Intra vires corporate agreement remains binding where all members approve, act on it, and later denial is barred by estoppel.

An intra vires corporate agreement remained binding despite doubt over one signatory's formal re-election as a director and alleged defects in execution. The court treated the company's conduct, including holding him out as a director, approval by the governing directors and sole other shareholder, payment under the agreement, and the plaintiff's reliance, as sufficient to validate the arrangement under Article 94 of Table A and unanimous corporate assent. The company was also estopped from denying due execution and sanction after accepting benefits and partly performing the agreement, because ratification and adoption by the controlling members barred later repudiation. The plaintiff was entitled to enforce the agreement with costs.

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Issues: (i) Whether the agreement was binding on the company despite the challenge to Murray's status as a director and the alleged defect in execution. (ii) Whether the company was estopped from denying due execution and sanction of the agreement after accepting, ratifying, and acting upon it.

Issue (i): Whether the agreement was binding on the company despite the challenge to Murray's status as a director and the alleged defect in execution.

Analysis: The evidence did not satisfy the Court that Murray had been formally re-elected as a director, but it did show that he was held out by the company as a director and that the other governing director acted on that footing. The governing directors and the sole other shareholder approved the arrangement, payments were made under it, and the plaintiff acted upon it. Article 94 of Table A provided that acts done by persons acting as directors would remain valid notwithstanding a defect in appointment or qualification. The Court also treated the agreement as intra vires and supported by unanimous corporate assent.

Conclusion: The agreement was held binding on the company.

Issue (ii): Whether the company was estopped from denying due execution and sanction of the agreement after accepting, ratifying, and acting upon it.

Analysis: The company had accepted the benefits and implemented the agreement in part, including payment under its terms and transfer of shares. On the facts, the Court found clear ratification and adoption by the relevant controlling members, and concluded that the company could not later repudiate the agreement on the ground of a defect in the director's appointment or in corporate sanction. The principle applied was that a company is bound in a matter intra vires by the unanimous agreement of its members.

Conclusion: The company was estopped from denying due execution and sanction.

Final Conclusion: The plaintiff succeeded in enforcing the agreement, and a decree was warranted in his favour with costs.

Ratio Decidendi: Where an intra vires corporate agreement has been approved and acted upon by all members or controlling persons, a defect in the appointment or qualification of one signatory director does not defeat the transaction, and the company is estopped from denying its validity after ratification and performance.

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