Pupils. CHAPTER II. WHO ARE CAPABLE OF CONTRACTING AND SUSTAINING IN considering this matter, a distinction must be made between private partnerships or firms, when there is delectus personæ, and public companies whose shares are transferable, and whose management is committed to officials. The consequences to which this distinction gives rise will be pointed out in the present chapter. In general, it may be stated that any person may be a partner or shareholder who is capable of giving consent, and who is not otherwise disqualified by law. It must be observed, however, that mere inability to give consent does not eo ipso disqualify one from forming or continuing the partnership relation in all cases; sometimes its only effect is to make it less binding. We shall treat of the consequences of inability to give consent under the following heads, viz. Minority, Coverture, and Lunacy. Minority. As by the law of Scotland a pupil is incapable of giving consent, and as guardians have no implied power to invest the property of their wards in trading speculations, it may be taken as the general rule, that a pupil cannot be made the member of a trading concern by the act of his guardians, or even of his father as his legal administrator (a). In M'Aulay v. Renny, a man who had signed a contract of partnership for his son, a boy of eleven years of age, in a company that traded for three years and then was sequestrated, was held to have made himself a partner instead of his pupil son, who was incapable of entering into the contract (b). A similar judgment was given in the case of Calder v. Downie (c), (a) 2 Bell's Com. 624. (b) 1803, 2 Bell's Com. 624, n. 5. (c) 1811, 16 F. C. 390; aff. 1815, 18 F. C. 508, 2 Bell's Com. 625, n. where the pupil was ten years of age; and in Pettigrew Wilson's case (a), where guardians had engaged their ward, a boy aged fourteen, in a coal partnership. It has been usual to quote these decisions, as establishing the doctrine that parents or guardians who engage pupils as partners, become in every case liable to the company as their substitutes or sureties. But it is very doubtful if this be a correct statement of the law of Scotland (b). In England the law seems to stand thus: A father or guardian English rules. may engage an infant as a partner, without incurring any responsibility as a partner himself, provided he receive no advantage or emolument from the transaction, is not in receipt of any of the profits in trust for the infant, and has not induced the company to receive the infant by fraudulent representations, or by holding out his own responsibility (c). But, on the other hand, if he transfer shares from his own name to that of the infant, in order to avoid responsibility, or even in bona fide, at a time when the company is insolvent, the transfer will be held null, and the father or guardian will still remain liable to be made a contributory (d). These rules appear extremely equitable in themselves, and seem to be the true exponent of the Scotch cases referred to above, in so far as the latter can be taken as precedents, encumbered as they are with specialties, and only imperfectly reported. Minors, strictly so called, may become shareholders or partners Minors. with consent of their curators, and if not so protected, by their own act; and this on the general principle, that minors, with or without curators, are entitled to the management of their estate. But whether they have guardians or not, they are entitled to get rid of this, as of other obligations contracted in minority, by action of reduction on the head of minority and lesion, brought within the Quadriennium Utile (e). (a) 1796. (b) Menzies' Lect. 421. (c) Collyer 8; Barklie v. Scott, 1 Huds. and Bro. 83; ex parte Maxwell, 24 Beav. 321. (d) Reaveley's case, 1 De G. and S. 550, and 12 E. Jur. 1065; Stikeman v. (e) Ersk. i. 7, 33; Dennistoun v. Avoiding of contract. Election to repudiate or abide by the contract. But to succeed in this action, the pursuer must prove, 1. That he was really minor at the time he became a shareholder, and that he was induced to become so through weakness on his own part, or imprudence or negligence on that of his curators; 2. That he is seriously injured by the transaction; for if the injury be of a trifling or doubtful kind, the remedy is excluded (a). Fraud on the part of a minor deprives him of this relief-e.g. if he should obtain shares in a company by representing himself to be major (b). A contract of copartnery entered into with a pupil, or with a minor having curators, and without their consent, may be avoided by the minor when he comes of age by his simple repudiation, and does not require to be set aside by reduction, being in one sense a nullity from the beginning (c). He will also be entitled to recover any contributions he may have made during the time it was supposed to exist (d); but from favour to commerce, this claim of restitution would seem to be excluded, where the minor has profited by the transaction, and it is no longer possible to restore matters in integrum (e). It must be observed, however, that the contract of partnership, like other contracts entered into with minors, is a nullity only if the minor chooses to regard it as such. He may on coming of age elect to continue it and hold it as good, and in such a case the other contracting parties remain bound. But whichever alternative he chooses to adopt, he must accept it with all its consequences,-that is to say, he must either repudiate his connection with the company altogether, in which case he will renounce alike liability and profit; or else he must abide by the company, in which case he will share risks as well as gains, according to the maxim, Qui sentit commodum sentire debet et onus. This doctrine has been repeatedly given effect to in England (ƒ); and although the pure question does not seem hitherto to have emerged (d) Ersk. i. 7, 41; Corpe v. Overton, 10 Bing. 253. (a) Ersk. i. 7, 36. (b) Wilkie v. Dunlop, 1834, 12 S. 506; Dennistoun v. Mudie, supra, and cases there referred to; Wright v. Snowe, 2 De G. and S. 321; ex parte Watson, 16 Ves. 265. (c) Ersk. i. 7, 34; but see Waddell v. Gibson, 18 Jan. 1812, 16 F. C. 473. (e) Ersk. i. 7, 41; Holmes v. Blogg, 8 Taunt. 