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partner in any company, it is not necessary to shew that he executed the deed of settlement, if it can be proved from his letters or admissions that he was a partner according to the terms of that deed (a). And, à fortiori, if he can be shewn to have done acts of management, more especially if he became a director, he will be deemed an actual partner, and chargeable accordingly (6). In such case, it is not necessary to shew that the individual sought to be charged actually signed any con. tract. If he consented to be a director, or belonged to the board of management, he is responsible for the proceedings of the board (c).

Signing the deed of settlement is conclusive evidence of partnership against those who sign it (d), and they will be considered as partners from the time of the payment of their respective deposits (e).

II. Again, as we have already noticed, a man will become chargeable as a partner in a joint stock company, by holding himself out to the world in that character. There is but little to distinguish the evidence in these cases from that by which a man may be charged as an ordinary partner. On this point, however, some few matters may here be noted, as more particularly applicable to the present subject. For, without question, they who appear as the active framers or carriers on of a company, they who canvass for subscriptions, who call the meetings, who hire the premises, who take pains to shew the world that they are the conductors of the concern, must be looked upon as actual partners, and be made liable accordingly. Still, even here, there are some niceties of distinction. For it seems that the doing of some few of these acts, without a general activity in the business, will not render a man a partner. The being present at a meeting where premises are proposed to be hired for carrying on the company, which premises are afterwards hired; and even, in addition to this, the soliciting other persons to become members of the company, will not, it seems,

(a) Harvey v, Kay, 9 Barn. & Cres. 356.

(6) Doubleday v. Muskett, 7 Bing. 118.

(c) Per Bosanquet, J., Ibid.
(d) See Bird v. Aston, 6 Bing.

788, 786, cited; D. Tindal, C. J., Fox v. Clifton, 12. 800; Shep. Touch. 71.

(e) Lawler v. Kershaw, 1 Mood. & Malk. 93,

make a man a partner, if he did no other acts of partnership (a). On the other hand, in a case where it was proved that A. B. had contributed to the funds of a building society, and had been present at a meeting of the society, and party to a resoulution that certain houses should be built, it was held, that this made him liable in an action for work done in building those houses, without proof that he had any actual interest in them, or in the land on which they were built (6).

Signing a prospectus of a future company does not make a man a partner to the world. Thus, in Bourne v. Freeth (c), the prospectus of a company, after stating that the Legislature had authorized the distilling of whiskey in England, proceeded as follows :-"The conditions upon which this establishment is formed are, first, they pledge themselves they will distil nothing but the purest malt spirit, in the smallest stills that Government will license, and on the same plan practised in the Highlands of Scotland, for which purpose an eminent distiller from Inverness-shire will be engaged; secondly, the concern will be divided into twenty shares of £100 each, which are transferable, five of which belong to Sir W. Fairlie, Bart., the founder of the works, the other fifteen subscribers to pay in their subscriptions to Messrs. Moss & Co., bankers, Liverpool, in such proportions as may be called for; thirdly, the concern to be under the management of a committee of three of the subscribers, to be chosen annually, upon the 10th of October; fourthly, regular books to be kept, which shall be open for the inspection of any of the subscribers, and a division of the

profits made twice a year, at Lady-day and Michaelmas; fifthly, £10 per cent. to be paid into the bank on or before the 1st of June next.” It was held, that this prospectus imported only that a company was to be formed, not that it was actually formed; and that a person who signed it, did not, by so doing, hold himself out to the world as partner, and, consequently, was not liable in an action for goods sold and delivered to the company. In this case, Bayley, J., observed, that the plaintiffs, when they saw the defendant's name to the prospectus, had no right to infer, from the terms of it, that he had become

(a) Bourne v. Freeth, 9 Barn. & Cres. 632; 4 Man. & Ryl. 512.

(6) Braithwaite v. Skofield, 9

Barn. & Cres. 401.

(c) Supra.

a partner at the time when he signed it; they ought, before they delivered goods on his credit, to have inquired whether he had become a partner subsequently, and, if they had so inquired, they would have found that he had not.

Again, in order to charge a person successfully with having held himself out as a partner, the act on which the party is so charged must appear to have been voluntary. In Fox v. Clifton (a), it was sought to charge the defendants with having held themselves out as partners, not merely by reason of their having paid deposits, but because their names, together with those of others who had paid deposits, had been entered in a book at the counting-house, which book was shewn to the plaintiff by the secretary of the company, upon the plaintiff's application to know their names. But Tindal, C. J., held that the communication of this book was no act done by the defendants themselves, or by their authority or permission, so as to make them nominal or ostensible partners. There was no evidence, he said, that the defendants knew of the existence of any copy of the list at the counting-house, still less, any evidence that such list was made up or shewn to any one with their permission or knowledge. The holding one's self out to the world as a partner, as contra-distinguished from the actual relation of partnership, imported at least the voluntary act of the party so holding himself out. It implied the lending his name to the partnership, and was altogether incompatible with the want of knowledge that his name had been so used.

