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and not that which regulates ordinary partnerships, must be applied ; and we therefore conclude that a provisional committee-man, who has merely allowed his name to appear as such in the prospectus and advertisements of a railway company, will not, as a matter of legal inference, be liable for the acts of the managing committee, unless he has either taken part in their appointment, or has in some way interfered with, or acquiesced in, their proceedings. The law was thus laid down by Parke, B., in the case of Law v. Wilson, recently tried before him ; and the ruling of this learned judge was approved of by Pollock, C. B., in the subsequent case of Banks v. Goode, at the Nisi Prius sittings after last Trinity term.(o) It likewise seems to have been followed in several other Nisi Prius cases, which have not yet appeared in the regular reports.
We may further remark, that if there be (as we have already suggested) any analogy between the respective positions of the committee of a club, and of a railway company, the judgments in Todd v. Emily, and Flemyng v. Hector, which certainly deserve, with reference to this subject, an attentive perusal, may be called in aid of the conclusion, which we have submitted to the reader. The proper questions then for the jury in an action against a provisional committee-man will substantially be : First, whether the defendant authorized *the insertion of his name in the list of the provisional committee ; and secondly, whether he authorized the
[*300] managing committee, or their agents, to pledge his credit for the debts of the concern. If the first of these questions should be answered in the affirmative, but no evidence be given to shew a delegation of authority by the defendant ultrà the fact of his consent to be a member of the provisional committee, the second of the above questions will it is conceived, become one of law merely, and the verdict will have to be entered for the defendant; unless, indeed, where the plaintiff relies upon the terms of the prospectus, as shewing a delegation of authority by the provisional committee as a body, in which case this document will, under the circumstances supposed, receive its true construction from the court : and if its construction should be such as that contended for by the plaintiff, the verdict will of course be entered for him.(p)
As regards the shareholders, it seems quite clear that they are not partners in the concern quoad the public; they merely contribute towards raising certain funds for liquidating the expenses incidental to the undertaking, and certainly cannot be considered as expressly or impliedly authorizing the managing directors to pledge their credit for any purpose whatsoever.(9) *Where, however, the terms of the prospectus have been complied with as regards the allotment of shares and the subscription of the
[*301] necessary capital, and the conditions precedent to the formation of the company have consequently been fulfilled, it cannot be doubted that a partnership exists as between all parties embarking as shareholders in the concern.(r) The application for shares, however, and payment of the deposit will amount to nothing - if the shares subscribed for are so few that the concern cannot proceed, and the scheme must necessarily be abortive ;' and in this case, according to a recent and well-known decision, the amount of the deposit may be recovered back :(8) providing there be evidence to shew that the scheme has in fact been abandoned.(1) Even where the subscribers' agreement has been executed it will, according to the case of Wontner v. Shairp,(u) be a question for the jury in an action for recovery of the deposit, whether the deed was executed by the plaintiff with the same understanding as the money was paid, or whether he was induced to execute it by any misrepresentation as to the actual position of ihe concern.
(o) These cases are not yet reported, except in “The Law Times," vol. vii. 236. 286. Acc., Parrett v. Blunt, Id. 287 ; Sheridan v. Whitington, Id. 433, cor. Parke, B.; Lambert v. Knill, Id. 409. See Barker v. Birt, 10 M. & W. 61.*
(p) The above remarks have been confined to that point which appears to us to be of the most practical importance, with reference to the liability of provisional committee.
It will of course be remembered that the provisions of the deed of settlement may in any particular case have a very material bearing upon the question of liability, (9) Ante, p. 294.
*Reprinted at $2.50 per vol.
We shall conclude these remarks with referring the *reader to [*302]
the case of Day v. Sharp, already noticed,(x) where it was held, that an action would lie at suit of the secretary of a railway company, who had previously been a member of the provisional committee of the company against the defendant, being liwewise a member of the same committee, there being evidence to shew that the defendant had assented to the change in the plaintiff's position; and had agreed that he should cease to hold the character of committee-man, and should assume that of secretary: this decision appears to have proceeded on the ground that the defendant was by his own acts estopped from setting up the partnership as a defence to the action. It was expressly decided in Lucas v. Beach,(y) that one shareholder may maintain an action against another shareholder in an undertaking in respect of a contract entered into prior to the existence of the partnership inter se ; and this decision is quite in accordance with established principles.
No. 11.-Joint Stock COMPANIES.
The recent statute 7 & 8 Vict. c. 110, intituled, An Act for the Registration, Incorporation, and Regulation of Joint Stock Companies, contains several provisions which have a direct bearing upon the subject of parties to actions, but which can only be briefly noticed in a work like the present.
