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.