properly speaking, be no "ratification" of a contract entered into on behalf of the corporation at a time when it had not attained legal existence. A ratification dates back to the making of the original contract and necessarily assumes a principal in existence and capable of contracting at that time. There can be no ratification of a contract entered into at a time when it could not have been made binding upon the principal.13 There Heel Shoe Co. v. Hartt, 181 Ind. 167; 103 N. E. 1063, 50 L. R. A. N. S. 979. Iowa.-Dubuque Female College v. District Township of Dubuque, 13 Iowa 555. Missouri.-State v. People's U. S. Bank, 197 Mo. 574, 591, 94 S. W. 953, 957. Nevada.-Alexander v. Winters, 23 Nev. 475, 49 Pac. 116, rehearing denied, 24 Nev. 143, 50 Pac. 798. New Hampshire.-Low v. Conn. & Passumpsic Rivers R. R., 45 N. H. 370, 378. New York.-Mesinger v. Mesinger Bicycle Saddle Co., 44 App. Div. 26, 60 Supp. 431; Gordon v. House of Childhood, Inc., 83 Misc. 74, 77, 144 Supp. 685. Pennsylvania.—Tift V. Quaker City National Bank, 141 Pa. 550, 21 Atl. 660, 38 Am. & Eng. Corp. Cas. 339. South Dakota.-Kaeppler v. Redfield Creamery Co., 12 S. D. 483, 81 N. W. 907. Teras.-Lancaster G. & C. Co. v. Murray G. S. Co., 19 Tex. Civ. App. 110, 47 S. W. 387. (Writ of error refused, 93 Tex. 732). ExlineReimers Co. v. Lone Star Life Ins. Co., Tex. Civ. App. - 171 S. W. 1060. Washington.-Chilcott v. Washington State Colonization Co., 45 Wash. 148, 88 Pac. 113. Wisconsin-Pratt V. Oshkosk Match Co., 89 Wis. 406, 62 N. W. 84. United Kingdom and Colonies.— Spiller v. Paris Skating Rink Co., L. R. 7 Ch. Div. 368; Mason v. Harris, L. R. 11 Ch. Div. 97, 103. 13. Federal.-Marconi's Telegraph Co. v. Cross, 16 Hawaii 390. Indiana.-See Smith v. Parker, 148 Ind. 127, 133, 45 N. E. 770, 772. Kentucky.-Oldham v. Mt. Sterling Imp. Co., 103 Ky. 529, 45 S. W. 779. Massachusetts.-Bradford v. Metcalf, 185 Mass. 205, 207, 70 N. E. 40; Abbott v. Hapgood, 150 Mass. 248, 22 N. E. 907, 5 L. R. A. 586, 15 Am. St. Rep. 193. Minnesota.-McArthur v. Times Printing Co., 48 Minn. 319, 51 N. W. 216, 31 Am. St. Rep. 653. Missouri.-Queen City Furniture Co. v. Crawford, 127 Mo. 356, 364365, 30 S. W. 163, 165–166. New York.-Oakes v. Cattaraugus Water Co. (dissenting opinion), 143 N. Y. 430, 440, 38 N. E. 461; 62 N. Y. St. Rep. 445, 26 L. R. A. 544; Stainsby v. Frazer Metallic Boat Co., 3 Daly 98. Rhode Island.-Ireland v. Globe is no doubt that a corporation can, by agreement express or implied, obligate itself to perform the contracts made on its behalf by its promoters, but it does so, not by ratifying the previous contract, but by entering upon a new agreement upon the terms contained in the contract which its promoters assumed to make on its behalf.14 The distinction is generally one of words rather than of substance, and frequently leads to unnecessary confusion. Occasionally, however, the distinction affects matters of substance, as Milling & Reduction Co., 20 R. I. 190, 38 Atl. 116, 38 L. R. A. 299. Texas.-Weatherford M. W. & N. W. Ry. Co. v. Granger, 86 Tex. 350, 24 S. W. 795, 40 Am. St. Rep. 837; Jones v. Smith, 87 S. W. 210. V. West Virginia.-Richardson Graham, 45 W. Va. 134, 30 S. E. 92. Wisconsin.-Badger Paper Co. v. Rose, 95 Wis. 145, 70 N. W. 302, 37 L. R. A. 162. United Kingdom and Colonies. In re Empress Engineering Co., L. R. 16 Ch. Div. 125, 128, 130; Melhado v. Porto Alegre Ry. Co., L. R. 9 C. P. Cas. 503, 505, 507; Kelner v. Baxter, L. R. 2 C. P. 174; In re Northumberland Ave. Hotel Co., L. R. 33 Ch. Div. 16, 21-22; Howard v. Patent Ivory Mfg. Co, L. R. 38 Ch. Div. 156, 164; Scott v. Lord Ebury, L. R. 2 C. P. 255, 36 L. J. C. P. N. S. 161. See Note to Oakes v. Cattaraugus Water Co., 26 L. R. A. 544, 548. Cf. Stanton v. N. Y. & Eastern R. R. Co., 59 Conn. 272, 285, 22 Atl. 300, 21 Am. St. Rep. 110; Schreyer v. Turner Flouring Mills Co., 29 Or. 1, 43 Pac. 719. 