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Page 136

CHAPTER 11
DIRECTORS

may still be bound if the case is one which comes within what is known as the rule in Royal British Bank v. Turquand.(63) THE RULE IS:
Persons dealing with a company are not concerned to enquire whether all matters of internal management have been complied with, if everything is apparently regular.
The reason for the rule is that as the memorandum and articles of association are registered, and accessible to all who care to consult them, everyone is presumed to know them.(64) They are therefore bound to see that externally everything is in order, but are not concerned with the indoor management. They cannot check matters of internal administration and are entitled to assume that they have been properly carried out.

Royal British Bank v. Turquand (1855), 5 E. & B. 248. A company issued a bond under its common seal, signed by two directors. The registered deed of settlement (corresponding to the articles) provided that the directors might borrow on bond such sums as they should be authorised by a general resolution of the company. No such resolution was passed. Held, the bond was binding on the company, as the lenders were entitled to assume that a resolution authorising the borrowing had been passed.

The rule is subject to exceptions. It does not apply in the following cases:
1. When it is known that the rules of internal management have not been complied with.
Howard v. Patent Ivory Co. (1888), 38 Ch. D. 156. Under the articles the directors had power to borrow up to £1,000 without the consent of the general meeting. The directors themselves lent £3,500 to the company without such consent, and took debentures. Held, the company was only liable to the extent of £1,000.
2. When a document is a forgery.
Ruben v. Great Fingall Consolidated, [1906] A. C. 439. The secretary issued a share certificate which apparently complied with the company's articles, being signed by two directors and the secretary, and having the company's seal affixed. The secretary had forged the directors' signatures and affixed the seal without authority. Held, the certificate was not binding on the company.
South London Greyhound Racecourses, Ltd. v. Wake, [1931] 1 Ch. 496. The company's articles provided that the seal could only be affixed by a resolution of the board of directors. Without any such resolution a share certificate was issued to W., signed by one director and the secretary, the number required by the articles. Held, the share certificate was a forgery and not binding on the company as the seal was not affixed by the company's authority.
3. When an agent of the company has done something beyond any authority which was given to him or which he was held out as having.

63 (1855), 5 E. & B. 248; (1856), 6 E. & B. 327.
64 Mahoney v. East Holyford Mining Co. (1875), L. R. 7 H. L. 869.

