CHAPTER VI.

ON MATTERS WHICH ARE REQUIRED TO BE PROVED BY WRITING-THE STATUTES OF FRAUDS-OF LIMITATIONS OF PRESCRIPTION.

MANY matters can be proved only by deed or other writing; and, in such cases, oral evidence, however distinct and direct, is wholly inadmissible.

INCORPOREAL RIGHTS,

Such as advowsons, rents, remainders, reversions, profits à prendre, and easements, can be created or assigned only by deed, and must therefore be proved by deed.1 Thus a ticket of free admission to a theatre or a race course is insufficient evidence of a title to enter, unless it be by deed.2

CONTRACTS BY CORPORATIONS.

Contracts and acts done by corporations, must generally be by deed; and can therefore be proved only by a deed bearing the corporation seal.3

This rule is an ancient principle of common law, and still remains abstractedly unmodified. But practically a large class of exceptions has been engrafted on it, and their accumulative result appears to be that minor contracts, and other matters which are essentially

1 Tayl. 782

[EV.]

2 Wood v. Leadbitter, 13 M. & W. 842.
3 Arnold v. Mayor of Poole, 4 M. & G. 860.
2 E

incidental and necessary to the daily working of a corporation, may be proved by the ordinary principles of parol evidence. Thus it has been said by Rolfe, B. : "A corporation, it is said, which has a head, may give a personal command and do small acts; as, it may retain a servant; it may authorize another to drive away cattle, damage feasant, or make a distress, or the like. These are all matters so constantly recurring, or of so small importance, or so little admitting of delay, that, to require in every such case the previous affixing of the seal would be greatly to obstruct the every-day ordinary convenience of the body corporate, without any adequate object. In such matters, the head of the corporation seems from the earliest times to have been considered as delegated by the rest of the members to act for them."1

His lordship referred also to the judgment of Lord Denman, in Church v. Imperial Gas Light Company, and spoke of the test as being a paramount convenience so great as almost to amount to a necessity.

The contract or matter must be evidently within the category of a corporation's incidental necessities and daily emergencies, in order to be provable without a writing under the corporation seal: and such a writing will be indispensable to prove any contract or other transaction, by or with the corporation, where the matter is not within the routine of its daily business; or when it is of such an importance as not to support a reasonable presumption that authority to make such a contract, &c., has been virtually delegated to the agents of the corporation. The practical question in such cases is, was the transaction incidental or foreign to the purposes and daily business of the corporation? If it be incidental, as to repair the premises of the corporation,2 or a contract to buy or sell such goods as the corporation is formed to buy and sell ;3 such a

1 Mayor of Ludlow v. Charlton, 6 M. & W. 821.

2 Saunders v. St. Neots Union, 8 Q. B. 810.

Church v. Imperial Gas Light and Coke Company, 6 A. & E. 846.

matter does not require to be proved by the corporation seal. But when the goods to be supplied are not such as those in which the corporation usually deals;1 or when the contract is of such a magnitude, and such an unusual description, as to require reasonably the formal and express assent of the corporation, the fact must be proved by writing under the corporation seal.2 It is also to be remarked, that a long current of recent cases has tended to restrict the general principle that corporations can only contract under seal. The courts are unwilling to hold such contracts void, merely because they are not evidenced by the corporation seal; and are becoming every year more and more inclined to hold corporations bound by the contracts and acts of authorized, or duly appointed, agents. Thus, it is said by a pre-eminent authority, in a very recent case, that although corporations can only contract under seal, they are bound by their conduct, and by the acts of their solicitors, after their contract, just as an individual would be." So, in tort, corporations are liable for the act of their servant, although they have not been appointed under the corporation seal; and use and occupation may be maintained by a corporation against a tenant who has entered, but who has not been constituted by a demise under seal.5

66

It is doubtful how far a corporation is bound by an executed contract, not under seal, but of which the corporation has received the benefit. The Court of Queen's Bench holds that the corporation is bound :6 the Court of Exchequer and the Common Pleas hold, apparently, that it is not bound.

