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In general, a corporation can only contract by writing under their

common seal.

But to this rule there are exceptions, which the reader will find enumerated in the case of East London Waterworks' Company v. Bayley, 4 Bing. 283. And among them is the power of issuing bills or notes enjoyed by a company incorporated for the purposes of trade, the very object of whose institution requires that they should exercise this privilege.(s)(1)

But a company incorporated for carrying on public works is not a corporation within the above exception.(t)

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*A corporation may, like natural persons, sue in assumpsit. The old doctrine that the consideration must not be executory, so that promises by it need not be alleged,(u) seems to be overruled.(v)

(8) Broughton v. Manchester Waterworks' Company, 3 B. & A. 1. (t) Ibid.

() Mayor of Stafford v. Till, 4 Bing. 75; 12 Moore, 260, S. C.

(e) Church v. Imperial Gas Company, 6 Ad. & E. 861; Mayor of Ludlow v. Charlton, 6 M. & W. 815; Paine v. Guardians of the Strand Union, 15 L. J. 89, M. Ca.

(1) The old doctrine that a corporation can contract only under its corporate seal is now repudiated. Chesnut Hill Turnpike Co. v. Rutter, 4 Serg. & Rawle, 16. Bank U. S. v. Dandridge, 12 Wheat. 64. Bank of Columbia v. Patterson, 7 Cranch, 299. Fleckner v. Bank U. S., 8 Wheat. 338. Hamilton v. Lycoming Insurance Co., 5 Penna. State Rep. 339. An insurance company may make a valid promissory note. Barker v. Mechanic Ins. Co., 3 Wend. 94.

A note in the form "I, G. C. L. treasurer" of a corporation, "promise, &c.," is the note of the corporation. Mann v. Chandler, 9 Mass. 335. But see Tucker v. Bass, 5 Mass. 164.

Power to advance money for a corporation will not authorise signing a note for them. Webber v. Williams College,

23 Pick. 302.

A factor employed by the general agent of a corporation to sell the goods manufactured and to purchase stock, has power to buy on credit, but not to

give the note of the corporation. Emerson v. Providence Manufacturing Co., 12 Mass. 237.

The general agent of a corporation can give their note for purchases necessary to carry on their business. Odiorne v. Maxcy, 13 Mass. 178. White v. Westport Manufacturing Co., 1 Pick. 215. Butts v. Cuthbertson, 6 Georgia, 166.

A bill of exchange directed to "John A. Wells, Cashier Farmers and Mechanics Bank of Michigan," and accepted by writing across the face thereof, "accepted John A. Wells, Cashier," is drawn upon and accepted by the bank, and not by Wells in his individual capacity. Farmers and Mechanics Bank v. Troy City Bank, 1 Douglas, 457.

A corporation authorized by its charter to employ its stock solely in advancing money upon goods, and the sale of such goods on commission, may lawfully accept bills drawn on account of future consignments. Munn v. Commission Company, 15 Johnson, 44.

And a corporation is liable to be sued in that form of action, on negotiable instruments, wherever it has the power to issue them.(w)(1)

The capacity of corporations to make, draw, or accept negotiable instruments, is further narrowed by the following enactment, contained in the various statutes passed for protecting the privileges of the Bank of England ;(x) "That it shall not be lawful for any body, politic or corporate, whatsoever, or for any other persons whatsoever, united or to be united in covenant or partnership, exceeding the number of six persons, in England, to borrow, owe, or take up any sum or sums of money on their bills or notes payable at demand, or at any less time than six months from the borrowing thereof, during the continuance of the privilege of banking granted to the Governor and Company of the Bank of England.”(y)

It has been held that these restrictions do not affect a commercial firm consisting of more than six persons.(z)

But in consequence of the panic in the latter part of the year 1825, the Bank of England consented to forego a portion of their exclusive privilege: and the 7 Geo. 4, c. 46, enacts, accordingly, that corporations or co-partnerships of more than six in number, carrying on business more than sixty-five miles from London, may issue bills or notes payable on demand, and that such corporations or co-partnerships may issue notes or bills amounting to 50l., payable in London or elsewhere at any period after date or sight. (a)

The third section declares, that any such corporation or partnership may discount bills not drawn by or upon them.

