Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/81

 CHAP. V.] PROMOTION OF A CORPORATION. [§ 87. not organized when those contracts were made. 1 And if it ratifies their contracts, then, in the absence of express agree- i Whitney v. Wyman, 101 U. S. 392; Spiller v. Paris Skating Rink Co., 7 Ch. D. 368; Davis Bros. v. Montgom- ery, etc., Co., 101 Ala. 127; Alexan- der v. Winters, 23 Nev. 475; Wall v. Mining & Smelting Co., 20 Utah, 474. See Perm Match Co. v. Hapgood, 141 Mass. 145, 149; Smith o. Parker, 148 Ind. 127; Scadden Flax G. M. Co. o. Scadden, 121 Cal. 33. A number of English cases, criticised in Spiller v. Paris Skating Rink Co., have held that a corporation could not ratify the acts of its promoters, because not in existence when the acts were done. See Kelner v. Baxter, L. R. 2 C. P. 174 (ante, §76); Scott v. Lord Ebury, 36 L. J. C. P. 161 (ante, §76); and Melhado v. Porto Alegre R. Co., 9 C. P. 503. In the last case Cole- ridge, C. J., seemed to think such cases should be decided differently, but could " find no legal principle" upon which an action brought against a corporation on a contract made by its promoters before, and ratified by it after, its organization could be maint ained. _ _ _ . k * It may be true, according to the common law, that no mere stranger, on whose behalf an agent did not even pretend to act, may ratify the contracts of such an agent so as to require rights or incur liabilities in regard thereto, towards the other contracting party. See Wilson v. Lumman, 6 Man. & Gr. 236. And it is said in the Digest: " Ratihabitio constituet tuum negotium, quod ab initio tuum non erat, sed tua cou- templatione gestum." Dig. lib. 3, ,tit. 5; De Neg. Ges 5, § 11. (Momm- 'sen's ed.; otherwise cited as 6, §9.) But at common law a chose in action rwas regarded as non-assignable; and yu the Roman law the competency to acquire rights and incur liabilities through an agent was of late growth. Moreover, a promoter does purport to act on behalf of the future cor-' poration; and the future corpora- tion, as between itself and its pro- moter, is entitled to the full benefit of his acts (see §§82-84); and it is only through the acts of its pro- moters that a corporation is formed. To say that the corporation when or- ganized cannot adopt and ratify such contracts of its promoters made on its behalf, as would have been within its powers to enter into after its or- ganization, is to say that a body of men, when incorporated and acting as a corporation, cannot ratify those contracts (of some of their number, probably) which it would be compe- tent for them, acting as a corpora- tion, to make, and which were made on their behalf, and in order that they might subsequently act as a cor- poration. Instances would seem hard to find where ratification could more properly take place. ^ _ 'There is, However, another ques- tion, which has nothing to do with the doctrines of ratification in them- selves considered. Suppose that a corporation has been formed, and that a given act is within its powers of corporate action. This act was done on behalf of the corporation, by its promoters prior to its organi- zation. May it not be said in such a case that, although it may be within the powers of the corporation to do such an act after its organization, yet, nevertheless, the corporate pow- ers took their beginning at a certain time, and it may not have been the intention of the legislature to allow a body of men to act as a corpora- tion prior to their incorporation, or 61