Изображения страниц

or contract without a seal. As to those acts or contracts which, if done or made by a natural person, must have been attested by his seal, there has not at any time been, nor is there now, any doubt that, if done or made by a corporation, they must also be attested by its seal. Even as to other acts and contracts, it was sometimes necessary for the corporation to act under its seal, though a natural person need not have used his, but it was by no means necessary that the seal be employed in all cases. In a comparatively early case, objection to the return of a mandamus was interposed, on the ground that it was made in the name of the corporation but without the common seal. “After a search for precedents, which were found both ways, Holt, C. J., held, and the rest concurred, that though a corporation cannot do an act in pais without their common seal, yet they may do an act upon record, and that is the case of the city of London every year, who make an attorney by warrant of attorney in this court, without ever sealing or signing; and the reason is, because

they are estopped by the record to say it is not their act": Mayor of Thetford's case, 1 Salk. 192; 3 Salk. 103.

It is clear that any corporation which engages in a general business of any character requiring the performance of numerous acts and the employment of many servants or agents cannot be expected to act or speak only by its seal, and that to make or enforce such a requirement would be to place it within the power of competitors who were able to transact their business with less formality and in a more common sense method. Hence, even in England, the requirement of the use of the corporate seal extends only to acts and contracts of a somewbat unusual character, in connection with which the corporate seal may be used without bampering the corporate business, or, in other words, where "to have required the seal would certainly not have tended to defeat the object for which the corporation was formed, nor was the subject matter of the contract one either of frequent occurrence or of urgency admitting of Do delay." Therefore, it was held that a resolution entered into at a corporate meeting, that the sum oi five hundred pounds should be paid in consideration of certain improvements to be made, would not support a setoff in favor of the person accepting such resolution and making such improvements, because the contract of the corporation had not been attested by the corporate seal. The court based its decision upon the assumption that every member of a corporation "knows that he is bound by what is done under the corporate seal, and nothing else," and that the "sea!, or some substitute for the seal, which by law shall be taken as conclusively evidencing the sense of the whole corporate body, is a necessity inherent in the very nature of the corporation": Mayor of Ludlow v. Charlton, 6 Mees. &. W. 822. A lease of lands of a corporation is one of the unusual acts not requiring such immediate attention as to dispense with the corporate seal, and therefore a corporation is not, in England, bound by an unsealed lease or contract for a lease: Carter v. Dean of Eli, 7 Sim. 211. A like rule applies to contracts to purchase real property: Gooday v. Colcbester etc. Ry., 17 Beav, 132; Preston v. Liverpool Ry. Co., 17 Beav. 114; 5 H. L. Cas. 605. A contract on the part of a dock company for scavenging its docks for a year was held invalid because not under seal: London Dock Co. v. Sinnott, 8 El. &. B. 347 ; while a contract for the use of a dock for a vessel was held not to require any seal, on the ground that it was a corporate act of frequent occurrence and not admitting of delay: Wells v. Mayor of Hull, L. R. 10 Com. P. 402. The statement made in many cases, that what are known as trading corporations are exempt from the common-law rule requiring corporations to speak or act by the common seal, is but an application of the general rule, that when a contract is of an ordinary or usual character, and clearly within the business which the corporation was formed to transact, it may be entered into and become obligatory on both parties, though not attested with the corporate seal: South of Ireland etc. Co. v. Waddle, L. R. 3 Com. P. 463; Henderson y. Australian etc. Co., 5 El. & B. 409; Australian etc. Co.




v. Hazett, 11 Ex. 228; Church v. Imperial etc. Co., 6 Ad. & E. 829; ID re Ebbw Vale Co., I. R. 8 Eq. 14. The English case wbich best states the general rule and the exceptions to it prevailing in that country is Church v. Imperial etc. Co., 6 Ad. & E. 876, 861, in which it was said: “The general rule of law is, that a corporation contracts under its common seal; as a general rule, it is only in that way that a corporation can express its will, or do any. act. That general rule, however, bas, from the earliest traceable periods, been subject to exceptions, the decisions as to which furnish the principle on which they have been established, and are instances illustrating its application, but are not to be taken as so prescribing in terms the exact limit that a merely circumstantial difference is to exclude from the exception. This principle appears to be convenience amounting almost to necessity. Whererer to hold the rule applicable would occasion very great inconvenience, or tend to defeat the very object for which the corporation was created, the exception has prevailed; hence the retainer by parol of an inferior servant, the doing of acts very frequently recurring, or too insignificant to be worth the trouble of afixing the common seal, are established exceptions; on the same principle stands the power of accepting bills of exchange, and issuing promissory notes, by companies incorporated for the purposes of trade, with the rights and liabilities consequent thereon”: See, also, Henderson v. Australian etc. Co., 5 El. & B. 409; Denton v. Easi etc. Co., 3 Car. & K. 16.

