(u) 10 B. & C. (21 E. C. L. R.) 128.
With regard to the borrowing of money, unless it be part of the ordinary business of the company, as it would be of a banking company (x), or express powers be given them by the deed, the directors have no authority to pledge the credit of the shareholders by borrowing money, even though it be necessary to enable them to carry on the affairs of the company (y). It has since been held that even a clause in the deed of settlement, under which a mining company was carried on, which provided that the affairs and business of the company should be under the sole and entire control of the directors, of whom there should not be less than five or more than nine, and that three of them should at all meetings of directors, and for all purposes, be competent to act, did not authorize them to borrow money for the necessary purposes of the mines (z). As to dealing on credit, the question whether the company may be made liable by its agents so dealing, depends, like the others we have been considering, upon the authority given to those agents; and this authority, as in other cases, may be proved *by showing it to have been actually given, or that concerns of the nature in question are ordinarily so carried on. "The question," said Lord Abinger, " which was de(x) Bank of Australasia v. Breillat, 6 Moore P. C. C. 152.
(y) Ricketts v. Bennett, 4 C. B. (56 E. C. L. R.) 686.
(z) Burmester v. Norris, 21 L. J. (Ex.) 43; 6 Ex. 796, S. C.
It is impossible within the limits of this work to enter even upon the subjects comprised within the Rail-way Clauses Act, the Lands Clauses Act, the Companies Clauses Consolidation Act, or the Acts regulating Joint Stock Banking Companies. All that can be done consistently with the present *object, in addition to what has been said, is, to give a general view of the Law of Contracts as applied by the general Act already referred to, and known as "The Companies Act, 1862."
By virtue of this Act, the principal Act, as amended by the other Companies Acts to which I have already referred (c), any number of persons not less than seven may, by using the modes prescribed by that statute, form themselves into an incorporated company, so as to obtain the advantages given them thereby. These modes are amongst other things the registration, in an office provided for that purpose, of a document called the memorandum of association, which memorandum is to declare the name of the company, its objects, capital, number of shares into which its capital is divided, the liability of its shareholders, whether limited 01 unlimited, and the part of the United Kingdom in which its registered office is to be established. The effect of this memorandum, when registered, binds the company and the shareholders in the same manner as a covenant to conform to all the regulations of the memorandum would bind them. It is clear, therefore, that the name of the company will thereafter be that which is declared in the memorandum of association until altered in a legal manner, and by this name only can it contract, so that the rights and liabilities provided by *statute shall attach to it by the contract. More precise regulations may also be made according to a form provided by the statute to accompany the memorandum of association, which are called articles of association. These also bind the shareholders and the company as if they had respectively covenanted to the same effect, and these, or such of them as are chosen by the company, being registered, and the registrar having certified that the company is incorporated, the shareholders become a body corporate by the name in the memorandum of association. But it must be remembered that if twenty persons or more after the 2nd of November, 1862, carry on in partnership any trade or business having gain for its object, unless so registered, or authorized by some other statute, or engaged in mining in the Stannaries, each of them may be sued for the whole debts of the co-partnership without joining any other member. As to contracts by companies which come within the prohibition contained in 25 & 26 Vict., c. 89 (The Companies Act, 1882), s. 4, see ante, p. *:292.
(a) Tredwen v. Bourne, 6 M. & W. 465; Hawken v. Bourne, 8 M. & W. 703.
(b) In re the German Mining Co., 22 L. J. (Ch.) 926.
(c) Ante, p. *383.
The objects for which the company is established, when once defined by the memorandum of association, cannot be departed from, and, therefore, a contract made by the directors of the company upon a matter not included in the memorandum of association is ultra vires of the directors and void, and cannot afterwards be ratified by the assent of *the whole body of the shareholders (d). It is indeed settled law that a statutory corporation created by Act of Parliament for a particular purpose is limited as to all its powers by the purposes of its incorporation as defined in the Act, and contracts in excess of those powers so limited are void (e). The doctrine of ultra vires, however, as thus explained, is to be applied reasonably, so that whatever is fairly incidental to those things which the legislature has authorized by an Act of Parliament, ought not (unless expressly prohibited) to be held as ultra vires (f). The cases illustrating this doctrine are very numerous, but to discuss them further would carry us beyond the limits of these Lectures, and I must therefore pass on with this brief notice of it (g).
Having, then, thus delineated the name by which a public company incorporated under the Act of 1862 may contract, and the sort of contracts which it may make, we come to consider the *manner in which it may make them. That Act gave no
(d) Ashbury Railway Carriage and Iron Co. v. Riche, L. R. 7 II. L. 653; 44 L. J. (Ex.) 185, reversing Riche v. Ashbury Railway Carriage and Iron Co., L. R. 9 Ex. 224; 43 L. J. (Ex.) 177.
(e) Ashbury Railway Carriage and Iron Co. v. Riche, L. R. 7 II. L. 653, 693; 44 L. J. (Ex.) 185, 209; Eastern Counties Ry. Co. v. Hawkes, 5 H. L. C. 331.