1 Copper Miners Company v. Fox, 16 Q. B. 229.

2 Homershan v. Wolverhampton Railway Company, 6 Exch. 137. 3 Lord St. Leonards: Eastern Counties Railway Company v. Hawkes, 25 L. T. 318.

4 Eastern Counties Railway Company v. Brown, 6 Exch. 314. 5 Mayor of Stafford v. Till, 4 Bing. 77.

6 Saunders v. St. Neots Union, 8 Q. B. 810. 7 Lamprey v. Billericay Union, 3 Exch. 307. 8 Arnold v. Mayor of Poole, 4 M. & G. 860.

CONTRACTS BY COMPANIES

Under the Companies Clauses Consolidation Act1 are provable under the following section:

Sect. 97. The power which may be granted to any committee to make contracts, as well as the power of the directors to make contracts on behalf of the company, may lawfully be exercised as follows; that is to say

With respect to any contract which, if made between private

persons, would be by law required to be in writing, and under
seal, such committee, or the directors, may make such contracts
on behalf of the company in writing, and under the common
seal of the company, and in the same manner may vary or
discharge the same:

With respect to any contract which, if made by private persons,
would be by law required to be in writing, and signed by
the parties to be charged therewith; such committee or the
directors may make such contract on behalf of the company
in writing, signed by such committee, or any two of them, or
any two of the directors, and in the same manner may vary
or discharge the same:
With respect to any contract, which if made between private
persons would by law be valid, although made by parol only
and not reduced into writing, such committee or the directors
may make such contract on behalf of the company, by parol
only, without writing, and in the same manner may vary or
discharge the same:

And all contracts, made according to the provisions herein con-
tained, shall be effectual in law, and shall be binding upon
the company and their successors, and all other parties thereto,
their heirs, executors, or administrators, as the case may be.
And on any default in the execution of any such contract, either
by the company, or any other party thereto, such action or suit
may be brought, either by or against the company, as might be
brought had the same contracts been made between private
persons only."

On this section it has been held, that where a company has had the benefit of a contract made by an agent, there will be evidence for a jury of such a contract.2

By the 98th section, the directors are to cause minutes to be made of all contracts entered into by

1 8 & 9 Vict. c. 16.

2 Pauling v. London and North Western Railway, 8 Exch. 867.

them, which minutes are to be signed by the chairman of the meeting, and in this form they are to be primâ facie evidence that the meeting has been duly convened, and that the persons attending were directors, &c., as the entry describes them.

The above act applies to contracts made by companies which are incorporated by special acts, and placed under its provisions, and therefore does not apply to contracts made by ordinary joint stock companies after complete registration. These are regulated by the

7 & 8 VICT. c. 110, s. 44.

And for the purpose of regulating contracts entered into on behalf of any joint stock company completely registered under the act (except contracts for the purchase of any article, the payment or consideration of which doth not exceed the sum of fifty pounds, or for any service the period of which doth not exceed six months, and the consideration for which doth not exceed fifty pounds, and except bills of exchange or promissory notes) be it enacted that:

Every such contract shall be in writing and signed by two at least
of the directors of the company on whose behalf the same shall
be entered into, and shall be sealed with the common seal thereof
or signed by some officer of the company on its behalf, to be
thereunto expressly authorized by some minute or resolution of
the board of directors, applying to the particular case:
And that in the absence of such requisites or of any of them, any
such contract shall be void and ineffectual (except as against
the company on whose behalf the same shall have been made.)

By the 45th section, companies may by their deed of settlement, or a bye-law, empower their directors to issue or accept bills or promissory notes, which are to be signed by two directors, on behalf of the company, and countersigned by the secretary.

By the 46th section, all instruments bearing the company's seal must also be signed by two directors: and by the 48th section, all bye-laws of the company are provable by written or printed copies purporting to have the seal of the registrar of joint stock companies.

Under this act, a company has been held liable on