have given them under the actual circumstances of the case if that form had not been adopted. And I think the consistency of the equity allowed in the Cork and Youghal Railway Co's Case with the general rule of law that persons who have no borrowing powers cannot, by borrowing, contract debts to the lenders, may be shown in this way. The test is: has the transaction really added to the liabilities of the Company? If the amount of the Company's liabilities remains in substance unchanged, but there is, merely for the convenience of payment, a change of the creditor, there is no substantial borrowing in the result, so far as relates to the position of the Company. Regarded in that light, it is consistent with the general principle of equity, that those who pay legitimate demands which they are bound in some way or other to meet, and have had the benefit of other people's money advanced to them for that purpose, shall not retain that benefit so as, in substance, to make these other people pay their debts. I take that to be a principle sufficiently sound in equity; and if the result is that by the transaction which assumes the shape of an advance or loan, nothing is really added to the liabilities of the Company, there has been no real transgression of the principle on which they are prohibited from borrowing." See further IN RE Guardian Permanent Benefit Building Society, 23 Ch. Div. 440; 9 Ap. Ca. 519; and Chapleov. Brunswick Building Society,5 C. P. D. 331 ; 6 Q.B. Div. 696 ; and Yorkshire Railway Wagon Co. v. Maclure, 19 Ch. D. 478; these last two cases show that although as against the Company a borrowing which is unauthorized is void, still the lenders have a remedy against the directors who sanctioned the same.

A refusal to allow the solicitor of a shareholder to inspect the register of mortgages is a refusal to the shareholder himself, IN RE Credit Co. 11 Ch. Div. 256.

to publish

69. Every limited banking Company, and every Certain insurance Company, and deposit, provident or benefit Companies Society under this Act, shall, before it commences statement business, and also on the first Monday in February entered in and the first Monday in August in every year during schedule. which it carries on business, make a statement in the form marked D in the first schedule hereto, or as near thereto as circumstances will admit; and a copy of such statement shall be put up in a conspicuous place in the registered office of the Company and in every branch office or place where the business of the Company is carried on.

If default is made in compliance with the provi sions of this section, the Company shall be liable to a penalty not exceeding fifty rupees for every day during which such default continues; and every director and manager of the Company who knowingly and wilfully authorizes or permits such default shall incur the like penalty.

Every member and every creditor of any Company mentioned in this section shall be entitled to a copy of the above-mentioned statement on payment of a sum not exceeding eight annas.

List of directors to be

sent to

Registrar.

Penalty on Company not keeping register of directors.

Promissory notes, bills

of exchange,

and hundis.

Sec. 44 of the English Companies' Act (25 and 26 Vic., e 89), 1862, and sec. 44 of the Indian Companies' Act X. of 1866, verbatim, fifty rupees and eight anuas being substituted for 'five pounds' and 'six pence' in the English Act.

Cf. 22 Vic., c. 91, s. 4.

70. Every Company under this Act and not having a capital divided into shares(i) shall keep at its registered office a register containing the names and addresses and the occupations of its directors or managers, and shall send to the Registrar of joint stock Companies a copy of such register, and shall from time to time notify to the Registrar any change that takes place in such directors or managers.

Sec. 45 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, and sec. 45 of the Indian Companies' Act X. of 1866, verbatim.

(i) As to the annual list of the members of other Companies, see sec. 48 supra.

71. If any Company under this Act and not having a capital divided into shares makes default in keeping a register of its directors or managers, or in sending a copy of such register to the Registrar in compliance with the foregoing rules, or in notifying to the Registrar any change that takes place in such directors or managers, such delinquent Company shall incur a penalty not exceeding one hundred rupees for every day during which such default continues; and every director or manager of the Company who knowingly and wilfully authorizes or permits such default shall incur the like penalty.

Sec. 46 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, and sec. 46 of the Indian Companies' Act X. of 1866, substituting "one hundred rupees" for "five pounds."

