CHURCH

2.

THE IMPERIAL GAS LIGHT AND COKE COMPANY.

[ *860 ]

[ *861]

brought for the breach of an executed contract, the evidence of the contract, if an express one, must be the same as if the action were brought while it was executory; an oral or written agreement, or a series of letters, might be produced to prove the fact, and the terms of the contract: could it be contended that these would be evidence of a valid contract after execution, but of a wholly inoperative one before? Unless positions such as these can be maintained, we do not see how to support any distinction between express executory and executed contracts of the description now under consideration.

A distinction, however, seems to be intimated, in some cases, between the express contract of the parties and that which the law will imply for them from an executed consideration. And a validity is attributed to the latter which is denied to the former. But there is no foundation for this: the difference between. express and implied contracts is merely a difference in the mode of proof. On the one hand, a plaintiff, who should sue on a contract to be implied from certain acts done, must be nonsuited if those acts were shown to be in compliance with stipulations antecedently entered into, unless he was prepared with evidence of all the stipulations. On the other hand, no contract can be implied from the acts of parties, or result by law from benefits received, but such as the same parties were competent expressly to enter into. And this is important in the present argument, because it makes the decisions on implied contracts authority for our decision upon an express one. Upon these grounds we are prepared to decide that the present action was maintainable. So far, therefore, as the decision of the Court of Common Pleas in East London Water Works Company v. Bailey (1) proceeded on the distinction between contracts executed and executory, we are compelled, after consideration, to express our opinion that it was wrongly decided. The case may be sustained, however, on another ground, consistent with our previous remarks, and which affords another reason for our present decision. The general rule of law is that a corporation contracts under its common seal: as a general rule, it is only in that way that a corporation can express its will or do any act. (1) 4 Bing. 283.

That general rule, however, has from the earliest traceable periods
been subject to exceptions, the decisions as to which furnish the
principle on which they have been established, and are instances
illustrating its application, but are not to be taken as so pre-
scribing in terms the exact limit that a merely circumstantial
difference is to exclude from the exception. This principle appears
to be convenience amounting almost to necessity. Wherever to
hold the rule applicable would occasion very great inconvenience,
or tend to defeat the very object for which the corporation was
created, the exception has prevailed: hence the retainer by parol
of an inferior servant, the doing of acts very frequently recurring,
or too insignificant to be worth the trouble of affixing the common
seal, are established exceptions; on the same principle stands
the
power of accepting bills of exchange, and issuing promissory
notes, by Companies incorporated for the purposes of trade, with
the rights and liabilities consequent thereon. These principles
were, it is evident, present to the attention of the Court of
Common Pleas when the case in question was decided; and they
might reasonably have held that a contract with a Water Com-
pany for the supply of iron pipes was neither one of so frequent
occurrence, or small importance, or so brought within the purpose
of the incorporation, that the principle of convenience *above
established required it to be taken out of the general rule.

If, however, the present case be tried by the same test, the decision ought to be the other way. On the face of this record, we must understand this Company to have been incorporated for the purpose of supplying individuals willing to contract with them for gas light and coke: and the present appears to have been a contract for the supply of gas for a year, amounting to 121. 16s., and so from year to year. We cannot be ignorant that such contracts must be of frequent and almost daily occurrence; and to hold that for every one of them, of the same or less amount (for, where the sum is so small, a diminution of half could not vary the principle), it was necessary to affix the common seal, would be so seriously to impede the corporation in fulfilling the very purpose for which it was created, that we think we are bound to hold the case fairly brought within the principle of the established exceptions.

CHURCH

V.

THE
IMPERIAL

GAS LIGHT
AND COKE
COMPANY.

[ *862 ]

CHURCH

v.

THE
IMPERIAL
GAS LIGHT

AND COKE
COMPANY.

1837.

[ 899 ]

Leaving, therefore, the ancient rule still unbroken in all the instances to which it is fairly applicable, we are of opinion that the present action was well brought; and, consequently, our judgment will be for the defendants in error.

Judgment affirmed.

PEARSON, ASSIGNEE OF JAMES GRAHAM, A BANKRUPT, v. ANDREW GRAHAM AND OTHERS (1).

(6 Adol. & Ellis, 899-904; S. C. 2 N. & P. 636; 7 L. J. (N. S.) Q. B. 247.)

Defendant, being in the employment of J. in his trade, sold, bonâ fule, some goods belonging to J., after J. had committed an act of bankruptcy, of which defendant was ignorant. The sale was more than two months before the commission issued. Defendant acted under a general authority. The assignee brought trover: Held,

1. On a plea of Not guilty, that defendant, having sold under a general authority only, had been guilty of a conversion; and that, if he had any justification, he should have pleaded it specially.

2. On issue joined on a traverse of the assignee's possession, that the plaintiff must recover; no evidence being given that the purchaser was ignorant of the bankruptcy; sects. 81 and 82 of stat. 6 Geo. IV. c. 16 (2) protecting the transfer only where the party dealing with the bankrupt is without notice; and the burthen of proof being here on the defendant who affirmed the sale.

