has been registered (a). When this rule exists, the seller remains liable for all calls made before the company chooses to register the purchaser (b). When shares are transferred and registered, after a call has been made, but before it is payable, it seems doubtful whether the company can enforce the call against either transferrer or transferree (c). It is no defence to an action for calls, that, according to statements made by directors, more than the subscribed capital will be necessary to complete the undertaking (d), or that the funds are being misapplied (e), or that a railway company has failed to complete a part of the line (ƒ), or that the scheme of a railway as authorized by the special act is different from that contained in the subscription contract (g). Yet it is a good plea in defence, that the call was not made by persons duly authorized (h); and that it was made before the whole of the capital had been subscribed, where the special act provided that until this was done, the provision and powers of the act should not come into force (i). But it has been held, that when there is no provision of this kind in the special act, the plea cannot be taken on sec. 16 of the English Lands Clauses Act, which, though it requires the whole capital to be subscribed before the compulsory powers can be exercised, does not prevent calls from being made before that has taken place (k).

(a) Howden v. Kennedy, 1855, 18 D. 246.

(b) Humble v. Langston, 7 M. and W. 517; London Ra. Co., 2 Ma. and Gr. 674., (c) North Am. Co. Association, 15 Jur. 187; Watson v. Eales, 23 Beav. 294; Aylesbury Ra. Co., 4 Ma. and Gr. 651, and 2 Ra. Ca. 668.

(d) Edinr. and Newha. Ra. Co., 1842, 4 D. 1459.

(e) Nat. Ex. Co., 1849, 11 D. 571.

(f) Newry Ra. Co., 1850, 13 D. 284.

(g) Fife and Kinross Ra. Co., 1861, 23 D. 891.

(h) Swansea Dock Co., 20 Law J. Ex. 447. See p. 155.

(i) Norwich and Lowest. Nav. Co., 1 Moo. and Mal. 151.

(k) Waterford and Dublin Ra. Co., 6 Ra. Ca. 753. The corresponding provision in the Scotch Act is sec. 15.

CHAPTER VII.

COMPANY OR PARTNERSHIP PROPERTY.

What it means. UNDER this expression is included whatever is immediately liable for the debts and obligations of the company; and this may consist either of what was originally contributed to the common stock, or of what has stante societate been added thereto.

Partnership property held in trust.

As, according to the law of Scotland, a partnership or unincorporated company is only a quasi person, and not a proper person, like an individual or a corporation, it should seem that it cannot hold property directly, any more than it can sue or be sued like a proper person. Whatever, therefore, by express contract, or by operation of law, becomes the property of the company, must be taken as held in trust for the uses and purposes of the company. Heritable property is held in the names of one or more of the partners, or in those of third persons as trustees chosen for that purpose; moveables or personalty appear to be held by all the parties jointly or pro indiviso, as trustees for the concern.

As regards the mode in which moveables are held, there no doubt hangs a good deal of confusion, or rather obscurity, about the dicta of our institutional writers; some loose expressions even appearing to indicate that personalty might be held directly by unincorporated companies. It is believed, however, that the theory here given is the only correct exponent of our law (a).

Partnership

contract

operates as a conveyance.

CONVEYANCE AND VESTING OF COMPANY PROPERTY.

The partnership contract operates as a direct conveyance of whatever is or has been undertaken to be contributed by a partner. (a) Bell's Princip. sec. 353; Shaw's Bell's Comm. 214; Stair i. 16, 1.

But it operates as a conveyance merely, and does not supersede the necessity of such modes of transference as are required by law (a).

Moveable property, conveyed under the partnership contract, Personalty. or by subsequent agreement, and already in possession of a partner at the date of the conveyance, requires no delivery to complete the transference to the company, because no delivery is possible, every partner being præpositus negotiis for the company, and the company as a fictitious person acting only through its agents (b).

notice.

But where commodities in the hands of third parties are con- Delivery and veyed by the owner as part of his contribution to the stock of the company, in order to ascertain whether delivery is necessary, it must first be considered in what character they are held by their possessors. If they are held by the latter merely as agents for the contributing partner, their delivery is not necessary, as possession by the agent is possession by the principal. If, on the other hand, having been purchased by the contributing partner, they still remain in the custody of the seller, delivery will be required (c). And this may be made to any one of the partners, or to a servant at the company's place of business. In order to prevent attachment of the contributed articles by the private creditors of the partner, intimation should, in the case under consideration, be at once made by the company to the seller, that the property had passed to the company, and that he must now make delivery to it (d). When a partner contributes liquid or illiquid claims which he holds against third parties (choses in action), the conveyance must be completed by intimation in the usual way.

Ships.

Feudal rights.

