Sometimes it will happen that a number of persons will assume to institute a corporation without having received any charter whatever. If a corporation be afterwards formed and the act be lawfully ratified, either expressly or by receiving a benefit, the corporation may be held upon the act done before the formation of the corporation.1 The corporation may claim the benefit of an act done on its behalf before the incorporation.2 But if there be no ratification, because no corporation results, the promoters or alleged corporators incur the responsibility of partners and may be held liable as such.8 If a ratification has taken place, it would seem to be true that where the other party has contracted with the corporation he ought not to be permitted to hold the corporators liable as partners.4 Yet if the act was one incapable of ratification,5 the corporation afterwards formed cannot be held; as, for instance, where the act was prohibited by an express rule of law.6 If no corporation be afterwards

3 See Sec. 118 et seq., post.

4 The cases may be found collected in 9 Am. & Eng. Encyc. Law (2d ed.), 471, notes 1 and 2.

11 Thomp. on Corp., sec. 480.

2 4 Thomp. on Corp., sec. 5321.

3 Kaiser v. Lawrence Sav. Bank, 56 Iowa, 104; Pettis v. Atkins, 60 I11 454; Allen v. Pegram, 16 Iowa, 163; McLennan v. Anspaugh, 2 Kan. App. 269; Hauser v. Tate, 85 N. C. 81.

4 See Huffcutt, Agency, 44.

5 This statement applies only to those acts which are beyond the scope of the corporate powers because forbidden by law, as explained in Sec. 32, ante. But all torts and contracts merely beyond corporate powers may be ratified. See next note.

6 California Bank v. Kennedy, 167 U. S. 362, 368, contains a correct statement of the rule, but it is wrongly applied in that case. But it is properly applied in Central formed, lie may hold the parties liable on the theory of an implied warranty of authority,7 under the general principles of the law of agency.