have been enforceable whilst it remained executory'. This theory, however, has now been definitely discarded in England, the accepted doctrine being that the validity of a contract made by a corporation without using its seal is to be tested by the same criteria, whether it is executory or executed. In some instances, it is true, we find that judges have, with characteristic caution, declined to express any decided opinion as to the correctness of this doctrine". But cases are not wanting in which its soundness was apparently taken for granted'. That it still remains unim

In East London Waterworks Co. v. Bailey (1827) 4 Bing. 283, (action for non-delivery of pipes for the plaintiffs' works), one of the grounds upon which the right of recovery was denied was, that there was a distinction between contracts executory and executed.

See also the Canadian cases reviewed in note 7, infra.

2 Church v. Imperial Gaslight & C. Co. (1837) 6 Ad. & El. 846, Lord Denman, C.J., reasoned as follows: "The same contract which is executory to-day may become executed to-morrow; if the breach of it in its latter state may be sued for, it can only be on the supposition that the party was competent to enter into it in its former; and if the party was so competent, on what ground can it be said that the peculiar remedy which the law gives for the enforcement of such a contract may not be used for the purpose? It appears to us a legal solecism to say that parties are competent by law to enter into a valid contract in a particular form, and that the appropriate legal remedies for the enforcement or on breach of such a contract are not available between them." In this case the Court explicitly disapproved the doctrine laid down in East London Waterworks Co. v. Bailey, supra. That decision was also condemned in South of Ireland Colliery Co. (1868) L.R. 3 C.P. 463 (per Montague Smith, J., p. 475).

The decision in Church v. Imperial Gaslight & C. Co. has been referred to by text writers of the highest eminence as having settled the law upon the subject. See Lindley, Comp. p. 221, and Sir F. Pollock, Contr. 150.

3

In Nicholson v. Guardians of Bradfield Union (1866) L.R. 1 Q.B. 620, Blackburn, J., remarked in the course of his judgment that it was unnecessary to express any opinion as to what might have been the case, if the plaintiff had been suing on a breach of the contract for a refusal to accept the goods ordered, or any other breach of the contract whilst still executory. In Hunt v. Wimbledon Local Board (1878) L.R. 4 C.P.D. 48, Cotton and Brett, L.JJ., expressed, arguendo, strong doubts as to the doctrine that there is an essential difference between executed and executory contracts.

In Young v. Mayor of Leamington Spa (1882) L.R. 8 Q.B.D. (C.A.) 579, where a mandatory statute prescribed that a seal should be used in making any contract involving the payment of more than a certain amount of the corporate funds, Brett, L.J., remarked (p. 586): "The fact that the defendants had the benefit of the contract will not prevent them from setting up the statute in answer to the plaintiff's claim." It is apprehended that the mere fact that the obligation of the corporation in this instance was imposed by any express words of a statute does not weaken the significance of this remark, as indicating the opinion of the learned judge, that the rights of the party claiming under a parol contract are in no respect enlarged in consequence of its having been executed.

pugned is also indicated by these considerations,-that there is no recent English decision in which the non-enforceability of an executory parol contract has been affirmed on the mere ground that it was executory; that the parol contract which was declared to be enforceable in a leading case already cited was, as a matter of fact, executory; and that none of the judgments delivered in the English cases in which plaintiffs have been held entitled to recover upon executed parol contracts (see preceding section, notes 1, 2,), contain any language which can reasonably be construed as indicating an adoption of the theory, that the rights of the plaintiffs were enlarged by the circumstance that the contract had been executed by them. It is manifestly not permissible to argue that cases in which it was simply held that certain parol contracts were enforceable after they had been executed may be taken as denying by implication that the contracts in question would not have been enforceable, if they had still remained executory. The conclusion seems to be unavoidable, therefore, that in several Canadian cases which evince more or less distinctly an acceptance of the theory, that the enforceability of a corporate contract may sometimes depend upon whether it has been executed or is still executory, there has been, in so far as the judgments are founded upon that theory, a divergence from the main current of the English authorities. It is worthy of observation, however, that the facts presented in at least a portion of these cases were such that, even if no significance whatever had been ascribed to this element, the decisions

*See London Dock Co. v. Sinnott (1857) 8 El. & Bl. 347 (§ 2, note 1, ante), where, although the executory character of the contract might have been put forward as a plea by the defendant, or assigned as a reason for the judgment against the plaintiff, this element was not adverted to.

6

South of Ireland Colliery Co. v. Waddle (1868) L.R. 3 C.P. 463, aff'd by the Exch, Ch. in L.R. 4 C.P. 617.

