Written contracts by associations; valid obligation, consent on the part of the obligor is absolutely In this If, however, in this state of matters anything important is permitted by the obligor to be done by the obligee, on the faith of the inchoate contract, so that matters no longer remain entire, then rei interventus is said to take place, and there is no longer locus pœnitentiæ. If, again, while the contract still remains incomplete from defect or informality, something is done by the obligor in respect of which it is confirmed or adopted, homologation is said to take place, and the contract cannot afterwards be repudiated or resiled from (a). These principles are all of them applicable to contracts entered into by a firm or company, and in their application sometimes give rise to important questions. Modes in which the Company is bound. As regards unincorporated associations, whether they be mere unincorporated firms or common law companies, the proper mode of binding the concern is by all the members signing their names individually (b). 'And this rule, which arises from the fact that such associations are not corporations, should be rigidly adhered to in all contracts of importance, particularly such as do not fall within the ordinary sphere of the company's line of business—e.g. where a cash credit bond is signed by a company as sureties. But it is not rigidly enforced in the case of mercantile documents plainly falling within the company's sphere of operations, where a partner has implied powers of agency to bind the concern (c). In such cases the company will be bound by any partner subscribing the social name when it includes the name of one or more individuals (d). It will also be bound by his signing his own name per procurationem for the company, and in so doing he may designate the company by a descriptive name (a) Shaw's Bell's Prin. p. 12. (b) Christie v. Reid, 1826, 4 S. 368; Melliss v. The Royal Bank, 1815, 18 F. C. 454. (c) See Robb v. Forrest, 1830, 8 S. 839; Forsyth v. Hare and Co. 1834, 13 S. 42; M'Lean v. Rose, 1836, 15 S. 236. (d) Selkrig v. Dunlop, 1804, Hume 277. which does not include the names of individuals, provided such name is that by which the company is generally known (a); but signature by the descriptive name without joinder of the signing partner as agent would not, it is thought, be enough (). Care must be taken, however, in thus signing per procurationem, that the fact of agency plainly appear ex facie of the signature, otherwise the obligation may be held to be that of the partner as an individual, and not of the company (c). All such compendious modes of binding the company depend for their validity on the fact of the transaction being within the company's known line of business, and therefore covered by the agency of the partner signing the document. If this is not so, the partner may indeed be bound personally, but the company will, unless upon other grounds, incur no obligation whatever (d). tions. As to corporations, it would rather appear that the ancient by corporacommon law of Scotland resembled that of England in requiring contracts of importance to be evidenced by deed under the common. seal (e). If, however, this were so, the custom has long since gone out of use; and it has become the rule, that corporations may be bound by the signature of their officers duly appointed for that purpose, and signing per procurationem (ƒ). associations. But as regards incorporated mercantile associations, it may be Incorporate laid down as a general rule, that they will only be effectually bound when the formalities have been duly observed which are contained in the instruments of their incorporation, whether charter or general or special act (g). The provisions of the Company Clauses (Scotland) Act, 1845, Act of 1845. with reference to this matter, are as follows: With respect to any contract which, if made between private persons, would be by law v. Shepherd, 1821, 1 S. 179; Kennedy, 1814, 18 F. C. 152. (a) See Blair Iron Co. v. Alison, 1855, 18 D. H. of L. 49, 27 Jur. 614; Fleming v. Ballantyne, 1842, 5 D. 305. (b) Culcreuch Cotton Co. v. Mathie, 1822, 2 S. 47, Sh. Bell's Pr. 399. (c) See Aberdeen Brew. Co. v. Gray, Wil. Thom. Bills 164; M'Gavin v. Ogilvie, 1854, 16 D. 540; Johnston v. Cliftonhill Coal Co., 1852, 15 D. 84. (d) See, as to this, M'Nair and Co. v. Gray, etc., 1803, Hume 753; Clarke (e) Ersk. i. 7, 64; Act 1555, c. 29; Act 1579, c. 80; Reg. Maj. 1. 3, c. 8; Kames' Eluc. Art. 24. (f) Bowie v. Wilson, 1695; Mag. of Pittenweem, 1752; Livy v. Mudie, 1774; Anderson v. Morton, 1779, all in M. 2511 et seq. (g) See Great Nor. Ra. Co. v. Inglis, 1851, 13 D. 1315, aff. 1852, 24 Jur. 434. Act of 1862. Act 1864. required to be by deed or by agreement in writing, and signed by the parties to be charged therewith, then such committee (i.e. a committee of the directors) or the directors may make such contract on behalf of the company, in writing, either under the common seal of the company, or 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' (a). The Companies Act of 1862, unlike that of 1856, makes no provision dispensing with the use of the common seal in the execution of deeds; but, on the contrary, it expressly mentions the possession of a common seal as one of the incidents of incorporation under its provisions (b); and provides that powers of attorney may be granted to persons abroad to execute deeds on its behalf under their own seals, on condition that such power of attorney shall be in writing under the common seal (c). Bills and promissory-notes may however be made, accepted, or indorsed on behalf of the company without the use of the common seal, if signed in the name of the company by any person acting under the authority of the company, or if signed on behalf of or on account of the company by any such person (d). 