during the time he shall be such commissioner shall be capable of taking or entering into any such bargain or contract, nor shall any commissioner act in any matter in which he shall be personally interested. And § 11 imposes a penalty of 507., upon every commissioner who acts being disqualified. It was contended that Halket, who had furnished the bricks to the commissioners, being himself a commissioner at the time, the contract was illegal and void. It is not necessary to decide this question and I wish to guard myself from being thought to give any judgment on that point.

MELLOR, J.-I wish to rest my judgment in this case on the general doctrine of estoppel. I cannot distinguish it in principle from In re Bahia and San Francisco Ry. Co., Law Rep., 3 Q. B., 583, which is founded on the very salutary decision of Freeman v. Cooke, 2 Ex., 654, 18 L. J. Ex., 114.

The local act contemplates the borrowing of money for the purposes of the works of the town of Herne Bay, and it gives the form of a mortgage upon which the money is to be borrowed. The form states that in consideration of the sum of money advanced and lent upon the credit of the rates for the purposes of the act, and paid to the treasurer of the commissioners, they thereby grant and assign a due proportion of the rates. That was the form of the mortgage in this case.

In addition to that the act, which enables the commissioners to raise money upon mortgage in that form, also enables the holder to assign the mortgages. He may, by a writing under his hand, transfer the same to any person, and it gives the form of indorsement by which the transfer may be made. There is a provision for registering the transfer, and when that is completed any person who is an innocent holder has a complete title. The commissioners who have borrowed the money and enable the transfer of the mortgage to be effected, cannot afterwards deny their liability on the ground that the mortgage was given, not for money lent, but for some purpose which they allege to be illegal. On that ground I hold the plaintiffs are entitled to the remedy they seek.

LUSH, J.-I also think it is unnecessary to express any opinion on the question whether if this action had been brought

by the original mortgagee, the commissioners could have set up any defense against the claim; because the defense-namely, his incapacity to contract at the time by reason of his filling the office of commissioner, cannot be set up against the plaintiffs, his transferees.

The mortgage security itself makes the money payable to Halket, or his assigns. The act of Parliament says that any person entitled to any security may transfer it in the terms specified in the act; and further, that when the transfer has been made and registered in the book of the commissionersand this has been registered-every such transfer shall entitle the person to whom the same shall be made to the benefit of the security thereby transferred. Now, the effect of those sections, I think, is to make these mortgages negotiable securities, and to attach to them the incidents of negotiable securities; one of which is that an innocent holder for value, as it is admitted the plaintiffs are, acquires a title of his own unaffected by any infirmity to which the title of the assignor might have been subject. Upon this ground I think the plaintiffs are entitled to judgment.

Then as to the alleged defect in the prayer of the mandamus, I think it quite enough to say that the complaint against the commissioners is not that they do not make rates, but that they apply the proceeds in a different way than that directed by the act of Parliament. It is to be assumed that they will go on making the rates as they have done. The mandamus is directed to the misappropriation: If it turns out to be needful to compel them to do what they have hitherto done, and to make rates, then a mandamus may be applied for that purpose.

JUDGMENT FOR THE PLAINTIFFS.

WHERE THE AUTHORITY TO ISSUE BONDS FOR RAISING MONEY FOR CORPORATE PURKOSES IS CONDITIONAL.

TWENTY-EIGHTH SELECTED CASE.

THE ROYAL BRITISH BANK V. TURQUAND.*

Plaintiff declared against defendants a joint stock company completely registered under Stat. 7 & 8, Vict., c. 110, on a bond, signed by two directors, under the seal of the company, whereby the company acknowledged themselves to be bound to plaintiff in 2,0007.

The plea set out the condition, which appeared to be for securing to the plaintiff, who was a banker, such sum as the company should, to the amount of 1,000l., owe to plaintiff on the balance of the account current, from time to time, and for indemnifying plaintiff to that amount from losses incurred by reason of the account between plaintiff and defendants. The plea further set out clauses in the registered deed of settlement, by which it appeared that the directors were authorized under certain circumstances, to give bills, notes, bonds, or mortgages; and one clause provided that the directors might borrow on bond such sums as should, from time to time, by a resolution of the company, be authorized to be borrowed. The plea averred that there had been no such resolution authorizing the making of the bond, and that it was given without authority of the shareholders.