Ships are transferred in terms of the Registration Acts. Feudal property is held for companies by the intervention of Realty. trustees, who may be either one or more of the partners or third persons chosen for that purpose (e). It has been held that a disposition to one partner nominatim and to the other members of the company was good, and that seisin and confirmation following thereon effectually vested the lands in the partners pro indiviso for the company (ƒ). This is not, however, a precedent to be followed in modern conveyancing.

(a) Stair i. 16, 1.
(b) Sh. Bell's Com. 216.

(c) Sh. Bell's Com. 216.

(d) 19 and 20 Vict. c. 60, s. 2.

(e) Menzies' Lect. 46.

(f) Dennistoun, MacNair, and Co.,

Leasehold.

Leasehold forming part of contribution.

When feudal property previously belonging to a partner is contributed as part of the stock, the partnership contract will convey the jus ad rem, or, in other words, will operate as a general disposition; but to exclude the diligence of the private creditors of the contributing partner, he must execute a disposition, or its equivalent, of the property in favour of the partners, or of some other person, in trust for the company; or else the company must bring a declarator and adjudication in implement with similar conclusions, and the title must in all cases be completed by registration in common form (a). The same rules apply as to acquisition of feudal property made, stante societate, for the company in name of a partner.

In like manner, the right to leasehold property ought to be taken to all the partners nominatim, or to some other persons as trustees for the company (b). It is sometimes indeed loosely said that a lease may be held by an unincorporated association; but if by this is meant that the quasi person of such an association can hold leasehold property, the proposition seems to be without foundation, and to be subversive of the distinction between mere partnerships and proper corporations. In the only case that might seem to countenance this view (c), the Court merely gave effect to a lease granted to a company socio nomine, for the same reason apparently that a title to sue socio nomine is sustained. It will be observed, however, that no countenance is given to the notion that unincorporated associations can hold leases in their descriptive names; and it is worthy of consideration how far this decision can in the present day be held of authority, when it is remembered that leases of a certain endurance may be entered on the register of sasines, thereby giving them even greater facilities for transmission and mortgage than belong to proper feudal rights.

When leasehold property forms part of what a partner undertakes to contribute, the partnership contract would seem to operate as an assignation to the whole partners, jointly and severally, for behoof of the concern, provided the lease contains a power to assign. 1808, M. App. Tack 15; compare with Morison v. Miller, 1818, Hume 720. (a) Shaw's Bell's Com. 216. (b) Bell on Leases i. 149; Murray v. Hogarth and Co., 1835, 13 S. 453.

(c) Dennistoun, M‘Nair, and Co. v. Macfarlane, 1808, M. App. Tack 15. See 1 Hunter on Landlord and Tenant, 205.

But possession by the company is still necessary to complete the transfer, and to render the right secure against a second assignee, or an adjudging creditor of the partner (a). When the lease is unassignable, the partnership contract would perhaps be considered as converting the tenant into a trustee for the company (b).

To exclude, however, all risk on the part of the company, it Practical rules. is most prudent in such cases to obtain, when practicable, either

a new lease from the landlord, or a sub-lease from the tenant, in favour of some one or more of the partners, or of strangers as trustees for the company (e). Adjudication may sometimes be found necessary as a means of making good the company's right to a lease contributed by a partner.

of lease.

When the lease has been registered, in terms of the late Act (d), Registration a notarial instrument in the form of Schedule C, appended to the statute, and setting forth the conveyance under the company contract, will, when registered, effectually complete the transference.

of lease.

A lease granted for behoof of a company, but excluding assig- Termination nees, expires on dissolution of the company, and can form no part of the separate estate of any of the partners (e).

COMPANY PROPERTY AS DISTINGUISHED FROM SEPARATE

ESTATE.

Company property must be carefully distinguished from the separate estate of the individual partners. It is no doubt true that every member of an association which has not attained limited liability, is liable for company debts to his last shilling and his last acre; yet the mere fact of his membership does not operate as a conveyance of any part of his separate estate which he has not agreed to contribute, so as to amalgamate it with the company property, to the effect of destroying his own rights as proprietor, and of liberating it from the diligence of his creditors. Company property is held in trust for the company, and is directly attachable by its creditors; separate estate remains the absolute property of the part

(a) Bell on Leases.

(b) See M' Vean, 1864, 2 M'Ph. 1150. (c) See Borrows v. Colquhoun, 1852, 14 D. 791; reversed 1854, 1 Macq. 691.

(d) 20 and 21 Vict. c. 26.

(e) Campbell v. Calder Iron Co., 11 Dec. 1805, 1 Bell on Leases 150, and 1 Bell's Com. 82.

Distinction pany property and separate

between com

estate.