72. A promissory note, bill of exchange or hundi shall be deemed to have been made, drawn, accepted or endorsed on behalf of any Company under this Act, if made, drawn, accepted or endorsed in the name of the Company by any person acting under the authority of the Company, or if made, drawn, accepted or endorsed by or on behalf or on account of the Company by any person acting under the authority of the Company.

Sec. 47 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, and sec. 47 of the Indian Companies' Act X. of 1866, verbatim, save that the word "hundis" is inserted in the Indian Act.

Cf. Act XIX. of 1857 s. 47; as to contracts by a Company, sec sec. 67,

supra.

"Whether or not a note or bill must, on the face of it, express that it is made, accepted or endorsed" by or on behalf or on account of" the Company, yet there must be on the face of it that which shows that it was so made, accepted, or endorsed, and which excludes the inference that it was made, accepted, or endorsed by or on behalf or on account of any other person. A bill or note may be in a certain sense on behalf or on account of, a Company, though there is upon its face no reference to the Company even in the form of a description of the persons, who actually make, accept, or endorse being directors or secretary. As between such persons and the Company such a bill or note may well be on behalf or on account of the Company; but it is not, therefore, so as between the Company and third parties. So far as third parties are concerned, a Company under the Act can be made liable on a bill or note only when such bill or note on the face of it expresses that it was made, accepted or endorsed by or on behalf or on account of the Company, or where that fact appears by necessary inference from what the face of the instrument itself shows. The addition to the signatures of individuals as makers, drawers, acceptors, or endorsers of notes or bills of their description as director or directors, secretary, treasurer and agent of a Company is not considered to raise such inference, as it does not exclude the supposition that, though described as directors, they intended to make themselves personally liable to the holders of the instrument, though as between themselves and the Company they may be entitled to be indemnified for anything they may have paid on account of the Company in respect of such notes or bills.' So held per Green, J. IN RE The New Fleming S. & W. Co., I L. R. 3 Bom. 439, where Dutton v. Marsh, L. R. 6. Q. B. 361 was followed (and see the comments by that learned Judge on Okell v. Charles, 34 T. L. 822, at p. 448.) The judgment of Green, J. was affirmed on appeal, I. L. R. 4 Bom. 275.

This case was followed in IN RE The Narsi S. and W. Co., I. L. R. 5 Bom. 92, where upon a claim being sent in by the National Bank in the liquidation of the Narsi Company the latter were held not liable as drawers of the bill in question, but were liable upon the ground that they by their directors had sold a bill on behalf of the company as a bill on which the Company was liable, but which turned out to be one on which the company was not liable, and had consequently been guilty of a misrepresentation within the meaning of secs. 18 and 19 of the Contract Act IX. of 1872.

Where the plaintiff advanced money upon the security of the machinery and tools of the Company under an agreement expressed to be made between the T. Company of the one part and the plaintiff on the other, which was signed by three of the directors (defendants) but not sealed with the seal of the Company nor counter-signed by the secretary, pursuant to the articles of association, nor did the defendants express that they signed on behalf of the Company, it was held that the defendwere personally liable to the plaintiff for the raonies advanced, notwithstanding the heading of the agreement which must be rejected, the agreement not having been signed in a form binding on the Company. McCollin v. Gilpin, 5 Q. B D. 390, affirmed, 6 Q. B. Div. 516.

ants

"If," said Lush, J. (5 Q. B. D.) at p. 393, "the defendants had so executed this agreement as to make it in form the Company's contract, the plaintiff would have been justified in assuming that they received the requisite authority of the Company in general meeting, and the defendants would have been then in the same position as the defendants

Prohibition against carrying on business with less

than seven members.

General meeting of Company.

in Richardson v. Williamson (L. R. 6, Q. B. 276). But the agreement does not contain or imply any such representation, inasmuch as it does not profess to be an assignment by the Company, but only by the directors as such." The case was affirmed by the Court of Appeal 6 Q. B. Div. 516, after hearing parol evidence to explain the ambiguity of the agreement.