SECTION III.

Of the Mutual Rights of Shareholders.

The partners in a joint stock company are of two classes : one consists of directors, trustees, and others, who are actively employed in conducting the concern; the other, of a number of persons who take little or no part in its management, and many of whom become shareholders for the sake only of obtaining a

(a) Ante, p. 736.

profitable investment for their money. The general conduct of the trade falls upon the directors, while the more particular transactions are usually managed by paid agents who are not shareholders. The funds and other property of the company are vested in the trustees.

I. 1. If a company be projected, but never come into actual operation, a person who has advanced his money upon the faith of the completion and continuance of the project, is entitled to recover his deposit in an action against the directors for money had and received to his use (a). Therefore, where a scheme for establishing a tontine was put forth, stating that the money subscribed was to be laid out at interest, and after some subscriptions had been paid to the directors, but before any part of the money was laid out at interest, the directors resolved to abandon the project; it was held that each subscriber night, in an action for money had and received, recover the whole of the money advanced by him, without deduction of any part towards the payment of the expenses incurred (6). So, in a case where A., the purchaser of shares in a projected railroad company, had sold them to B., and the undertaking was afterwards abandoned before anything was done in pursuance of the project, it was held, that B. might recover the amount of the shares in an action against A. (c).

Similar relief may be had in equity, in cases where the projected company turns out to be a mere bubble, and the whole scheme was concocted in fraud. Thus, in the well-known case of Colt v. Woollaston (d), the defendant Woollaston, wh ha procured a patent for extracting oil out of English radishes, assigned this patent to one Arnold, in trust for the contributors to the project, which he divided into five thousand shares, valuing every share at £20, in order to raise £100,000. As an encouragement and security for the contributors, Woollaston likewise conveyed to Arnold and his heirs an estate which he

(a) It has been held that if A. sell B. certain shares in a projected joint stock company, and the undertaking is abandoned before anything is done under it, B. may recover from A. the amount of the shares. Kempson v. Saunders, 4 Bing. 5.

(6) Nockles v. Crosby, 3 Barn. & Cres. 814 ; 5 Dowl. & Ryl. 751.

(c) Kempson v. Saunders, 12 Moore, 44 ; 4 Bing. 5. See Watkins v. Huntley, 2 Car. & Pay. 410.

(d) 2 P. W. 154. See Stent v. Bailis, Id. 217.

had bought for £31,800, subject to a mortgage of £28,000, upon trust in the first place to pay off the mortgage, and afterwards, to pay to him, Woollaston, £57,200, (in all £85,200); and as to the surplus which the estate would raise, it was to be for the benefit of the contributors. The project was to be called the “Land Security and Oil Patent;” and was represented by the defendants to be a most advantageous project without any hazard, there being land security given for the benefit of the contributors. The project failed, and the contributors, with some resentment, called for their money; upon which the projectors promised to return the money with interest, within six months; but afterwards this was refused. The plaintiffs, who had each contributed £120 for six shares a-piece, then brought their bill to be repaid these several sums, and the Court granted the relief. Sir Joseph Jekyll said that this was an imposition, to propose the surplus of the value of an estate, (which cost but £31,800), after £85,000 charged upon it-more than double its value-as a security to the contributors who laid out their money upon this project: it was giving them moonshine, instead of anything real. It was no objection that the parties had their remedy at law, and might bring an action for monies had and received for the plaintiff's own use; for, that in cases of fraud a Court of equity has a concurrent jurisdiction with the common law, matter of fraud being the great subject of relief there.

Modern cases in equity have been decided on the same principles. In Green v. Barrett (a), the plaintiff was a shareholder in, and the defendants were the directors of a company called “ The Imperial Distillery Company.” The bill alleged that ten of the defendants caused a prospectus to be printed and distributed, stating the capital of the company to be £600,000, in 12,000 shares of £50 each, naming certain persons as directors, &c.; and promising that a settlement would be prepared ; and that an act of Parliament would be passed to enable the company to sue and be sued in the names of its officers. The bill further stated, that the plaintiff, confiding in the truth and accuracy of the prospectus, and in the persons named as directors therein, and believing that it would be adhered to and carried into effect, purchased twenty shares, and paid his de

(a) 1 Sim. 45.

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