1832.

POLHILL against WALTER.

be taken to have intended, that all such persons should give credit to the acceptance, and thereby act upon the faith of that representation, because that, in the ordinary course of business, is its natural and necessary result.

If, then, the defendant, when he wrote the acceptance, and, thereby, in substance, represented that he had authority from the drawee to make it, knew that he had no such authority, (and upon the evidence there can be no doubt that he did,) the representation was untrue to his knowledge, and we think that an action will lie against him by the plaintiff for the damage sustained in consequence.

If the defendant had had good reason to believe his representation to be true, as, for instance, if he had acted upon a power of attorney which he supposed to be genuine, but which was, in fact, a forgery, he would have incurred no liability, for he would have made no statement which he knew to be false: a case very dif ferent from the present, in which it is clear that he stated what he knew to be untrue, though with no corrupt motive.

It is of the greatest importance in all transactions, that the truth should be strictly adhered to. In the present case, the defendant no doubt believed that the acceptance would be ratified, and the bill paid when due, and if he had done no more than to make a statement of that belief, according to the strict truth, by a memorandum appended to the bill, he would have been blameless. But then the bill would never have circulated as an accepted bill, and it was only in consequence of the false statement of the defendant that he actually had authority to accept, that the bill gained its credit, and the plaintiff sustained a loss. For these

reasons

reasons we are of opinion that the rule should be made absolute to enter a verdict for the plaintiff.

1832.

POLHILL

DUNSTON and CLARKE, Assignees of JOHN DUNSTON, against The IMPERIAL Gas Light and Coke Company (a).

EBT for fees due to the bankrupt as a director of the company, for his labour and services in attending courts, committees, and deputations of the company, for them and at their request; and generally for work and labour. Plea, the general issue. At the trial before Lord Tenterden C. J., at the sittings in London after Hilary term 1831, the following facts appeared: -The company was incorporated by statute 1 & 2 G. 4. c. cxvii., and by section 52. of that act it was provided that there should be one of the proprietors of shares in the company, qualified and to be appointed as in the act was mentioned, who should be governor, and eighteen of such proprietors, qualified and to be appointed as in the act was mentioned, who should be directors of the said company; that other proprietors should be appointed deputy-governor and auditors; and that there should be one other person, to be appointed

&c. At a meeting of the company a resolution was passed, not under seal, that a remuneration should be allowed to every director for his attendance on courts, committees, &c., viz. one guinea for each time:

Held, that a director who had attended courts, &c. could not maintain an action for payinents according to the above resolution, for that it was not a by-law within the statute, nor a contract (if such could have been available) to pay the directors or any of them for their attendances, and the directors could not be considered as servants to the company, and, as such, entitled to remuneration for their labour according to its value.

Quære, Whether a company incorporated for the purpose of manufacturing, can contract otherwise than under seal, for service, work, and the supply of goods for carrying on the business. 41588d.3157

(a) This case was decided in last Michaelmas term.

as

1832.

DUNSTON against

The IMPERIAL

Gas Light
Company.

as in the act was mentioned, to be the clerk of the said company. By sect. 53. directors were to be holders of ten shares in the joint stock of the company. By sect. 56. it was enacted, that at the first general meeting of the company there should be an election of eighteen proprietors, duly qualified, to be directors of the affairs of the company for certain periods there mentioned, and of another fit person to be clerk, and who, as such, was, by sect. 60., to attend the meetings of the company, and register the orders and proceedings. The directors were, by sect. 69., to meet once a week at least, and at such other times as they should think proper; but no business was to be transacted unless four directors and

the governor or deputy, or in their absence six directors, should be present. By sect. 71. it was enacted, that the directors for the time being should have the custody of the common seal of the company, and should have full power and authority to use the same for the company's affairs and concerns; to meet and adjourn from time to time, and from place to place; and to direct, manage, and transact the affairs and business of the company, as well in issuing, laying out, and disposing of money for the purposes of the company, as in contracting for and purchasing messuages, lands, &c. for their use, and entering into contracts for the lighting of any streets, &c. within the limits of the act, and in ordering, directing, and employing the works and workmen, and selling and disposing of messuages, lands, &c., and articles produced by the company in their manufacture of gas, and in making and carrying into effect all contracts touching or concerning the same, subject to such orders, bylaws, rules, and regulations as should at any time be

duly

duly made by the company in restraint, control, or regulation of the powers by this act granted. Some particular powers were specifically given them by subsequent sections. By sect. 76. it was enacted, that the company should have power at general or special general meetings duly called, to make such rules, orders, and by-laws as to them should seem meet, for the good government of the company, and for regulating the proceedings of the directors, and for regulating all officers, workmen, and servants to be employed about the company's affairs and business, and for the superintendence and management of the said company in all respects, and from time to time to alter or repeal such rules, orders, and by-laws; and that all such rules, orders, and by-laws (being reduced into writing, and the common seal of the company thereto affixed, countersigned by the clerk) should be binding upon all such persons, and a justification to them in any court of law or equity, provided the same were not repugnant to the laws of England. By 4 G. 4. c. xcv., the number of directors was reduced, and some other regulations were made respecting them; and by 10 G. 4. c. xii., the proprietors were enabled to remove any director, &c., for negligence or misconduct, a power not previously given.

The first directors, of whom the bankrupt was one, were elected in July 1821. On the 15th of August 1822, the following resolution was agreed to at a general meeting of the company, and entered in their books, but never passed under their common seal. "Resolved, That the following remuneration be allowed to the governor, deputy-governor, and directors from the time of their appointment after the passing of the act thenceforth, viz. that the sum of two guineas each

1832.

DUNSTUN against The IMPERIAL Gas Light Company.

be

1832.

DUNSTON against The IMPERIAL Gas Light Company.

be allowed to the governor and deputy-governor for every attendance at a court of directors, and to every director for the like attendance, one guinea. That the governor and deputy-governor, and each director, be allowed the sum of one guinea for every attendance at a committee or on a deputation of the company. That the chairman of the several committees be allowed one guinea and a half for every attendance."

The bankrupt, with other directors, attended the meetings and transacted the business of the company from the time of his election till the year 1829, when he ceased to be a director. His fees were paid down to the end of 1827, but those accruing afterwards were withheld on the ground of alleged misconduct, and the present action was brought to recover them. It was contended at the trial, that the above resolution, not being under seal, was not a by-law within the meaning of the statute, and could, therefore, be no legal foundation for the present claim: and that the plaintiffs could not avail themselves of a contract for remuneration, independently of a by-law, (supposing such contract to have existed, which was denied,) since the company, being a corporation, could only bind themselves under seal. Lord Tenterden thought the action not maintainable, and directed a nonsuit, giving leave, however, to move to enter a verdict for the plaintiffs. A rule nisi was accordingly obtained, and in last Michaelmas term,

Sir James Scarlett and R. V. Richards shewed cause. The sum claimed was a mere gratuity, and could not in itself be the subject of an action. The directors are not in the situation of servants to the company; they are themselves the masters, and their labour is nothing

more