508; ex parte Taylor, 2 E. Jur. N. S. 220, 8 De G. M'N. and G. 254. (f) North-West. R. Co., 5 Ex. 114; Leeds and Thirsk R. Co., 4 Ex. 26; The Birkenhead and Lancashire R. Co., 5 Ex. 24. See Lindley, p. 75. in this country, there can be no doubt that the law would be held to be the same on the well-known principle of Approbate and Reprobate! be effectual, unequivocal. Furthermore, if a minor on attaining majority elect to repudiate Repudiation, to the contract, he must do so unequivocally. Any act on his part, must be even during the quadriennium utile, plainly inferring homologation, e.g. payment of calls, sharing profits, signing name of firm, etc., ought to bar subsequent repudiation, unless it can be shown that such acts were done under evident misconception of their import. This has been frequently decided in England (a), and from analogous cases there can be no doubt that the law of Scotland is the same (b). Coverture.-At common law, all deeds done or contracts entered Coverture. into by a married woman without her husband's consent are null and void. But this general rule is subject to divers exceptions. 1. A married woman's personal obligations receive effect during a legal or voluntary separation from her husband, or when he is abroad (e). 2. Her obligations hold good as to all property in relation to which her husband has renounced his jus mariti and jus administrationis. And, 3. Her obligations are good as to any estate conveyed to her under exclusion of her husband's curatorial power. In all cases other than such as fall under these exceptions, it should seem that a married woman cannot become a partner or shareholder without her husband's concurrence, which if he gives, he must virtually be looked upon as the responsible party. of marriage in private firmus; In private partnerships where there is delectus persona, if a Consequences single woman who is a partner marry, her marriage, which would have the effect of substituting her husband in her place, operates as a dissolution of the partnership relation, unless the copartners agree to accept of her husband as partner (d). In public com- in public panies where there is no delectus persona, the concern being managed (a) Goode v. Harrison, 5 B. and A. 147; Holt v. Ward, Str. 937; Cork and Bandon Railway Co., 10 Q. B. 935; Lindley, p. 76; Coll. 8. 16. (b) Forrest v. Campbell, 1853, 16 D. (c) Churnside, 1789, M. 6082; Orme, 1833, 12 S. 149. See also the Conjugal Rights (Scotland) Amendment Act, 1861. (d) Nerot v. Burnand, 4 Russ. 247. companies. Lunacy. In the case of private firms. Supervening lunacy. Public companies. by officials, and the shares being transferable, the marriage of a female shareholder does not terminate the partnership relation, though it may operate as a transfer of shares to the husband. It may here be observed, that a married woman, though possessed of separate estate, cannot validly enter into a contract of partnership with her husband (a). Lunacy. As regards this disqualification, a distinction must be taken between lunacy preceding, and lunacy supervening on, the contract of partnership; and a difference must also be made between private firms and public associations. We shall first consider the case of private firms or partnerships. A lunatic cannot enter into a contract of partnership, because he is not capable of giving the consent necessary to found that relation. But this rule would seem subject to the equitable exception, that if one contracts with a lunatic bona fide and in ignorance of this incapacity, and if by reason of rei interventus it has become no longer possible to restore matters in integrum, the contract will not be held to be a nullity so as to set the lunatic free from the liabilities he has thereby incurred, previous to the time when the other partner was made aware of the lunacy (b). If, during the subsistence of a partnership, one of the partners becomes lunatic, this does not seem of itself to operate a dissolution. But if, on application to the Court, it appears that the lunacy is incurable, and the partnership is such as to require contributions of skill and industry, a dissolution will probably be decreed (c). Until, however, the partnership is dissolved, the lunatic is entitled to share the profits with his copartners, and is liable for the consequence of their acts (d). In the case of public associations or joint-stock companies proper, a lunatic can neither become a subscriber for, nor a purchaser of shares, if his lunacy be known, because he is plainly (a) Per Lord Ivory in Macara v. Wilson, 1848, 10 D. 707. (b) Molton v. Camroux, 2 Ex. 487; Beavan v. M'Connell, 9 Ex. 309; Pollock v. Paterson, 1811, 16 F. C. 369; Spence, 1812, 16 F. C. 727, 1 Bell's Com. 489, n. 2. See also Baxter v. Earl of Portsmouth, 5 B. and C. 170. (c) Jones v. Noy, 2 Myl. and Kee. 125; Wrexham V. Huddlestone, 1 Swanston 514, n.; Waters v. Taylor, 2 Ves. and Bea. 299. (d) Sadler v. Lee, 6 Beav. 324; Jones v. Noy, supra. |