directors.2 A corporation cannot, before it has achieved legal

existence, have agents or enter upon contractual relations. One might, says the Supreme Court of Illinois, as well say that a child in ventre sa mère may enter into a contract, or that its parents may bind it by contract, as that a corporation may enter into any contract, or transact any business, before it has a full and complete organization and existence as an entity.

§ 47. Power of promoter to make contract for corporation after granting of charter.

When a charter has been granted the corporation has in a sense achieved legal existence. The promoters are, however, not the agents of the corporation and cannot contract for, or otherwise represent it, and the company is not bound by the engagements made by them on its behalf pending complete organization. The

Rep. 1018, 51 C. C. A. 592; National
Conduit M'f'g Co. v. Connecticut
Pipe M'f'g Co., 73 Fed. Rep. 491;
Macey Co. v. Globe Wernicke Co.,
180 Fed. Rep. 401, 103 C. C. A. 547.
See post, §§ 71 and 67.

3. Gent v. Manufacturers & Merchants Ins. Co., 107 Ill. 652, 658, 6 Am. & Eng. Corp. Cas. 588.

4. Illinois.-Gent v. Manufacturers & Merchants Ins. Co., 107 Ill. 652, 658, 6 Am. & Eng. Corp. Cas. 588; Western Screw & Manufacturing Co. v. Cousley, 72 Ill. 531.

Kansas.-Whetstone V. Crane Bros. M'f'g Co., 1 Kan. App. 320, 41 Pac. 211.

United Kingdom and Colonies.-
Gunn v. London & Lancashire Fire
Ins. Co., 12 Com. Bench N. S. 694;
Payne v. New South Wales, etc.,
Co., 10 Exch. 283, and see Hutch-
ison v.
Surrey Consumers, etc.,
Ass'n, 11 C. B. 689.

Nor have the incorporators power to contract for the corporation pending its complete organization. (Moore & Handley Hardware Co. v. Towers Hardware Co., 87 Ala. 206, 6 So. 41, 13 Am. St. Rep. 23; Blood v. La Serena L. & W. Co., 113 Cal. 221, 45 Pac. 252; Safety Deposit Life Ins. Co. v. Smith, 65 Ill. 309; Stowe v. Flagg. 72 Ill. 397; Montgomery v. Whitbeck, 12 N. D. 385, 96 N. W. 327; Coyote G. & S. M. Co. v. Ruble, 8 Or. 284, 291-292; McVicker v. Cone, 21 Or. 353, 28 Pac. 76; Ireland v. Globe Milling & Reduction Co., 20 R. I. 190, 38 Atl. 116, 38 L. R. A. 299. Cf. Harrison v. Vermont Manganese Co., 1 N. Y.

corporation may be bound by the contract of the promoters, made after the granting of its charter, if a provision to that effect is contained in the corporate charter, or in the statute under which the company is organized.5 Power to contract for the company pending its complete organization would, if granted by charter or statute, generally be conferred upon the incorporators, or upon the directors named in the charter, or upon some person or persons occupying toward the corporation some more definite relation than that of promoter.

§ 47. Power of promoter to make contract for corporation after complete organization.

After a corporation has been fully organized, its management

Misc. 402, 49 St. Rep. 873, 20 Supp. 894), except perhaps as to acts necessary to be performed to perfect the corporate organization. Low v. Conn. & Pass. Rivers R. R., 45 N. H. 370, 377; Hall v. Vermont & Mass. R. R. Co., 28 Vt. 401, 407 and see post, § 84, note 14.

The incorporators' contract would, to bind the corporation, have to be sanctioned by a majority of them. Clarke v. Omaha & Southwestern R. R. Co., 5 Neb. 314, 328; Low v. Conn. & Passumpsic Rivers R. R., 45 N. H. 370, 379; Bell's Gap Railroad Co. v. Christy, 79 Pa. 54, 59, 21 Am. Rep. 39; Tift v. Quaker City National Bank, 141 Pa. 550, 21 Atl. 660, 30 Am. & Eng. Corp. Cas. 339; Tanner V. Sinaloa Land & Fruit Co., 43 Utah 14, 134 Pac. 586.

