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Issues: Whether the agreement dated 18th April 1928 is binding on the company and creates a valid equitable charge on the outstanding bills and monies realized thereunder (including monies in the receiver's hands).
Analysis: The instrument grants the financial agent exclusive rights to collect and appropriate moneys in satisfaction of advances, which, if binding, falls within the principle that an agreement between debtor and creditor that a debt shall be paid out of a specific fund creates an equitable charge. Although the company's articles required the company seal to be affixed in the presence of two directors and the document bore an irregular sealing and signature, the company and its directors acted upon the written agreement from its date. Where an agreement in writing embodies the parties' intention to create a charge and the company has acted under it, a mere formal defect in sealing does not defeat the substantive obligation. Prior authority treating improperly sealed debentures as operative agreements supports giving effect to the parties' intention when power to create the charge existed and the company manifested assent by conduct. An objection not raised at trial that the document required registration cannot be entertained at the appellate stage.
Conclusion: The agreement dated 18th April 1928 is binding on the company and creates a valid equitable charge in favour of the plaintiff on the outstanding bills and the moneys realized thereunder (including monies in the receiver's hands); the appeal is allowed and the decree below insofar as it declared the agreement not binding is set aside.
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