Stamp for agreement under seal.

What is a deed ?

Whether a company can make a simple contract under

its seal.

or unless it is otherwise proved that the stamp appearing on the instrument was affixed thereto at the proper time."

The same section also provides that every person who, being required by law to cancel an adhesive stamp, wilfully neglects or refuses duly and effectually to do so in manner aforesaid shall forfeit the sum of 107.

As to stamping an agreement under the seal of a company: It is generally assumed that every agreement by a company under its seal is a deed, and therefore if not otherwise specifically charged with duty by the Stamp Act, 1870, is liable as a "Deed of any kind whatsoever, not described in this schedule" (Schedule to the Act) i.e., requires a 10s. deed stamp: and this appears to be the correct view.

It is not every instrument under seal that is a deed, but all the definitions include "a contract in writing sealed and delivered." Thus, in Co. Litt. 161, (b), it is said, "A deed signifieth in the Common Law three things, viz., writing, sealing, and delivering, comprehending a bargain or contract between party and party." So in Comyn's Digest it is said, "A deed is a writing containing a contract, and signed, sealed and delivered by the party." See title "Fait." It is subsequently mentioned that signing is not essential. In Spelman's Glossary, title Factum, a deed is defined as "Scriptum solemne quo firmatur donum, concessio, pactum contractus, et hujus modi." See also the definitions in Cruise's Digest, Tomlin's Law Dictionary, and Wharton's Law Lexicon.

It appears extremely difficult to draw any distinction between. a contract under the seal of a company and a contract sealed and delivered by a private person. Nevertheless it is sometimes contended that a company may make a simple contract under its seal.

Thus: "In a recent case not reported, in which a rule for a new trial was obtained on several grounds, and amongst them on this, that the declaration purported to be on a simple contract, whereas the policy was made by a company under seal; when the cause came to be shown on that point, Blackburn, J., inquired whether the seal in that case was of any other legal effect than merely the form proper to the company? Counsel for the plaintiff thereupon desisted from arguing the point, and it was not further pressed by the defendants. Roper v. English and Scottish Marine Insurance Co., Limited, coram

Q. B. Arnold on Marine Assurance, 4th Ed. (1871), p. 143.
So in Ex parte the City Bank, 3 Ch. 758, one of the questions
was, whether a debenture expressed to be "given under the
common seal of the company" was a promissory note.
It was
contended that, being under seal, it was a deed, and therefore
could not be a promissory note, which is a simple contract. It
did not become necessary to decide the point, but Page Wood
and Selwyn, L.JJ., were both of opinion that the instrument,
though under seal, was a promissory note. See also Ex parte
Colborne and Strawbridge, 11 Eq. 478.

On the other hand, in Enthoven v. Hoyle, 13 C. B. 373; 21 L. J., N. S., C. P. 100, it was held or assumed by the Court of Exchequer Chamber. [Parke, Alderson, and Martin, BB., Patterson and Wightman, JJ.] that a debenture under the seal of a company was, though stamped as

a promissory note, a deed. So also in Crouch v. Credit Crouch v. CreFoncier of England, 8 Q. B. 375, Blackburn, J., in delivering dit Foncier. the judgment of the Court, after referring to the opinions of Page Wood and Selwyn, L.JJ., above cited, expressed doubt whether an instrument under the seal of a corporation could be held to be a promissory note. See also The Queen v. Morton, L. R. 2 C. C. R. 22.

necessarily make contract

a deed.

It has been held that the mere affixing of a seal to a contract Seal affixed does not make it a deed where it appears not to have been in- does not tended to operate as a deed. Thus, where a contract concluded with the words "to which the parties have set their hands" (not hands and seals), it was held not to be a deed, although seals were set opposite the signatures. Clement v. Gunhouse, 5 Esp. 83. See also Chanter v. Johnson, 14 M. & W. 408. And by analogy it would seem that a contract by a company which concludes, "As witness the hands of the said and of A. B.

on behalf of the company," would not be held to be a deed even though the seal of the company be affixed thereto. See Aggs v. Nicholson, 1 H. & N. 165; Dutton v. Marsh, L. R. 6 Q. B. 361. Such a contract is not intended to be included in the expression "a contract under the seal of a company" where used in these pages. But it is difficult to understand how a contract in writing expressed to be "given under the common seal," and concluding "In witness whereof the common seal," &c., can be treated as a simple contract. It comes within all the definitions of a deed. It is a contract in writing scaled and delivered, for

Contract under seal

should be

stamped as a deed.

in the case of a corporation the affixing of the seal operates as the delivery of the deed. "Grant on Corporations," 63, and cases there cited.

