Royal British Bank v Turquand (1856) 119 ER 886 The deed of settlement, the equivalent of the constitution of a company, empowered the board of directors to borrow such sums as were authorised by a resolution of the general meeting of the shareholders. The company borrowed money from a bank on the authority of two of its directors who authenticated the company's common seal. There was no authority given by the general meeting. The company refused to repay the loan and argued that the bank had constructive notice of the constitution and should have been aware of the lack of authority. It was held that an outsider need not inquire into whether such a resolution had in fact been passed. The company was still bound to the bank because the passing of the resolution was a matter internal to the company