This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The original rule was that a corportion "acts and speaks only by its common seal. . . . It is the fixing of the seal, and that only, which unites the several assents of the individuals who compose the community and makes one joint assent of the whole."1 Exceptions were made to this rule in cases of trivial or routine business.2 When trading and manufacturing corporations became important, it was evident that to require the case of the corporate seal would destroy the practical effectiveness of such corporations, and the exceptions multiplied until it may be said that in the United States they have become the rule, and now a corporation need not affix its seal to a contract,3 except in cases such as deeds,4 where a natural person should
1 Black. Com. I. 475; Preston v. R. R., 17 Beav. 114 (117) ; Gooday v. R. B., 17 Beav. 132 (13G) ; Winne v. Bampton, 3 Atk. 473; Waller v. Bank, 3 J. J. Mar. (Ky.) 201; Garrison v. Combs, 7 J. J. Mar. (Ky.) 84; 22 Am. Dec. 120.
2 Church v. Imperial, etc., Co., 6 Ad. & El. 846; 33 E. C. L. 230; Diggle v. R. R., 5 Exch. 442.
3 Gottfried v. Miller, 104 U. S. 521; First, etc., Bank v. Mining Co., 89 Fed. 439; Crowley v. Mining Co., 55 Cal. 273; Savings Bank v. Davis, 8 Conn. 191; B. S. Green Co. v. Blodgett, 159 Ill. 169; 50 Am. St. Rep. 146; 42 N. E. 176; Columbia Casino Co. v. Columbian Exposition, 85 Ill. App. 369; Globe, etc., Co. v. Reid, 19 Ind. App. 203; 47 N. E. 947; modified on rehearing, 49 N. E. 291; Muscatine, etc., Co. v. Lumber Co., 85 Ia. 112; 39 Am. St. Rep. 284; 52 N. W. 108; Commercial Bank v. Mfg. Co., 1 B. Mon. (Ky.) 13; 35 Am. Dec. 171; Fitch v. Mill Co., 80 Me. 34; 12 Atl. 732; Speirs v. Drop-Forge Co., 174 Mass. 175; 54 N. E. 497; National, etc., Association v. Stone Co., 49 Minn. 220; 51 N. W. 916; Carey, etc., Co. v. Cain, 70 Miss. 628; 13 So. 239; Goodwin v. Screw Co., 34 N. H. 378; Crawford v. Longstreet, 43 N. J. L. 325; Western, etc., Co. v. Bank, 9 N. M. 1; 47 Pac. 721; Leinkauf v. Caiman, 110 N. Y. 50; 17 N. E. 389; Hand v. Coal Co., 143 Pa. St. 408; 22 Atl. 709; Gassett v. Andover, 21 Vt. 342; Winterfield v. Brewing Co., 96 Wis. 239; 71 N. W. 101; Ford v. Hill, 92 Wis. 188; 53 Am. St. Rep. 902; 66 N. W. 115. The seal is especially unnecessary where the corporation has no seal. Omaha, etc., Co. v. Burns, 49 Neb. 229; 68 N. W. 492; Stevens v. Ball Club, 142 Pa. St. 52; 11 L. R. A. 860; 21 Atl. 797; Turner v. Lumber Co., 106 Tenn. 1; 58 S. W. 854.
4 Danville Seminary v. Mott, 136 Ill. 289; 28 N. E. 54; Caldwell v. Mfg. Co., 121 N. C. 339; 28 S. E, 475; Thayer v. Mill Co., 31 Or. 437? 51 Pac. 202. (Citing In re St. Helen Mill Co., 3 Sawy. (U. S. C. C.) 88.) affix his seal.5 This rule applies to public as well as to private corporations at Modern Law, and a public corporation may make a valid contract without affixing the corporate seal, if it is such a contract that a natural person would not be required to execute it under seal, and if the charter or other statute does not require a seal.6 The presence of a corporate seal has still some legal effect in some jurisdictions. An instrument sealed with a corporate seal is treated as prima facie the instrument of the corporation,7 while if such seal is not affixed authority to execute the instrument must be shown.8 In some jurisdictions the absence of a corporate seal prevents the instrument from being a corporate obligation.9
In Tennessee it is held that the act abolishing private seals does not change the law as to corporate seals,10 but the omission of a seal from a corporate deed does not avoid it in equity, but only in law.11 The seal is said to be unnecessary except in case of contract of unusual or extraordinary character.12 In Canada a contract must be in the form required by the charter or under seal.13 In England the courts adhere to the old rule formally, though they have so honey-combed it with exceptions that it is practically obsolete.
Where a seal is proper, it is held in most jurisdictions that any form of mark intended as a seal may be adopted and used by the corporation.14 Thus it may adopt the private seal of
5Benbow v. Cook, 115 N. C. 324; 44 Am. St. Rep. 454; 20 S. E. 453.
6 Gordon v. San Diego, 101 Cal. 522; 40 Am. St. Rep. 73; 36 Pac. 18; affirming in bane 32 Pac. 885; Frankfort Bridge Co. v. Frankfort, 18 B. Mon. (Ky.) 41; Matthews v. Westborough, 134 Mass. 555; Bren-nan v. Weatherford, 53 Tex. 330; 37 Am. Rep. 758.
7 Mills v. Mining Co., 132 Cal. 95; 64 Pac. 122.
8 Degnan v. Thorougbman, 88 Mo. App. 62.
9 St. Joseph's, etc., Society v.
Church, 3 Pen. (Del.) 229; 50 Atl. 535.
10 Garrett v. Land Co., 94 Tenn. 459; 29 S. W. 726.
11 Precious Blood Society v. El-sythe, 102 Tenn. 40; 50 S. W. 759.
12Diggle v. Ry., 5 Exch. 442; Paine v. Guardians, 8 Q. B. 326; 55 E. C. L. 325.
13 Garland, etc., Co. v. Electric Co., 301 Ont. 40.
14 Blood v. La Serena, etc., Co., 113 Cal. 221; 45 Pac. 252; reversing in banc 41 Pac. 1017; Johnston v. Crawley, 25 Ga. 316; 71 Am. Dec one of its officers,15 or the word "seal,"16 or "L. S.,"17 or a scroll seal,18 or a piece of paper attached by a wafer, without any sort of impression.19