Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/85

 CHAP. V.] PROMOTION OF A CORPORATION. [§90. it may force the party who contracted with the promoter to perform on his side. 1 III. When the contract has been executed by the other con- tracting party, the corporation should be held to perform on its side, if (1) it has ratiiied the contract, 2 or (2) voluntarily ac- cepted the benefit arising from the performance of the contract in such a manner as to estop the corporation from denying that it has ratified the contract. 3 But, on the other hand, if the benefit from the contract came to the corporation without any voluntary action on its part, or on the part of those whose acts in regard to the subject-matter of the contract are to be re- garded as the acts of the corporation, then there is no principle in law or equity on which it can be compelled to carry out en- gagements entered into without its authority, and which it has never even impliedly ratified. 4 1 See Bedford and Cambridge R'y Co. v. Stanley, 32 L. J. Eq. GO; Cot- ton Press Co. v. McKellar, 86 Tex. 694. 2 Bonds issued by promoters before incorporation may, after incorpora- tion, be ratified by tbe directors so as to become valid obligations of the corporation. Wood v. Wheelen, 93 111. 153. See Richwald v. Commer- cial Hotel Co., 106 111. 439, 448. 8 Bonner v. American Spiral Hinge 5 Mfg. Co., 81 N. Y. 468; Grape Sugar, etc., Mfg. Co. v. Small, 40 Md. 395; Little Rock and Fort Smith R. R. Co. v. Perry, 37 Ark. 164; Paxton Cattle Co. v. First Nat. Bank, 21 Neb. 621; Moore, etc., Hardware Co. v. Towers Hardware Co., 87 Ala. 206. that a corporation was not affected with notice of facts known to its pro- moters. y?&> 65
 * Zang v. Adams, 23 Col. 408, held