manufacturing company had appointed a manager to superintend and transact its manufacturing business, but the general business was to be transacted by a board of directors, who had power to appoint officers and delegate their authority, and goods for the manufacture had been ordered by the manager, the chairman, the deputy-chairman, and the secretary, and were used for the company's purposes, the Court of Common Pleas considered, that, although, with the exception of the manager, none of these officers had authority to give such orders, and although the directors did not expressly adopt them, yet, as they knew they had been so furnished, the company was liable (c).

It will probably appear quite clear from what has been said before, and if not, it is sufficiently from the very nature of the thing, that the contracts to which a member of a joint stock company becomes liable, because they are made by the agents of the company or certain of its members, must be contracts either expressly authorised by him, or appropriate, in order to carry out the purposes for which the company was formed. Thus, in the celebrated case of Dickenson v. Valpy (d), which was an action on a bill of exchange, purporting to be drawn and accepted by a mining company, wherein the plaintiff, an indorsee for value, sought to charge the defendant as a member of that com

(c) Smith v. Hull Glass Co., 21 L. J. (C. P.) 106; 11 C.

B. 897.

10 B. & C. 128.

pany, the Court of Queen's Bench held that, assuming the defendant to be a member of that company, it was incumbent on the plaintiff to prove that the directors of the company had authority to bind the other members, by drawing and accepting bills of exchange; and that the plaintiff, not having produced the deed of co-partnership, nor given any evidence to show that it was necessary for the purpose of carrying on the business of a mining company, or that it was usual for them to draw or accept bills of exchange, there was no evidence of such authority to draw or accept them. "There was not any evidence," said Parke, J. (afterwards Lord Wensleydale), "to prove an authority of the parties in this concern to draw such a bill of exchange as this. I very much doubt whether there is any authority in mining companies, arising by implication from the nature of their dealings, to draw or accept bills of exchange; and it is to be observed, that there was no proof of any usage to do this in such companies. The argument would go to this, that all persons who deal in the produce of the land, which they jointly occupy, because they might sell that produce at a distance, would have an implied power given to each other to draw bills of exchange for the purpose of receiving payment for it; if the argument was valid it would show that farmers acting in partnership, as well as miners, would have, as incidental to the relation of partners, an authority to draw bills of exchange

upon the persons to whom the produce of the land was sold; there is, however, no necessity to decide that point, because there is no ground, at all events, to say that mining partners have an implied authority from one another, arising from the nature of their business, to draw such a bill of exchange as this, for, upon the face of it, this is a bill drawn by the company upon themselves, and though it is in form treated as a bill of exchange, it is in substance only a promissory note; and the effect of saying that one member of a company like this can draw such bills or notes, would be, that each of the partners in the concern would have the power of pledging the others." Still more general was the language of Tindal, C. J., in delivering the judgment of the Court of Common Pleas in the case of Bramah v. Roberts (e). In that case a bill had been drawn by one of the directors of a gas company on himself and the other directors, which was accepted by the chairman for himself and the other directors. This acceptance was held not to bind them. It has been decided that, in the absence of proof to the contrary, one member of a joint stock company cannot bind the remainder by negotiable instruments. "The address of a bill," said the Chief Justice, "to the directors of a metropolitan company, and the frame of acceptance by the chairman of such directors, for himself and the

(e) 3 Bing. N. C. 963.

other directors, can only be referable, unless some explanation is given, to a company of the description well known in all the Courts of law and equity in Westminster Hall as joint stock companies, and not to ordinary partnerships in trade. It was proved upon the trial of the cause, that Clare, the drawer of the bill, from whom the plaintiff's derived title, and upon whose indorsement they rely, was the same William Clare who was one of the acceptors and one of the defendants in his capacity of acceptor; so that the bill is drawn by one of the directors upon himself and the other directors, payable to his own order, and accepted by another director for himself and the rest. But the right of one director to draw a bill upon the rest, and still further, the power of one director to accept a bill for himself and the others, so as to make those others liable, according to the case of Dickenson v. Valpy (ƒ), in the authority of which case we entirely concur, is not a right or power implied by law, like that which belongs to one member of an ordinary partnership in trade with respect to bills drawn and accepted for the purposes of the trade. It must depend upon the powers given by the charter or deed or agreement under which the company is established and constituted, or some other agreement between the parties, whether a bill so drawn and accepted shall or shall not have

(f) 10 B. & C. 128.

that legal effect. But upon the trial of this cause, no evidence whatever was given by the plaintiffs of the constitution of this company, nor of any authority given, by deed, or otherwise to any one of the directors to bind the other directors, or to bind the company at large, by his acceptance of bills of exchange; and in the absence of such evidence, we are of opinion that no such authority is to be implied by law, or can be held to exist.”

With regard to the borrowing of money, unless it be part of the ordinary business of the company, as it would be of a banking company (g), or express powers be given them by the deed, the directors have no authority to pledge the credit of the shareholders by borrowing money, even though it be necessary to enable them to carry on the affairs of the company (h). It has since been held that, even a clause in the deed of settlement, under which a mining company was carried on, which provided that the affairs and business of the company should be under the sole and entire control of the directors, of whom there should not be less than five or more than nine, and that three of them should at all meetings of directors, and for all purposes, be competent to act, did not authorise them to borrow money for the necessary purposes of the mines (i).

(g) Bank of Australasia v. Breillat, 6 Moore P. C. C. 152.

(1) Ricketts v. Bennett, 4

C. B. 686.

(i) Burmester v. Norris, 21 L. J. (Ex.) 43; 6 Ex. 796, S. C.

BB