remains the inconvenient distinction of two if not three different rules for corporations of different kinds. corporations: in course don't want As concerns trading corporations the law may be taken Trading as settled by the unanimous decisions of the Court of Common Pleas and of the Exchequer Chamber in South Contracts of Ireland Colliery Co. v. Waddle (b). The action was of business brought by the company against an engineer for non- don delivery of pumping machinery, there being no contract Ireland under seal. Bovill, C. J. said in the Court below that it co. v. Colliery was impossible to reconcile all the decisions on the subject: Waddle. 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 (c), 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." semble. The decision was affirmed on appeal without hearing Cases counsel for the plaintiffs, and Cockburn, C. J. said the overruled, 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 nondelivery of iron pipes ordered for the company's works (d). Expressly (b) 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. (e) This qualification is itself subject to the rule established by Royal British Bank v. Turquand, 6 E. & B. 237; 25 L. J. Q. B. 327, and similar cases, and mentioned at p. 122 above. For details see Note (d) The directors were authorized Cases affirmed. 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 don 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 Ireland 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 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 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.). Australian Royal Mail Co. 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. Ebbw Vale Company's case, 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. corpora When purposes: authori As concerns non-trading corporations, the question has Nonnever been decided by a Court of Appeal. But the weight trading of the most recent authorities, together with the analogy tions. of those last considered, seems to give a sufficient warrant created for the statement made above, that all contracts necessary for special and incidental to the purposes for which the corporation State of exists may be made without seal, at least when the corpo- Neration has been established for special purposes by a cessary modern statute or charter. On the rule as thus limited. the latest case is Nicholson v. Bradfield Union (e), where it contracts was held that a corporation is liable without a contract seal. 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: (e) L. R. 1 Q. B. 620. and in cidental" don't want Municipal corporations, &c.: Old rule in force, semble. 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 direc tions 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. Hunt v. Wimbledon Local Board (C. A.) 4 C. P. D. 48. Whether the preparation of plans for new offices for an incorporated local Board, which plans were not acted on, is work incidental and necessary to the purposes of the Board, quaere. The actual decision was on the ground that contracts above the value of 50%. were imperatively required by statute to be under seal. With regard to municipal corporations (and it is presumed other corporations not created for definite public purposes) the ancient rule seems to be still in force to a great extent. An action will not lie for work done on local improvements (ƒ), or on an agreement for the purchase of tolls by auction (g), without an agreement under seal. The Court of Common Pleas held (in 1875) that where a municipal corporation owns a graving dock a contract to let a ship have the use of it need not be under the corporate seal. (f) Mayor of Ludlow v. Charlton, 6 M. & W. 815. (g) Mayor of Kidderminster v. Hardwick, L. R. 9 Ex. 13. This was put however on the ground that the case does fall within the ancient exception of convenience resting on the frequency or urgency of the transaction. The admission of a ship into the dock is a matter of frequent and ordinary occurrence and sometimes of urgency (h). ments to corpora There has also been little disposition to relax the rule Appointin the case of appointments to offices, and it seems at offices by present that such an appointment, if the office is of any importance, must be under the corporate seal to give the holder a right of action for his salary or other remuneration. This appears by the following instances: Appointment of attorney: Arnold v. Mayor of Poole, 4 M. & Gr. 860. It is true that the corporation of London appoints an attorney in court without deed, but that is because it is matter of record: see pp. 882, 896. But after an attorney has appeared and acted for a corporation the corporation cannot, as against the other party to the action, dispute his authority on this ground: Faviell v. E. C. Ry. Co. 2 Ex. 344, 17 L. J. Ex. 223, 297. Nor can the other party dispute it after taking steps in the action: Thames Haven, &c. Co. v. Hall, 5 M. & Gr. 274. Cp. Reg. v. Justices of Cumberland, 17 L. J. Q. B. 102. Grant of military pension by the East India Company in its political capacity: Gibson v. E. I. Co. 5 Bing. N. C. 262. Increase of town clerk's salary in lieu of compensation: Reg. v. Mayor of Stamford, 6 Q. B. 434, L. J. Dig. 6, 422. Office with profit annexed (coal meter paid by dues) though held at the pleasure of the corporation: Smith v. Cartwright, 6 Ex. 927, 20 L. J. Ex. 401. (The action was not against the corporation but against the person by whom the dues were alleged to be payable. The claim was also wrong on another ground.) Collector of poor rates: Smart v. West Ham Union, 10 Ex. 867, 24 L. J. Ex. 201; but partly on the ground that the guardians had not undertaken to pay at all, the salary being charged on the rates; and wholly on that ground in Ex. Ch., 11 Ex. 867, 25 L. J. Ex. 210. Clerk to master of workhouse: Austin v. Guardians of Bethnal Green, L. R. 9 C. P. 91. Dunstan v. Imperial Gas Light Co. 3 B. & Ad. 125, as to directors' fees voted by a meeting; but chiefly on the ground that the fees were never intended to be more than a gratuity. Cope v. Thames Haven, &c. Co. 3 Ex. 841, 18 L. J. Ex. 345: agent appointed for a special negotiation with another company not allowed to (h) Wells v. Kingston-upon-Hull, L. R. 10 C. P. 402. |