Page images
PDF
EPUB

who persisted in making law for themselves? How were their fantastic notions to be translated into the king's legal English?

I suspect our common lawyers made the attempt with only half a will, cherishing secretly the hope that Jews and Lombards, with their commercial notions, would some day be expelled the realm. At any rate, they succeeded very ill in what they did attempt.

Not recognising the firm, they consequently could not recognise its ownership of the partnership stock. They had, therefore, to recognise an actual interest in the partners. This was very oddly defined.

Of the various modes in which property could be held without division by more than one owner, joint-tenancy is expressly distinguished by the Common Law through this characteristic, that, on the death of one of the joint-owners, the whole of the object owned passes to the survivor. “The nature of joyn-tenancy is,” says Littleton (s. 280), “ that he which surviveth shall have only the entire tenancy.” “Joyn-tenants have a sole quality of survivorship,” says Lord Coke (Co. Litt.

a 180 b)," which co-parceners have not.”

.” Yet the legal definition of the partner's interest is, that it is “a joint-tenancy without benefit of survivorship as between the partners themselves, but with survivorship in regard to third persons, who may sue or be sued by the survivor." Could not one almost fancy such a definition to have been introduced, in a moment of grim fun, by soine crabbed legal sage, for the sole purpose of puzzling the brains of the Lombard merchant ? For it follows clearly, from what we have seen above, that a "joint-tenancy without benefit of survivorship,” is about as rational an expression as a round square, or a dark light.

Absurd or not, however, this is the legal view of the partnership interest. Sir E. Coke says of two joint merchants, that “the wares, merchandises, debts, or duties, that they have, as joint merchants or partners, shall not survive, but shall go to the executors of him that deceaseth."-(Co. Litt. 182 a); very loose wording, to say the least, on the part of such an authority, since it would imply, literally, that the executors of the deceased partner took the whole to the prejudice of the surviving one.

And it has been held in a late case (Buckley v. Barber, 6 Esch. 164), that the title to partnership chattels does not survive, and that a surviving partner cannot mortgage a deceased partner's share for the purpose of carrying on the trade. Which case, by the way, is sufficient to show that the other half of the full definition, “with survivorship in regard to third persons," is far too general. In fact, when the thing is looked into, it is found that the only survivorship admitted as towards third persons, is for purposes of procedure.

But now, after the Common Law has spoken of the partner's interest in the stock as a joint-tenancy without benefit of survivorship, Equity is found running upon an exactly opposite tack, and dealing with it as a tenancy in common. .

It does this so positively and distinctly, that, according to a wellknown rule, wherever property is left to two jointly for the purposes of a trade, and is so dealt with accordingly, this is held actually to sever the joint-tenancy, as it is termed, unless there be something in the will to preserve it, notwithstanding the joint-trade (9 Ves. 596; Jackson v. Jackson). Where a will bequeathed leaseholds and personalty, in terms clearly amounting to joint-tenancy, such a severance was presumed from the fact of the parties dealing with it as partners, and that from the time of their entering into possession (S. C. 7 Ves. 535, 9 Ves. 591). And although, according to these views, land intended for partnership purposes is usually conveyed to partners as tenants in common, still, as in the case of a will, so in that of a purchase, the mere circumstance of the partnership is sufficient to draw the same consequence, whatever be the form of the conveyance. In “ the case of a joint lease taken, or a fee purchased to carry on the joint-trade,” the Court, to use Lord Thurlow's words, will “convert the jointproperty for the purposes of trade, and making a common advantage” (1 Ves. J. 434, Lyster v. Dolland; and see Lake v. Craddock, 3 P. W. 158; Lake v. Gibson, 1 Eq. Ca. Abr. 290).

So that, putting these various rules of law together, we come to the luminous conclusion, that the interest of the partners in the stock is a joint-tenancy without benefit of

a

survivorship, which is severed from the time of their entering into possession-in other words, a thing self-contradictory in itself, which is born and dies in a breath.

In attempting to give to a class of working-men some notions of our English law of partnership, I had to come across this branch of it, and to dismiss it in these terms: “I shall be able to tell you something of the proportions in which the partners are deemed to be interested in the stock and profits. I shall be able to tell you what becomes of the stock on dissolution of the partnership. I shall be able to tell you what powers may

. be exercised over it by the partners during the partnership or its winding up. But what the nature of their interest is, I cannot tell you, for I really do not know.”

2. Powers of the Partners over the Assets : How perfectly inconsistent the legally recognised powers of the partners over the stock are with any legal statement of their interest in it, is sufficiently shown by a single example.

