1867 MABER v. MABER. strictness of law, was made. We may take it that the money was in the pocket of the deceased. He was willing to produce it, and a receipt was given by the plaintiff, in the presence of the wife of the deceased, and an indorsement made upon the note. I think, altogether, that would be enough to justify us in coming to the conclusion upon a plea of payment, that it was proved; and there is therefore sufficient to take the case out of the Statute of Limitations, though no money actually passed. Attorneys for plaintiff: Dangerfield & Fraser. Attorney for defendant: George A. James. Rule discharged. June 8. D'ARCY v. THE TAMAR, KIT HILL, AND CALLINGTON Directors-Company-Bond under Company's Seal-Unauthorized Bond-Con- The prescribed quorum of directors in the defendants' company being three, the secretary affixed the seal of the company to a bond, after having obtained the written authority of two directors at a private interview, and at another private interview the verbal promise of a third to sign the authority. The company being sued upon this bond : Held, that the seal of the company was affixed without lawful authority, and that the company were therefore not liable on the bond. ACTION on a bond for 20007., dated the 29th of September, 1864, given under the seal of the defendants to the plaintiff, and conditioned for the payment, with interest, on the 29th of September, 1866, of 10007., recited to be due to the plaintiff from the defendants for work and labour. (1) Plea, non est factum. Issue thereon. The cause was tried before Martin, B., at the sittings after Easter Term, 1866. It was proved that the seal of the defendants' company was affixed by the secretary (who also countersigned the bond), and it (1) The plaintiff was the defendants' engineer; he sued in this action on behalf of one Hall, to whom he had assigned the bond. was admitted that the secretary was the proper person to affix the seal, provided he were duly authorized, but it was contended for the defendants that he was not so authorized. The secretary gave evidence that he was authorized by three directors to affix the seal, but, on cross-examination, admitted that the assent of two out of the three had been obtained at a private interview at the house of one of them, where the two signed a letter authorizing the issue of the bond, and that, on meeting the third in the street, he had then obtained his assent and his promise to sign the letter. The signature of the third, however, was not obtained until after the issuing of the bond. It further appeared that, when the bond was given, there were more than three directors, and it was not shewn that any committee had been appointed under 8 Vict. c. 16, s. 95. The Companies Clauses Act, 1845 (8 Vict. c. 16), which is incorporated in the defendants' special act, provides (s. 90), that "the directors shall have the management and superintendence of the affairs of the company, and they may lawfully exercise all the powers of the company, except as to such matters as are directed by this or the special act to be transacted by a general meeting of the company, but all the powers so to be exercised shall be exercised in accordance with, and subject to, the provisions of this and the special act," and subject also to the control of general meetings. It also provides (s. 92) that the directors "shall hold meetings at such times as they shall appoint for that purpose;" that “in order to constitute a meeting there shall be present at least the prescribed quorum ;" and "that all questions shall be determined by the majority of votes of the directors present;" ss. 95 and 96 provide for the appointment of committees, with the power of doing any acts which the directors might do. By s. 97, "the power which may be granted to any such committee to make contracts, as well as the power of the directors to make contracts on behalf of the company, may be lawfully exercised as follows: that is to say, with respect to any contract which, if made between private persons, would be by law required to be in writing and under seal, such committee or the directors may make such contract on behalf of the company in writing and under the common seal of the company.". 1867 D'ARCY V. The defendants' special act (27 & 28 Vict. c. ccxciv.) s. 24, provided that the number of directors should be, until the first general THE TAMAR, meeting of the company, eleven, and afterwards should not exceed KIT HILL, six, nor be less than three; "and the quorum of a meeting of direcTON RAILWAY tors shall be three, unless the number of directors is reduced to three, and then, until the number is raised, the quorum shall be two." AND CALLING COMPANY. A verdict was found for the plaintiff for 10817., leave being reserved to the defendants to move to enter a verdict for them, or a nonsuit, on the ground that the seal was affixed without lawful authority. A rule having been obtained accordingly, Patchett and Thesiger shewed cause. The bond bearing the company's seal is primâ facie the company's bond, and it lies upon them to disprove it. It is not denied that the seal was affixed by the proper person, and it must therefore be assumed against the company that all the necessary formalities were complied with, and strict proof of the contrary must be given: Clarke v. Imperial Gas Light Company. (1) But further, the secretary swears that he was authorized by three directors to affix the seal, and it appears that in fact he was so. In answer to this, the defendants contend that the directors had no authority, because they were not acting together. But this is not shewn to be necessary; or, if