In the United States cases may be found stating in general terms that the assent of a corporation to its contract must be expressed under its corporate seal: Waller v. Bank of Kentucky, 3 J. J. Marsh, 201; or holding that a bond given by a private corporation is not valid in the absence of such seal: South Missouri etc. Co. v. Jeffries, 40 Mo. App. 360; Tanner etc. Co. v. Hall, 22 Fla. 391; but as to the first proposition, what was said was clearly a dictum, and as to the second, it cannot be ascertained from the reports of the cases whether or not the bond in question was not one which required to be sealed, even had it been executed by or on behalf of a natural person. In this country, the rule is well nigh, if not absolutely, universal, that a corporation need not do any act or execute any contract or writing under its seal, except it be such as to require a geal when done or executed as the act or contract of a natural person. No distinction is attempted to be made between the ordinary and frequently recurring business acts of a corporation and those of less frequent occurrence, and in the doing of which the corporation was not impelled by any special urgency and could bave taken time to affix its seal, had it thought proper to do so. This must necessarily be so as to those acts or contracts which ordinarily rest in parol, and which are carried on by the officers and agents of the corporation at its place of business, or elsewhere, and which are not accompanied with any formality when carried on by natural persons or their authorized agents: Ross v. Madison, 1 Ind. 281 ; 48 Am. Dec. 361; Crowley, Genegee etc. Co., 55 Cal. 273; Lee v. Flemingsburg, 7 Dana, 28. This is equally true of contracts in writing when not required to be under seal when entered into by or between natural persons: Campbell v: People, 159 III. 9; ante, p. 134; as promissory notes: Mott v. Hicks, 1 Cow. 513; 13 Am. Dec. 550, and note; Commercial Bank v. Newport eto. Co., 1 B. Mon. 13; 35 Am. Dec. 171; Barker v. Mechanica' etc. Co., S Wend. 94; 20 Am. Dec. 664; Hamilton v. New Castle etc. Ry., 9 Ind. 359; and indorsements and other transfers thereof: Everett v. United States, 6 Port, 166; 30 Am. Dec. 584; Garrison y. Combs, 7 J.J. Margh. 84; 22 Am. Dec. 120; Garvey v. Colcock, 1 Nott & McC. 231; delegations of au: hority to agents to collect and secure debts: Lathrop v. Commercial Bank, 8 Doug. 114; 33 Am. Dec. 481; agreements to sell and con. vey real property: Banks v. Poitiaux, 3 Rand. 136; 15 Am. Dec. 708; chattel mortgages: Duke v. Markham, 105 N. C. 131; 18 Am. St. Rep. 889; implied contracts of every character: Hamilton v. Newcastle etc. Ry. Co., 9 Ind. 359; New Athens v. Thomas, 82 I11. 259; all delegations


[ocr errors]

of authority to oficers or other agents which in the case of natural per. sons need not be under seal: Fleckner v. United States Bank, 8 Wheat. 355; Board of Education v. Greenebaum, 39 ml. 609; contracts for the doing for or by the corporation of any work for which it is authorized to contract: Christian Church v. Johnson, 53 Ind. 273; Muscatine etc. Co. v. Muscatine etc. Co., 85 Iowa, 112; 39 Ain. St. Rep. 284; National etc. Assn. v. Prentice etc. Co., 49 Minn. 220; bills of sale of personal property: Cary etc. Lumber Co. v. Cain, 70 Miss. 628; assignments of letters patent: Gottfried v. Miller, 104 U. S. 521; or of leases of real property: Sandiord v. Tremlett, 42 Mo. 384. The acts or contracts of & corporation which need not be evidenced by its corporate seal are by no means limited to the illustrations given above. In truth, there is in this country no limitation whatever that is not equally applicable to the acts and contracts of natural persons. A certificate of stock need not be under the seal of the corporation: Fitzhugh v. Bank, 3 T. B. Mon, 126; 16 Am. Dec. 90. Though the statute, in the case of certain corporate bonds of a public, or quasi public, character, manifestly intends that they shall be issued under seal, still, if they are issued without such seal through inadvertence or misunderstanding, and are accepted and received by purchasers in good faith and for value, they will be regarded as binding to the same extent as if the seal had not been omitted therefrom: Solon v. Williamsburg, 114 N. Y. 122; Ber. nards Tp. v. Stebbins, 109 U. S. 341. The American rule, with some of the reasons in its support, was thus stated: “The old doctrine that corporations can only be bound by act under their corporate seal has been long exploded. They have become numerous, and their operations extend to almost every enterprise of the country, demanding such powers and facilities within their sphere of action as belong to natural persons in the prosecution of like enterprises, and, being intangible and invisible beings, created by law, they can exercise them through natural persons only. Unless they may be bound in the ordinary affairs of the corporation by the acts and admissions of their officers, they would enjoy an immunity incompatible with the rights of individuals, and destructive of the objects of their creation”: Chicago etc. R. R. V. Coleman, 18 III, 299; 68 Am. Dec. 544. “It is well settled that the acts of a corporation evidenced by vote, written or unwritten, are as completely binding upon it, and are as complete authority to its agents, as the most solemn acis done under the corporate seal; that it may as well be bound by express promises through its authorized agents as by deed; and promises might as well be implied from its acts and the acts of its agents, as if it had been an individual”: Board of Education v. Greunebaum, 39 III, 612.