(w) Murray v. East India Company 5 B. & Al. 204.

(x) 39 & 40 Geo. 3, c. 28, s. 15.

(y) For the history and exclusive privileges of the Bank of England more at large, see the case of the Bank of England v. Anderson, 3 Bing. N. Ca. 589; 4 Scott, 50; Keen, 328.

(z) Wigan v. Fowler, 1 Stark. 459.

(a) The limitation of 50l. appears to be abolished by the 3 & 4 Wm. 4, c. 83, s. 2, and 7 & 8 Vict. c. 32, s. 26. As to the mode of recovering penalties, see 8 & 9 Vict. c. 76, s. 5.

(1) A cashier has prima facie authority to indorse, on behalf of the bank, securities held by it, and any restriction on this authority must be proved by the party contesting it. Wild v. Passamaquoddy Bank, 3 Mason, 505. Fleckner v. United States Bank, 8 Wheat. 357. Everett v. U. States, 6 Porter, 166.

Elliott v. Abbot, 12 N. Hamp. 549. Crocket v. Young, 1 Smedes & Marsh. 241. Harper v. Calhoun, 7 How. Miss.

203.

Farrar v. Gilman, 19 Maine, 440. Farmers' & Mechanics' Bank v. Troy City Bank, 1 Dougl. 457. Badger v. Bank of Cumberland, 26 Maine, 428.

Each offence against the provisions of the act subjects to a penalty of 501.

The act by which the Bank Charter was renewed in 1833, the 3 & 4 Wm. 4, c. 98, continued the privileges bestowed on the Bank of England by the 39 & 40 Geo. 3, and subsequent *acts, [ *53] subject to termination on twelve months' notice, to be given after the 1st August, 1844. The privileges of the Bank are now further continued by the 7 & 8 Vict. c. 32, subject to termination on twelve months' notice to be given after the 1st August, 1855.

The 3 & 4 Wm. 4, c. 98, provides that no bank of more than six persons shall issue in London, or within sixty-five miles thereof, bills or notes payable on demand, saving the rights of country bankers to make their notes payable in London.(b)

The 3 & 4 Wm. 4, c. 98, further declares that other corporations and companies of more than six persons may carry on the business of banking in London, provided they do not issue bills or notes at less than six months' date. (c)

That the notes of the branch banks of England shall be made payable where issued.(d)

The Bank of England can issue bank notes unstamped, (e) and has the exclusive privilege of doing so within the city of London and three miles thereof.(f).

No person who was not a banker issuing his own notes on the 6th of May, 1844, can now issue bank notes.(g)

Banks of six, or fewer than six persons, existing as banks of issue before the 6th May, 1844, may issue bills and notes, and promissory notes payable to bearer on demand, on unstamped paper, (except within the city of London and three miles thereof) within the provisions of 9 Geo. 4, c. 23, s. 1.

Banking corporations and companies of more than six persons can

(b) 3 & 4 Wm. 4, c. 98, s. 2.

(c) Sec. 3. Therefore a banking partnership of more than six persons in London, or within sixty-five miles thereof could not accept a bill at less than six months drawn upon them by a customer. Bank of England v. Anderson, 3 Bing, N. C. But the restriction is relaxed by the 7 & 8

589; 4 Scott, 50; Keen, 328, S. C.

Vict. c. 32, s. 26.

(d) 3 & 4 Wm. 4, c. 98, s. 4. (e) 7 & 8 Vict. c. 32, s. 7.

(ƒ) 9 Geo. 4, c. 23, s. 1.

(g) 7 & 8 Vict. c. 32, ss. 10, 11, 12.

not issue in London or within sixty-five miles thereof any bill or note payable on demand.(h)

Every member of a banking partnership is liable to the payment of outstanding notes, though he were not a partner when they were issued.(i)

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*The law as to the liability of directors of joint-stock companies drawing, accepting, or indorsing bills, involves some nice distinctions, and is, perhaps, not yet very clearly settled.