it were so, yet any state of facts not absolutely excluded by the evidence might be assumed in support of a due exercise of authority. The bond, then, being formally regular, the defendants are bound to shew that its issue was inconsistent with the statutes under which they acted: Hill v. Manchester and Salford Waterworks Company. (2) But it is not contended that the directors had not power to issue the bond, which was given for the payment of a debt due for work done for the company, and is clearly within their ordinary powers. Were it, however, in respect of the mode of issuing it or otherwise in excess of their authority, yet the company would have no defence against the plaintiff, who was without notice of the irregularity: Royal British Bank v. Turquand (3); Agar v. Athenæum Life Assurance Society. (4) Lastly, whatever objection (1) 4 B. & Ad. 315. (3) 5 E. & B. 248; 6 E. & B. 327; 24 L. J. (Q.B.) 327; 25 L.J. (Q.B.) 317. (4) 3 C. B. (N.S.) 725; 27 L. J. (C.P.) 95. of this kind can be taken to the deed, it ought to be specially pleaded, and cannot be proved under non est factum. [BRAMWELL, B., referred to Bank of Ireland v. Evans' Trustees (1) and asked whether, if the seal had been affixed by the secretary without any colour of authority, it could be contended that the plaintiff could recover.] It must be admitted he could not. They also referred to Laird v. Birkenhead Railway Company (2) and Lowe v. London and North Western Railway. (3) Montagu Chambers, Q.C., and Paterson, in support of the rule, were stopped. MARTIN, B. We are all of opinion that the allegation that this is the bond of the company is disproved. The Companies Clauses Consolidation Act, 1845 (which is incorporated with the defendants' special act), enacts (ss. 90, 91), that, with the exception of certain specified matters reserved to the general meetings, the business of the company shall be conducted by the directors; and s. 92 and the following sections point out the mode in which they are to conduct it. They are to hold meetings, at which the prescribed quorum must be present, and questions at such meetings are to be determined by a majority of votes. The quorum prescribed by s. 24 of the special act was here three, for it is in evidence that, when this bond was given, there were more than three directors. No special resolution of the company is shewn authorizing the issue of this bond, and it does not appear that any committee has been appointed under s. 95 of the general act. The bond, therefore, must, by s. 97, have been made by the directors, acting in the manner pointed out by the previous sections. The question then is, whether the company's seal was affixed to the bond by the authority of the directors so acting, for the secretary had no authority to affix it unless he was authorized by them. Now it is not necessary that there should be any fixed place of meeting, but it is quite clear that the directors are to act together, and in a meeting, (1) 5 H. L. C. 389; 4 Irish Com. Law Rep. 624. (2) John. 500; 29 L. J. (Ch.) 218. (3) 18 Q. B. 632; 21 L. J. (Q.B.) 361. An attempt was also made at the trial, and on the argument, to connect 1867 D'ARCY V. THE TAMAR, KIT HILL, TON RAILWAY AND CALLING COMPANY. 1867 whereas the authority on which the secretary acted was given by two only acting together, and by the subsequent assent of a third. The authority, therefore, was not of such a character as enabled THE TAMAR, KIT HILL, the secretary to affix the seal so as to bind the company. D'ARCY v. AND CALLING TON RAILWAY COMPANY. BRAMWELL, B. I am of the same opinion. It is not to be presumed that what has been done is ultrà vires, and therefore when an instrument is produced under the seal of the company, it is primâ facie to be taken that the seal was properly affixed. But it is here shewn affirmatively that the seal was not properly affixed; for this could not be done, except by the authority of such a number of directors as had power to act for the company, acting jointly and as a board. This is clearly the intention of the act; and it is an obvious consideration that, if it were otherwise, a quorum of directors might meet at one place with power to act for the company, and another quorum might, at the same time, meet at another place, with equal power and come to an opposite determination. But it is manifest that the seal was affixed without the authority of the directors meeting as a board, and the bond is therefore void. If it is not contended that the affixing of the seal by the secretary without any colour of authority would bind the company, then it follows that, although, if you do not examine into the authority, the bond under the company's seal is primâ facie good, yet when the inquiry is made, and the want of authority is disclosed, the company cannot be bound. The plaintiff suffers no injury by this decision, for the debt for which the bond was given remains as good as before. CHANNELL, B. I also think this rule must be made absolute. On the production of the bond under the corporate seal it is primâ facie to be assumed that it is valid; the defendants must shew that the necessary authority was not given; and I have no doubt that it is open to them to shew this under the plea, non est factum. They have accepted this onus of proof, and I think that they have satisfied it; for it appears that there were more than three directors, and that the authority was never given by a quorum of three. Without saying that the board are bound to meet at any particular place, yet when an authority is given to a less number to bind the whole body, they must meet in some place where all may be pre |