It follows from what we have already said, that the effect of the omission to affix the corporate seal to a contract, or other writing intended to bind the corporation, is to be found by inquiring whether such writing would be binding on a natural person if not attested with his seal. In some of the states, the distinction between sealed and unBealed writings has been abolished, and all writings may be properly executed by the signature of the persons intended to be bound by them, and, where such is the case, we see no necessity for the use of a seal when a corporation is a party, though its use may be desirable for purposes which we shall hereafter state. On the other hand, if the write ing is such that a natural person must attest it with his seal, then a corporation is equally bound to use something ug its common or corporate seal, and the effect of its omission to do so will be the same as it A natural person, in his attempted execution of a like instrument, had been guilty of a similar inadvertence or omission: Duke v. Markham, 105 N. C. 131 ; 18 Am. St. Rep. 889; Danville Seminary v. Mott, 136 II. 289; Kinzie v. Chicago, 2 Scam. 187; 33 Am. Dec. 443; State v. Al. lis, 18 Árk. 269; Garrett v. Belmont Land Co., 94 Tenn. 459; Sandford 1. Tremlett, 42 Mo. 384; State v. Senft, 2 Hill'(. C.), 367.

According to the rules of practice prevailing in some of the courts, a corporation, in answering therein, is required to do so under its com. mon seal. Such appears to be the case in Virginia, when it is required to answer a garnishment; Baltimore etc. R. R. Co.v. Gallahue, 12 Gratt. 655; 65 Am. Dec. 254. Under the practice prevailing in courts of chan. cery, it was always proper, and probably necessary, for a corporation to answer by its corporate seal, and, if the proper officer refused to affix it, he could be compelled to do so by mandamus, and, when so affixed, the answer seems to have had the same effect as the answer of a natural person, duly verified: Foster's Federal Procedure, sec. 151 ; Daniell's Chancery Practice, 4th Am. ed., 146; Angell and Ames on Corporations, gecs. 665, 666; Baltimore etc. R. R. v. Wheeling, 13 Gratt. 40; Haight V. Morris Aqueduct, 4 Wash. C. C. 605; Ransom y. Stonington Bank, 13 N. J. Eq. 212.

The Omission of a Corporate Seal in those cases in which it is required to be used to attest a contract, writing, or other act, has substantially the same effect as the omission of a natural person to so sign or other. wise execute a contract that it shall be obligatory upon, and enforceable against, him: Koehler v. Black etc. Co., 2 Black. 715; In re St. Helen Mill Co., 3 Saw. 88; Eagle etc. Co. v. Monteith, 2 Or. 285; Richardson v. Scott etc. Co., 22 Cal. 156. Under the statute of frauds, a party who has himself duly executed a contract, cannot generally plead the statute as against the other party who did not execute it, but must, if the latter aggumes to enforce the contract, be regarded as bound by it. It is said, however, that if a corporation has not sealed a contract with its common seal, it is not enforceable against the other contracting party, though he, on his part, did sign and otherwise properly execute it, because both of the parties ought to be bound or neither, and the corporation ought not to be able to rely on a contract which, for want of its seal, is not enforceable against it: Mayor of Kidderminster v. Hardwick, L. R. 9 Ex. 18. There must be many instances in which a contract, even if it be conceded to be one which ought to have been attested by the corporate seal, is binding on the corporation because it has been fully executed by the other contracting party, and the corporation has received the benefits of such contract. This is notably true of many ultra vires contracts: Pomeroy on Contracts, sec. 56; Whitney Arms Co. v. Bar. low, 63 N. Y. 62; 20 Am. Rep. 504; Miners' etc. Co. v. Zellerbach, 37 Cal. 543; 99 Am. Dec. 300. And the reasons which estop corporations from asserting the defense of ultra vires are at least equally persuasive, when the only defense urged is a failure to give authenticity to a contract by the use of a common or corporate seal. So corporations, as well as natural persons, are subject to the law of specific performance, and may, though their contracts or other writings were not at their origin enforceable, because of the absence of the corporate seal or of some other defect in their execution, be required to submit to a decreo for specific performance when the other contracting party has, by his acts of part performance, accepted by the corporation, been placed in a position where, to deny such performance, would be manifestly inequitable: Mayor of Kidderminster v. Hardwick, L. R. 9 Ex. 18; Wood v. Tate, 2 Bos. & P., N. R., 247; Commissioners v. Merral, L. R. 4 Ex. 162. In equity, we naturally expect less effect to be given, than at law, to the omission of a corporate seal, even though the instrument in question is one to which such a seal ought to have been affixed, for if it were intended as the act of the corporation, and its execution was authorized by a resolution of the board of trustees, or by any other competent authority, then it can be sustained in equity, and the corporation required to affix its seal: Missouri River etc. Ry. Co. v. Commissioners, 12 Kan. 482; or the instrument can be given effect by regarding that as done which ought to be done. Hence, though a mortgage to which the seal of the corporate mortgagor is not affixed is not valid at law, yet it may be enforced in equity by treating it as an equitable mortgage, or, at least, as an agreement for a mortgage, subject, however, to other and paramount equities and to equities equally entitled to cope sideration supported either by legal liens or by legal title: Allis v. Jones, 45 Fed. Rep. 148; Miller v. Rutland etc. Co., 36 Vt. 452.

