Page:Halsbury Laws of England v1 1907.pdf/396

 Agency.

174 Sect.

2.

Acts capable of Ratification.

Forgery.

Act ultra vires the principal.

{e), provided it be ratified within a reasonable time (/), immaterial that the contract was made by the agent in fraud of the principal {g). But where the agent and third party are able to rescind their transaction (as in the case of a payment by the agent to the third party, followed by repayment to the agent by mutual agreement), so that there remains nothing to ratify, ratification by the principal is inoperative Qi).

repudiation

and

it is

379. A forgery is probably, as being void in its inception, incapable of ratification by the person whose name is forged, though he may incur a liability on the instrument on the principle of estoppel (^). An act may be void in its inception, and therefore not capable of ratification, because it is one which the intended principal had Many cases illustrate this rule, largely not the power to do. connected with acts done on behalf of corporations or companies which are not within the scope of their powers as limited by the special Act, charter, or memorandum of association under which However desirous the members of the they are incorporated. corporation or company may be of ratifying such an act, they cannot do so {k). For instance, if directors pay dividends out of capital on a balance-sheet inflated by known bad debts, such a payment cannot be ratified by the shareholders, because the powers of the company do not authorise the payment of dividends out of capital (/). But an act which is beyond the powers of the directors or other agents, but within the general powers of the company, may be adopted and validly ratified by resolution of the shareholders (m), though such a ratification will not be implied merely from the fact that the shareholders have seen and passed without comment the Shareholders may, however, balance-sheet or formal documents (n). Bolton Partners v. Lambert (1889), 41 Ch. D. 295. But this decision lias criticised, and Lord Lindley in Fleming v. Bank of New Zealand, [1900] A. C. 577, at p. 587, expressly reserved the right of the Privy Council Eatification does not relate to consider the point; and see pp. 177, 11^, post. back when parties other than the co-- contracting party have acquired rights before ratification {Re Gloucester Municipal Election Petition, [1901] 1 K. B. 68a). (/) Re Portuguese Consolidattd Copper Mines, Ltd. (1890), 45 Ch. D. 16; Re Tiedemaun and Ledermann Freres, [1899] 2 Q. B. 66. ((/) Re Tiedemann and Ledermann Freres, supra. (A) Walter v. James (1871), L. E. 6 Exch. 124; but see also Hooper v. Kerr, Stuart &- Co. (1901), 83 L. T. 729. (i) Brook v. Hook (1871), L. E. 6 Exch. 89 (Martin, B., dissenting), and see but see contra, Bills of Exchange Act, 1882 (45 & 46 Yict. c. 61), s. 24 McKenzie v. Britisli Linen Co. (1881), 6 App. Cas. 82, Blackbuei^, J., at p. 99. {k) Aslibury Railvmy Carriage and Lron Co. v. Riche (1875), L. E. 7 H. L. 653 Atliy Guardians v. Murphy, [1896] 1 Ir. E. 65; Be Empress Engineering Co. Mann v. Edin(1880), 16 Ch. D. 125; Re Dale and Plant (1889), 61 L. T. 206 hurgh Northern Tramways Co., [1893] A. C. 69. {I) Flitcroft's Case (1882), 21 Ch. D. 519. (m) Irvine v. Union Bank of Australia (1877), 2 App. Cas. 366; Grant v. United Kingdom Sivitchhack Raihuays Co. (1888), 40 Ch. D. 135. See, however, Boschoek Proprietary Co. v. Fuke, [1906] 1 Ch. 148. The directors themselves may ratify an act done on behalf of the company if the act was within their o-vcn powers {Wilson v. West Hartlepool Rail. Co. (1866), 2 De G. J. & S. 475). {n) Blackburn and District Benefit Building Society v. Cunliffe, Brooks & Co. (1883), 29 Ch. D. 902. (e)

been

much