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CHAPTER 17
DEBENTURES

v. Turquand, (6) and recover the amount of the loan. In other cases he can sue the directors for damages for breach of their implied representation that they had power to borrow.

Firbank's Exors. v. Hunzphreys (1886),18 Q. B. D. 54. F. did work for the company. The company, being unable to pay cash, agreed to allot debentures to F. At the time,, although F. was ignorant of it, all the debentures which the company had power to issue had already been issued. Held, F. was entitled to recover as damages against the directors the par value of the debentures he ought to have received.

If the borrowing is in excess merely of the directors' powers and not of the powers of the company, it can be ratified and rendered valid by the company.(7)
On the other hand, if the borrowing is beyond the powers of the company, no ratification can render it valid. Such borrowing does not give rise to any indebtedness either at law or in equity on the part of the company. (8)
Money paid under an ultra vires contract which is not a contract of borrowing, e.g., money paid for shares which a company had no power to issue, can be recovered.(9)
The lender of money borrowed for ultra vires purposes, has, however, the following remedies:
1. If the money borrowed has been applied in paying off the indebtedness of the company, whether incurred before or after the money was borrowed, he can rank as a creditor to the extent to which the money has been so applied. (8)
Whether this is based on the ground that the ultra vires borrowing does not increase the general indebtedness of the company, or on the principle of subrogation, is doubtful. The lender is not, in such a case, entitled to any securities or priorities of the creditors who are paid by means of his money.

Re Wrexham, etc., By. Co., [1899] 1 Ch. 440. A company had A, B and C debenture stock, and in issuing this stock had exhausted its borrowing powers. The bank advanced money to pay the interest on these three classes of debentures. A receiver was then appointed, who had funds in hand sufficient to pay the interest to the A stockholders, but not enough to pay the B and C stockholders in full. The bank claimed (i) that before any interest was paid to the stockholders they were entitled to be repaid their advance, (ii) alternatively that they were entitled to be repaid the sum paid by them to the A stockholders before any payment was made to the B and C stockholders. Held, as the advance was not a valid one, they were not entitled to either of these claims.(10)

6 (1855), 5 E. & B. 248; 6 E. & B. 327; ante, p. 136.
7 Irvine v. Union Bank of Australia (1877), 2 App. Cas. 366.
8 Baroness Wenlock v. R. Dee Co. (1887), 19 Q. B. D. 155; Sinclair v. Brougham,
[1914] A. C. 398.
9 Sinclair v. Brougham, [1914] A. C. at p. 440.
10 Some doubt is thrown on this decision in Sinclair v. Brougham, [1914] A. C. at p. 144.

