclusively evidencing the sense of a whole body corporate, is a necessity inherent in the very nature of a corporation" (a). It is, no doubt, a matter of "inherent necessity" that an artificial person can do nothing save by an agent: and the common seal in the agent's custody, when an act in the law purports to be the act of the corporation itself, or his authority under seal, when it purports to be the act of an agent for the corporation, is in English law the recognized symbol of his authority. But there is no reason in the nature of things why his authority should not be manifested in other ways: nor is the seal of itself conclusive, for an instrument to which it is in fact affixed without authority is not binding on the corporation (b). On the other hand although it is usual and desirable for the deed of a corporation to be sealed with its proper corporate seal, it is laid down by high authorities that any seal will do (c). A company under the Companies Act, 1862, must have its name (a) Mayor of Ludlow v. Charlton, 6 M. & W. 815, 823, adopted by Pollock, B., in Mayor of Kidderminster v. Hardwick, L. R. 9 Ex. at p. 24, and see per Keating, J., Austin v. Guardians of Bethnal Green, L. R. 9 C. P. at p. 95. (b) Bank of Ireland v. Erans' Charities, 5 H. L. C. 389. (c) 10 Co. Rep.306, Shepp. Touchst. 57, supra, p. 96. Yet the rule is doubted, Grant on Corp. 59, but only on the ground of convenience and without any authority. The like rule as to sealing by an individual is quite clear and at least as old as Bracton: Non multum refert utrum [charta] proprio vel alieno sigillo sit signata, cum semel a donatore coram testibus ad hoc vocatis recognita et concessa fuerit, fo. 38a. Cp. Britton, 1. 257 (Clarendon Press ed.) engraved in legible characters on its seal, and any director, &c., using as the seal of the company any seal on which the name is not so engraved is subject to a penalty of 507. (ss. 41, 42): but this would not, it is conceived, prevent instruments so executed from binding the company (). The seal of a building society incorporated under the Building Societies Act, 1874 (37 & 38 Vict., c. 42, s. 16, sub-s. 10), "shall in all cases bear the registered name thereof," but no penalty or other consequence is annexed to the non-observance of this direction. . Patter We now turn to the exceptions. According to the modern Modern authorities it is now established, though not till after sundry Bank of exceptions. conflicting decisions, that the "principle of convenience amount-Columbia ing almost to necessity" will cover all contracts which can son (Sufairly be treated as necessary and incidental to the purposes for preme which the corporation exists: and that in the case of a trading U.S.) Court, corporation all contracts made in the ordinary course of its business or for purposes connected therewith fall within this description. The same or even a wider conclusion was much earlier arrived at in the United States. As long ago as 1813 the law was thus stated by the Supreme Court : "It would seem to be a sound rule of law that wherever a corporation is acting within the scope of the legitimate purposes of its institution all parole contracts made by its authorized agents are express promises of the corporation, and all duties imposed on them by law, and all benefits conferred at their request, raise implied promises for the enforcement of which an action may well lie (b)." This broad statement cannot at present be said to be correct Not so in England except for trading corporations, and it may be also wide in England. for non-trading corporations established in modern times for special purposes: and with all respect for the reasons of the Court of Exchequer in Mayor of Ludlow v. Charlton, (c) one may perhaps venture to regret that we have not adopted the rule laid (a) Notwithstanding the statutory penalty, there is an instance on record of the private seal of a director being used when the company had been so recently formed that there had been no time to make a proper seal, Gray v. Lewis, 8 Eq. at p. 531. As to execution of deeds abroad by companies under the Acts of 1862 and 1867, see the Companies Act (b) Bank of Columbia v. Patterson, (c) 6 M. & W. 815. Ꮵ Trading corpora tions: in course of seal. S. of down by the American Supreme Court in its fulness and simplicity. The former conflict of decisions is now much reduced, but there remains the inconvenient distinction of two if not three different rules for corporations