A similar case was that of British Thomson Houston Co v Federated Etiropean

A similar case was that of british thomson houston co

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company as its managing director. A similar case was that of British Thomson-Houston Co. v. Federated Etiropean Bank Ltd., 9 where by the articles of associa- tion of the defendant company the directors had power to delegate to one or more of their own body such of the powers conferred on the directors as they might consider requisite for carrying on the business of the company, and to determine who should be entitled to sign contracts and documents on the company's behalf. There was nothing to show that the plaintiffs in fact knew of the articles of association of the defendant company; nevertheless the company was held bound by a guarantee given to the plaintiffs by the chairman of the board, one N. Pal, and signed in the following form: "Federated European Bank Ltd. (signed) N. 6 [1896] 2 Ch. 93. 8 Ibid. 102. 1 Ibid. 104. 9 [1932] 2 K.B. 176, C.A.
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2 Q.B. QUEEN'S BENCH DIVISION. 493 " Pal." Again in Clay Hill Brick & Tile Co. Ltd. v. Rawlings 10 C. A. a company was held bound by the act of its chairman, who acted X964 as managing director though never appointed as such, in receiving FREEMAN cheques from a customer in payment for goods supplied by the & LOOKYER company. These, it will be seen, were all cases in which not only BUOKHORST did the articles of association confer power on the directors to p PABK delegate, but the person purporting to act for the company was (MANGAL) acting within the scope of what would normally be expected to be ' within the authority of one in his position. waimer L.J. It has been submitted on behalf of the defendants, however, that where, as here, the person contracting with someone purport- ing to act on behalf of a company has in fact no knowledge of its articles of association, and has made no inquiries with regard thereto, he cannot rely on any power of delegation contained therein when there has been no actual delegation. In such a case, it has been argued, the rule in Turquand's case u has no application, and there can be no room for any presumption that the power of delegation has been properly and regularly exercised. In support of this submission reliance is placed on the decision of this court in Houghton & Go. v. Nothard, Lowe & Wills, 1,1 especially on the judgment of Sargant L.J., which was followed in this court in Kreditbank Cassel G.m.b.H. v. Schenkers 13 and also by Slade J. in Rama Corporation Ltd. v. Proved Tin & General Investments Ltd. 1 * If Houghton's case 15 does establish the broad proposition contended for, it would, I agree, be difficult to reconcile it with the authorities to which I have previously referred, especially with the decision of this court in British Thomson-Houston Go. v. Federated European Bank Ltd. 1 * This was a difficulty which was clearly felt by Slade J. in Rama's case. 17 He made no secret of the fact that he thought the decisions of this court were conflicting; he accordingly based his judgment on the decision in Houghton's case 18 and refused to follow that of British Thomson-Houston Go. v. Federated European Bank Ltd.
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