the general case, a competent ground of reduction; and it may be laid down as an absolute rule, that no decree-arbitral can stand where the arbiter has received the evidence of one of the parties, and has refused to hear the other.' But the parties to a submission are not entitled to be re-heard, and it does not vitiate the arbitration that the oversman had taken part in the proceedings throughout, and had at length pronounced decreet-arbitral on information obtained by him as oversman elect; and where the arbiter is selected as a person of skill, and the reference relates to matters of opinion, he is entitled to exercise his own judgment, and is not obliged to listen to the opinions of other skilled persons.3 501. What is the effect of an award ultra vires compromissi ? Such an award generally is sustained only in so far as it is within the submission, and reduced quoad excessum.* But where the decision of one point, which is ultra vires, cannot be set aside without affecting another which is within the submission, the award will be wholly reduced." 502. What is the effect of a submission with regard to pre scription? A special submission interrupts prescription; because it is equivalent to a demand by the creditor of his claim, and to joining issue with the debtor in an action at law. But a general submis 1 Sharpe, 24th Feb. 1815, H. of L., 3 Dow's App. 102; E. of Dunmore, 28th Jan. 1835, 13 S. 356. * Crawford, 4th Feb. 1828, 20 D. 488. 3 Johnston, 8th July, 1817, Dow's App. 247; Macdonald, 8th Dec. 1843, 6 D. 186; Mitchell, 17th June, 1848, 10 D. 1297; M'Nair's Trustees, 16th Feb. 1855, 17 D. 445. 4 Crawford, M. 6835; Kidd, 19th June, 1810, F.C. Reid, 15th Dec. 1826, 5 S. 140. affords no presumption of any evil intention on the part of the arbiter, but is in many cases a perfectly correct course, and it may be imperatively forced on the arbiter by the highest considerations of justice;" Ledingham, 16th Dec. 1859, 22 D. 245. The same principle had been recognised (per Lord Fullerton) in Mitchell, 17th June, 1848, 10 D. 1297, though there the award was set aside on the ground that the arbiter had received evidence on the one side, and refused to do so on the other. See also Miller, 10th March, 1855, 17 D. 689. sion does not interrupt, unless followed by proceedings pointing out the particular claims.'(c) XI. CONTRACT OF COPARTNERY. 503. Define partnership. Partnership may be defined as "a mutual contract and voluntary association of two or more persons for the acquisition of gain or profit, with a contribution, for that end, of stipulated shares of goods, money, skill, and industry."2 504. Can any one of several partners bind the company by signing the firm to a bill, if the contract prohibits his doing so? State the reasons. (1.) If the bill is granted in relation to a matter which might reasonably be supposed to fall within the line of the company's business, the company will be bound by it, if the receiver was ignorant of the prohibition; because the public have no notice of the provisions of the contract, being a private deed, and are entitled to rely on the law of partnership, which establishes a general institorial power in each partner to bind the company. (2.) If the party receiving the bill was aware of the limitation, he cannot claim upon it against the company, although granted in relation to the company's business; as he is barred by personal exception from pleading the general law of partnership. (d) (3.) If the bill is not in the line of the company's business, the firm will not be bound to the original receiver of the bill; because the institorial power of binding the company at common law applies only to matters connected with the business. (4.) If the company have recognised or adopted the bill by the 1 Duff on Deeds, 307. 2 Bell's Prin. 351. (c) Several of the matters referred to in this title should be, and generally are, provided for in the deed of submission; such as those in Ans. 480, 481 (4) (including agreement that in the event of the arbiter's death any evidence, &c., previously taken shall be available in any after proceedings between the parties), 483, 487, and 493. (d) It is not clear, however, that the company, though not liable on the bill, might not be so on other grounds for the debt, if the partner was entitled to make transactions, though not to sign bills in relation to them. prohibited partner, it will be binding on them, whether in the line of the business or not, the objections otherwise competent to them being excluded personali exceptione. (5.) If the bill, during its currency, has found its way into the hands of a bona fide onerous indorsee, it will, in all circumstances, be binding on the company; because onerous indorsees, without notice, and acquiring the right before the term of payment, are not liable to latent objections pleadable against the drawer and indorser. But if the bill has been acquired by the indorsee after it is due, he is liable to all such objections.1 505. Does a partner, who fraudulently uses the company firm, bind the other partners? (1) The whole partners will be bound if the obligation is in the line of the partnership.2 (2) But if the fraudulent transaction is manifestly different from the company's trade, (e) the company's signature gives no recourse against partners ignorant of the fraud.3 506. Can a partner assign his interest in the company? Unless authorised by the contract, or with consent of the others, a partner cannot assign his interest in the company, to the effect of substituting the assignee as a partner, on account of the delectus persona implied in partnership; but he may assign his interest in the stock and profits due to him at the dissolution of the company. (f) [See Cassels, 6 R. 955 in confirmation of the last sentence in the note.] 1 Bell's Com. ii. 503; Dewar, M. 14569; Clark, 30th Nov. 1821, 1 S. 179; Props. of Bo'ness Canal, 23rd June, 1791; Hume, 751; 19 & 20 Vict. c. 60, § 16. 