Appoint- 
ment under 
the Articles. 
Cd 
SECRETARIAL PRACTICE 
Cairns, in the Court of Appeal, stated the effect of the 
article as being that, the articles being an agreement infer 
socios, it amounted to an agreement between the parties 
to it to employ the plaintiff. This being an agreement 
to which the plaintiff was in no way a party, he had no 
right of action upon it. ‘This article,” he says, ‘is either 
a stipulation which is binding on the members or else a 
mandate to the directors; in either case it is a matter between 
the directors and shareholders and not them and plaintiff.’ 
Lord Cairns meant, apparently, that the contract was be- 
tween the company and each individual member, and also 
between each individual member and each of his fellow 
members; but, in view of Lord Herschell's words in Welton v. 
Saffrey (quoted above), it appears that the latter of these 
two elements must strictly be excluded. The principle 
of the decision is not, however, affected by the exclusion. 
The hardship of this decision is more apparent than real. 
If a man is appointed by the articles, secretary or solicitor of a 
company, there is, it is true, no binding contract by the com- 
pany or the members to employ him as such. The prudent 
and the usual course is for a contract to be entered into 
between the company and the individual -it is desired to 
employ, wholly apart from the articles, and then his position 
is clear. Even if no contract has in fact been entered into, 
and a person appointed by the articles has in fact been 
employed as, say, secretary, the view taken by the Courts 
is that, although the articles do not constitute a contract, 
it can be ascertained from them upon what terms he is 
serving. Or, to put the matter in another way, if the com- 
pany and the secretary act as contemplated by the clause, the 
Courts will treat them as though they had entered into a 
contract in terms of the clause. There have been many 
cases in which this principle has been acted on, and in some 
of them the individual was a director. [See e.g. ex parle 
Beckwith (1898), 1 Ch. 324). 
Articles of association are public documents, and a person 
dealing with a company will be deemed to know and under- 
stand the contents of the articles [Griffith v. Paget (1877), 
6 Ch. D. 511]; but he is not bound to do more than make 
sure that the proposed dealing is not inconsistent with the 
company’s regulations. ‘If the directors have power and 
authority to bind the company but certain preliminaries are 
required to be gone through on the part of the company 
before that power can be duly exercised, then the person 
contracting with the directors is not bound to see that all 
these preliminaries have been observed. He is entitled to