each should have one-third interest for profit and loss; and that the funds should be provided by S. and A. drawing upon G., and discounting and remitting to him the proceeds. S. and A. drew each of them separately on G., who accepted; and they separately discounted the bills and remitted him the proceeds. G. and S. having both failed, and the holder of S.'s bill having claimed payment of the contents from A., it was held, that as the proceeds of that bill had been applied to the prosecution of a joint adventure in which they were all partners, A. was liable in payment (a). In bill transactions, as in other matters of contract, companies are bound by the acts of their accredited agents, whether they are partners or not, in all matters within the sphere of their agency. Thus, where a bill was granted blank in the drawer's name, and thereafter discounted with a bank agent, who filled it up with his own name as drawer, and indorsed it to the bank; and this agent, on the bank re-indorsing it for the purpose of his operating payment, deleted his own name, and caused the party to whom it was originally granted to sign as drawer and also as indorser; it was held in an action at the instance of the bank against the acceptors, that the bank, being identified with the acts of their agent, could not recover (b). But the case is different if blame is to be imputed to the party transacting with the agent. Thus, a party at the request of a bank-agent gave him bills which the agent ostensibly discounted, but of which the party allowed him to retain the proceeds for his private accommodation. The agent having become bankrupt, it was held, that although the discount of the bills had been reported to the bank, they were not liable for the money (c). It is a rule of law founded on the most equitable considerations, that a protest of a bill taken by a notary who is the acceptor, indorser, or drawer, is inept (d). The principle of this rule obviously applies to partners, who being in the active management of the company's affairs, act as notaries in protesting bills in which the company is concerned. is concerned. And accordingly it has been observed from the bench, that the managing partner of a bank ought not to (a) British Linen Co. v. Alexander, 1853, 15 D. 277. (b) Young's Trs. v. Scott, 1831, 9 S. 574. (c) Armstrong's Assignees v. Leith Banking Co., 1831, 9 S. 889. (d) Russell v. Kirk, 1827, 6 S. 133; Leith Bank v. Walker's Trs., 1836, 14 S. 332. Companies are bound by acts of their agents. Protests should notaries who not be taken by are partners. act as notary in protesting bills due to the bank (a); but it has been held to be no objection to the validity of a protest of a bill, that the notary, who was indorser without recourse, had some years before been a partner of a company who were the drawers of the bill, and had been subsequently found liable, in respect of insufficient notification of his retirement, for the debts of the company (b). Extinction of rights and obligations. EXTINCTION OF RIGHTS AND OBLIGATIONS. The rights and obligations of companies in questions with their own members and the public may be extinguished by mora and taciturnity in the same way as those of individuals. Some cases illustrative of the operation of this principle will be found noted below (c). Acquisition of rights by prescription. PRESCRIPTION. Corporations may acquire rights by prescription like individuals (d); and therefore there can be no doubt that railway companies and the like may in this way acquire or amplify such rights as it is competent for them to possess, having regard to the instru (a) Farries v. Smith, 1813, 17 F. C. 360. (b) M'Kenzie v. Smith, 1830, 9 S. 52. (c) 1. Between partners or shareholders and their companies: Blackburn v. Finlay, 1848, 10 D. 590; Blackburn v. Buchanan, 1848, 20 Jur. 199; M'Laren v. Liddell's Trustees, 1862, 24 D. 577; Craig v. Douglas, Heron, and Company, 1780, aff. 1781, 2 Pat. App. 575; Flowerdew v. Laing, 1843, 5 D. 440. It may be remarked, however, that in questions of accounting inter socios, delay unaccompanied by something more significant will seldom avail to bar a full investigation at the instance either of partners or their representatives. Lister v. Sutor, 1811, aff. 1815, 6 Pat. App. 78; Maclaren or Law v. Liddell's Trs., 1860, 22 D. 373. See 2. Between companies and strangers: Craig and Co. v. Hamilton, 1823, 2 S. 305; Hunter and Co. v. Levy and Co., 1825, 3 S. 425; Watson and Co. v. O'Reilly and Co., 1826, 4 S. 480; Hutchison and