The replication set out the deed of settlement further, by which it appeared that the company was formed for the purpose of carrying on mining operations and forming a railway.

On demurrers to the plea and replication, held, by the court of Exchequer Chamber, affirming the judgment of Q. B. that plaintiff was entitled to judgment, the obligee having, on the facts alleged, a right to presume that there had been a resolution at a general meeting, authorizing the borrowing the money on bond.

Semble, per JERVIS, C. J., that such resolution would confer sufficient authority if it authorized the borrowing on bond of such sums as the directors might deem expedient, in accordance with the statute and deed, without otherwise defining the amount.

THE plaintiffs declared against the defendant, as official manager of Cameron's Coalbrook Steam, Coal, and Swansea and London Railway Company, according to the Joint Companies Winding-up Acts (the company being completely registered under Stat. 7 & 8 Vict., c. 110). The declaration al

*Reported in 6 Ell. & Bl., 327 (1856).

leged that the company, before defendant became official manager; to-wit., on 6th of March, 1850, by their writing obligatory, sealed with their common seal, acknowledged themselves to be held and firmly bound to plaintiffs in 2,000l., to be paid to plaintiffs on request; for which payment the said last mentioned company did bind themselves and their successors. Yet the said sum, or any part thereof, has not been paid.

Plea in which was set out the condition, which appeared to be for the securing to the plaintiffs, who were bankers, such sum as the company should to the amount of 1,000l. owe to the plaintiffs on the balance of the account current, from time to time, and for indemnifying plaintiffs to that amount from losses incurred by reason of the account between plaintiffs and the company.

The plea further set out clauses of the registered deed of settlement of the company, by which it appeared that the directors were authorized, under certain circumstances, to give bills, notes, bonds, or mortgages; and one clause provided that the directors might borrow on bond such sums as should from time to time, by a general resolution of the company, be authorized to be borrowed. The plea averred that there had been no such resolution authorizing the making of the bond, and that the same was given and made without authority or consent of the shareholders of the company.

The replication set out the deed of settlement further, by which it appeared that the company was formed for the purpose of carrying on mining operations and forming, a railway. It is then alleged that at a general meeting of the company it was resolved "that the directors of the company should be, and they were thereby authorized to borrow on mortgage, bond, or otherwise, such sums for such periods and at such rates of interest as they might deem expedient in accordance with the provisions or the deed of settlement and act of Parliament. And the said resolution and determination has thence hitherto remained unrescinded."

The replication then alleged that afterwards, in accordance with the authority granted by the general meeting, the direc tors agreed to enter into the bond, and appointed two directors to affix their seal, and the secretary to sign the bond, which

bond, so sealed and signed, plaintiffs took "in full faith and belief of the validity of the said resolutions, and that the said bond was authorized by and would be a valid and binding security upon the said company."

The plaintiffs also demurred to the plea. The defendant joined in the demurrer, and also demurred to the replication. Joinder.

In the last Trinity Term judgment was given for the plaintiffs in the Court of Queen's Bench. Royal British Bank v. Turquand, 5 E. & B., 248 (E. C. L. R., Vol. 85).

The defendant suggested error on this judgment in the Court of Exchequer Chamber, which the plaintiff denied.

JERVIS, C. J.-I am of opinion that the judgment of the Court of the Queen's Bench ought to be affirmed. I am inclined to think that the question which has been principally argued, both here and in that court, does not necessarily arise and need not be determined. My impression is (though I will not state it as a fixed opinion) that the resolution set forth in the replication goes far enough to satisfy the requisites of the deed of settlement. The deed allows the directors to borrow on bond such sum, or sums of money, as shall from time to time, by a resolution passed at a general meeting of the company, be authorized to be borrowed; and the replication shows a resolution passed at a general meeting, authorizing the directors to borrow on bond such sums for such periods and at such rates of interest as they might deem expedient, in accordance with the deed of settlement and the act of Parliament; but the resolution does not otherwise define the amount to be borrowed. That seems to me enough. If that be so the other question does not arise.

But whether it be so or not, we need not decide, for it seems to us that the plea, whether we consider it as a confession and avoidance, or a special non est factum, does not raise any objection to this advance as against the company.

We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and deed of settlement. But they are not bound to do more.