travel books:
where is HTML where is HEAD where is TITLE may still be bound if what is case is one which comes within what is known as what is rule in Royal British Bank v. Turquand.(63) what is RULE IS: Persons dealing with a company are not concerned to enquire whether all matters of internal management have been complied with, if everything is apparently regular. what is reason for what is rule is that as what is memorandum and articles of association are registered, and accessible to all who care to consult them, everyone is presumed to know them.(64) They are therefore bound to see that externally everything is in order, but are not concerned with what is indoor management. They cannot check matters of internal administration and are entitled to assume that they have been properly carried out. Royal British Bank v. Turquand (1855), 5 E. & B. 248. A company issued a bond under its common seal, signed by two directors. what is registered deed of settlement (corresponding to what is articles) provided that what is directors might borrow on bond such sums as they should be authorised by a general resolution of what is company. No such resolution was passed. Held, what is bond was binding on what is company, as what is lenders were entitled to assume that a resolution authorising what is borrowing had been passed. what is rule is subject to exceptions. It does not apply in what is following cases: 1. When it is known that what is rules of internal management have not been complied with. Howard v. Patent Ivory Co. (1888), 38 Ch. D. 156. Under what is articles what is directors had power to borrow up to £1,000 without what is consent of what is general meeting. what is directors themselves lent £3,500 to what is company without such consent, and took debentures. Held, what is company was only liable to what is extent of £1,000. 2. When a document is a forgery. Ruben v. Great Fingall Consolidated, [1906] A. C. 439. what is secretary issued a share certificate which apparently complied with what is company's articles, being signed by two directors and what is secretary, and having what is company's seal affixed. what is secretary had forged what is directors' signatures and affixed what is seal without authority. Held, what is certificate was not binding on what is company. South London Greyhound Racecourses, Ltd. v. Wake, [1931] 1 Ch. 496. what is company's articles provided that what is seal could only be affixed by a resolution of what is board of directors. Without any such resolution a share certificate was issued to W., signed by one director and what is secretary, what is number required by what is articles. Held, what is share certificate was a forgery and not binding on what is company as what is seal was not affixed by what is company's authority. 3. When an agent of what is company has done something beyond any authority which was given to him or which he was held out as having. 63 (1855), 5 E. & B. 248; (1856), 6 E. & B. 327. 64 Mahoney v. East Holyford Mining Co. (1875), L. R. 7 H. L. 869. where is meta name="keywords" content="old books, Free book , free book offer , free audio books , free coloring book pages , free book reports , free audio book , audio books free download , book free , free guest book , books free , free book summaries , download free audio books , free childrens books." where is where are they now rel="stylesheet" type="text/css" href="../../style.css" where is meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" where is BODY bgColor=#ffffff text="#000000" where are they now ="#000000" v where are they now ="#FF0000" where is div align="center" where is strong where is strong where is a href="http://www.aaoldbooks.com" Books > where is a href="../default.asp" title="Book" Old Books > where is strong where is a href="default.asp" Poetry Northwest (1959) where is table width="700" border="1" align="center" cellpadding="15" cellspacing="0" where is center where is tr where is td width="160" align="center" valign="top" where is div align="center" where is td align="center" valign="top" where is div align="left" where is div align="center" where is p align="left" Page 136 where is strong CHAPTER 11 DIRECTORS where is p align="justify" may still be bound if what is case is one which comes within what is known as what is rule in Royal British Bank v. Turquand.(63) what is RULE IS: Persons dealing with a company are not concerned to enquire whether all matters of internal management have been complied with, if everything is apparently regular. what is reason for what is rule is that as what is memorandum and articles of association are registered, and accessible to all who care to consult them, everyone is presumed to know them.(64) They are therefore bound to see that externally everything is in order, but are not concerned with what is indoor management. They cannot check matters of internal administration and are entitled to assume that they have been properly carried out. Royal British Bank v. Turquand (1855), 5 E. & B. 248. A company issued a bond under its common seal, signed by two directors. The registered deed of settlement (corresponding to what is articles) provided that what is directors might borrow on bond such sums as they should be authorised by a general resolution of what is company. No such resolution was passed. Held, what is bond was binding on what is company, as what is lenders were entitled to assume that a resolution authorising what is borrowing had been passed. what is rule is subject to exceptions. It does not apply in what is following cases: 1. When it is known that what is rules of internal management have not been complied with. Howard v. Patent Ivory Co. (1888), 38 Ch. D. 156. Under what is articles what is directors had power to borrow up to £1,000 without the consent of what is general meeting. what is directors themselves lent £3,500 to what is company without such consent, and took debentures. Held, what is company was only liable to what is extent of £1,000. 2. When a document is a forgery. Ruben v. Great Fingall Consolidated, [1906] A. C. 439. what is secretary issued a share certificate which apparently complied with what is company's articles, being signed by two directors and what is secretary, and having what is company's seal affixed. what is secretary had forged the directors' signatures and affixed what is seal without authority. Held, what is certificate was not binding on what is company. South London Greyhound Racecourses, Ltd. v. Wake, [1931] 1 Ch. 496. what is company's articles provided that what is seal could only be affixed by a resolution of what is board of directors. Without any such resolution a share certificate was issued to W., signed by one director and what is secretary, what is number required by what is articles. Held, what is share certificate was a forgery and not binding on the company as what is seal was not affixed by what is company's authority. 3. When an agent of what is company has done something beyond any authority which was given to him or which he was held out as having. 63 (1855), 5 E. & B. 248; (1856), 6 E. & B. 327. 64 Mahoney v. East Holyford Mining Co. (1875), L. R. 7 H. L. 869. where is Server.Execute("_SiteMap.asp") %

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