Page images
PDF
EPUB

account. (k) So, where A. and B. entered into partnership to work a coalmine, and the mine being worked out they agreed to divide the partnership stock of materials and utensils, each party taking one half according to a valuation to be made, and after such valuation had been made, B. agreed to take the whole pursuant to that estimate, and accordingly entered into possession ; it was held that A. had an immediate right of action for a moiety of the value of the partnership stock.(?)

76. In the case just referred to,(m) we find the following remarks by the court, in connexion with the present subject. Upon the general rule of law there is no difficulty ; one partner cannot maintain an action for a balance on the partnership account, until the accounts have been settled and adjusted, and until it is ascertained what is the balance due from the partner against whom the claim is made. But there may be special bar

gains, by which particular transactions are *insulated and separated [*59]

from the winding up of the concern, and are taken out of the general law of partnership.(n) In a recent case, however, it was observed that Fromont v. Coupland,(0) and other similar cases seem to limit the right of action on an account between partners to a settlement of accounts on a final close of all partnership transactions ; but that, at all events, the settlement must be one which is binding and conclusive upon the partners. (p)

77. Where A. promised to repay his co-partner B., out of the amount of goods then sold, provided the latter would accept and pay certain bills for the firm, it was held that, on payment of such bills by B., the fund in A.'s hands, being specific and ascertained, became separated from the partnership account.(9) Where there were two partners in a certain voyage, one of whom agreed to pay the broker's commission on receiving a larger share of the profits, and after the partnership accounts were settled and adjusted he neglected so to do; an action to recover the amount of commission, paid by the other partner, was held to be maintainable.(r) So, also, if a sum of money be awarded to be paid by two partners jointly in equal moieties to a third party, one partner paying the whole amount may recover against his [ *60]

*copartner;(8) and an action may be maintained by a shareholder

against the company of which he is a member, on a contract entered into prior to his becoming so.(u)

78. It has been held that, although partners cannot, by a private arrangement amongst themselves, relieve any one member of their body from liability quoad the public, yet several partners in an undertaking may

(m) Id.

(k) Brierley v. Cripps, 7 C. & P. 709.u (1) Jackson v. Stopherd, 2 Cr. & M. 361. (n) See Sharp v. Warren, 6 Price, 132; Chadwick v. Clarke, 1 C. B. 700; Rawlinson v. Clarke, 15 L. J., N. S., Exch. 171.

(0) Supra (i). See Garbett v. Veale, 5 Q. B. 409.

(p) Carr v. Smith, 5 Q. B. 138. See Sharpe v. Cummings, 14 L. J., N. S., Q. B. 10. See 8 & 9 Vict. c. 95, ss. 65. 68; under this Act a partner may sue his copartner. (9) Coffee v. Brian, 3. Bing. 54:- Robson v. Curtis, 1 Stark. 78,3

Wilson v. Cutting, 10 Bing. 436.2

Burnell v. Minot, 4 Moore, 340; Sharpe v. Cummings, 14 L.J., N. S., Q. B. 10; Hutton v. Eyre, 6 Taunt. 289;" Wright v. Hunter, 1 East, 20; Osborne v. Harper, 5 East, 225. (u) Lucas v. Beach, 1 Scott, N. R. 350.

•Eng. Com. Law Reps. 32. Id. 11. Id. 2. Id. 25. •Id. 1.

agree with a copartner that he shall cease to hold that character, and shall assume another, and may by such an agreement, as evidenced by their own acts and conduct, estop themselves from subsequently setting up the partnership as existing inter esse.(x)

79. It follows from the general rule above laid down, that one firm cannot maintain an action against another firm if the same person is a partner in both houses, provided the right of action accrued during the period of his being such partner; nor does the death of the last-mentioned party remove this objection, though, after his decease, the surviving partners of one firm may sue those of the other on transactions subsequent thereto.(y)

*80. Secondly, as between partners and strangers to the firm. In suing strangers to the firm on a partnership transaction all the [ *61 ] partners must join, for they are jointly interested ;(2) but subsequently admitted partners should not be joined, even though under an agreement to share in profit and loss from a period antecedent to the contract.(a) The proper test for determining whether any particular transaction was on behalf of the partnership, is, whether the amount to be recovered would go, in the first instance, to the partnership fund.(6)

81. So, that where a guarantee was given and addressed to one member of a firm, but it was proved that the advance was made out of the partnership fund, it was held that the firm and not the individual member ought to sue ;(c) though, on a covenant in a deed signed by one partner in the name of the firm and sealed with his seal, the partner executing alone can sue:(d) but if an application for a loan be made generally to a partner in a bank, the borrower thereby entitles the party so applied to, on making the advance, to hold him answerable to such party in either of his capacities of a partner or of a *private individual, according to that in which he makes the advance.(e) Where, however, the loan is made by one