See further as to the personal liability of the directors of a Company which had no power to accept bills, who had accepted a bill of exchange "for and on behalf of " the Company, The West London Commercial Bank v. Kitson and others, 12 Q. B. D. 157. Where however the two learned Judges who heard the case (Day and A. L. Smith, J. J.) differed as to the grounds upon which they held the directors liable; Day, J. holding the defendants liable on the ground that as between themselves and the plaintiffs the defendants had been guilty of constructive fraud by issuing a bill which contained an untrue statement that they were authorized to accept it on behalf of the Company, or upon the ground that, apart from fraud, they were, as between themselves and a bona fide indorsee for value, precluded from denying the truth of any statement contained in their acceptance of a negotiable instrument. A. L. Smith, J. on the ground that there was evidence of an implied contract by the defendants with the plaintiff's that they were authorized to accept the bill on behalf of the Company. Affirmed 13 Q. B Div. 360.

An article of Association which empowered the agents of a Company to draw, endorse and negotiate on behalf of the Company all such cheques, promissory notes, &c. as should be necessary for enabling them to carry on the business of the Company," was held not to empower them to accept bills drawn on the Company with a view that the proceeds should be placed to their general account, and that from that general account advances should be, from time to time, made to the Company. Oriental Bank v. The Baree Tea Co. 13 Calc. Rep. 412.

73. If any Company under this Act carries on business when the number of its members is less than seven, for a period of six months after the number has been so reduced, every person who is a member of such Company during the time that it so carries on business after such period of six months, and is cognizant of the fact that it is so carrying on business with fewer than seven members, shall be severally liable for the payment of the whole debt of the Company contracted during such time, and may. be sued for the same without the joinder in the suit of any other member.

Sec. 48 of the English Companies' Act (25 and 26 Vic.. c. 89), 1862, and sec. 48 of the Indian Companies' Act X. of 1866, verbatim.

(i) See sec. 128, clause (c) post.

Cf. Sec. 43 of Act XIX. of 1857.

Provisions for Protection of Members.

74. A general meeting(i) of every Company under this Act shall be held once at the least in every year.

sheet.

A balance-sheet shall be made out and filed with Balancethe Registrar of joint stock Companies within twelve months after the Company has been registered, and once at least in every year afterwards within twelve months from the filing of the balance-sheet immediately preceding; and such balance-sheet shall contain a summary of the property and liabilities of the Company, arranged under the heads appearing in the form annexed to table A in the first schedule hereto, or as near thereto as circumstances admit.

And once at the least in every year the accounts Audit. of the Company shall be examined and the correctness of the last balance-sheet and its conformity with the law ascertained and certified by one or more auditor or auditors.

No balance-sheet shall be filed with the Registrar unless or until its correctness and conformity with. the law have been so ascertained and certified, and it has been laid before and adopted by the Company in general meeting.

If default is made in compliance with any of the provisions of this section, every director and manager of the Company who knowingly and wilfully authorizes or permits such default shall be liable to a penalty of one thousand rupees.

The first paragraph of the section contains the whole of sec. 49 of the English Companies' Act (25 and 26 Vic., 89), 1862, and corresponds with the first paragraph of sec. 49 of the Indian Companies' Act X. of 1866, which continued as follows: "a balance-sheet shall be made out in every year, and laid before the Company in General Meeting, and filed with the Registrar of joint stock Companies, and Such balance-sheet shall coutain, &c.," as in the present section; save the last paragraph but one, which is new.

The section in X. of 1866 adapted, is from Act XIX. of 1857, ss. 30-37. Mr. Whitley Stokes (p. 23 of the Companies' Act X. of 1866) says, "it was thought desirable to follow the example of the framers of Act XIX. of 1857, and make compulsory the preparation and filing of an annual balance-sheet and the annual examination of the Companies' accounts."

(i) Sched. I., table A (29)—(43).

The first general meeting must be held within six months after the memorandum of association has been registered, sec. 75 post.

The word "year" means the period of time commencing on the 1st January and ending on the 31st December, and not the period of twelve months commencing from the day of registration of a Company. Gibson v. Barton, L. R. 10, Q. B. 329.