of different kinds. As concerns trading corporations the law may be taken as settled by the unanimous decisions of the Court of Common Contracts Pleas and of the Exchequer Chamber in South of Ireland Colbusiness liery Co. v. Waddle (a). The action was brought by the Comdon't want pany against an engineer for non-delivery of pumping machinery, Ireland there being no contract under seal. Bovill, C.J. said in the Court below that it was impossible to reconcile all the decisions on the subject: but the exceptions created by the recent cases were too firmly established to be questioned by the earlier decisions, which if inconsistent with them must be held not to be law : Colliery Co. v. Waddle. Cases over ruled, semble. "These exceptions apply to all contracts by trading corporations entered into for the purposes for which they are incorporated. A company can only carry on business by agents,-managers and others; and if the contracts made by these persons are contracts which relate to objects and purposes of the company, and are not inconsistent with the rules and regulations which govern their acts, [this exception is far from being unqualified, see Royal British Bank v. Turquand &c. supra, p. 106], they are valid and binding upon the company, though not under seal. It has been urged that the exceptions to the general rule are still limited to matters of frequent occurrence and small importance. The authorities however do not sustain the argument." The decision was affirmed in appeal without hearing counsel for the plaintiffs, and Cockburn C.J. said the defendant was inviting the Court to reintroduce a relic of barbarous antiquity. It is submitted that the following cases must since this be considered as overruled :: East London Waterworks Co. v. Bailey, 4 Bing. 283. Expressly said in the Court below to be no longer law, per Montague Smith, J. (a) L. R. 3 C. P. 463, in Ex. Ch. 4 C. P. 617. Most if not all of the previous authorities are there referred to. See L. R. 3 C. P. 475. Action for non-delivery of iron pipes ordered for the company's works (a). Homersham v. Wolverhampton Waterworks Co. 6 Ex. 137, 20 L. J. Ex. 193. Contract under seal for erection of machinery price of extra work done with approval of the company's engineer and accepted, but not within the terms of the sealed contract, held not recoverable. Diggle v. London & Blackwall Ry. Co. 5 Ex. 442, 19 L. J. Ex. 308. Work done on railway in alterations of permanent way &c: this case already much doubted in Henderson v. Australian Royal Mail &c. Co. 5 E. & B. 409, 24 L. J. Q. B. 322, which is now confirmed in its full extent by the principal case. Probably Finlay v. Bristol & Exeter Ry. Co. 7 Ex. 409, 21 L. J. Ex. 117, where it was held that against a corporation tenancy could in no case be inferred from payment of rent so as to admit of an action for use and occupation without actual occupation. Also London Dock Co. v. Sinnott, 8 E. & B. 347, 27 L. J. Q. B. 129, where a contract for scavenging the company's docks for a year was held to require the seal, as not being of a mercantile nature nor with a customer of the company, can now be of little or no authority beyond its own special circumstances: see per Bovill, C. J. L. R. 3 C. P. 471. Even in the House of Lords it has been assumed and said, though fortunately not decided, that a formal contract under seal made with a railway company cannot be subsequently varied by any informal mutual consent: Midland G. IV. Ry. Co. of Ireland v. Johnson, 6 H. L. C. 798, 812. firmed. The following cases are affirmed or not contradicted. Some of Cases afthem were decided at the time on narrower or more particular grounds, and in one or two the trading character of the corporation seems immaterial: Beverley v. Lincoln Gas Co. 6 A. & E. 829. company for price of gas meters supplied. Action against the Action by the com Church v. Imperial Gas Co. ib. 846, in Ex. Ch. pany for breach of contract to accept gas. A supposed distinction between the liability of corporations on executed and on executory contracts was exploded. Copper Miners of England v. Fox, 16 Q. B. 229, 20 L. J. Q. B. 174. Action (in effect) for non-acceptance of iron rails ordered from the company. The company had in fact for many years given up copper mining and traded in iron, but this was not within the scope of its incorporation. (a) The directors were authorized by the incorporating Act of Parliament to make contracts; but it was held that this only meant they |