*7. And it has accordingly been held, that a public company, as the commissioners of sewers for a county, might impose a rate to defray the expense of opposing a bill, in parliament, which threatened to affect the interests of the company unfavorably, the same as they might to defray the expense of litigation in court.18 Lord Campbell said: "Our determination rests upon the ground that this opposition was clearly bona fide, and clearly prudent.'

19

8. In a very recent case, in Vice-Chancellor Wood's court,1 *the defendants entered into an agreement to purchase plaintiffs' property, there being at the time no legislative permission either to buy or sell such property. Subsequently such roads from certain cities, to meet at a given place, and that the charges for transportation shall be regulated by both companies, and also the meeting of the cars, and the through freight cars, is a valid contract, and will be enforced by injunction in equity. That to fix the charge for the transportation of passengers and freight, is the exercise of the corporate franchise of each company, and an agreement that both companies shall regulate this is no abandonment or transfer of the franchise of either.

18 Reg. v. Commissioners of Norfolk, 15 Q. B. 549. The ground upon which the decisions in England and America, which hold the franchises of corporations not to be assignable except by consent of the legislature, rest, is mainly the same as that upon which it has been held in this country, that such franchises are beyond legislative control, namely, that the charter constitutes a contract between the sovereignty and the corporation, on the one part, for the grant of certain privileges and immunities, and upon the other for the performance of certain duties and functions, which are deemed an equivalent or consideration. And this feature is of peculiar force in the case of that class of corporations upon which the legislature have conferred important public duties and functions, as railways and banks, and some others. The state confers upon a railway some of its most essential powers of sovereignty, that of eminent domain, and of a virtual monopoly in transportation of freight and passengers, and in return therefor stipulates for the faithful performance of these duties by the corporation. The corporation have no more right, in equity and justice, to transfer their obligations to other companies, or to natural persons, than the state have to withdraw them altogether. Either would be regarded as an abuse of the powers conferred, or an impairing of the just obligation of the contract resulting from the grant, and its acceptance.

19 Leominster Canal Co. v. Shrewsbury & Hereford Railw., 3 Kay & J. 654; s. c. 29 Law Times, 342, August, 1857. The learned judge concludes his opinion in this case in a manner very creditable to his sense of fair dealing and good faith in the conduct of railway directors: "I cannot, however, but feel that solicitors acting for railway companies, like that of the defendants, must be in a most painful position when they are unable to rely (as here they cannot) upon the good faith or even the common honesty of directors."

permission was obtained, and steps taken by the defendants, under the act, to carry the contract into effect, but they ultimately refused to complete their purchase, on the ground that the original agreement was not under the seal of the corporation, nor signed by two of their directors. The plaintiffs then filed a bill for specific performance, and it was held, that the bill must be dismissed, on the ground that the contract was originally ultra vires, not being made dependent upon obtaining the consent of the legislature. It is also said, that the contract would not be binding upon the company, unless made under their common seal, that being required in the defendants' special act, and if it were binding, that mandamus is the more appropriate remedy.

9. A railway company cannot acquire the franchise, so as to be bound to perform the duty of an existing ferry, without the authority of the legislature, given either expressly, or by necessary implication.20

10. And the grant to a railway company, having its terminus at the bank of the river Hudson, opposite the city of Albany, of power to connect its terminus upon one side of the river with a depot upon the opposite bank; though it does, by implication, give the right to establish a ferry, does not make it a part of the railway, so that passengers crossing the river may be regarded as carried under the general railway franchise.

11. And where the grant of such a ferry was restricted, by express condition, to the transportation of freight and persons carried by the railway, and their servants and employees, it was held that the company, by constantly carrying other persons gratuitously across their ferry, were guilty of an infringement of the franchise of a pre-existing ferry, the same as if such persons were carried for toll.21

12. And the grant in express terms of a ferry as a portion of the line of a railway, will not empower the railway company to use the ferry for any other purpose than the transportation of the freight and passengers of the company.22

20 Battle, J., in State v. Wilmington & Manch. Railw., Busbee, 234.
21 Aikin v. The Western Railw., 20 New York, 370.

22 Fitch v. N. H. N. L. & Stonington Railw. Co., 30 Conn. 38.

SECTION II.