TROVER for hops, laying the possession in the plaintiff as assignee. Andrew Graham pleaded (3), first, Not guilty; secondly, that James Graham was not a bankrupt in manner &c.; thirdly, that the plaintiff was not lawfully possessed in manner &c. Issues on all the pleas. On the trial before Tindal, Ch. J. at the Westmoreland Summer Assizes, 1835, it was proved that James Graham, being a dealer in seeds, committed an act of bankruptcy, 24th July, 1834, by absenting himself. On the following day, Andrew Graham, who had been for some time employed by the bankrupt in his business, sold the hops in question to a person who paid the fair value for them and took them away. It appeared that Andrew had not any express authority from the bankrupt to sell the goods, but took upon himself to sell them

(1) Cited and followed in the judgment of MELLISH, L. J., in Ex parte Schulte, In re Matanlè (1874) L. R. 9 Ch. 409, 413.-R. C.

(2) See now the Bankruptcy Act,

1883 (46 & 47 Vict. c. 52), s. 49.R. C.

(3) The other defendants pleaded separately from A. Graham, and the plaintiff demurred.

under his general authority. The commission issued in November, 1834. In answer to separate questions from the LORD CHIEF JUSTICE, the jury found, first, that James Graham absented himself with intent to defeat his creditors; secondly, that Andrew acted under a general authority, and had no notice of the act of bankruptcy at the time of the sale. His Lordship directed a verdict for the plaintiff, giving leave to move for a *nonsuit. In Michaelmas Term, 1835, Blackburne obtained a rule nisi accordingly. In Easter Term last (1),

LORD DENMAN, Ch. J. in this Term (May 31st) delivered the judgment of the COURT. After stating the pleadings and facts, his Lordship said:

The jury found that the defendant acted under a general authority, and that he did not know of the act of bankruptcy; but no question appears to have been submitted to them as to the knowledge of the purchaser. Upon this state of facts two questions arise: first, whether the defendant did convert the goods at all; and, secondly, if he did, whether the plaintiff, as assignee, was possessed of them, or, in other words, whether any property in them passed to him by the assignment.

As to the first question, it might be very doubtful whether a servant delivering goods by his master's order, could be said to have converted those goods, as against the assignees of his master. Coles v. Wright (2) rather seems to show that he could not. But, in the present case, the defendant had received no express orders as to the goods in question, but took upon himself, under a general authority, to sell and deliver them at a time when, as it afterwards turned out, his master had absconded and abandoned all control over his property. This was a sufficient dealing with them to constitute a conversion, unless by any other facts the defendant could show that he was justified in what he did; and then such justification should have been put on the record by way of special plea.

The next question therefore arises, viz. whether the property

(1) May 3rd. Before Lord Denman, Ch. J., Littledale, Patteson,

and Coleridge, JJ.

(2) 4 Taunt. 198.

PEARSON

v. GRAHAM.

[ *900 ]

[ 902 ]

[ *903 ]

in these goods passed to the plaintiff, as assignee, under the assignment of the commissioners. Now, assuming that it would pass by relation to the act of bankruptcy, that is, from the 24th of July, still it is contended that the sale is protected and rendered valid by the eighty-first section of stat. 6 Geo. IV. c. 16, and that the plaintiff had, in consequence of that section, no property and no possession actual or constructive.

That section renders valid all conveyances by, and all contracts and other dealings and transactions by and with, any bankrupt, bona fide made and entered into more than two calendar months before the date and issuing of the commission against him, notwithstanding any prior act of bankruptcy, provided the person so dealing with such bankrupt had not, at the time of such conveyance, contract, dealing, or transaction, notice of any prior act of bankruptcy. In this case the transaction was more than two months before the commission, and the defendant had no notice of a prior act of bankruptcy. But the defendant was not the person dealing with the bankrupt; he was the agent or servant of the bankrupt, and the person dealing with the bankrupt was the purchaser.

In order, therefore, to render the transaction valid, the jury should have been satisfied that the purchaser had no notice of a prior act of bankruptcy, as to which no question was put, nor, as it should seem, any evidence offered. The onus of showing the validity of the sale, in order to raise the question of property or no property in the plaintiff (assuming that it could be so raised), lay with the defendant; and, as he failed in showing the validity, the general rule applies; and the property was in the plaintiff by relation.

A further question arises on the eighty-second section, which provides that all payments really and bona fide made to a bankrupt before the date and issuing of a commission shall be deemed valid, notwithstanding a prior act of bankruptcy, provided the person so dealing with the bankrupt had not, at the time of such payment to him, notice of any prior act of bankruptcy.

Cash v. Young (1) and Hill v. Farnell (2) are authorities to show that a payment on a ready money purchase is within this section; (2) 9 B. & C. 45.

(1) 2 B. & C. 413.