*353 members of the body corporate is not equivalent to an instrument under its seal (g); and a corporation will not be compelled to execute a contract which it has been resolved shall be entered into by it. (h) A distinction was at one time supposed to exist between executed and executory contracts; but except where the equitable doctrines of part performance are applicable, a corporation is no more bound by a contract not under its seal, of which it has had the benefit, than it is by a similar contract which has not been acted upon by either party. (?)

the general

But strict as is the rule in question, it is and always has been subject to qualification. There are, it is said, some Exceptions to matters of so trivial a nature that they can be done so rule. as to bind a corporation in the absence of any instrument under its seal (k); and what is more to the present purpose, it is held that if a corporation is created for carrying on a particular business, it will be bound by unsealed contracts entered into on its behalf in the ordinary course and bonâ fide for the *purposes of such *354 business. (7) Upon this principle the East India Company was held liable to be sued upon bills of exchange accepted on its behalf, although its seal was not upon them. (m) So gas companies have been held bound by agreements, not under seal, for the supply of gas (n) and gas meters (0); a navigation company has been held bound by a contract, not under seal, for the navigation of its ships (p); a railway company has been held bound to pay for rails, oil, and paint, &c., supplied to it on the order of its officers (2); a colliery company for pumping machinery supplied for the purposes of its colliery (r); a poor law union for coals supplied on similar orders (8); and a municipal corporation owning a dock for refusing

508; Jackson v. The North Wales Rail. Co. 13 Jur. 69; The Directors of the Midland Great West Rail. of Ireland v. Johnson, 6 H. L. C. 798. In Nicholson v. Bradfield Union, L. R. 1 Q. B. 620, a corporation was held liable to pay for goods sold and delivered pursuant to an unsealed contract; and Sanders v. Guardians of St. Neotts Union, 8. Q. B. 810, Haigh v. North Brierley Union, E. B. & E. 873, and Clarke v. Cuckfield Union, 21 L. J. Q. B. 349, are to the same effect. These cases are in direct conflict with those referred to in the text, to which may be added Frend v. Dennett, 4 C. B. N. S. 577, and in equity, 5 L. T. 73, N. S. The whole subject is in a most unsatisfactory state. See Mr. Pollock's excellent treatise on Principles of Contract, p. 130, et seq. edition 2.

(k) See as to this, South of Ireland Coll. Co. v. Waddle, L. R. 3 C. P. 463, and 4 ib. 617.

(1) See as to the last condition, Ebbw Vale Co. 8 Eq. 14, which, properly understood, is not inconsistent with the text.

(m) Edie v. The East India Co. 2 Burr. 1216, and Murray v. The East India Co. 5 B. & A. 204.

(n) Church v. The Imperial Gas Light Company, 6 A. & E. 846.

(0) Beverley v. The Lincoln Gas Co. 6 A. & E. 829. The judgment in this case deserves more attention than it has received.

(p) Henderson v. The Australian Royal Mail Steam Navigation Co. 5 E. & B. 409.

(q) Ebbw Vale Co. 8 Eq. 14; Denton v. East Anglian Rail. Co. 3 Car. & Kir. 16.

(r) South of Ireland Coll. Co. v. Waddle, L. R. 3 C. P. 463, and 4 ib. 617.

(8) Nicholson v. Bradfield Union, L. R. 1 Q. B. 621.

to admit a ship which they had agreed to admit in its turn. (†) On the other hand, it was held in a well-considered case, that a dock company was not bound by an unsealed agreement for cleansing its docks (u); and still more recently, that poor law guardians are not bound by an unsealed agreement engaging a clerk. (a) The exception in question, therefore, must still be applied with caution. Another qualification of the general rule is founded upon the equitable doctrines of part performance. If a corporation has entered into an unsealed agreement which has been partly performed, and if the nature of the agreement and other circumstances are such as would induce a Court to decree specific performance of the contract if the parties to it were ordinary indi

Part performance.

viduals, the Court will hold the corporation bound by the *355 *agreement, and will enforce it accordingly against or in favor of the corporation as the case may require. (y)

Ratification.

Estoppel by record.

A corporation may obviously ratify, under seal, a contract previously entered into but not under seal; but whether any other ratification of a contract required to be under seal will bind the corporation is questionable. (2) It has, indeed, been said, that a corporation which sues upon an unsealed contract thereby irrevocably ratifies it by matter of record; and that the invalidity of the contract sued upon cannot avail as a defense to the action; and further, that if the corporation is afterwards sued upon the same contract, it would be estopped from denying its validity. (a) These propositions have, however, been denied by high authority and cannot be relied upon. (b)

(t) Wells v. The Mayor of Hull, L. R. 10 C. P. 402.

(u) London Dock Co. v. Sinnott, 8 E. & B. 347. But see on this case, South of Ireland Coll. Co. v. Waddle, ubi sup.

(x) Austin v. Guardians of Bethnal Green, L. R. 9 C. P. 91.