Co. v. Scott, 1830, 8 S. 377; Harford and Co. v. Robertson, 1832, 6 W. and S. 1; Ogilvie v. Duff, 1834, 12 S. 857; Forbes v. Edinburgh Water Co., 1830, 8 S. 459 ; Armstrong v. Edinburgh and Leith Ship. Co., 1825, 3 S. 323; Mann and Co. v. Skinner, 1829, 7 S. 806; Hunter v. Fleming and Strang, 1829, 8 S. 234; Macallum and Co. v. M'Keand, 1847, 9 D. 630; Moir v. Alloa Coal Co., 1849, 12 D. 77. (d) See Ayton v. Magistrates of Kirkaldy, 1833, 11 S. 676; Magistrates of Hamilton v. Duke of Hamilton, 1846, 8 D. 844, aff. 1850, 7 Bell's App. 1, 22 Jur. 266; Greig v. Magistrates of Kirkaldy, 1851, 13 D. 975; Wauchope v. York Buildings Co., 1781, M. 10706, House of Lords, 1782, 2 Pat. App. 595. ments and purposes of their formation. It is by no means certain whether the quasi person of an unincorporated company can acquire by the long prescription, though the decision in the case of a friendly society would seem to countenance the affirmative view (a). They may, however, acquire rights by acquiescence (b). RIGHT TO INTERDICT. Interdict is competent at the instance of companies against Interdict. their partners, and of partners against their companies, when it can be shown that either of them are doing, or intending to do, something injurious to the rights and interest of the other. Thus interdict was granted against the partner of a company, after he had been sequestrated, from selling by auction bills accepted by him in name of the company (c); and the instances are numerous of companies being interdicted by their partners from departing from the provisions of the contract of formation, applying the company funds in an improper manner, etc. (d). These matters will be fully treated of under the heading of 'Interdict' in a subsequent part of the treatise. PUBLIC BURDENS. burdens. Companies are liable to be assessed for poor rates like indivi- Public duals, when they are possessed of means and estate liable to such assessment. The more important decisions on this subject will be found noted below (e). (a) Kirk-session of South Leith v. Scott, 1832, 11 S. 75. (b) Moir v. Alloa Coal Co., 1849, 12 D. 77. (c) Taylor and Sons v. Taylor, 1823, 2 S. 143. (d) Learmonth v. Leadbitter, 1841, 3 D. 1192; Brown v. Sir C. Adam, 1848, 10 D. 744; Wilson v. Glasgow and South-Western Ra. Co., 1850, 13 D. 227. (e) Railway Companies: - Edinburgh and Glasgow Ra. Co. v. Meek, 1849, 12 D. 153; Glasgow and Ayr Ra. Co. v. Abbey Parish of Paisley, Canal Companies: Anderson v. may It here be noticed that the valuation of subjects acquired by railway and canal companies is struck by the Assessor of Railways and Canals. 17 and 18 Vict. cap. 91, sec. 3. See Forth and Clyde Canal Co., 1859, 24 D. 1453. Water Companies :-Hay v. Edinburgh Water Co., 1850, 12 D. 1240. Ordinary Companies:- Buchanan v. Parker, 1827, 5 S. 362; Bakers of Paisley v. Mags. of Paisley, 1836, 15 S. 200; Adams v. M'Leroy and Co., 1851, 14 D. 248; Walkinshaw v. Adams, 1850, 13 D. 198. CHAPTER IV. RIGHT TO SHARE PROFITS AND DIVIDENDS. principle. THE acquisition of gain and its division among the members form General The share to which each partner is entitled, and the periods at which a division of the profits is to take place, generally are, and always ought to be, specifically fixed in the instrument of formation, or in some written agreement subsequently signed by all the partners. When this, as sometimes happens, has been neglected, questions of a very embarrassing kind are apt to present themselves. In the absence of any written agreement, the proportion in which the several partners are to share profits is a question of fact which it properly falls within the province of a jury to determine, having regard to the whole circumstances of the case and certain rules of law (a). As has been seen, it is a fixed principle of law, founded on the most equitable considerations, that wherever a partnership has been proved to exist, every partner is entitled to at least some share of the profits. Beyond this, there is a legal presumption for equality among all the partners, which, in dubio, ought to form the rule of division (b). But as this is merely a (a) Campbell's Trs. v. Thomson, 1829, 7 S. 650, as revd. 5 W. and S. 16, 7 Bligh 432; Aberdeen Town and County Bank v. Clark, 1859, 22 D. 41. See p. 135. See also Bruce v. Ogilvie, 1813, House of Lords, 1 Dow (b) Fergusson v. Graham's Tr., Shares and sion ought to contract. periods of divi be fixed in the In absence of sions, the propartner's share such provi portion of each is a question for a jury. |