1934 (1) TMI 15

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....went into voluntary liquidation and the mortgage property was sold and eventually purchased by the 4th defendant. The mortgage-deed was signed by the working director and by the secretary of the company (the 1st and the 2nd defendants). The plaint avers that the debt was regularly contracted in accordance with the powers and authority possessed by the said director and secretary under the articles of "the said company and the special resolutions passed from time to time." The 4th defendant in his written statement says that be does not admit that the document was executed by and on behalf of the company, the 1st and the 2nd defendants not being competent to contract loans, much less to charge the property of the company. Objection is taken ....

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....y a question of fact. It is also a question of fact whether the 4th defendant took a sale of the property in such circumstances as would qualify the plaintiff to take advantage as against him of any equitable charge which might exist over it. Since no satisfactory explanation is forthcoming for the failure to bring these questions to trial, I do not feel justified in entertaining them in second appeal. Article 15 of the company's articles of association provide that as follows: "All deeds, hundies, cheques, certificates and other instruments shall be signed by the managing director, the secretary and the working director on behalf of the company, and shall be considered valid. The suit document, as has been said, is signed only by the se....

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....ctor by themselves were not legally competent to execute the mortgage-deed. Some attempt appears to have been made to show that the company had specially authorised these two officers to borrow money, but the learned District Judge has found this not proved and this finding being one of fact is final. It is further argued that even if the execution of the bond was marked by irregularity, yet the mortgagee is entitled to enforce it upon the general principle that there was every reason to believe that the officers who executed it had authority to do so. This point has been discussed by the learned District Judge and I think the view which he has taken of the law is correct. There are undoubtedly cases in which the principle just referred ....