answer.

plaintiff. These allegations are, however, put in issue by the The proof would have justified a finding by the jury that the plaintiff's promise to abandon the enterprise, and leave the field open to Cowan and his associates, was an element that entered into the contract, and an inducement to its execution. No such purpose, however, appears upon the face of the contract. The consideration there expressed for the payment of the money was services which the plaintiff could lawfully perform, and which it is claimed he did perform, for the defendant. The court was not warranted in holding, as matter of law, that the purpose of the contract was forbidden by public policy, or that it was made for a purpose other than that stated upon its face. If that question was in the case at all, it was one for the jury, as the evidence was not conclusive, but open to different inferences. But we think that this agreement, upon any view of the facts, does not come within that class of contracts which are forbidden or are held void on grounds of morality or public policy. There was no purpose to suppress competition or bidding at any public sale, or letting of a contract for public purposes, or in restraint of trade, or to influence the action of public officials. Assuming that both the plaintiff and Cowan intended to apply for the franchise, and that the latter persuaded the former to abandon his purpose, and aid him in the manner mentioned in the contract, for the consideration promised, there was nothing immoral, or that threatened the public interests or the public good, in such an arrangement. If the business of a private individual or corporation is threatened with competition, it is not illegal or immoral if one can persuade his competitor to abandon an enterprise in which both cannot succeed, and take employment with the one remaining in the business, at a stated compensation. Such an agreement, fairly entered into, is legitimate business. If the parties in this case deemed it for the interest of both that only one application should be made for a franchise that could be granted to but one of them, the arrangement does not, as I conceive, violate any settled rule or principle of public policy. Match Co. v. Roeber, 106 N. Y. 473; 13 N. E. Rep. 419; Leslie v. Lorillard, 110 N. Y. 519; 18 N. E. Rep. 363; Tode v. Gross, 127 N. Y. 480; 28 N. E. Rep. 469; Thermometer Co. v. Pool, 51 Hun, 157; 4 N. Y. Supp. 861; Cameron v. Water Co., 62 Hun, 269; 16 N. Y. Supp.

!

757. For these reasons the judgment should be reversed, and a new trial granted, costs to abide the event.

GRAY, J. (dissenting). If, at the time the agreement set forth in the complaint was made, there had been such a corporation as the Cattaraugus Water Company, then it would be quite conceivable that there might be a ratification by it of the act of a person standing in the relation to it of an officer or agent. Ratification presupposes the doing of an act by an agent which a principal could have authorized. It is defined as an agreement to adopt an act performed for us by another, and is equivalent to an original authority to do the thing in question. But here Cowan represented no one but himself. He and others were proposing to associate themselves in a corporate project. He was a mere promoter, and he had no principal. When the plaintiff entered into the agreement with Cowan, he was bound to inform himself as to whether the latter represented an actual principal. If he neglected to do so, his agreement was worthless, except so far as it imposed upon Cowan, individually, a liability for undertaking to act with no responsible principal behind him. Dunl. Paley Ag. *374. We may assume that there was sufficient evidence upon which a jury might have found that there was ratification, if there had been a contract made for the company; but it ought to be perfectly manifest that, unless there had been in esse a corporation de facto or de jure, which could have made Cowan its attorney or agent, there could not be such a thing as a ratification. The rule is stated in Morawetz Priv. Corp. (§ 547) as follows, viz.: "A corporation is not responsible for acts performed or contracts entered into before it came into existence, by promoters or other persons assuming to bind the company in advance." Again, at section 549, the author says that "a corporation cannot be charged with the acts or contracts of its promoters by virtue of the technical doctrine of ratification. This doctrine applies only to acts performed on behalf of an existing principal." These statements are amply borne out by the authorities cited by the author, and are founded in clear reason. And see Railroad Co. v. Magistrates of Helensburgh, 2 Macq. H. L. Cas. 391, 409. There may, however, be an adoption of agreeVOL. X.-78

ments made by promoters of companies by a formal acceptance, or, if it is a case where the members of the corporation would be chargeable with knowledge of the contract, and had knowingly received the benefit of an engagement entered into by promoters, adoption might be implied. The adoption of such an agreement by a corporation is equivalent, of course, to the creation of a new agreement, and is governed by all the rules applicable to the formation of a contract under the common law. 1 Morawetz Priv. Corp. § 549. I am unable to believe, and I know of no authority for holding, that adoption, in such a case of a written contract could rest in implication from the mere statements or acts of the interested party who made it, with no evidence to show any knowledge or acquiescence on the part of any other officer or member of the corporation. I think any other view would be a most hazardous one to take for the interests of shareholders in corporations.

