Modern Bank of v. Patter son (Supreme affixed without authority is not binding on the corporation (a). 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 (b). A company under the Companies Act, 1862, must have its name 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 (c). 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. We now turn to the exceptions. According to the modern exceptions. authorities it is now established, though not till after sundry Columbia conflicting decisions, that the "principle of convenience amounting almost to necessity" will cover all contracts which can fairly be treated as necessary and incidental to the purposes for which the corporation exists: and that in the case of a trading 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 : 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 (a) Bank of Ireland v. Evans' Charities, 5 H. L. C. 389. (b) 10 Co. Rep. 30b, Shepp. Touchst. 57, supra, p. 99. 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. (c) Notwithstanding the statutory penalty, there is an instance on re cord 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. The like direction and penalty are contained in the Industrial and Provident Societies Act 1876, 39 & 40 Vict. c. 45, ss. 10, sub-s. 1, and 18, sub-s. 2. As to execution of deeds abroad by companies under the Acts of 1862 and 1867, see the Companies Act 1862, s. 55, and the Companies Seals Act 1864 (27 Vict. c. 19); in Scotland, the Conveyancing (Scotland) Act 1874, 37 & 38 Vict. c. 94, s. 56. 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 (a)." This broad statement cannot at present be said to be correct Not so wide in in England except for trading corporations, and perhaps also 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 (b), one may perhaps venture to regret that we have not adopted the rule laid 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. tions: in course seal. S. of As concerns trading corporations the law may be taken as Trading settled by the unanimous decisions of the Court of Common Corpora Pleas and of the Exchequer Chamber in South of Ireland Col- Contracts liery Co. v. Waddle (c). The action was brought by the Com- of business pany against an engineer for non-delivery of pumping machinery, don't want there being no contract under seal. Bovill, C.J. said in the Ireland Court below that it was impossible to reconcile all the decisions Colliery Co. v. 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 : "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. 109], 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 (a) Bank of Columbia v. Patterson, 7 Cranch, 299, 306. (b) 6 M. & W. 815. (c) L. R. 3 C. P. 463, in Ex. Ch. 4 C. P. 617. Most if not all of Waddle. Cases overruled, semble. Cases affirmed. occurrence and small importance. The authorities however do not sustain the argument." The decision was affirmed on 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. Action for non-delivery of iron pipes ordered for the company's works (a). Expressly said in the Court below to be no longer law, per Montague Smith, J. See L. R. 3 C. P. 475. 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. W. Ry. Co. of Irleand v. Johnson, 6 H. L. C. 798, 812. The following cases are affirmed or not contradicted. Some of them were decided at the time on narrower or more particular (a) The directors were authorized by the incorporating Act of Parliament to make contracts; but it was held that this only meant they might affix the seal without calling a meeting. grounds, and in one or two the trading character of the corporation seems immaterial :— Beverley v. Lincoln Gas Co. 6 A. & E. 829. Action against the company for price of gas meters supplied. Church v. Imperial Gas Co. ib. 846, in Ex. Ch. Action by the company 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. Lowe v. L. & N. W. Ry. Co. 18 Q. B. 632, 21 L J. Q. B. 361. The company was held liable in an action for use and occupation when there had been an actual occupation for corporate purposes, partly on the ground that a parol contract for the occupation was within the statutory powers of the directors and might be presumed: cp. the next case. Pauling v. L. & N. W. Ry. Co. 8 Ex. 867, 23 L. J. Ex. 105. Sleepers supplied to an order from the engineer's office and accepted: there was no doubt that the contract could under the Companies Clauses Consolidation Act be made by the directors without seal, and it was held that the acceptance and use were evidence of an actual contract. Henderson v. Australian Royal Mail &c. Co. 5 E. & B. 409, 24 L. J. Q. B. 322. Action on agreement to pay for bringing home one of the Company's ships from Sydney. Here it was distinctly laid down that "where the making of a certain description of contracts is necessary and incidental to the purposes for which the corporation was created" such contracts need not be under seal (by Wightman J.): "The question is whether the contract in its nature is directly connected with the purpose of the incorporation" (by Erle, J.). Same Company v. Marzetti, 11 Ex. 228, 24 L. J. Ex. 273. Action by the company on agreement to supply provisions for its passenger ships. Reuter v. Electric Telegraph Co. 6 E. & B. 341, 26 L. J. Q. B. 46. Where the chief point was as to the ratification by the directors of a contract made originally with the chairman alone, who certainly had no authority to make it. Claim of Ebbw Vale Company, 8 Eq. 14, decides that one who sells to a company goods of the kind used in its business need not ascertain that the company means so to use them, and is not prevented from enforcing the contract even if he had notice of an intention to use them otherwise. Nontrading согрога tions. When created purposes: State of As concerns non-trading corporations, the question has never been decided by a Court of Appeal. But the weight of the most recent authorities, together with the analogy of those last considered, seems practically to give a sufficient warrant for the for special statement made above, that all contracts necessary and incidental to the purposes for which the corporation exists may be made authori- without seal, at least when the corporation has been established ties. "Necessary and for special purposes by a modern statute or charter. On the incidental" rule as thus limited the latest case is Nicholson v. Bradfield Union (a), where it was held that a corporation is liable without a contract under seal for goods of a kind which must be from time to time required for corporate purposes, at all events when they have been actually supplied and accepted. Earlier decisions are as follows: contracts don't want seal. Municipal Sanders v. St. Neot's Union, 8 Q. B. 810, 15 L. J. M. C. 104. Iron gates for workhouse supplied to order without seal and accepted. Paine v. Strand Union, ib. 326, 15 L. J. M. C. 89, is really the same way, though at first sight contra: the decision being on the ground that making a plan for rating purposes of one parish within the union was not incidental to the purposes for which the guardians of the union were incorporated: they had nothing to do with either making or collecting rates in the several parishes, nor had they power to act as a corporation in matters confined to any particular parish. Clarke v. Cuckfield Union, 21 L. J. Q. B. 349 (in the Bail Court, by Wightman, J.) Builders' work done in the workhouse. The former cases are reviewed. Haigh v. North Brierly Union, E. B. & E. 873, 28 L. J. Q. B. 62. An accountant employed to investigate the accounts of the union was held entitled to recover for his work as "incidental and necessary to the purposes for which the corporation was created," by Erle, J., Crompton, J. doubting. In direct opposition to the foregoing we have only one decision, but a considered one, Lamprell v. Billericay Union, 3 Ex. 283, 18 L. J. Ex. 282. Building contract under seal, providing for extra works on written directions of the architect. Extra work done and accepted but without such direction. Held, with an expression of regret, that against an individual this might have given a good distinct cause of action on simple contract, but this would not help the plaintiff, as the defendants could be bound only by deed. With regard to municipal corporations (and it is presumed (a) L. R. 1 Q. B. 620. |