[ *62 ] member of a firm and nominally in his individual capacity, the surviving partners, after his decease, cannot sue for the amount of such loan, unless they distinctly prove that it was in reality intended to be made on the partnership account ;(8) nor can surviving partners sue the agent of a deceased partner for money really belonging to the partnership, but entered

(2) Day v. Sharp, Law Times, yol. vii. p. 62. See Radenhurst v. Bates, 3 Bing. 463. 470;Davies v. Hawkins, 3 M. & S. 488. 491.

(y) Bosanquet v. Wray, 6 Taunt. 597;c Mainwaring v. Newman, 2 B. & P. 120; Rose v. Poulton, 2 B. & Ad. 822. See Bosanquet v. Woodford, 5 Q. B. 310. Reference may also be made to Jacaud v. French, 12 East, 317; Sparrow v. Chisman, 9 B. & C. 241 ;e Jones v. Yates, 9 B. & C. 532.e

(2) Ante, s. 20. For the rule in equity, see Story's Eq. Pl. ss. 167, 168. As to what constitutes a partnership with reference to strangers, see the cases Chitt. Contr. 3d ed.

240 et seq.

(a) Wilsford v. Wood, 1 Esp. 183.

(6) Bond' v. Pittard, 3 M. & W. 357; Pearson v. Skelton, 1 M. & W. 504; Thacker v. Shepherd, 2 Chitt. R. 652.

(C) Garrett v. Handley, 3 B. & C. 462;f and 4 B. & C. 664; Walton v. Dodson, 3 C. & P. 162; and see Moller v. Lambert, 2 Camp. 548.

(d) Metcalfe v. Rycroft, 6 M. & S. 75; ante, s. 55. (e) Per Bayley, B., Alexander v. Barker, 2 Cr. & J. 138. (g) Per Denman, C. J., Sims v. Bond, 5 B. & Ad. 393.b Eng. Com. Law Reps. 13. cId. 1. Id. 22. oId. 17. fId. 10. 6Id. 14. bId. 27. May, 1847.-5

by such agent in his separate account with the deceased partner, for there is no privity between the parties.(h) Where a partner contracts apparently on his own account, but really on account of the firm, either he may sue alone or the firm may sue on the contract made by him as their agent,(i) unless such partner was clearly dealt with in his individual capacity,(k) or unless he expressly declared the subject-matter of the contract to be his sole property ;(l) and generally, whether, under given circumstances, an advance of money was made by the individual or by the partnership, is a question for the jury to decide.(m)

82. Again, cases may occur in which an action is maintainable by an individual partner, though arising out of partnership concerns, on the ground that he alone is interested therein : thus, where accountants were

*employed to make out partnership accounts, and likewise the sepa[ *63]

rate balance of each partner, it was held, that one partner who sustained loss by the inaccuracy of his separate account and balance, might sue alone for compensation, for there was a contract between the defendants and each of the partners, as well as a contract between the defendants and all.(n)

83. The directors of a company established by deed of settlement, derive the power of contracting for the company and of suing on contracts, so entered into, from the express provisions of the deed ; and where this power is vested in all the directors, they must sue jointly, unless the company be empowered to sue in the name of any one director, by statute ;(0) and this holds notwithstanding the bankruptcy of one director, unless such office was thereby determined; though, whether the contract was made with themselves as directors, or with the company, will be determined by the particular circumstances under which it was concluded. (p) Therefore, a bond given to the trustees of an insurance company, conditioned for the faithful services of a clerk to the company, may be put in suit by them ;(9) and such trustees are the proper plaintiffs in an action for the recovery of [ *64]

money paid under a policy of insurance *executed by them, but

void on account of fraud, such payment having been made out of moneys deposited at the bankers of the company in the names of the trustees.(r)

84. Where a partner is only nominally such, he need not be joined in suing on a contract to which he was a stranger;(8) but it is necessary to show distinctly that he had no interest either in the partnership or in the

case,

(h) Sims v. Brittain, 4 B. & Ad. 375.

(i) Ante, s. 57; Arden v. Tucker, 4 B. & Ad. 815; Skinner v. Stocks, 4 B. & Ald. 437 ;k Bawden v. Howell, 4 Scott, N. R. 331.

