Page images

should be made defendants, subject to a plea in abatement, with an averment, that a co-executor is alive and has administered. (d) An action was brought against A. B. & C. as executrix and executors of one J. T., for a debt due from the testator. B. & C. severally pleaded plene administravit, except as to the sum of £383 6s. 7d.; and also except as to certain goods and chattels; the defendant *took judgment against A. for the assets [*289] admitted to be in her hands, and judgment of assets in futuro as to the residue against the three; the goods were thereupon seized, and sold under a fi. fa., and A. alone gave a cheque on the bankers with whom the £383 68. 7d. was deposited, which was dishonoured, because not signed by B. & C.; the plaintiff then brought an action of debt against A. alone, suggesting a devastavit. Held, that the defendant was clearly liable in such action, and that she was conclusively bound by her admission of the possession of assets in the former action.(e)

(d) Archb. Pl. & Ev., 2nd. ed., 70; 1 Wms. Saund. 291 g; ante, p. 197, n. (6) (e) Cooper v. Taylor, 7 Scott, N. R. 950.



THE ordinary rules which have been already laid down, with reference to the liabilities of Principal and Agent, will, it is believed, be found applicable in determining the respective liabilities of parties engaging as members of Railway Companies. Now the stat. 7 & 8 Vict. c. 110, s. 4, provides that a company shall be entitled to a certificate of provisional registration when the proposed name of the intended company, the business and purpose of the company, and the names, occupations, places of business, and residence of its promoters have been registered, and we shall therefore consider the existence of the company as commencing with its provisional registration, merely observing, that in some instances a certificate of provisional registration is obtained by the promoters, before any steps have been taken towards the formation of a committee, or managing body, and before any expenses have in fact been incurred, whereas, in other cases, parties have previously agreed to co-operate in the undertaking, as members of the provisional or managing body. No prospectus nor advertisement can however be issued before a certificate of provisional [*292] registration has been obtained, and the liability of parties who may have entered into contracts prior thereto will depend in all respects upon the principles which have been already laid down as applicable to ordinary contracts. Assuming, then, that the company has obtained its certificate under the above-mentioned statute, we shall proceed to consider the liability which attaches to a member of the managing body. I. When the provisional is identical with the managing committee. II. When the managing com

mittee is elected or appointed by the provisional committee. III. When the provisional and managing committees, although co-existent, are independent of each other. It is believed that every case which can occur in practice will be found to fall within one or other of the above three classes.

I. In the case first supposed it is evident that the managing body must be either altogether self-constituted or must be called into existence by persons proposing at some future period, i. e., as soon as shares shall be issued, to become shareholders in the company, and with respect to the

liability of such parties, the remarks in a case (a) already cited seem directly applicable : "when persons mect to prepare the measures necessary for calling the society into existence, attendance on such meeting and concurrence in such measures may be strong evidence that any individual there present and taking part in the proceedings held himself out as a paymaster to all who executed their orders;" if, therefore, expenses are incurred by the committee *prior to the issue of shares in the [*293] undertaking, and in pursuance of resolutions passed at the preliminary meeting of persons interested in the prosecution of the undertaking, it seems clear that parties attending at such meeting, and assenting to such resolutions, will be liable for the expenses so incurred.

It will, in the next place, be convenient to remark that the managing body of a railway company is by no means on the footing of an ordinary trading co-partnership: its position seems to be much more analagous to that of the committee of a club; and the distinction between these two is obvious, for where persons engage in a community of profit and loss as partners, one partner has the right of property for the whole, and may, in ordinary transactions, bind the partnership by his act; but a tradesman who has supplied goods to a club "cannot recover against a member of the committee, unless he shews that the person making the contract was the agent of the defendant, and by him authorized to enter into the contract on his behalf;" (b) that is to say, in the latter case the agency must be proved, whereas, in the former, it is implied by law. It is clear that in order to fix the member of the committee of a railway company with liability for goods supplied to the commitee, some proof must be given that the party sought to be charged either concurred in giving the order, or has recognised and assented to it when given. Before any allotment of shares has been made, and before, consequently, any capital has been *raised for meeting expenses [*294] incident to the preliminary operations, a member of the acting committee must indeed be presumed to have authorized that body to pledge his individual credit for goods to be supplied for their use, and for other reasonable and necessary expenses; but even in this case the question as to liability is one of fact, and not of law, and it will be for the jury to infer from the defendant's conduct whether he did not give authority to some one to pledge his credit for such things as might be necessary for carrying on the concern.(c) Where, however, a subscription has been entered into for liquidating the preliminary expenses, or when funds have been raised in the usual manner, by issuing shares in the undertaking, it is clear that the inference to be drawn by the jury will be the reverse of that just mentioned; for, as observed by Alderson, B., in a recent case,(d)" if A. gives money to B. to do a certain act, the natural inference is that B. is to spend the money, and not pledge A.'s credit; but if A. gives B. authority to do something, but gives him no money for the purpose, then he may pledge the credit of his principal for what is necessary."(e) Inasmuch, then, as the liability of a member of the managing body of a rail

(a) Lake v. The Duke of Argyll, 6 Q. B. 478, 479, ante, p. 168. (b) See the judgments of Lord Abinger, C. B., and Parke, B., in Flemyng v. Hector, 2 M. & W. 172.* (c) See Bartlett v. Lambert, 10 Jur. 416. (e) See Flemyng v. Hector, 2 M. & W. 172,+

(d) Bartlett v. Lambert, supra.