Necessity of Contracts of Corporations being under seal.

1. The English courts manifest great reluctance to abandon the former rule of law on this subject.

n. 2. Extended review of the English and some of the American cases.

2. Reference to later decisions.

3. What amounts to a seal, according to modern use.

§ 143. 1. The apparent hesitation among the English courts and text-writers to accept the acknowledged rule of the American courts, that a corporation may as well contract, by mere words, without writing, or by implication of law, or by vote, or by writing, without seal, as a natural person; in short, that in the case of a contract, by a corporation, a seal is of no more necessity or significance than in the case of a contract by a natural person, would seem to justify some reference here to the present state of the English law upon the subject.2

1 Hodges on Railways, 59, 60, 61, and notes.

2 It would seem a very obvious view of the question, that if a seal is not, as was at one time claimed, indispensable to the authentication of a corporate contract, if, in short, it can be dispensed with in any case, it becomes merely a matter of reason and discretion, or more properly, perhaps, of intention and convenience, in order to show the definite act of the company, and when it shall be required, or when a contract shall be said to be complete without it, is rather a question of usage than an unbending rule of law. Beverley v. Lincoln Gas Light & Coke Co., 6 Ad. & Ell. 829, is the case of gas-meters ordered for the use of the company by one of the committee, taken on trial, and not returned in a reasonable time, and the company held liable. This is the earliest case in the English books where the courts in that country made any formal departure from the old rule, and it was here held, that a corporation aggregate is liable in assumpsit for goods sold and delivered. Patteson, J., refers to the American authorities upon the subject, and says: "It is well known that the ancient rule of the common law, that a corporation aggregate could speak and act only by its common seal, has been almost entirely superseded, in practice, by the courts of the United States." And after stating the greater facilities here for advancement in jurisprudence, the learned judge enters a formal disclaimer against "the right or the wish to innovate on the law upon any ground of inconvenience, however strongly made out; "but when we have," says the learned judge, "to deal with a rule established in a very different state of society, at a time when corporations were comparatively few in number, and upon which it was very early found necessary to ingraft many exceptions, we think we are justified in treating it with some degree of strictness, and are called upon not to recede from the principle of any relaxation in it, which we find to have been

*2. The English courts in many recent cases seem to have applied the general rule of presumption, by which the conduct of established by previous decisions." And this seems to form the basis of the subsequent decisions of the English courts upon the subject. The decisions have evinced an effort to preserve the rule, and at the same time to invent and ingraft such a number of exceptions upon it as really to meet all the inconvenience or absurdity which could fairly be objected against the old rule. But in settling the exceptions, the decisions have not always commended themselves as consistent either with reason or with each other. Thus affording another striking illustration of the folly of attempting to maintain an absurd rule, by multiplying exceptions, every one of which was based upon a principle of reason, which, if carried to its legitimate results, would subvert the rule itself. This was in 1837, in the K. B., and established the exception to the old rule of executed contracts for goods sold and used by the company in the business for which it was created. The next year the same court held, that a corporation might also maintain an action upon an executory contract not under seal. Church v. The Imperial GasLight & Coke Co., 6 Ad. & Ell. 846. This was upon a contract to take gas of the company, which the defendant below declined to receive. In 1843 a case arose in the Common Pleas, Fishmonger's Co. v. Robertson, 5 M. & G. 131. This was an action upon a contract to pay the plaintiffs 1,000l. to withdraw their opposition to a bill in parliament, and to promote its passage into a law, the parties being mutually interested in the same, and alleging performance of the contract on the part of the plaintiffs. The subject was very much considered, and an elaborate opinion delivered by Tindal, Ch. J., and it was decided, that the contract having been executed on the part of the corporation, and the defendants having received the full consideration, were bound by the contract, and that the contract was not void as against public policy. See also Arnold v. The Mayor of Poole, 4 Man. & Gr. 860 (1842), to the same effect, where it is held, that no municipal corporation but that of London can appoint an attorney except under the corporate seal. Mayor of Ludlow v. Charlton, 6 M. & W. 815 (1840). But the Court of Q. B., in 1846 (Sanders v. St. Neot's Union, 8 Q. B. 810), held, that if work be done for a corporation, and adopted by them for purposes connected with the incorporation, although not under seal, they are liable for it. The case of the Governor & Company of Copper Miners v. Fox, 16 Q. B. 229 (1851), holds that the plaintiffs could not sue upon a mutual contract, because the plaintiffs' portion of it, not being under seal, and being for the delivery of iron rails, and the plaintiffs being incorporated for dealing in copper, not coming within the proper business of the company, as a trading company, they were not bound by it, and by consequence the defendants were not. This case admits the exception from the old rule of all contracts pertaining to the proper business of the incorporation, and then attempts a distinction between dealing in iron and copper! a distinction which, if it be of any force, would show that the contract, being ultra vires, would not bind the company in any form. The next case (Homersham v. Wolverhampton Waterworks, 6 Exch. 193; s. c. 6 Railw. C., 790, ante, § 113), in the order of time, is for extra work, under a contract, which was done in express violation of the provisions of the general contract, in regard to extra work, and was not authorized, in the manner required in rela

