{"id":1674,"date":"2024-10-28T14:38:39","date_gmt":"2024-10-28T14:38:39","guid":{"rendered":"https:\/\/fawyerz.in\/judgments\/?p=1674"},"modified":"2025-03-12T16:24:04","modified_gmt":"2025-03-12T10:54:04","slug":"royal-british-bank-v-turquand-case-summary","status":"publish","type":"post","link":"https:\/\/fawyerz.in\/judgments\/company-law\/royal-british-bank-v-turquand-case-summary\/","title":{"rendered":"Royal British Bank v. Turquand (1856) (Case Summary)"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1674\" class=\"elementor elementor-1674\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-52238618 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=\"52238618\" 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-49798489\" data-id=\"49798489\" 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-bf12ba1 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=\"bf12ba1\" 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-1c5689a5\" data-id=\"1c5689a5\" 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-1ed85447 elementor-widget elementor-widget-heading\" data-id=\"1ed85447\" 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\">Royal British Bank v. Turquand (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-2955ff95 elementor-widget elementor-widget-image\" data-id=\"2955ff95\" 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=\"1312\" height=\"736\" src=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA.jpeg\" class=\"attachment-1536x1536 size-1536x1536 wp-image-1675\" alt=\"Royal British Bank v. Turquand\" srcset=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA.jpeg 1312w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA-300x168.jpeg 300w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA-1024x574.jpeg 1024w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA-150x84.jpeg 150w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/a-black-and-white-image-of-a-courtroom-setting-in-zp0KuZLER0-gNr6SH4SSjg-NQ1uH2-pTSC0yz41ZchTjA-768x431.jpeg 768w\" sizes=\"(max-width: 1312px) 100vw, 1312px\" 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-75562f58 elementor-widget elementor-widget-text-editor\" data-id=\"75562f58\" 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 of company law establishes the doctrine of indoor management. Opposite to the doctrine of constructive notice, this doctrine protects the outsider against the company so it is not prejudiced by the non-compliance of regulations in the indoor working of a company.<\/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\/royal-british-bank-v-turquand-case-summary\/#Facts_of_Royal_British_Bank_v_Turquand\" >Facts of Royal British Bank v. Turquand<\/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\/royal-british-bank-v-turquand-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\/royal-british-bank-v-turquand-case-summary\/#Judgment_of_Royal_British_Bank_v_Turquand\" >Judgment of Royal British Bank v. Turquand<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Facts_of_Royal_British_Bank_v_Turquand\"><\/span><span style=\"color: #993300;\"><b>Facts of Royal British Bank v. Turquand<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><ol><li><span style=\"font-weight: 400;\">The Royal British bank gave a loan to the plaintiff company. The company issues a \u00a32000 bond as a security towards the loan.<\/span><\/li><li>The company went into liquidation and Turquand was appointed as the liquidator of the company.<\/li><li>The company denied the liability of the loan by the Royal British bank alleging that their Articles of Association mandated a general resolution to authorize the directors to borrow money.<\/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 it was the duty of the Royal British Bank to check whether a resolution has been passed to authorize the directors to borrow the loan.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Whether the loan given is valid and enforceable?<\/span><\/li><\/ol><h2><span class=\"ez-toc-section\" id=\"Judgment_of_Royal_British_Bank_v_Turquand\"><\/span><span style=\"color: #993300;\"><b>Judgment of Royal British Bank v. Turquand<br \/><\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p><span style=\"font-weight: 400;\">The court held that it was not mandatory for the Royal British Bank to check whether the resolution to authorize the directors was passed or not. The court established the doctrine of indoor management and held that passing any internal resolution is indoor management of a company and can not be considered as a constructive notice.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The rule of constructive notice is only applicable to public documents. If a company enters into a contract, it can be presumed that the company has complied with the internal regulations of the company. Hence, there can be no prejudice against the bona fide party.\u00a0<\/span><span style=\"font-style: inherit; color: var( --e-global-color-text ); font-family: var( --e-global-typography-text-font-family ), Sans-serif; background-color: var(--ast-global-color-5);\">The company was held to be bound by the loan and the validity of the contract was upheld.<\/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 of company law establishes the doctrine of indoor management. Opposite to the doctrine of constructive notice, this doctrine protects the outsider against the company <\/p>\n","protected":false},"author":3,"featured_media":1675,"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 center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9],"tags":[33],"class_list":["post-1674","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law","tag-doctrine-of-constructive-notice"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/comments?post=1674"}],"version-history":[{"count":38,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1674\/revisions"}],"predecessor-version":[{"id":4416,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1674\/revisions\/4416"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/media\/1675"}],"wp:attachment":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/media?parent=1674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/categories?post=1674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/tags?post=1674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}