2 Bell's Prin. 354. 3 M'Nair, 19th Jan. 1803; Hume, 753. 4 Neilson, M. 14564. (e) This expression is perhaps not the best for conveying the meaning. Professor Bell's (Com. ii. 506) expression is "the usual course of trade," which probably implies something more than a deviation from the kind of trade, though in some cases this might be sufficient. The view now suggested seems to derive support from Professor Bell's illustration, which is—" Thus a reference to arbitration will not bind the company if signed or agreed to by one of the partners," &c. (f) The question in Neilson's case (cited) was not as to an assignation, but as to the competency of attaching a partner's share by arrestment or confirmation as executor-creditor. See as to the point in this answer, note (r), to Ans. 302. The assignation to the profits may take effect before the dissolution. 507. Where a single individual trades under a company firm, Have the creditors dealing with that firm a preference over the stock? State the reason. No; because one person cannot make a partnership; for the reason, that an individual, by a fictitious partnership, might have a dangerous power of acting unfairly towards his creditors.'(g) 508. Is a company liable for obligations granted by a partner in his own name in the line of the company's business, and in rem versum of the company? State the reason. The company is not liable if the partner is the proper debtor in the obligation, and it is undertaken in his own name; because the creditor had no grounds for relying on the credit of the company.'(h) 1 Nairn, 5th Feb. 1798; 1 Bell's Illus. 252. 2 Menzies Lect. 412 (424); White, 12th Jan. 1841, 3 D. 334; Crum, 5th March, 1858, 20 D. 751. (g) But a company may be constituted in name of an individual, and summary diligence may proceed against any partner on a decree against the company under that name; Drew, 14th Jan. 1865, 3 M'P. 384. (h) As a general rule, the statement in this answer is correct; but it is not easy to conceive a case purely and precisely meeting the conditions of the question, and the cases cited do not so meet them. In one sense an obligation may be said to be in rem versum of any and every one who, however indirectly or remotely, derives benefit from it. Of this, White (cited) is an illustration. He had entered into a joint adventure with Reid, a builder, for the erection and letting of houses. Reid was to erect and finish them, and White was to pay him a certain sum by instalments " as the stipulated price of erecting and finishing the said buildings." Reid employed M'Intyre to execute the brickwork, and before completion of the buildings, failed, having, however, received more from White than was due; and M'Intyre sued White for payment of his account, who pleaded, successfully, that the contract was not, as alleged, with or for the benefit of the joint adventure, but with Reid alone. Here, if White was benefited, it was only through Reid being thereby enabled to make his stipulated contribution to the joint adventure. The contract was entered into by Reid on his own account, and, in the words of Professor Bell (Com. ii. 542), "the transfer to the concern is by the commutative operation of partnership, not by sale and mandate." If, however, a company were to be put in possession, and to accept of goods which they knew had been bought by a partner to whom they had given no consideration for them, which would be a direct case of in rem versum, it seems not quite certain that they would not be liable to the seller. 509. Where the contract contains a reserved power to a majority of the partners to alter the contract; Does that give the majority a power to increase the capital? State the reason. No; because the amount of capital, when fixed by the contract, is a fundamental article of the partnership, and cannot be increased without the consent of all the partners.1(i) 510. When the contract contains no provision relative to the partners' shares of the profits; How will these be fixed? (1.) Where the shares of the profits are not expressed, they are presumed to be proportionate to the amount of capital contributed by each partner. (2.) Where neither stock nor profits are specified, the presumption(k) is for equality, in the absence of proof to the contrary.2 511. Where a company holds heritable property, Does a partner's share of it, on his death, fall to his heir or his executor? 1 Monro, 5th Feb. 1851, 13 D. 595. 2 Ersk. 3, 3, 19; Menzies Lect. 415 (427). (i) In this answer there is introduced a condition which is not in the question,-viz., "the amount of capital, when fixed by the contract," and the rule is laid down too broadly. The judgment in Monro proceeded on the opinions of a majority of the judges, that one of the articles of the contract (which was of a joint-stock company) fixed a limit to the capital in terms which over-rode and controlled the article containing the general power to alter, and excluded its operation in that respect. The case was decided on a construction of the contract, and not on the general principle assumed in the question. Had the contract not contained that special clause, the general power to alter would probably have been held to extend to and include an increase of capital; and at all events there is nothing to prevent such a power being given in the contract, the judgment in Monro going only this length, that where the capital is limited, it cannot be increased "without the consent of all the partners, unless the contract contained a clause conferring that power on a majority." (k) It is a presumption of fact, not of law; Campbell's Trs., H. of L. 5 W. & S. 16; Aberdeen Town and County Bank, 20th Nov. 1859, 22 D. 44. There was no contract, but the principle is the same. |