EDITORIAL DEPARTMENT it was formerly held that the question is not whether there can be a binding contract at law, but whether the court will permit the Company to use its powers under the act in direct opposition to an arrangement made with a third party prior to the act upon the faith of which they were permitted to obtain power. The decision has been criticised for assuming any identity between the promoters and the corporation itself. The view now taken in England is that the corporation is not liable on contracts ante dating its formation, although made on its account, but that the corporation may be come liable on a new contract. In deter mining- whether or not such contract exists, steps taken by either party in the belief that the original agreement made through the pro moter still exists, will not be considered. "The American cases both at law and in equity are overwhelmingly in favor of hold ing the corporation liable on the contract antedating its existence wherever it has rati fied or adopted the same; ratification or adop tion being shown either by express resolution of the managing body, or by accepting the benefits or fruits of the contract. The Amer ican courts insist on some act by the cor poration subsequent to organization showing an intent to be bound." Estoppel is the theory of some courts. In others the agreement between the promoter and third person is regarded as an open offer to the corporation, which it may accept when organized, and thus create a new contract between the third persoa and the corporation. "Both English and American decisions recog nize the possibility of a new contract between the corporation when organized and the third person, the broad line of distinction between the cases being the manner in which such a contract can be made out." "The American decisions, while practically unanimous in the result reached, are far from satisfactory as to the legal principles under lying the liability. The English cases, on the other hand, have developed a logical, con sistent theory of liability. The consequences of the liberal American view on the question of proof are not unjust: the corporation is protected against improvident agreements made on its account by promoters, since it has
the power of acceptance or refusal. It is sub mitted that an equally just result is possible without doing violence to recognized prin ciples of agency and contract." CORPORATIONS (Public Policy). The ad dress of Hon. Peter S. Grosscup, before the Ohio State Bar Association on " The Corpo ration Problem and the Lawyer's Part in its Solution," is printed in the December American Law Review (V. xxxix, p. 835). The corporation is the great and all-powerful fact of our generation. Another great fact in American life, is the individuality of the American. One of the predominating influ ences in the development of the individual man has been his right to conquer and hold individual property. Two generations ago, this country was confronted with a great fact, the public-landed domain. This country, knowing that the individual was its greatest force and its greatest security, opened lands. to men and women who would live there. At this time the corporation was creeping in,bringing a far larger domain than that repre sented by all the agricultural lands of this country. Had we dealt with this new domain of property as we dealt with the landed do main, we should not have had this outcry against corporations. The people feel that the men who own this property are, in a cer tain sense, alien to their way of living. Corporations were first organized by special legislation, but after a while the special acts no longer filled the purpose. Then came our policy of general laws, and that policy has gone on, loosening the grip of government upon the corporation, instead of tightening it, states running a race as to which one could grant the freest and easiest terms to those wishing to incorporate, until it has come to pass that the granting of the seal to a corporation, is a mere empty administrative act of the Secretary of State. A corporation may be organized on any line it pleases. This is the worst feature of our present corporation law. The Ameri can people object that men shall make great sums dishonestly out of the corporation policy of the country. The problem is not how to regulate the corporation, in the matter of prices it shall charge, but how to make the corporation honest; how to make it serve its purpose as an agency or government as well