* natural persons is to be judged of, to corporations. Thus it was held, that where a company has stood by and seen works per

*

tion to contracts, by the company's charter. It seems to have been correctly enough decided, upon either ground, that no recovery could be had. Ante, § 113, and cases cited. Lamprell v. Billericay Union, 3 Exch. 283 (1849). But Cope v. Thames Haven Dock & Railw. Co., 3 Exch. 841, seems to be an express decision affirming the general necessity of the corporate seal to bind the company (1849). So also Diggle v. The London & Blackwall Railw., 5 Exch. 442, is of the same character, being for extra work performed in express violation of the general contract; and there are some other cases of this kind in the English Reports.

But the next case in the order of time, involving the general question, is Finlay v. Bristol & Exeter Railw., 7 Exch. 409; s. c. 9 Eng. L. & Eq. 483, and here it was held, that although a corporation was liable for use and occupation, on a parole demise, it is only liable for the actual occupation, and a continuous occupation, for several years, will not render the corporation tenants from year to year. In Clark v. The Guardians of the Cuckfield Union, 1 B. C. C. 81; s. c. 11 Eng. L. & Eq. 442, the cases are all elaborately reviewed by Wightman, J., and the conclusion arrived at, that whenever the purposes for which a corporation is created render it necessary that work should be done, or goods supplied, to carry such purposes into effect, and such work is done, or such goods supplied, and accepted by the corporation, and the whole consideration for payment is executed, the corporation cannot refuse to pay, upon the ground that the contract was not under seal; and the case of Lamprell v. Billericay Union, 3 Exch. 283, is seriously questioned. In Lowe v. The London & N. W. Railw, 17 Jur. 375; s. c. 14 Eng. L. & Eq. 18, it is held, where a railway have taken possession of land, and occupied it, by the permission of the owner, for the purposes of their incorporation, that they are liable to be sued in assumpsit, for use and occupation, notwithstanding they have not entered into a contract under their common seal. But in the case of Smart v. The Guardians of the Poor of West Ham Union, 10 Exch. 867; s. c. 30 Eng. L. & Eq. 560 (1855), the question came before the Court of Exchequer, and the judges manifested a firm determination to adhere strictly to the old rule. Parke, B., says: With respect to the case of Clark v. The Guardians of the Cuckfield Union, I must say that I am not satisfied with the observations of my brother Wightman, for if that case be correctly decided, the effect would be to overrule several previous decisions of this court." And Alderson, B., says: "We must adhere to former decisions, till overruled by a court of error."

But in the case of the Australian Royal Mail Co. v. Marzetti, in June, 1855, in the Court of Exchequer, 11 Exch. 228; Pollock, Ch. B., says, in regard to a contract not under seal: "The principle applicable to corporations is, that in respect of small matters, where it would be absurd and inconvenient to require them to put their seals to contracts, in those cases they may contract without seal," also "in respect of matters for which it was created.” — “These principles," adds the learned chief baron, are founded on justice, public con

66

South Staffordshire Railw. Co., 2 De G. J. & S. 230; 11 Jur. N. S. 192.