(k) Brandon v. Hubbard, 2 B. & B. 11.! (l) Lucas v. De La Cour, 1 M. & S. 249. (m) Boswell v. Smith, 6 C. & P. 60.(n) Story v. Richardson, 6 Bing. N. C. 123. The declaration was framed in

but the plaintiff might have sued alone in assumpsit, per Bosanquet, J., Id. 130.

(0) See Skinner v. Lambert, 11 Law Journ., N. S., C. P. 237. (p) Phelps v. Lisle, 10 Ad. & E. 113.0 (9) Metcalf v. Bruin, 12 East, 400; see Megginson v. Harper, 2 Cr. & M. 322. (r) Lefevre v. Boyle, 3 B. & Ad. 877.P (8) Kell v. Nainby, 10 B. & C. 20;9 Glossop v. Colman, 1 Stark. 25." Eng. Com. Law Reps. 24. Id. 6. 'Id. 6.mid. 25. ĐId. 37. oId. 37. PId. 23.

aId. 21. "Id. 2.

[ *65 ]

particular transaction,(t) and he must join in suing on a bill of exchange drawn in the name of the firm including bis own.(u)

85. A dormant partner may be joined or not at the election of the ostensible partner;(x) but any defence, as a set-off available against the party actually contracting, would appear to be so against both the partners if they join, the defendant having been ignorant of the partnership :(y) and a personal contract which the defendant was induced to enter into with the ostensible partner, by reason of the confidence reposed in him, cannot it *should seem, be transferred on his retirement to the dormant partner, or enforced subsequently thereto.(2)

86. If there be any change in the firm, those should be made plaintiffs who composed the firm when the cause of action accrued,(a) though, in the case of a guarantee, the surety is discharged by the retirement of one of the partners,(b) or by the principal taking a partner ;(c) but if a note be given to a firm " or order” as a security, it will be a security for advances made after a change in the firm.(d) When one member of a partnership firm becomes bankrupt, the solvent partners have a right to use the names of the bankrupt's assignees on giving them an indemnity against costs;(e) and, on the death of one partner, the survivors must sue expressly as such, without joining the personal representatives of the deceased, for the remedy by action survives to the copartners. ($)

87. Lastly, it must be observed, that counts on individual claims cannot be joined with others in respect of partnership transactions ; nor can money had and *received by A. prior to the partnership, and acknowledged by him during it, be set off in an action by A. and B. as .

[*66] partners ;(h) but a partner suing as survivor may insert in the declaration a count for a debt due to himself in his separate capacity.(i)

88. On contracts entered into by a corporate body with one of its own members, either party may sue the other, for, with reference to these,

(9) Teed v. Elworthy, 14 East, 210; Page v. Hiscox, Parsons v. Crosby, cited Id. 213. (u) Guidon v. Robson, 2 Camp. 302. (1) Leveck v. Shaftoe, 2 Esp. 468; Stacey v. Decy, Id. 469, n. (a); Cothay v. Fennell, 10 B. & C. 671;" Lloyd v. Archbowle, 2 Taunt. 324; Skinner v. Stocks, 4 B. & Ald. 437;s Mawman v. Gillet, 2 Taunt. 325, n. (a); Bawden v. Howell, 4 Scott, N. R. 331.

(y) Robson v. Drummond, 2 B. & Ad. 303. 308 ;t Mawman v. Gillett, 2 Taunt. 325, n. (@); Chitt. Contr. 3d ed. 848, 849; but see the remarks on Mawman v. Gillett, 2 Selw. N. P. 10th ed. 1135.

(z) Robson v. Drummond, 2 B. & Ad. 303. 307, 308." (a) Wilsford v. Wood, 2 Esp. 183. (b) Dry v. Davy, 10 A. & E. 30 ;* Myers v. Edge, 7 T. R. 254. See further as to this, Chitt. Contr. 3rd ed. 524, 525. (c) Bellairs v.

Ebsworth, 3 Camp. 53. (d) Pease v. Hirst, 10 B. & C. 122 ;y Per Lord Denman, C. J., 10 A. & E, 31, 32.* (e) Whitehead v. Hughes, 2 Cr. & M. 318.

(g) Per Lord Tenterden, C. J., Jones v. Yates, 9 B. & C. 538 ;a Jell v, Douglas, 4 B. & Ald. 374;Israel v. Simmons, 2 Stark. N. P. C. 356 ;c Martin v. Crump, 2 Salk. 444; S.C. 1 Lord Raymond, 340; Rex v. Collector of Customs, 2 M. & S. 225 ; Com. Dig. Merchant, (D.); Webber v. Tivill, 2 Wms. Saund. 121 b., and n. (1).