*Sect. 25, empowers the company, when completely registered, [*303] to sue and be sued by their registered name in respect of any claim by or upon the company, upon or by any person, whether a member of the company or not, so long as any such claim may remain unsatisfied.
With respect to s. 26, it has been decided that the sale of scrip in railway companies provisionally registered is not prohibited thereby ; this was held by the Court of Exchequer in Young v. Smith, East. T. January 26,
(T) Holmes v. Higgins, 1 B. & C. 74, recognized Lucas v. Beach, 1 Scott, N. R. 350.
(8) Walstab v. Spottiswoode, 15 L. J., N. S., Ex. 193. 198; Pitchford v. Davis, 5 M. & W.2; Nockells v. Crosby, 3 B. & C. 814.C
(t) Smith v. Newcomb, cor. Patteson, J., at Lincoln Midsummer Assizes, 1846. (u) Cor. Erle, J., June 23, 1846. (3) Ante, p. 60, but see Holmes v. Higgins, 1 B. & C. 74.d (y) 1 Scott, N. R., 350.
ÞEng. Com. Law Reps. 8. Id. 10. dId. 8.
1846, and by the Court of Queen's Bench in the subsequent case of Lawlon v. Hickman, the judgment in which was delivered at the sittings after the last Trin. Term. It is hardly necessary to observe that this decision is most important with reference to all questions arising between the vendor and vendee of scrip, and the right of the latter to recover the purchasemoney where there has been a total failure of consideration.(2)
Sects. 44, 45, and 46, regulate the manner in which contracts (including bills of exchange, promissory notes, and deeds,) shall be entered into on behalf of the company, and the liability which shall be incurred thereby.
Sect. 66 enacts that every judgment in any action against the company “ shall and may take effect, and be enforced, and execution thereon be issued, not only against the property and effects of such company, but also if due diligence shall have been used to obtain satisfaction of such judgment, &c. by execution against the property and effects of such company then against *the person, property, and effects of any shareholder for the time being, or any former shareholder of such company, in
[*304] his natural or individual capacity, until such judgment, &c. shall be fully ratisfied. Provided in the case of execution against any former shareholder, that such former shareholder was a shareholder of such company at the time when the contract or engagement for which such judgment, &c. may have been obtained, was entered into, or became a shareholder during the time such contract or engagement was unexecuted or unsatisfied, or was a shareholder at the time of the judgment, &c. being obtained. Provided also, that in no case execution be issued on such judgment, &c. against the person, property, or effects of any such former shareholder of such company after the expiration of three years next after the person sought to be charged shall have ceased to be a shareholder of such company."
Sect. 67 provides for the reimbursement of shareholders against whom execution has issued, either by recovering against the company, or by enforcing contribution from the other shareholders, in like manner as contribution may be enforced in ordinary cases of copartnership.
Sect. 68 regulates the proceedings to be taken in execution against the person or property of a shareholder.
The statute 7 & 8. Vict. c. 111, intituled “ An Act for facilitating the winding up the affairs of Joint Stock Companies unable to meet their pecuniary engagements," provides (s. 2) that “ the bankruptcy of any such company or body in its corporate or associated capacity, as the case may be) shall not be construed to *be the bankruptcy of any member of such
[*305] company or body in his individual capacity."
And sect. 8 empowers the assignees of the estate and effects of the company to sue any person, whether member of such company or not, for any
debt or demand on behalf of the company. The statute 8 & 9 Vict. c. 16, is intituled “ An Act for consolidating in one Act certain provisions usually inserted in acts, with respect to the constitution of companies incorporated for carrying on undertakings of a public nature,” the 25th Sect. of this act empowers the company to enforce the payment of calls by action.
Sect. 36 enacts, that, if any execution either at law, or in equity, shall
(z) See Leeman v. Lloyd, 14 L. J., N, S., Q. B., 165.
have been issued against the property or effects of the company, and if there cannot be found sufficient whereon to levy such execution, then such execution may be issued against any of the shareholders to the extent of their shares respectively in the capital of the company, not then paid up.
Sect. 37 enacts, that, if by means of any such execution any shareholder shall have paid any sum of money beyond the amount then due from him, in respect of calls, he shall forthwith be reimbursed such additional sumn by the directors out of the funds of the company.(a)
Sect. 97 points out the various modes in which contracts may be entered into by the directors, on behalf of the company, and enacts that, “ All contracts made according to the provisions herein contained shall be
*effectual in law, and shall be binding upon the company and their [*306]
successors, and all other parties thereto, their heirs, executors or administrators, as the case may be, and on any default in the execution of any such contract, either by the company or any other party thereto, such actions or suits may be brought either by or against the company as might be brought had the same contracts been made between private persons only.”