In Copper Miners of England Co. v. Fox (1850) 16 Q.B. 230, where the right of the corporation to recover in an executory contract for the supply of iron rails was denied, for the reason that such a contract was beyond the scope of its charter, Lord Campbell remarked, arguendo, that, if the contract had been shewn in any way to be incidental or ancillary to carrying on the business of copper mines," it would have been binding though not under seal.

might well have been the same as those which were actually rendered'.

In Dempsey v. Toronto (1849) 6 U.C.Q.B. 1, where a municipal corporation was held to be liable in assumpsit for services actually rendered, it was laid down that there was no general principle, applicable to all classes of corporations, that they are not liable to be sued, because they have never promised under seal that they would give a recompense.

In Pim v. Municipal Council of Ontario (1860) 9 U.C.C.P. 304 the plaintiff was allowed to recover for work done under a parol contract for the erection of a court house and gaol for a municipality. The Chancellor, who delivered the judgment, laid much stress upon the fact that the distinction between executory and executed contracts had been recognized in East London Waterworks Co. v. Bailey (note 1, supra), and attempted to minimize the effect of the decision in Church v. Imperial Gaslight & C. Co. (note 2, supra), on the ground that it was not intended to be of general application to all classes of contracts. The present writer ventures to think that it is quite possible to agree with the learned judge in his views as to the actual scope of the decision, without assenting to the conclusion drawn by him. The remarks of Lord Denman undoubtedly have reference merely to contracts of the kind discussed in the preceding section. But manifestly a decision which declares that where the validity of such a contract to be determined, the question whether they are executory or executed is immaterial, is of sufficiently wide application to cover any case which involves a contract of that description; and this was really the only aspect under which it was necessary to consider the import of the decision. It should be observed that this Canadian case antedates South of Ireland Colliery Co. v. Waddle, supra, by several years, and that the learned Chancellor had not the advantage of the guidance afforded by the very explicit statements of the law which are found in the later case.

In Clark v. Hamilton, &c., Institute (1854) 12 U.C.Q.B. 178, an architect was held entitled to recover for his services in connection with the construction of a building for the use of the defendants. The broad principle was applied that a corporate body cannot avail itself of the property or labour of others, and accept and apply such property for the purpose for which it was organized, and then refuse, on the ground that its contract was not sealed, to pay for what has thus benefitted them. Robinson, C.J., relied upon the consideration that the contract was one within the scope of the corporate charter, and in the course of its business. Burns, J., was of opinion that the contract was enforceable on the ground that it was made to carry out the very thing for which the corporation had been created. There is no little difficulty in accepting this decision simply as a legitimate application of the doctrine here referred to. Certainly that doctrine is subjected to an exceedingly severe strain, where it is invoked to support contracts for carrying out an important work of construction which, in spite of what. was said by the judges, seems not have been not so much a contract made in the course of the corporate business, as one made with a view to obtaining a convenient place of business, which might for ought that appears, have been procured without undertaking the erection of a building. Such a contract seems to fall within the scope of the qualifying remarks of Montague Smith, J. (as quoted at the beginning of the last section), that a seal "is required only in matters of unusual and extraordinary character, which are not likely to arise in the ordinary course of business." If these views are correct, it is clear that the decision cannot be supported without the aid of the doctrine which treats executory and executed contracts as being upon a different footing. It may be observed that the dissent of Draper, J., was put upon an untenable ground, viz., that

4. Common law rule modified by legislation. The chaotic condition of the authorities, which is disclosed by the review of the cases in the three preceding sections indicates that there is an urgent necessity for the enactment of statutes which

the claim was not one for "small and ordinary services," that might frequently be required. The theory thus relied upon is discredited by the more recent English decisions. See the judgment of Bovill, C.J., in South of Ireland Colliery Co. v. Waddle (1868) L.R. 3 C.P. 463, (note 1, ante).

In Perry v. Ottawa (1864) 23 U.C.Q.B. 391 a man employed by a municipal committee to make plans was held entitled to recover for his work, though no contract under seal had been made. The last cited case was followed as a controlling authority.

In Marshall v. School Trustees of Kitley (1855) 4 U.C.C.P. 376 where the defendants were held not liable for the cost of a schoolhouse erected for them under a parol contract, and accepted after its completion, the rationale of the decision apparently was that the contract had reference to a matter of unusual importance. This case is at variance with the general current of the authorities cited in this note-more especially Clark's case, supra, but in the opinion of the present writer it is in harmony with the English decisions.