14. Federal.-Marconi's Telegraph Co. v. Cross, 16 Hawaii 390. Indiana.-Smith v. Parker, 148 Ind. 127, 133, 45 N. E. 770. Kentucky.-Oldham v. Mt. Sterling Imp. Co., 103 Ky. 529, 45 S. W. 779. Massachusetts.-Koppel v. Mass. Brick Co., 192 Mass. 223, 78 N. E. 128; Bradford v. Metcalf, 185 Mass. 205, 207, 70 N. E. 40; Holyoke Envelope Co. v. U. S. Envelope Co., 182 Mass. 171, 65 N. E. 54; Pennell v. Lothrop, 191 Mass. 357, 77 N. E. 842. Minnesota-McArthur V. Times Printing Co., 48 Minn. 319, 51 N. W. 216, 31 Am. St. Rep. 653; Wasser v. Western Land Securities Co., 97 Minn. 460, 464-465, 107 N. W. 160, 161; Battelle v. Northwestern Cement & Concrete Pavement Co., 37 Minn. 89, 33 N. W. 327. Missouri.-Queen City Furniture Co. v. Crawford, 127 Mo. 356, 364365, 30 S. W. 163, 165-166; Richard Brown & Son Contr. Co. v. Bambrick Bros. Const. Co., 150 Mo. App. 505, 131 S. W. 134; Van Noy v. Central Union Fire Ins. Co., 168 Mo. App. 287, 153 S. W. 1090. New York.-Oakes v. Cattaraugus Water Co. (dissenting opinion), 143 N. Y. 430, 440, 38 N. E. 461; 62 N. in McArthur v. Times Printing Co.,15 where a contract of employment would, if the promoters' agreement had been considered "ratified and the contract in suit as entered into at the date of the original agreement, have been a contract not to be performed within one year and therefore void under the statute of frauds. The court, however, held that the agreement of the promoters was not ratified; that the contract in suit was made at the time that the corporation agreed to be bound by the terms of the promoters' contract; that it was to be performed within one year from that date, and was therefore valid and enforceable. 66 It seems to be held in Re Dale & Plant, Ltd.,16 that a resolution of the directors in terms " confirming" the agreement of the promoters, is ineffectual because such an agreement cannot be "confirmed," and that the resolution of the directors to be effectual should have provided that the corporation enter upon a new agreement upon the same terms as those contained in the agreement assumed to have been made for it by its promoters. This ruling, if intended by the court, is altogether too technical, and will, it is hoped, not be followed. § 51. Status of promoter's contract pending action of corporation. It has been suggested that a contract made by the promoters on behalf of a corporation to be organized by them, is to be con Co., L. R. 33 Ch. Div. 16, 21-22; 15. 48 Minn. 319, 51 N. W. 216, 31 Am. St. Rep. 653. 16. 61 L. T. N. S. 206; cf. Mun sidered a continuing offer on the part of the opposite party to the agreement, which may, unless previously withdrawn, be accepted by the corporation after its complete organization.17 The status of the promoters' contract pending the action of the corporation thereon, depends largely upon the terms of the agreement. The contract while not binding upon the corporation is ordinarily enforceable against the promoters because of their assuming to act as agents for a non-existent principal.18 The agreement also renders the opposite party liable in damages to the promoters if he, after the organization of the corporation, refuses to contract with it.19 The agreement of the parties is, therefore, pending the organization of the