Company articles control execution of instruments; a bond signed contrary to mandatory requirements was unenforceable.

A company instrument executed contrary to mandatory execution requirements in its articles is not binding on the company. The articles required the mortgage bond to be signed by the Managing Director, the Secretary and the Working Director, but it was signed only by two officers. The court held that a person dealing with the company is taken to have constructive notice of the articles, and cannot rely on a vague recital of authority where the defect is apparent on the face of the document. The mortgage bond was therefore invalid and unenforceable against the company, and enforcement of the bond failed.

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Issues: Whether a mortgage bond executed on behalf of a company by only two officers, when the articles required signature by three specified officers, was valid and binding on the company.

Analysis: The articles required deeds and similar instruments to be signed by the Managing Director, the Secretary and the Working Director, and the suit bond was signed only by the Secretary and the Working Director. In the absence of a specific empowering provision, the statutory rule recognised execution by persons acting under the company's authority, but the company's own articles controlled the mode of execution. A person dealing with the company was taken to have constructive notice of the articles and could not rely on a vague recital of authority in the bond where the defect appeared on the face of the instrument. The principle protecting outsiders dealing in good faith did not apply where the irregularity was apparent.

Conclusion: The mortgage bond was invalid and unenforceable against the company, and the plaintiff could not recover on it.

Final Conclusion: The appeal failed because the suit was based on an instrument that was not validly executed in accordance with the company's articles, and the plaintiff was not entitled to enforcement of the mortgage.

Ratio Decidendi: Where a company's articles prescribe a mandatory mode of execution for instruments, a document executed contrary to that requirement is not binding on the company, and constructive notice of the articles defeats reliance on apparent authority where the defect is patent.

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