The directors of a building society which had lent money on a postponed security, granted to a prior bondholder, in order to induce him to refrain from exposing the subjects to sale under the powers in his bond, a bond of corroboration, by which the society undertook along with the debtor the personal obligation for the debt due under the prior bond. The rules of the society gave no express power to grant such bonds. The society afterwards went into liquidation, and the liquidators sought to reduce the bond on the ground that it was ultra vires of the directors to grant it. Held ( aff. judgment of Second Division) that the bond of corroboration fell to be reduced
Judges:
Lord Chancellor, Lord Blackburn, and Lord Watson
Citations:
[1884] UKHL 139, 22 SLR 139
Links:
Statutes:
Building Societies Act 1874 13
Jurisdiction:
Scotland
Banking, Company
Updated: 27 June 2022; Ref: scu.636749