corporation, something more than a continuing offer which the party is at liberty to withdraw before its acceptance by the corporation. If the promoters expressly stipulate, as they sometimes do, that they shall not be personally liable upon their contract, there is no consideration for the agreement to enter into a contract with the proposed corporation, and the so called agreement amounts, in the absence of an independent consideration, to nothing more than an offer which may be withdrawn at any time before acceptance. son v. Magee, 161 N. Y. 182, 185, 55 N. E. 916, reargument denied, 161 N. Y. 638, 57 N. E. 1118; also perhaps James Young & Sons, Ltd., v. Gowans, 10 Scots Law Times 85. 17. Massachusetts.-Penn Match Co. v. Hapgood, 141 Mass. 145, 149, 7 N. E. 22; Athol Music Hall Co. v. Carey, 116 Mass. 471. Minnesota.-Minneapolis Threshing Machine Co. v. Davis, 40 Minn. 110, 41 N. W. 1026, 3 L. R. A. 796, 12 Am. St. Rep. 701. Texas.-Weatherford M. W. & N. W. Ry. Co. v. Granger, 86 Tex. 350, 355, 24 S. W. 795, 797, 40 Am. St. Rep. 837. Utah.-Wall v. Niagara Min. & Sm. Co., 20 Utah 474, 59 Pac. 399. Wisconsin.-Pratt V. Oshkosh Match Co., 89 Wis. 406, 62 N. W. 84, citing Morawetz on Corporations, § 548. So held of a contract signed by the opposite party, but not on behalf of the corporation, in Lauder v. Peoria Agricultural & Trotting Soc., 71 Ill. App. 475, 480, and in Omaha Loan & Trust Co. v. Goodman, 62 Neb. 197, 86 N. W. 1082. 18. See post, § 77. It has also been suggested that the agreement with the promoters is an alternative offer to be accepted and carried out either by the promoters, or by the corporation after its organization.20 A party entering into an agreement with promoters assuming to act on behalf of a proposed corporation, while bound to perform upon demand of the corporation, cannot be compelled to yield performance to the promoters as individuals if the corporation is not organized.21 The agreement is, therefore, not an alternative offer which may be carried out by either the promoters or the corporation. § 52. Status of subscription agreements pending action of corporation. Agreements to subscribe for the shares of a company to be formed stand upon a basis somewhat different from other contracts made with the promoters. These subscription agreements are not binding upon the corporation until accepted by it,22 but some cases hold that the agreement is binding as a contract between the subscribers, and that none of them can withdraw therefrom unless with the consent of all.23 Other cases hold that the 20. Holyoke Envelope Co. v. U. S. Envelope Co., 182 Mass. 171, 65 N. E. 54. 21. See post, § 79. 22. Maine.-Starrett v. Rockland, etc., Ins. Co., 65 Me. 374. Minnesota.-Minneapolis Threshing Machine Co. v. Davis, 40 Minn. 110, 41 N. W. 1026, 3 L. R. A. 796, 12 Am. St. Rep. 701; Red Wing Hotel Co. v. Friederich, 26 Minn. 112, 1 N. W. 827. Missouri.-Joy v. Manion, 28 Mo. App. 55. New York.-Yonkers Gazette Co. v. Taylor, 30 App. Div. 334, 51 Supp. 969, 5 N. Y. Ann. Cas. 384. Ohio.-Dayton, etc., Turnpike Co. v. Coy, 13 Ohio St. 84. Wisconsin.-Badger Paper Co. v. Rose, 95 Wis. 145, 70 N. W. 302, 37 L. R. A. 162, and cases cited; Franey v. Warner, 96 Wis. 222, 231-232, 71 N. W. 81, 84. Reid on Corporate Finance, § 121. The corporation does not, by refusing to accept the plaintiff's subscription, become liable for the return to him of moneys paid by him to the promoter, but never received by the corporation. Commonwealth Bonding & Casualty Ins. Co. v. Thurman, Tex. Civ. App. 176 S. W. 762. 23. Alabama.-Knox v. Childers |