Under the circumstances it seems expedient to stamp a contract under the seal of a company as a deed. It may

here be observed that the Commissioners of Inland Revenue consider that every contract by a company under its seal, if not otherwise chargeable, is liable as a deed. And every contract under the seal of a company to be filed with the Registrar of Joint Stock Companies must be stamped accordingly before it will be filed.

A contract under the seal of a company cannot, it would seem, in any view be liable to the sixpenny stamp duty, for that duty is imposed on agreements "made in England and Ireland under hand only," and it has been held that the words in italics are used to exclude agreements under seal. Chadwick v. Clarke, 9 Jur. 539; 14 L. J., N. S., C. P. 223.

Where a company desires to make a simple contract in writing, the proper plan appears to be to procure it to be signed on behalf of the company as above mentioned, p. 16. It will be just as binding as if under seal, and no difficulty can then arise as to the stamp.

AGREEMENTS.

PRECEDENT I.

AGREEMENT for SALE to intended COMPANY of BUSINESS of Prec .I.
MECHANICAL ENGINEER, including LEASEHOLDS and
CHATTELS. Consideration Cash and Shares. Vendor
not to carry on similar business. Power to rescind.

of

AN AGREEMENT made the

day of

between A., Parties.

(hereinafter called the vendor) of the one part, and B., of on behalf of a company about to be formed under the Companies Acts, 1862 and 1867, with the name of The Company, Limited (hereinafter called the company), of the other part. WHEREAS the vendor has for some time past carried on Recitals. business as a mechanical engineer upon the leasehold hereditaments hereinafter described: AND WHEREAS the memorandum and articles of association of the company have, with the privity of the vendor, been already prepared, and are about to be registered (a): AND WHEREAS the nominal capital of the company is to be 80,000l., divided into 10,000 shares of 81. each: AND WHEREAS by the said articles of association it is provided that the directors of the company shall, immediately after the incorporation thereof, adopt, on behalf of the company, and carry into effect an agreement therein referred to, being these presents: Now IT IS HEREBY AGREED as follows:

(a) Sometimes the memorandum and articles have not been prepared when the agreement is executed, and in such case the first clause of the agreement is not uncommonly to the following effect :-"The said B. shall before the day of next, procure a company with a capital of 80,000l., divided into 10,000 shares of 87. each, to be incorporated under the Companies Acts, 1862 and 1867, by the name of The Company, Limited, as a company limited by shares, for the purpose among others of adopting and carrying this agreement into effect. The memorandum and articles of association of the said company shall before the registra

Prec. I.

Agreement for sale. Parcels.

Consideration, cash, and shares.

Numbers.

Vendor's title to leaseholds.

tion thereof be submitted to the vendor for his approval." But it is
better to prepare the documents before the agreement is executed.
Occasionally, where, as in the precedent, there is a recital that the memo-
randum and articles have been prepared, the agreement contains a clause
as follows:-"The said B. shall before the
day of procure the
said company to be incorporated under the Companies Acts, 1862 and
1867, with the said memorandum and articles of association, and no
alteration before the registration of those documents shall be made
therein without the consent of the vendor." This would be the first
clause.

1. The vendor shall sell, and the company shall purchase: First, the leasehold hereditaments described in the schedule hereto, for the unexpired residue of a term of ninety-nine years therein granted by the indenture of lease specified in the same schedule, subject to the rent reserved by the said indenture of lease, and the covenants and conditions therein contained, and on the lessees' part to be observed and performed. Secondly, the steam-hammers, cranes, steam-engines, lathes, and all other the plant, machinery, tools, stock-in-trade, chattels, and effects, in or about the said premises firstly described. Thirdly, the good-will of the said business, and all book and other debts due to the vendor in connection with the said business, and the full benefit of all securities for such debts, and of all contracts, engagements, rights, and privileges, to which the vendor is entitled in relation to the said business.

2. The consideration for the said sale shall be the sum of 20,0007., which shall be paid and satisfied as follows; namely, as to the sum of 4,0007. in cash, and as to the residue by the allotment to the vendor, or his nominee (b) or nominees, of 1500 fully paid-up shares in the company of S. each.

(b) As to the validity of this, see supra, p. 11.

3. The said 15,000 shares shall be numbered (c) in the books of the company inclusive.

to

(c) As to giving the numbers, see supra, p. 11.

4. The title of the vendor to the said leasehold hereditaments shall commence with the said indenture of lease, and the company shall not call for the production of, or investigate or make any objection or requisition in respect of the