5. See Joint Stock Companies Act of 1844 (Stat. 7 & 8 Vict. Chap. 110), § 23; Bull v. Chapman, 8 Exch. 444; Taylor v. Crowland Gas & Coke Co., 23 L. J. Exch. N. S.

254, 10 Exch. 293;
In re
State
Fire Ins. Co., 36 L. J. Ch. N. S. 634,
and see Hill v. Gould, 129 Mo. 106,
116, 30 S. W 181, and Munson v.
Syracuse, etc., R. R., 103 N. Y. 58,
76, 8 N. E. 355, 29 Am. & Eng. R. R.
Cas., 377.

As to the interpretation of such statutes see Gent v. Mfrs. & Mchts. Ins. Co., 107 Ill. 652, 6 Am. & Eng. Corp Cas. 588, and Montgomery v. Whitbeck, 12 N. D. 385, 96 N. W. 327.

6. White v. Kahn, 103 Ala. 308, 15 So. 595; Gent v. Mfrs. & Merchants Ins. Co., 107 Ill. 652; Montgomery v. Whitbeck, 12 N. D. 385, 96 N. W. 327; Ireland v. Globe Milling & Reduction Co., 20 R. I. 190, 38 Atl. 116, 38 L. R. A. 299; Badger Paper Co. v. Rose, 95 Wis. 145, 70 N. W. 302, 37 L. R. A. 162.

7. Allman v. H. R. & E. R. R. Co., 85 Ill. 521, 7 Rep. 236; Selkirk v. Windsor, etc., R. R. W. Co., 20 Ont. L. R. 290, 15 Ont. W. R. 87.

rests with the directors, and the promoters have, as such, no further connection therewith. It sometimes happens that the promoters of a corporation are, after the organization of the company, authorized to represent it and to make engagements on its behalf. Whatever power may be so granted to the promoters rests, not upon their relation of promoters to the corporation, but upon some agency independent thereof.

§ 49. Liability imposed upon corporation by act of incorporation, or by articles of association.

A corporation becomes liable for the contracts previously made on its behalf by the promoters if a provision to that effect is contained in the special act by which the corporation is created, or the general statute under which it is organized.9

A provision contained in the articles of association that the company shall assume responsibility for the contracts made by its promoters, imposes no liability upon the corporation. The articles of association constitute, it is held, a contract between the share holders inter se, and not a contract between the corporation and third parties, and a provision in the articles that the corporation shall enter upon or carry into effect a contract made by its promoters, cannot be availed of by the opposite party to such contract.10 A provision of the articles of association that

Utah.-Wall v. Niagara Mining & Smelting Co., 20 Utah 474, 59 Pac. 399, citing Taylor on Private Corporations, § 87.

United Kingdom and Colonies.— Carden v. General Cemetery Co., 5 Bing. N. C. 253; Tilson v. Warwick Gas Light Co., 4 Barn. & Cres. 962; Scott v. Lord Ebury, L. R. 2 C. P. 255, 264, 36 L. J. C. P. 161; In re Brampton & Longtown Ry. Co., L. R. 10 Ch. App. 177; Hitchins v. Kilkenny, etc., Ry., 9 C. B. 536.

10. Weatherford, etc., Ry. Co. v.

the company shall assume the obligations incurred on its behalf by its promoters may, however, constitute an authorization to the board of directors to assume responsibility for the agreements made by the promoters, or to pay for the benefits received thereunder.11

§ 50. Assumption of liability by the fully organized corporation. While the promoters have no power to represent or contract for the corporation, the corporation may, after it has been fully organized, agree to be bound by the terms of the contracts made by them on its behalf. It is sometimes said that the corporation may, after it has attained legal existence and complete organization, "ratify" the contracts made on its behalf by the promoters.12 This statement is not strictly correct. There can,