{"id":1444,"date":"2024-10-24T15:44:02","date_gmt":"2024-10-24T15:44:02","guid":{"rendered":"https:\/\/fawyerz.in\/judgments\/?p=1444"},"modified":"2025-03-12T16:24:35","modified_gmt":"2025-03-12T10:54:35","slug":"ashbury-railway-carriage-and-iron-co-vs-riche-case-summary","status":"publish","type":"post","link":"https:\/\/fawyerz.in\/judgments\/company-law\/ashbury-railway-carriage-and-iron-co-vs-riche-case-summary\/","title":{"rendered":"Ashbury railway Carriage and iron Co. vs Riche (1875) (case Summary)"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1444\" class=\"elementor elementor-1444\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5d93937d elementor-section-full_width elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"5d93937d\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-4d90a959\" data-id=\"4d90a959\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-3de62d14 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"3de62d14\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-2873ee77\" data-id=\"2873ee77\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-20fca2e9 elementor-widget elementor-widget-heading\" data-id=\"20fca2e9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\">Ashbury railway Carriage and iron Co. vs Riche 1875 (Case Summary)<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1d678df2 elementor-widget elementor-widget-image\" data-id=\"1d678df2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"718\" src=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche.jpg\" class=\"attachment-1536x1536 size-1536x1536 wp-image-1445\" alt=\"Ashbury railway Carriage and iron Co. vs Riche\" srcset=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche.jpg 1280w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche-300x168.jpg 300w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche-1024x574.jpg 1024w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche-150x84.jpg 150w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Ashbury-railway-Carriage-and-iron-Co.-vs-Riche-768x431.jpg 768w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" title=\"\">\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5fbb5f7b elementor-widget elementor-widget-text-editor\" data-id=\"5fbb5f7b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">This landmark case on doctrine on ultra vires strengthened the fundamental rule of company law that a company shall not work beyond its objectives as specified on the Memorandum of Association. The case decided on the consequences of a company going out of the objective clauses mentioned in the MOA for business.<\/span><\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/ashbury-railway-carriage-and-iron-co-vs-riche-case-summary\/#Facts_of_Ashbury_railway_Carriage_and_iron_Co_vs_Riche\" >Facts of Ashbury railway Carriage and iron Co. vs Riche<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/ashbury-railway-carriage-and-iron-co-vs-riche-case-summary\/#Issues_framed\" >Issues framed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/ashbury-railway-carriage-and-iron-co-vs-riche-case-summary\/#Judgment_of_Ashbury_railway_Carriage_and_iron_Co_vs_Riche\" >Judgment of Ashbury railway Carriage and iron Co. vs Riche<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Facts_of_Ashbury_railway_Carriage_and_iron_Co_vs_Riche\"><\/span><span style=\"color: #993300;\"><b>Facts of Ashbury railway Carriage and iron Co. vs Riche<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The objective clause of the Railway Carriage company\u00a0 expressly stated that the company could make, sell or lend railway carriages and wagons.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the year 1864, the company got contract from the belgium government wherein they were required laying down railway tracks.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company already had many contracts. Therefore, it delegated the work to Riche.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Riche was not having sufficient funds for the project. Therefore, the Railway carriage company contracted to finance Riche for the completion of the project.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company later refused to finance Riche for the project.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Being aggrieved, Riche sued the Railway Carriage company.<\/span><\/li><\/ol><h2><span class=\"ez-toc-section\" id=\"Issues_framed\"><\/span><span style=\"color: #993300;\"><b>Issues framed<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Whether the Railway Carriage company had the legal capacity to finance Riche?<\/span><\/li><\/ol><h2><span class=\"ez-toc-section\" id=\"Judgment_of_Ashbury_railway_Carriage_and_iron_Co_vs_Riche\"><\/span><span style=\"color: #993300;\"><b>Judgment of Ashbury railway Carriage and iron Co. vs Riche<br \/><\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p><span style=\"font-weight: 400;\">The court decided the case in favour of the Railway Carriage company. The court ruled that a company does not have legal capacity to go beyond its MOA and enter into contracts beyond its object clauses. The court further while discarding the contention of Riche held that a contract beyond the objectives of the company is void ab initio, therefore, they can not be ratified by the board. This made the contract between the Railway Carriage company and Riche invalid and unenforceable in court. <\/span><span style=\"font-weight: 400;\"><br \/><\/span><span style=\"font-weight: 400;\">This case established the doctrine of ultra vires that means any contract ultra vires to the Objective clause of a company is void ab initio.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>This landmark case on doctrine on ultra vires strengthened the fundamental rule of company law that a company shall not work beyond its objectives as specified on the Memorandum of Association. <\/p>\n","protected":false},"author":3,"featured_media":1445,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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