The plaintiff sought payment from the defendants, a joint stock Company, on a bond, signed by two directors, under the seal of the Company whereby the Company acknowledged themselves to be bound to the plaintiff in pounds 2,000. The company said that there had been no resolution authorising the making of the bond, and that it was given without the authority of the shareholders.
Held: The plaintiff was entitled to judgement, the obligee having, on the facts alleged, a right to presume that there had been a resolution at a general meeting, authorising the borrowing the money on bond. Outsiders dealing with a company in good faith can assume that acts within the company’s constitution and powers have been properly and duly performed and are not bound to enquire whether acts of internal management have been regular.
Jervis CJ said: ‘We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here, on reading the deed of settlement, would find, not a prohibition from borrowing, but a permission to do so on certain conditions. Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that which on the face of the document appeared to be legitimately done.’
Jervis CJ
(1856) 6 E and B 327, [1856] EngR 470, (1856) 6 El and Bl 327, (1856) 119 ER 886
Commonlii
England and Wales
Citing:
Appeal from – The Royal British Bank v Turquand 2-Jun-1855
. .
Cited by:
Cited – Douglas and others v Hello! Ltd and others; similar HL 2-May-2007
In Douglas, the claimants said that the defendants had interfered with their contract to provide exclusive photographs of their wedding to a competing magazine, by arranging for a third party to infiltrate and take and sell unauthorised photographs. . .
Cited – Criterion Properties plc v Stratford UK Properties LLC and others HL 17-Jun-2004
The parties presented their claim before the House, but the House found that it was to be argued differently. The new arguments had not been pursued or prepared before the case came to the House, and it was remitted to the lower courts for the issue . .
Cited – Lever (Finance) Ltd v City of Westminster CA 22-Jul-1970
The appellant developers had obtained detailed planning approval for fourteen houses, but after adjustments for a building line, moving several properties distances of several feet toward other properties, further plans were submitted without . .
Explained – Morris v Kanssen HL 1946
The House considered the effect of provisions relating to the acts of directors in the 1929 Act. Lord Simonds said: ‘There is, as it appears to me, a vital distinction between (a) an appointment in which there is a defect or, in other words, a . .
Lists of cited by and citing cases may be incomplete.
Updated: 08 October 2021; Ref: scu.251748