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where is HTML where is HEAD where is TITLE v. Turquand, (6) and recover what is amount of what is loan. In other cases he can sue what is directors for damages for breach of their implied representation that they had power to borrow. Firbank's Exors. v. Hunzphreys (1886),18 Q. B. D. 54. F. did work for what is company. what is company, being unable to pay cash, agreed to allot debentures to F. At what is time,, although F. was ignorant of it, all what is debentures which what is company had power to issue had already been issued. Held, F. was entitled to recover as damages against what is directors what is par value of what is debentures he ought to have received. If what is borrowing is in excess merely of what is directors' powers and not of what is powers of what is company, it can be ratified and rendered valid by what is company.(7) On what is other hand, if what is borrowing is beyond what is powers of what is company, no ratification can render it valid. Such borrowing does not give rise to any indebtedness either at law or in equity on what is part of what is company. (8) Money paid under an ultra vires contract which is not a contract of borrowing, e.g., money paid for shares which a company had no power to issue, can be recovered.(9) what is lender of money borrowed for ultra vires purposes, has, however, what is following remedies: 1. If what is money borrowed has been applied in paying off what is indebtedness of what is company, whether incurred before or after what is money was borrowed, he can rank as a creditor to what is extent to which what is money has been so applied. (8) Whether this is based on what is ground that what is ultra vires borrowing does not increase what is general indebtedness of what is company, or on what is principle of subrogation, is doubtful. what is lender is not, in such a case, entitled to any securities or priorities of what is creditors who are paid by means of his money. Re Wrexham, etc., By. Co., [1899] 1 Ch. 440. A company had A, B and C debenture stock, and in issuing this stock had exhausted its borrowing powers. what is bank advanced money to pay what is interest on these three classes of debentures. A receiver was then appointed, who had funds in hand sufficient to pay what is interest to what is A stockholders, but not enough to pay what is B and C stockholders in full. what is bank claimed (i) that before any interest was paid to what is stockholders they were entitled to be repaid their advance, (ii) alternatively that they were entitled to be repaid what is sum paid by them to what is A stockholders before any payment was made to what is B and C stockholders. Held, as what is advance was not a valid one, they were not entitled to either of these claims.(10) 6 (1855), 5 E. & B. 248; 6 E. & B. 327; ante, p. 136. 7 Irvine v. Union Bank of Australia (1877), 2 App. Cas. 366. 8 Baroness Wenlock v. R. Dee Co. (1887), 19 Q. B. D. 155; Sinclair v. Brougham, [1914] A. C. 398. 9 Sinclair v. Brougham, [1914] A. C. at p. 440. 10 Some doubt is thrown on this decision in Sinclair v. Brougham, [1914] A. C. at p. 144. 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 186 where is strong CHAPTER 17 DEBENTURES where is p align="justify" v. Turquand, (6) and recover what is amount of the loan. In other cases he can sue what is directors for damages for breach of their implied representation that they had power to borrow. Firbank's Exors. v. Hunzphreys (1886),18 Q. B. D. 54. F. did work for what is company. what is company, being unable to pay cash, agreed to allot debentures to F. At what is time,, although F. was ignorant of it, all what is debentures which what is company had power to issue had already been issued. Held, F. was entitled to recover as damages against what is directors what is par value of what is debentures he ought to have received. If what is borrowing is in excess merely of what is directors' powers and not of what is powers of what is company, it can be ratified and rendered valid by what is company.(7) On what is other hand, if what is borrowing is beyond what is powers of the company, no ratification can render it valid. Such borrowing does not give rise to any indebtedness either at law or in equity on what is part of what is company. (8) Money paid under an ultra vires contract which is not a contract of borrowing, e.g., money paid for shares which a company had no power to issue, can be recovered.(9) what is lender of money borrowed for ultra vires purposes, has, however, what is following remedies: 1. If what is money borrowed has been applied in paying off what is indebtedness of what is company, whether incurred before or after what is money was borrowed, he can rank as a creditor to what is extent to which the money has been so applied. (8) Whether this is based on what is ground that what is ultra vires borrowing does not increase what is general indebtedness of what is company, or on the principle of subrogation, is doubtful. what is lender is not, in such a case, entitled to any securities or priorities of what is creditors who are paid by means of his money. Re Wrexham, etc., By. Co., [1899] 1 Ch. 440. A company had A, B and C debenture stock, and in issuing this stock had exhausted its borrowing powers. what is bank advanced money to pay what is interest on these three classes of debentures. A receiver was then appointed, who had funds in hand sufficient to pay what is interest to what is A stockholders, but not enough to pay what is B and C stockholders in full. what is bank claimed (i) that before any interest was paid to what is stockholders they were entitled to be repaid their advance, (ii) alternatively that they were entitled to be repaid what is sum paid by them to the A stockholders before any payment was made to what is B and C stockholders. Held, as what is advance was not a valid one, they were not entitled to either of these claims.(10) 6 (1855), 5 E. & B. 248; 6 E. & B. 327; ante, p. 136. 7 Irvine v. Union Bank of Australia (1877), 2 App. Cas. 366. 8 Baroness Wenlock v. R. Dee Co. (1887), 19 Q. B. D. 155; Sinclair v. Brougham, [1914] A. C. 398. 9 Sinclair v. Brougham, [1914] A. C. at p. 440. 10 Some doubt is thrown on this decision in Sinclair v. Brougham, [1914] A. C. at p. 144. where is Server.Execute("_SiteMap.asp") %

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