Assuming that a corporation may become obligated by a contract made for it before its incorporation, through acceptance or adoption, it should at least appear, in order to justify a verdict from the facts, that those facts established a knowledge by its agents of its existence and of its terms, or that the benefits, the acceptance of which is relied upon to constitute adoption, were of that nature as to presuppose, and to charge the company or its agents with, knowledge of a contract with the person from whom derived. In this case it is not proved that there was any formal or official action upon the agreement, or that any of the directors knew of such, outside of Cowan himself. There was nothing which amounted to a representation by the defendant to plaintiff that the contract was subsisting and valid. Wilson v. Railway Co., 2 De Gex, J. & S. *491. There may have been sufficient. evidence in the case to warrant the submission to a jury of the question whether the defendant had not, through its chief officer and manager, become liable to pay plaintiff the value of his services, as the evidence might exhibit that value to be. But this is not such an action. The plaintiff rests his action solely upon the obligation which the agreement set forth imposed upon the defendant, and if, as it is conceded, there could have been none imposed at the time, it could never have become one, in the absence of an adoption of the agreement. As I have said, this

agreement, so far as the record discloses, was never brought to the knowledge of any of the directors, or of the members of the corporation; and it is not at all easy to see what services the plaintiff actually did under it, before or after the company was formed, which could possibly have led any one to suppose that he was under a contract with it, of the nature of the one in question, or of any other nature. We assume, however, that there were services rendered to and accepted by the defendant, but we hold that they were to be recovered for according to their value, and that the contract produced by the plaintiff never became the agreement of the company, so as to obligate it absolutely, and in all events, to pay him the sum stated therein upon the completion of the water works. For these reasons the judgment should be affirmed, with costs.

EARL, PECKHAM and BARTLETT, JJ., concur with O'BRIEN, J.; FINCH, J., concurs with GRAY, J.; ANDREWS, Ch. J., not sitting. Judgment reversed.*

1. Powers of president of corporation.-The powers of the president of a corporation by virtue of his office are considered at length in note to Wait v. Nashua Armory Assn., 5 Am. R. R. & Corp. Rep. 149, 151. See, also, 7 Am. R. R. & Corp. Rep. 160, notes 5 and 6; Greig v. Riordan, 99 Cal. 316; 33 Pac. Rep. 913. Where the president is the managing and controlling officer of a corporation and, as such, negotiates and completes contracts on behalf of the corporation, he has power to bind the corporation by acknowledging an error in the contract and consenting to a change therein to correspond to the truth. Nichols v. Scranton Steel Co., 137 N. Y. 471; 33 N. E. Rep. 561.

The president, who is also the general manager and chief executive officer of a corporation, the principal business of which is the investment of its funds in mortgages and other securities, may bring a writ of entry in the name of the corporation to foreclose a mortgage owned by it. Trustees of Smith Charities v. Connolly, 157 Mass. 272; 31 N. E. Rep. 1058.

The president of a corporation has no power, without the authority of the directors or stockholders, to consent to the appointment of a receiver to wind up the affairs of the corporation. Walters v. Anglo-American Mortgage & Trust Co., 50 Fed. Rep. 316.

2. Adoption and ratification of contracts made by promoters.- See for treatment of question McArthur v. Times Printing Co., 5 Am. R. R. & Corp. Rep. 743, and note.

* Reported in 38 N. E. Rep. 461.

Corr & Co. v. SUTTON.

(Supreme Court of Michigan, October 16, 1894.)

FOREIGN CORPORATIONS. STATE CANNOT IMPOSE CONDITIONS UPON THEIR RIGHT TO TRANSACT INTERSTATE COMMERCE. Act of Michigan, 1893, No. 79, requiring all domestic corporations thereafter organized and all foreign corporations thereafter permitted to do business in the state, to pay a franchise fee, and declaring all contracts made by them before complying with the act to be void, does not apply to foreign corporations selling goods in the state through itinerant agents, since, if so applied, it would be a restraint upon interstate commerce and void.

R. B. Wilkinson, for appellant. Bowen, Douglas & Whiting and A. N. Ellis, Attorney-General, for appellee.

HOOKER, J. The plaintiff, a corporation of the state of Illinois, recovered a judgment in the Wayne County Circuit Court, from which the defendant appeals. The finding of facts shows that plaintiff was engaged in the business of shipping from Illinois goods manufactured in that state, to its customers in Michigan, on orders given it by mail, or taken by its agents in Michigan; that on January 23, 1894, the plaintiff, through its duly authorized agent, entered into a written contract with the defendant, in the city of Detroit, Mich., for the sale to him of a quantity of white lead at a specified price, to be paid for upon delivery; that on January 27, 1894, delivery of the lead was tendered at Detroit. The defendant refused to receive the lead, claiming the contract to be void. At the time of making such tender the plaintiff had not filed articles of association in this state, and had not paid to the secretary of state a franchise fee, as provided by No. 79 of the Laws of 1893. Counsel for plaintiff seek to avoid the effect of said act, contending that it is in conflict with the provision of the Federal Constitution that "congress shall have power to regulate commerce among the several states." Art. 1, § 8. The defendant relies upon the familar rule that states may impose conditions upon the right of foreign corporations to do business within their limits. This rule has been recognized by the federal courts where it does not conflict with the power of congress to regulate commerce. See Paul v. Virginia, 8 Wall. 168. But, where the effect is to restrain or obstruct