It is conceived, however, to be a general rule, that if the directors accept simply in their own names, with or without authority to do so, they, and they only, are liable at law on the bills. (k) And that they are liable at law not only to holders who are strangers, but to holders who may be also holders of letters of allotment, or holders of scrip.(1)

If, however, having authority to bind the company by bills, the directors accept, in the name of the company, a bill drawn on the company, it is conceived that every member of the company is liable as a joint acceptor to any holder, not being also a member of the company.(m)

An authority, (n) to make contracts and bargains and to transact all matters requisite for the affairs of the company, will not in general authorize the directors to draw bills.(0)

Directors signing a joint and several note are personally responsible.(p)

If a bill be drawn on several trustees or directors who have power to bind each other, an acceptance by one in his own name is the acceptance of all.(q)

Notice to one member of a joint stock company is not notice to all. (r)

(h) 39 & 40 Geo. 3, c. 28, s. 15; 3 & 4 Wm. 4, c. 98, s. 3; and see 3 & 4 Wm. 4, c. 83, s. 2. See further Bank of England v. Anderson, supra, and Booth v. Bank of England, 6 Bing. N. C. 415; 1 Scott, N. R. 701, S. C. See also the provisions of 7 Geo. 4, c. 46; 7 & 8 Vict. c. 32, s. 26, and 8 & 9 Vict. c. 76.

(i) 7 Geo. 4, c. 46, s. 1.

(k) Page 26.

(7) Fox v. Frith, 10 M. & W. 131.

(m) See Teague v. Hubbard, 8 B. & C. 345; 2 M. & R. 369, S. C.; Higgins v. Senior, 8 M. & W. 834; Fox v. Frith, 10 M. & W. 131; Steele v. Harmer, 15 L. J. Exch. 217; 14 M. & W. 831; 19 L. J. 34, Exch.; 4 Ex. 1, S. C.

(n) See as to bills by registered companies, 7 & 8 Vict. c. 110, s. 45.

(0) Harmer v. Steele, 19 L. J. Exch. 34; 4 Ex. 1, S. C.

(p) Healey v. Story, 18 L. J. 8, Exch. See also Penkivil v. Connell, 19 L. J. 305, Exch.

(q) Jenkins v. Morris, 16 M. & W. 877.

(r) Powles v. Page, 3 C. B. Rep. 31; Steward v. Dunn, 12 M. & W. 664.

If persons who fill official situations, as churchwardens, overseers, surveyors, commissioners, managers of joint stock banks, and the like, give bills or notes on which they describe themselves in their official capacity, they are nevertheless personally liable. Thus, drafts on a banker signed by commissioners under an inclosure act "as commissioners," bind the commissioners personally.(s) So does a promissory note given by A. and B. as churchwardens and overseers.(t) So it is conceived that the legal interest in a bill or note given to an officer in his name of office, vests in the person *who happens to fill the office at the time. Thus, a note given to the [*55 ] manager of a joint stock banking company vests at law in the person who fills that office when the note is given. (u) And where a note was made payable to the trustees acting under A.'s will, parol evidence was held admissible to shew who they were and what the trusts were.(v)

But where a note is given to the treasurer of a friendly society for the time being, neither the treasurer when the note is given, nor his successor in office, can maintain an action on the note, for the acts of Parliament, establishing friendly societies, contemplate proceedings by complaint before a justice of the peace.(w)

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(t) Rew v. Petet, 1 Ad. & E. 196; 3 Nev. & M. 456, S. C., nom. Crew v. Retit:

and vide ante, p. 26.

(u) Robertson v. Sheward, 1 M. & Gran. 511; 1 Scott, N. R. 419, S. C.

() Megginson v. Harper, 4 Tyrhw. 96; 2 Cr. & M. 322, S. C.

(w) Timms v. Williams, 3 Q. B. Rep. 413.

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