## Facts

- C. A. Nimocks, acting as a promoter for a planned newspaper corporation, arranged for McArthur to work as an advertising solicitor.
- On September 12, 1889, Nimocks purported to contract in the corporation’s name for McArthur’s employment for one year beginning October 1, 1889.
- The corporation was not organized until October 16, 1889, but McArthur began work on October 1 and continued working until April 1890.
- After incorporation, corporate officers knew of the arrangement and permitted McArthur to perform without formally approving, repudiating, or redefining the contract’s terms.
- The company discharged McArthur in April 1890.
- McArthur claimed a fixed one-year employment contract and sued for damages for wrongful discharge; the company asserted the work was week-to-week and terminable for cause.

## Issues

1. Whether a corporation, after coming into existence, can become bound by a contract made on its behalf by a promoter before incorporation.
2. Whether the corporation adopted the promoter’s alleged one-year employment contract by allowing performance and accepting services with knowledge of the arrangement.
3. Whether the evidence supported treating McArthur’s employment as a one-year term rather than week-to-week.

## Decision

- The Minnesota Supreme Court affirmed the judgment for McArthur.
- The court held that a corporation may adopt a promoter’s pre-incorporation contract after organization and thereby become bound.
- The court concluded the corporation adopted the employment agreement by knowingly accepting McArthur’s services without repudiation.
- The verdict’s finding of a one-year contract was left undisturbed, supporting liability for discharge before the term ended.

## Legal Principles

- A corporation is not automatically bound by agreements made before it exists, but it may later adopt such agreements and assume contractual obligations.
- Adoption may be express or implied from conduct, including knowledgeable acceptance and retention of benefits of the other party’s performance.
- When adoption is shown, the corporation is liable for breach of the adopted contract according to the contract’s proven terms.
- Factual disputes over the existence and duration of an adopted agreement may be resolved by the trier of fact, and an appellate court will not reweigh that determination absent legal error.

## Conclusion

The court held that the corporation became bound to the promoter-negotiated employment contract by permitting performance and accepting services with knowledge of the arrangement, and it affirmed damages for breach of the one-year term after McArthur’s discharge.


McArthur v. Times Printing Co., 48 Minn. 319, 51 N.W. 216 (Minn. 1892)