Neither joint-tenants nor tenants-in-common have any power to dispose of more than their own individual share of the thing held in fellow-ownership. But when we come to those anomalous forms of commercial fellow-ownership called partnerships, we find each partner invested with a sole power of disposing of or pledging the partnership assets, so far at least as they do not consist of land. Nothing simpler, if with the trader you consider the partnership property as that of a single owner—the firm-and each of the partners as being a joint-and-several agent or attorney for that owner. But nothing more exceptional, if you attempt to refer the act to the exercise of any recognised form of fellow-ownership.

In order, therefore, to explain the exercise of these anomalous powers of partnership, the law was driven to borrow an idea from out of a different sphere to that of the rights of property—the idea of the partnership agency. The nearest approach which it could make to the mercantile idea of the agency of the partners for the firm, was to consider them as agents each for the other of them. “The general principle which governs all partnerships in trade," it has been said, is this, " that each partner constitutes the others his agents, for

[ocr errors]

the purpose of entering into all contracts for him within the scope of the partnership concern.”—(C. J. Tindal, 6 Bingh. 792; Fox v. Clifton). Observe the qualification, most important in practice. The mutual agency of partners for each other, which forms--so to speak--the field of partnership action, is bounded by a line drawn, or rather staked out by the Courts, not always very precisely or sufficiently, at those points where the exercise of such agency is deemed not to be requisite for the purposes of the partnership.

3. Partnership Dealings with Land :—The full and frank recognition of this mutual agency of partners, to its utmost possible extent, even without a legal recognition of the firm, would have gone far to cure many of the practical difficulties of partnership. For instance, if one partner, as agent for the other, has power to pledge or dispose of the personal property of the partnership, there seemed no reason why he should not equally have power, as such agent, to pledge or dispose of its real property. Had this been the case—had land once brought into partnership been wholly assimilated to other partnership stock, for the purposes of the partnership—an immense impetus would have been given to commercial enterprise, and a whole head of most perplexing and much litigated law would have been absent from our treatises.

But here the Common Law took its stand. As soon as the land was in question, it immediately threw aside the idea of the partnership agency, and betook itself to the consideration of the partner's interest in the land. Neither joint-tenant nor tenant-in-common could dispose of the whole of the real or personal estate held jointly or in common. Therefore the partner—that mysterious joint-tenant without benefit of survivorship, holding in severalty from the moment of his entering into possession-might dispose of the whole of the partnership personalty, and of his share only of the realty.

4. Incapacity of one Partner to bind others by Deed :-A deed sealed and delivered was, if I may use the term without irreverence, one of the great sacraments of the Common Law, the mysteries of which were best unmeddled with by traders. ACcordingly, it was laid down that, whatever might be the powers

.

of one partner to bind another, he certainly could not do so by deed. With ludicrous solicitude for commercial interests, Lord Kenyon declared that the contrary principle“ would be a most alarming doctrine to hold out to the commercial world !" (Harrison v. Jackson, 7 T. R. 207.) For one partner to sign away £100,000 of partnership stock, had nothing—the judicial mind appears to have thought--alarming in it to the mercantile world. But for one partner to seal and deliver the conveyance of a 40s. partnership freehold ! .

It is scarcely necessary to point out that there is not the slightest difficulty in the execution of a deed by a firm, as such, any more than by a corporation. Most firms perhaps have seals of their own; all might have. Indeed, there was one way in which, without departing from its principles, the law might have conferred very great facilities upon partnership dealings, and at the same time reduced them to a more wholesomely strict rule. In dealing with powers, it requires (to some extent, at least) the instrument conferring the power to be of equal solemnity with the instrument by which it is executed; where a deed has to be sealed and delivered, it requires the power to be under seal (or by will in due form). Now, had it held that the power to bind copartners by deed was implied in every duly executed deed of copartnership, and in such only, more partnerships might have come to be constituted by deed, and the Courts might have been spared many and many a puzzling case on contracts of partnership, either verbal, or established by some informal writing. But nothing of the kind was thought of. Indeed, regular deeds of copartnership may be said to have only acquired a real importance on the day when Lord Eldon was at last worried into saying, that, in cases of partnership disputes, he would interfere where there was an express written contract, but not otherwise. 5. Exceptions as to Land and Deeds :

-The result of the doctrine of partnership agency, that “the act and assurance of one partner, made with reference to business transacted by the firm, will bind all the parties” (C. J. Abbott, 2 B. and Ald. 688; Sandilands v. Marsh), would thus seem to be qualified

« EelmineJätka »