Director personal liability for company debt requires express undertaking or pleaded fraud; decree set aside and leave to defend granted.

A company remains a separate juristic person, so its debt does not automatically become the personal liability of its directors. Personal liability can arise only from an express guarantee, indemnity, or similar contractual assumption, or from fraud that is specifically pleaded and proved with particulars. Here, no pleading showed that the former directors had undertaken joint and several liability or personally promised repayment, and the fraud allegation lacked the required particulars. The decree against them was therefore unsustainable, and they were entitled to unconditional leave to defend.

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Issues: Whether the erstwhile directors of a company could be held personally liable for repayment of amounts invested in debentures in the absence of any personal guarantee, indemnity or contractual undertaking, and whether the plea of fraud justified fastening such liability on them.

Analysis: A company is a separate juristic person and its obligations do not automatically become the personal obligations of its directors. Personal liability of directors arises only where they have expressly undertaken such liability by guarantee, indemnity or similar contractual assumption, or where fraudulent misrepresentation is specifically pleaded and proved so as to justify piercing the corporate veil. In a summary suit, bald allegations are insufficient, and fraud must be pleaded with particulars as required by the procedural rules. On the pleadings, there was no assertion that the appellants had guaranteed the debt, agreed to pay on behalf of the company, or otherwise assumed joint and several liability. The material also did not disclose the specific particulars necessary to sustain a finding of fraud against them.

Conclusion: The appellants could not be made personally liable for the company's debt; the decree against them was unsustainable and they were entitled to unconditional leave to defend.

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