Ashbury Rly Carriage and Iron Co Ltd v Riche

Incorporated under the Companies Act 1862, the Ashbury Railway Carriage and Iron Company Ltd’s memorandum, clause 3, stated that its objects were "to make and sell, or lend on hire, railway-carriages…" and clause 4 stated that activities beyond this needed a special resolution. But the company agreed to give Riche and his brother a loan to build a railway from Antwerp to Tournai in Belgium. Later, the company repudiated the agreement. Riche sued, and the company pleaded that the action was ultra vires. ==Judgment==

Exchequer Court The judges of the exchequer chamber being equally divided, the decision of the court below was affirmed. Blackburn J said: House of Lords The House of Lords, agreeing with the three dissentient judges in the Exchequer Chamber, pronounced the effect of the Companies Act to be the opposite of that indicated by Mr Justice Blackburn. It held that if a company pursues objects beyond the scope of the memorandum of association, the company's actions are ultra vires and void. Lord Cairns LC said, ==References==