Sect. 100 provides that the directors shall not be personally liable, and that they shall be indemnified out of the capital of the company for all payments made or liability incurred in respect of any acts done by them, and for all losses, costs, and damages which they may incur in the execution of the powers granted to them.”
Lastly. By stat. 9 & 10 Vict. c. 28, intituled “ An Act to facilitate the Dissolution of certain Railway Companies,” it is provided (s. 25) “ that the resolution to dissolve the company, or the actual dissolution thereof, shall not alter or affect the rights of creditors or other persons not being shareholders in the company, nor any engagements whatsoever which the committee may have entered into;" and sect. 31 provides ó that where the dissolution of a company shall have been resolved under this act, if judgment shall have been recovered, or shall afterwards be recovered in any action against any member of the committee, for any debts due from such company, or from such committee, in respect of the undertaking, the member against whom such judgment shall have been recovered shall be entitled at law to a contribution from each of the other members of such committee towards the payment of the moneys recovered by such judgment, and of
all costs *and expenses in relation thereto, of such a share of the [*307]
whole amount of such moneys, costs, and expenses, as would have been borne by such respective member upon an equal contribution by all the members of such committee, and may recover the contributions to which he
may be so entitled, or any of them, by action or actions of debt, or on the case against all or any such other members of such committee, but so that no such member shall be liable in any such action as aforesaid, for more than the share to which he shall respectively be liable to contribute under this provision.”'
(a) As to proceedings against the shareholders in public companies, see Bradley v. Eyre, 11 M. & W. 433; Bradley v. Warbury, Id. 452 ; Clowes v. Brettel, Id. 461; Beech v. Eyre, 6 Scott N. R. 327.
No. III.— JOINT STOCK BANKS.
Joint Stock Banks in England are now regulated by the provisions of the recent statute 7 & 8 Vict. c. 113, of which act, sect. I enacts « That it shall not be lawful for any company of more than six persons to carry on the trade or business of bankers in England after the passing of this act (5th Sept., 1844,) under any agreement or covenant of copartnership made or entered into on or after the 6th day of May last past, unless by virtue of letterspatent to be granted by her Majesty, according to the provisions of this act; but nothing herein contained shall be construed to restrain any such company established before the said 6th day of May, for the purpose of carrying on the said trade or business of bankers in England, from continuing to carry on the same trade and business as legally as they might have done before the passing of this act, until letters-patent shall have been granted to them severally on *their application as hereinafter provided to be made, subject to the provisions of this act."
(*308] The act further provides (s. 6) that the company may be incorporated by letters-patent, to be granted by ihe Crown; (s. 7,) that incorporation shall not limit the liability of the shareholders ; (s. 8,) “ that no action or suit by or against the company shall be in any wise affected by reason of the plaintiff or defendant therein being a shareholder or former shareholder of the company; but any such shareholder, either alone or jointly with another person, as against the company, or the company as against any such shareholder, either alone or jointly with any other person, shall have the same action and remedy in respect of any cause of action or suit whatever which such shareholder or company might have had if such cause of action or suit had arisen with a stranger.”
Sect. 10 provides that execution upon any judgment may be issued against the property and effects of the company, and if such execution shall be ineffectual to obtain satisfaction of the sums sought to be recovered thereby, then it shall be lawful for the creditor to have execution in satisfaction of such judgment against the person, property, and effects of any shareholder, or, in default of thus obtaining satisfaction against the person, property, and effects of any person who was a shareholder of the
company at the time when the cause of action against the company arose ; provided that no person having ceased to be a shareholder of the company shall be liable for
debt for which he would not have been liable as a partner, or for which judgment shall have been obtained, after the expiration of three *years from the time when he shall have ceased to be a shareholder of such company.(a)
[*309] Sects. 11, 12, 14 and 15, provide for the reimbursement of individual shareholders out of the property and effects of the company, or in default thereof by contribution from the other shareholders.
(a) As to proceedings under 7 Geo. 4, c. 46, and 1 & 2 Vict. c. 96, see Esdaile v. Lund, 12 M. & W. 607 ;* Steward v. Dunn, Id. 655; Lyon v. Haynes, 6 Scott, N. R. 371; Davidson v. Bower, 5 Scott, N. R. 538; Philipson v. The Earl of Egremont, 6 Q. B. 587 ; Bosanquet v. Woodford, 5 Q. B. 310 ;a Fowler v. Rickerby, 3 Scott, N. R. 138; Steward 'v. Greaves, 10 M. & W. 711 ;* Crellin v. Calvert, 14 M. & W. 11;* Ransford v. Bosanquet, 2 Q. B. 972.b
a Eng. Com. Law Reps. 48. bId. 42. "Reprinted at $2.50 per vol.