'The Companies Seals Act, 1864' (e), gives certain facilities for sealing deeds executed in foreign countries, to such registered companies as choose to adopt its provisions in their articles of associa tion or by special resolution (sec. 6). According to these provisions, a company under the Act of 1862, and carrying on business in foreign parts, may cause an official seal to be prepared fac simile of their common seal, but having in addition inscribed on the face thereof the name of each and every place, district, or territory abroad, where it is intended to be used, and may from time to time break up and renew such seal or seals, and vary the limits within which it is intended to be used (sec. 2). The company, by instrument under its common seal, may empower agents, boards, managers, etc., to affix this official seal to all documents requiring such attestation; and the powers so given continue in force for the time specified in the instrument, or until notice of revocation (sec. 4). The person affixing the seal must, by writing under his (a) 8 and 9 Vict. c. 17, s. 100. (d) Sec. 47. (b) Sec. 18. hand on the document sealed, certify the date and place of sealing; and the company will be thus as effectually bound as if the document had been under the common seal (sec. 5). The Letters Patent Acts contain no provisions relative to this Letters Patent matter. Acts. other than by writing. As to contracts perfected otherwise than by writing, the rule Contracts is that the company, whether corporate or unincorporate, will be bound by the proceedings of its accredited agents acting in that character, and so that they themselves would be bound if acting as principals. The provisions of the Companies Clauses Consolidation (Scot- Act of 1845. land) Act, 1845, in relation to this matter, are as follows: With respect to any contract which, if made between private persons, would by law be valid, although made by parole only, and not reduced to writing, such committee (i.e. a committee of the directors) may make such contract on behalf of the company by parole only, without writing, and in the same manner may vary or discharge the same' (a). If a contract be merely pending between the firm and a stranger, any one of the partners may rivet it indissolubly rei interventu, e.g. by accepting on the part of the company delivery of goods in relation to which the sale had not been formally completed. It is often a matter of difficulty to determine whether, in contracting, a partner has bound the company, or merely himself, or both; in other words, whether he acted as a principal, as an agent, or in both characters. To determine such questions, recourse must be had to the law of principal and agent, the principles of which, both in the English and Scottish systems, may be briefly stated as follows: Perfecting of interventu. contract rei Whether a partner binds the company or himself. agency. If an agent discloses his principal, and represents himself as Principles of acting factorio nomine, he binds not himself, but his principal (b). If he does not disclose his principal, he binds himself (c). If a (a) 8 and 9 Vict. c. 17, s. 100. (b) Brown v. M'Dougall and Co., 1802, 13 F. C. 146, Mor. App. Factor 1; Cowan v. Davidson and Co., 1814, 17 F. C. 505; Jobson v. Ford, 1815, Hume 354; Findlay v. Fleming and Co., 1832, 10 S. 739; Hampton v. Adam, 1839, 1 D. 500; Millar v. Mitchell, 1860, (c) Robertson v. Gillespie, 1823, 2 S. 561. Application to companies. General rules. contract be made with a man on his own credit, he cannot escape When these rules are applied in questions arising between companies, their members, and the public, and when it is borne in mind that in partnership agency is more frequently implied than express, the following would seem to be the results: 1. If a partner contract with a stranger in his character of partner, he binds the company, and is himself liable only as a member thereof (e). He may, however, in this case render himself directly liable, e.g. by representing himself as sole partner (ƒ), or by contracting not only as a partner, but as an individual (g). 2. If a partner contract not as a partner, but as an individual, he binds not the firm, but himself; and even though the firm should (a) Lang and Co. v. M‘Leod, 1830, 8 S. 323; Sorley's Trs. v. Graham, 1832, 10 S. 319. 1 Bell's Com. 492. (b) Young v. Smart, 1831, 10 S. 130; Stevenson v. Campbell, 1836, 14 S. 562. (c) See previous cases, and Woodside v. Cuthbertson, 1848, 10 D. 604. (d) Millar v. Mitchell, 1860, 22 D. $33; Brown v. M'Dougall, 1802, M. voce Factor, App. No. 1; Burgess v. Buck and Co., 1829, 7 S. 824. See as to English law, Addison on Contracts, 4th ed.; Bacon's Abridgment, voce Merchants and Merchandise; Smith's Mercantile Law; Livermore's Treatise on Agency; Story on Agency; Lindley 261, 294; and the cases and authorities quoted in Millar v. Mitchell, supra. (e) Ex parte Buckley, 14 M. and W. 469; ex parte Wilson, 3 M. D. and D. 57; Millar v. Mitchell, supra ; Brown v. M'Dougall, supra. (f) De Mautort v. Saunders, 1 B. and Ad. 398; City of London Gas Co. v. Nicholls, 2 Car. and Pa. 365; Whitwell v. Perrin, 4 C. B. N. S. 412. (g) Higgins v. Senior, 8 M. and W. 834; ex parte Wilson, 3 M. D. and D. 57. |