(h) France v. White, 6 Bing. N. C. 33. The effect of a receipt by one partner in the name of the firm, may be destroyed by proving that it was a fraud on the copartners. Farrar v. Hutchinson, 9 A. & E. 641.e

(i) Chitt. jun. Plead. 152, n. (c). "Eng. Com. Law Reps. 21. Id. 6. Id. 22. Id. 22. Id. 37. 5]d. 21. "Id. 17,

bid 6. cId. 3. dId. 37. Id. 36.

the member contracting is as distinct from the corporation as any third person, and must be deemed a stranger.(k)

89. The power of making bye-laws for the recovery of penalties from individual members, by particular officers belonging to the body, is included in the very act of incorporation,(l) and the right of suing, being founded on agreement between the members, must be exercised pursuant thereto ; and actions for penalties can only be maintained in the names of the officers appointed to recover them, (m) and during the period of their official existence : so that where a penalty was imposed on the party refusing to discharge the duties of a certain office on election thereto, and such penalty

was made payable to the master and wardens for the time being, [ *67]

*for the use of the corporation, it was held that an action would not lie at suit of those officers, after ceasing to be such.(n)

90. Actions against strangers must be brought in the corporate name, and not in that of the officer contracting on behalf of the corporation, nor of the individuals composing it ;(0) a foreign corporation may, moreover, sue as such on proof of its being incorporated.(r) It may be observed also that acts of Parliament frequently enable corporate bodies to sue, and other parties to sue them in the names of their clerks, treasurers, &c., for the time being.

91. As to the mode in which a corporation may contract, the general rule is, that this can only be done under its corporate seal; and the exceptions to this rule result from the necessity or exigency of particular circumstances; as, where the subject-matter of the contract is of constant requirement and small amount, in which case a corporate body may súe on a parol contract, whether executed or executory, express or implied(9) -[ *68 ]

*as, in assumpsit for use and occupation, where the tenant has held

premises under them, and paid rent.(r) 91 a. Where a contract does not fall within the exceptions to the

(k) Per Parke, J., Dunston v. The Imperial Gas Light and Coke Company, 3 B. & Ad. 132;f Per Denman, C. J., Hill v. The Manchester and Salford Waterworks Company, 5 B. & Ad. 875;6 see Carden v. The General Cemetry Company, 5 Bing. N. C. 257.h

(l) 2 Selw. N. P. 10th ed. 1158. (m) Per Best, C. J., Radenhurst v. Bates, 3 Bing. 470;. Feltmakers' Company v. Davis, 1 B. & P. 98, and cases there cited.

(n) Graves v. Colby, 9 A. & E. 356. See The Thames Haven Dock and Railway Company v. Rose, 5 Scott, N. R. 524; Piper v. Chappell, 14 M. & W. 624.*

(0) 1 Bla. Com. 474, 475; Bowen v. Morris, 2 Taunt. 374; Cooch v. Goodman, 2 Q. B. 380. See Warde v. Clarke, 12 M. & W. 747.*

(p) The National Bank of St. Charles v. De Bernales, 1 C. & P. 569. (q) Per Tindal, C. J., delivering judgment, Gibson v. The East India Company, 5 Bing. N. 270, 271;m Beverley v. The Lincoln Gas Light and Coke Company, 6 A. & E. 829, 845;" Church v. The Imperial Gas Light and Coke Company, 6 A. & E. 846 ;" Judgment, Arnold v. The Mayor of Poole, 5 Scott, N. R. 775; Reg. v. Mayor of Stam. ford, 6 Q. B. 433 ; The City of London Gas Light and Coke Company v. Nicholls, 2 C. & P.365;' The Mayor of Ludlow v. Charlton, 6 M. & W.815,6 cited and recognised in 5 Scott, N. R. 775, where the general rule was applied, and it was held that the appointment of an attorney by a municipal corporation (except in the case of the City of London,) must be under the corporate seal. Post, s. 216.

(r) The Mayor of Stafford v. Till, 4 Bing. 75 ;P The Mayor, &c. of Carmarthen v. Lewis, 6 C. & P. 608;9 The Dean aud Chapter of Rochester v. Pierce, 1 Camp. 466; The Mayor of London v. Hunt, 3 Lev. 37. Eng. Com. Law Reps, 23. &Id. 27. h]d. 35. 'Id. 11. *Id. 36. 'Id. 42. mId. 35.

nid. 33. "İd. 12. PId. 13. `91d. 25. *Reprinted at $2.50 per vol.

« PreviousContinue »