In Bernardin v. North Dufferin (1891) 19 Can. Sup. 581, where a parol contract for the building of a bridge was made in pursuance of a resolution passed by a municipal council, the majority of the Court, (Ritchie, C.J. and Strong, C.J., dissenting), proceeded upon the theory that the rule requiring the use of a corporate seal is subject to an exception in cases where the contract has been executed and the benefit of the stipulated work has been received by the corporation. All the earlier English and Canadian authorities were discussed in very elaborate judgments by Gwynne and Patterson, JJ.

In Wood v. Ontario &c. R. Co. (1874) 24 U.C.C.P 334, it was held under 34 Vict, ch. 48, the Act incorporating the Ontario and Quebec R.W. Co. and the Railway Act of 1868, s. 14, sub-s. 13, (which provides that "directors shall make by-laws for the appointment of all officers, servants and artificers"), that the defendants were empowered to appoint an agent to negotiate for and obtain municipal aid, and that for that purpose a resolution of the board of directors, or any entry or minute in their record of proceedings would have been sufficient, without the formality of a by-law or the seal of the company. The Court laid it down, arguendo, that, if the plaintiff had been appointed a clerk or bookkeeper, he would on the same principles have been entitled to recover the value of his services, a corporation being liable, in any event, for the value of services which have actually been performed and accepted by its authorized agent, provided the contract was within its charter powers.

In a case where a question arose as to validity of the appointment of a clerk, it appeared that, under the statutes incorporating the defendants, (Consol. Stat. U.C. ch. 53, § 19, 37 Vict. ch. 50, D.), the directors of the defendant company were empowered from time to time, at any of their usual meetings, to appoint such persons as they thought proper to be officers of the society, and from time to time to discharge such persons, and appoint others in the room of those who vacated, died, or were discharged, but nothing was said as to the mode of appointment, whether under corporate seal or otherwise. The conclusion of the Court was thus stated: "Looking at the statute under which the defendants are incorporated, the

will put this branch of law upon a more rational footing. It is satisfactory to be able to note that the process of simplification has already been commenced in Canada'.

5. American doctrine as to the use of the corporate seal.—The doctrine established in the United States is that a corporation can

duration and character of the employment of the plaintiff, and the circumstances attending his appointment, this case does not, under the authorities, fall within any of the well recognized exceptions to the general rule; and therefore, that the contract, so far as executory, must be evidenced by the seal of the defendants." Hughes v. Canada Permanent Loan & Sav. Soc. (1876) 39 U.C.Q.B. 221.

In Ellis v. Midland R. Co. (1882) 7 Ont. App. 464 an action on a verbal contract of employment by which the plaintiff had been appointed master of a steamer, a nonsuit on the ground that a seal had not been used was held to be erroneous, as such a contract might possibly be binding, and a further enquiry into the facts was necessary. But as this case related to the hire of an employé of a superior grade, it stands in direct antagonism to the cases cited in § 1, which, in England at all events, have not been restricted in their effect to any perceptible extent by those discussed in § 2. 1

The same remark is applicable to Forrest v. Great Western C. R. Co. (1899) 12 Man. 472, the chief engineer of a railway company, who had performed his duties for a certain period, under a parol agreement by the president was held to be entitled to recover at the rate agreed upon. The Court proceeded upon the ground that the rule as to the use of a seal had been relaxed in cases of executed contracts, where the work done or the goods supplied were necessary for the purpose of the corporation, and the corporation had accepted them, and received the benefit thereof.

In an action for the breach of an agreement by preventing the performance of certain work, it was held that a plea simply stating that the contract was not under seal did not set forth a good defence, for the reason that there was nothing to shew that the contract was not within the scope of the plaintiff company's powers, and within the ordinary course of its business, or for purposes connected with it. The Court declined to assume that it was a contract which, although executory and not under seal, was not valid and binding. Co-operation Stone Cutters' Assn. v. Clarke (1880) 31 U.C.C.P. 280.

1

By the Dominion Companies Act, §76, it was enacted as follows: "Every contract, etc. made, etc., on behalf of the company, by an agent, officer or servant of the company, in general accordance with his powers as such under the by-laws shall be binding on the company, and in no case shall it be necessary to have the seal of the company affixed to any such contract. or to prove that this same was made

.

in pursuance of any by-law, or special note, etc." The effect of this provision apparently is, that an unsealed contract of hiring entered into by a duly authorized agent of a company, for a purpose within the scope of its charter, is binding upon it, whatever may be the character or grade of the position to which the contract relates. This provision constitutes § 24 of the Joint Stock Companies Act of 1902.

In Quebec a similar provision has been adopted by the Provincial Parliament. Rev. Stat. § 4746.