The Effect of the Corporate Seal is, in England, in many instances, as wo have seen, to constitute the only competent evidence of the final corporate action, while in this country, its presence is not indispensable, except in those cases in which the writing is of a character requiring a seal, even when executed on behalf of a natural person. The seal, when not indispensable, is always appropriate, and should be affixed to all writings to which the corporation is a party, unless, indeed, its presence necessarily changes their character and effect so as to prevent their accomplishing the purposes intended by the parties. Thus, they may not intend that the instrument shall be, technically speaking, speciality, but should have the incidents and be enforceable by the remedies attending simple contracts. It has been held that the affixing of the corporate seal to a contract has the same effect as the afixing of the seal of a natural person; in other words, that it creates a speciality, actions for the enforcement of which must, where the common law preVails, be in the form appropriate to contracts under seal, and though the contract is in form negotiable, that it cannot, as in the case of promis. enry notes, have the attributes of negotiability: Clark v. Farmers' etc. Co., 15 Wend. 256; Porter v. Androscoggin etc. Co., 37 Me. 349; Beboist v. Carondelet, 8 Mo. 250. Thus bolding would necessarily deprive a corporation of the power of making simple contracts, where the common law requiring their assent to be evidenced by a corporate seal has not been modified. So far as instruments negotiable in form are con. cerned, the rule is generally, if not universally, treated as obsolete, and such an instrument, though the corporate seal is impressed upon it, is negotiable to the same extent as if executed by a natural person, not ander geal: In re General Estates Co., L. R. 3 Ch. 758; Mercer Co. v. Hacket, 1 Wall. 83; Mason . Frick, 105 Pa. St. 162; 51 Am. Rep. 191; White 5. Vermont etc. Ry., 21 How. 575; Auerbach v. Le Sueur etc. Co., 23 Minn. 291; 41 Am. Rep. 285.

The reason why it is desirable to attest all contracts and other acts of the corporation with its seal, when this is possible, is that the presence of such seal establishes, prima facie, that the instrument to which it is affixed is the act of the corporation, and dispenses with the necessity of any proof, on the part of the person claiming under it, that it was exocuted by the proper officers, that they had authority to 80 execute it, and that all proceedings, of whatever character, necessary to such authority had been duly given, unless the corporation shall first, by competent evidence on its part, have rebutted the presumption arising from the presence of tbe common seal. It is sometimes said that, the signa. tures of the proper officers appearing, it will be presumed from the presence of the seal that it was affixed by them after being duly authorized to do so, but the rule is by no means limited to those cases in which it appears that the officers who executed the instrument were the proper officers to do so. In truth, as we understand the law, while it is usual for the officers who execute the instrument on behalf of the corporation to sign it themselves in their official capacity in such a way that an inspection of the writing will show what oficers or agents un. dertook to act for the corporation, this is not necessary: Jackson v. Walsh, 3 Johng. 226; Angell and Ames on Corporations, sec. 225; Doo 5. Hozg, 1 Bos. & P., N. R., 306; Clark v. Farmers'etc. Co., 15 Wend. 256; Sugden on Vendors, 8th Am. ed., 730. It is sufficient that the name of the corporation be written by some officer or agent, and we doubt, under the foregoing authorities, whether anything more is nec. essary than the affixing of the seal. In other words, as we understand the rule, the sealing by a corporation has an effect equal to the signing and sealing by a natural person. It is not, however, usual to employ the seal alone. The common practice "is to affix the seal with a declaration that it is the seal of the corporation, and to verify the act by tho eignatures of the president and secretary of the corporation": Kinzie 1. Chicago, 2 Scam. 187; 33 Am. Dec. 443.

« ПредыдущаяПродолжить »