(y) See Crook v. Seaford, 10 Eq. 678, and 6 Ch. 551; London and Birmingham Rail. Co. v. Winter, Cr. & Ph. 57; Earl of Lindsey v. Great Northern Rail. Co. 10 Ha. 675; Laird v. Birkenhead Rail. Co. Johns. 500; Wilson v. West Hartlepool Rail. Co. 34 Beav. 187, and 2 De G. J. & Sm. 475; Marshall v. Corporation of Queensborough, 1 Sim. &

Stu. 520; Maxwell v. Dulwich College, 7 Sim. 222; Stevens' Hospital v. Dyas, 15 Ir. Ch. 405. In Crampton v. Varna Rail. Co. 7 Ch. 562, the contract was not one which could be specifically enforced, and in Leominster Canal Co. v. Shrewsbury and Hereford Rail. Co. 3 K. & J. 654, there was nothing amounting to part performance in the sense in which that expression is used in equity.

(2) See the observations of Lord Blackburn, L. R. 9 Ex. 261. (a) Fishmongers' Co. v. Robertson, 5 Man. & Gr. 192.

(b) Mayor of Kidderminster v. Hardwick, L. R. 9 Ex. 13; Copper Miners' Co. v. Fox, 16 Q. B. 237;

If, however, a corporation is sued upon an unsealed agreement and judgment is obtained against it, the corporation Effect of a will not be allowed afterwards to repudiate the agree- judgment. ment unless the judgment can be shown to have been obtained by frand; or unless the agreement itself can be fimpeached for fraud and the question of fraud was not in issue in the action in which judgment was obtained. (c)

*Before leaving the present subject, it may be observed *356 that although an instrument sealed with the corporate seal is prima facie valid, yet if the seal is essential to its val- seal improperidity, and if it be proved that the seal was improperly ly affixed. affixed, e. g., was affixed by a person having no authority to use it, the instrument is void as a corporate act. (d) But those. persons who in practice conduct a company's business, have im-plied authority to use its seal for the purposes of such business. (e),

Statutory exceptions to the foregoing rule.

The general rule, that a corporation is not bound by any contract not under its common seal, applies to all incorporated Contracts of companies, save where it has been abrogated by statute; companies. whence it follows, that in order that an incorporated company may be bound by a contract entered into on its behalf, the contract must fall within one of the exceptions already referred to, or be under the common seal of the company, or be entered into in the manner and form directed by the statute which empowers the company to contract in some other mode. (ƒ)

(c) See Williams v. St. George's Harbor Co. 2 DeG. & J. 547; Hulett's case, 2 J. & H. 306. In The Athenæum Life Assur. Soc. v. Pooley, 1 Giff. 102, and 3 DeG. & J. 294, debentures were set aside, although in Agar v. Athenæum, &c., Co. 3 C. B. N. S. 725, judgment had been obtained on another of like nature. But in the latter case the only plea was non est factum, and no question of fraud, even if there were any in that case, was raised. As to what fraud will avoid a deed at law, see Wright v. Campbell, 2 Fos. & Fin. 393.

It is important, therefore, to ascertain what statutory enactments there are bearing upon this subject.

Statutory enactments.

The Banking act, 7 Geo. 4, c. 46, and the Letters Patent act, 7 Will. 4 & 1 Vict. c. 73, leave the common law untouched as regards the question now under consideration. But companies regulated by these acts are not incorporated by them.

*357

The Joint-stock companies registration act, 7 & 8 Vict. c. 110, SS 44-46; the Joint-stock companies banking act, 7 & 8 Vict. c. 113, § 22; and the Joint-stock companies act of 1856, § 41, all contained provisions on this subject; but these acts are now repealed, and it is not necessary further to allude to them. (g) *(1) By the Metropolis gas act, 1860 (h), the contracts of gas companies regulated by that act and entered into in accordance with it are binding without any seal, if signed by two or more directors, or by the company's secretary, or other officer, by the authority of two or more directors. (2) The Companies clauses consolidation act, 8 & 9 Vict. c. 16, renders it lawful for the directors of a company to which that act applies to appoint committees (§,95), and enacts (97) that the power of the committees as well as the power of the directors to make contracts on behalf of the company may lawfully be exercised as follows:

(1) Metropolitan gas act.

(2) 8 & 9 Vict. c. 16.

"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 contract 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.

(g) Upon 7 & 8 Vict. c. 110, § 45, relating to bills and notes, see Halford v. Cameron's Coalbrook Co. 16 Q. B. 442; Edwards v. Cameron's Coalbrook Co. 6 Ex. 269; Aggs v. Nicholson, 1 H. & N. 165; Healey v. Story, 3 Ex. 3; Allen v. The Sea, Fire and Life Insurance Co. 9 C. B. 974; Gordon v. The Sea, Fire and Life Insurance Co. 1 H. & N. 599. As to § 44, relating to other contracts, see Ridley v. The Plymouth Grinding Co. 2 Ex. 711; Ex parte Eagle Insur. Co. 4 K. & J. 549; Hambro' v. Hull and London Fire Insur. Co. 3 H. & N. 789; Brit

ish Empire Co. v. Browne, 12 C. B. 723. As to § 29, relating to contracts with directors, see Stear's case, Johns. 480; Ernest v. Nicholls, 6 H. L. C. 401; Curteis v. Anchor Insur. Co. 2 H. & N. 537; Poole v. National Provincial, &c. Assurance Society, ib. 687; Murray's Ex. ca. 5 De G. M. & G. 746; Teversham v. Cameron's Coalbrook, &c. Rail. Co. 3 DeG. & S. 296; Baker's case, 1 Dr. & Sm. 55.

(h) 23 & 24 Vict. c. 125, § 20. Quære what the words "entered into in accordance with this act" really mean.