*Reprinted at $2.50 per vol.

way company depends upon the proof of agency in every case when the contract in question was not made by him in person, it seems, on principle, that he would not be bound by the act of the majority of the committee, provided he expressly dissented therefrom, in which *case neither actual nor implied authority for such act from the dissentient member could of course be shewn. "It might be," remarks [*295] the learned baron(f) whose words we have already quoted, "that the majority only gave authority, and that the defendants dissented from it. If so, I should think they only were liable who voted for it." Such a case, however, is, we believe, in general, and certainly ought to be, provided for, either by the resolutions adopted by the committee for its internal management, or by the express terms of the subscribers' agreement; and in the absence of any such provisions, it will at all events be necessary for the member sought to be charged in respect of a contract entered into by order of the committee, to shew that he was one of the minority who dissented from giving the order. Mere absence, however, of the defendant from the committee, on any particular occasion, would seem to imply assent rather than dissent, and would not, it is conceived, raise any presumption favourable to him. The power, moreover, of the majority of the committee to bind the minority, and of present to bind absent members, by any particular act or contract done or entered into by them, will depend upon its quality and nature. For instance, if a bill of exchange were accepted by several members of the committee acting as such, in pursuance of a formal resolution, and with a view to raising money for the purposes of the company, it is apprehended that those members only would be liable whose *were on the bill, or who had expressly authorized its accep[*296] tance.(g) Where scrip has been issued, and the subscribers' agreement has consequently been signed, the powers entrusted to the directors will be ascertained by reference to that deed, and we need only observe that these powers, which are in general sufficiently ample, must be strictly pursued. The authority of the committee is necessarily limited to such acts as may be within the contemplation of the clauses of that deed by which the affairs of the company are regulated. When they act in violation of those rules they exceed the authority which is delegated to them, and their acts are void, and cannot be binding on any member of the committee who has not expressly assented to them.(h) It is quite clear that when a party becomes a member of the committee of a railway company he will not be liable for goods supplied, or on any contract entered into prior to the period of his joining the concern, unless, indeed, he use the goods or ratify the contract, in which case he would, according to the ordinary rule that ratihabitio retrotrahitur, be responsible.(i)


II. In cases where the managing committee is selected by the provisional committee out of its own body, and invested with general powers for carrying out the objects of the company, the liability or non-liability of a member

(f) Todd v. Emly, 8 M. & W. 508,* and Bartlett v. Lambert, 10 Jur. 417. (g) See per Lord Abinger, C. B., 2 M. & W. 179.* Ante, p. 165.

(h) See Per Coltman, J., with reference to a benefit society. Tyrell v. Woolley, 2 Scott, N. R. 181, per Lord Abinger, C. B., 2 M. & W. 179, 180.*

(i) Bartlett v. Lambert, 10 Jur. 415. See Kerridge v. Hesse, 9 C. & P. 200.*

[blocks in formation]

of the provisional committee who has assented to this delegation of authority will depend upon whether the act done, and on which he is [*297] sought to be charged, was or was not within the general scope of the authority thus delegated. This question will, in most cases, be for the jury; and the difficulty which may be felt in answering it will be found to result from the fact that the powers delegated to the acting body are usually very ill-defined. It seems, however, that the remarks already made as to the liability of a member of the managing committee for the acts of his codirectors will in general apply when a question arises as to the liability of a member of the provisional committee for the acts of that body to which he has himself agreed to entrust the management of the concern. And since cases falling strictly within the class to which we have here adverted are certainly of rare occurrence, we shall proceed, thirdly, to offer some remarks with reference to cases in which the provisional and managing committees are co-existent but independent of each other.

III. The principal difficulty here consists in determining whether the strict rule applicable to the case of an ostensible partner in a trading firm applies also to that of a provisional committee-man who has simply allowed his name to appear as such to the world, but who has not in any way interfered in the management of the company. The rule as to the liability of an ostensible or nominal partner in a trading concern has been already stated,(k) and may be illustrated by the case of Guidon v. Robson.(1) There, a merchant carrying on trade on his own separate account introduced into his *firm the name of a clerk who did not partake in the profits of the [*298] business, but continued to receive a fixed salary. And Lord Ellenborough, C. J., ruled that the nominal partner was to be considered in all respects as a partner as between himself and the rest of the world, and that, where the name of the real person is introduced with his own consent, it is immaterial what agreement there may be between him and those who share the profit and loss. "They are," observed his lordship," equally responsible, and the contract of one is the contract of all."(m) Now, this decision depends upon a principle which is altogether inapplicable to the case of a railway undertaking, viz., that one partner is an agent for his co-partners for trading purposes, and the case cited merely shows that the same principle must be applied where a person who is not really a partner holds himself out to the world as such. We have already stated our belief that the individual members of the managing committee of a railway company are not, by implication of law, agents for each other, or for the entire body; but that some proof must be given of express or implied authority to them to act as such. It must be observed, moreover, that the test usually applied for determining whether or not a trading partnership exists, quoad third persons, viz., the participation of the parties in the profits of the concern,(n) is manifestly inapplicable in the case of a railway company. To [*299] such a company we apprehend that the law of principal and agent,

(k) Ante, p. 107.

(1) 2 Camp. 302. Per Eyre, C. J., Waugh v. Carver, 2 H. Bla. 246. Ante, pp. 64. 167. (m) Unless, perhaps, where it can be shewn that the plaintiff was not aware that the party had held himself out as a partner, and had not, consequently, given him credit. See per Tindal, C. J., Holcroft v. Hoggins, L. J., N. S., C. P. 129. Ante, p. 172.

(n) Potts v. Eyton, C. P. Trin. T., May 22, 1846.

« PreviousContinue »