ARTICLES OF ASSOCIATION 
presume that the directors are acting lawfully in what they 
do’ [per Selwyn, L.J. Land Credit Co. of Ireland (1869), 
4 Ch. App. at p. 469], provided he does not negligently 
disregard facts which put him on inquiry as to some irregularity 
"Liggett (Liverpool) v. Barclays Bank (1928), 1 K.B. 48]. 
[f, however, the person is contracting, not with the directors 
as a board, but with an individual director, he will not be 
entitled to presume that authority has been conferred on 
the individual director unless that director has been held out 
as having authority, e.g. he was the managing director, and the 
contract was within the ordinary ambit of the powers of a 
managing director [Houghton & Co. v. Nothard Lowe & Wills 
1927), 1. K.B. 246]. 
The interpretation of articles is a matter which involves 
the most careful attention. To discover the true meaning 
of an article, it is frequently necessary to look, not only at 
the other articles of the same group, but also at the whole 
set. A striking instance of this is to be found in the case of 
Moseley v. Koffyfontein Mines (1910, 2 Ch. 382, and, on 
appeal, 1911, 1 Ch. 73), where the decision of the Court of 
first instance as to the construction of an article, was re- 
versed by the Court of Appeal, on consideration in connection 
with the article in question of another article which does not 
appear to have been brought to the notice of the Court 
below. See also Adair v. Old Bushmills Distillery Co. (1908, 
W.N. 24); Collaroy Company v. Giffard (1928, Ch. 144). 
In respect of matters which the Act requires to be stated in 
the memorandum, when there is an inconsistency between the 
memorandum and the articles, the memorandum must 
prevail [Wedgwood Coal and Iron Co., Anderson’s Case (1878), 
7 Ch. D. 75]. In respect of matters which the Act does not 
require to be stated in the memorandum, if there is an 
ambiguity, the articles may be permitted to explain the 
memorandum [Capital Fire Insurance Association (1882), 
Ch. D. 209]. 
Reference has been made above to the power of alteration 
by a company of its articles. This power, which is of the 
widest description, is conferred by s. 10 of the Act, which 
provides that: (1) Subject to the provisions of this Act and to 
the conditions contained in its memorandum, a company 
may by special resolution alter or add to its articles’; and 
(2) ‘Any alteration or addition so made in the articles shall, 
subject to the provisions of this Act, be as valid as if originally 
contained therein, and be subject in like manner to alteration 
by special resolution.’ 
[nterpreta- 
tion. 
Alterations.