CHAPTER III. HOW PARTNERSHIPS AND COMMON LAW COMPANIES MAY SUE AND BE SUED. principle of English and Scotch law. It is a fundamental principle of Scotch as well as of English law, Fundamental that the right of suing and being sued in the corporate or descriptive name is a privilege competent to no other associations than such as are incorporated or privileged by public authority, that is, by special act, charter, letters patent, or registration (a). But beyond this, the two systems widely diverge. The law of England sees in an unincorporated association nothing but the individual members of which it is composed, and has generally held inflexibly to the rule, that it can only appear judicially when every member has been made a plaintiff or defendant, as the case may be (b). The law of Scotland, on the other hand, inasmuch as it sees in such associations not only the individual members, but their aggregation, forming the quasi person of the company, requires indeed that the members shall be before the Court, but in most cases is satisfied by the appearance of some, as representatives of the whole. Where the two systems diverge. The consequences of the English principle have been unsatis- Consequences of English factory in the extreme. In questions with the public, the company rule. (a) Masons of Lodge of Lanark, 1730, M. 14554; Wilson v. Jobson, 1771, M. 14555; Heritors etc. of Dalry, 1791, M. 14557; Stevenson v. Arran Fish. Co., 1757, M. 14560; Lawson v. Gordon, 1810, 15 F. C. 741; Culcreuch Cotton Co., 1822, 2 S. 47; Sea Insurance Co., 1827, 5 S. 348; Commercial Bank, 1828, 3 W. and S. 365; Tannoch v. Reed, 1829, 7 S. 606; Kerr v. Clyde Ship. Co., 1839, 1 D. 96-104. (b) See Lindley, p. 383 et seq., and p. 718 et seq. Effect of recognising the quasi person in Scotland. Scottish theory. has often been disabled from prosecuting its just claims; for, as all the partners must appear as plaintiffs, the refusal of any of their number to allow his name to be used, or his subsequent withdrawal of it from the instance, grounds a plea in abatement, if the defendant choose to object (a); and in questions inter socios, unincorporated companies have been found incapable of either suing their members or being sued by them, on the ratio, that as all the partners must appear as plaintiffs or defendants, as the case may be, one at least of their number would in either case have to appear in both characters (). It is true that in equity some relief was ultimately accorded, where, in a question with the public, the company had to sue or be sued; but the consequences of the principle referred to ultimately proved so mischievous and insurmountable, that this more than anything else led to the introduction of the Registration Acts (e). In Scotland, the recognition of the quasi person of unincorporated associations has prevented the occurrence of these ludicrous consequences, and this practical denial of justice. The mere circumstance, that some of the members of an unincorporated association do not concur in an action, or that they disclaim a defence maintained by the company, does not of itself terminate the one or invalidate the other, in the absence of fraud or collusion; and, as will be afterwards seen, actions between the company and its members are even more favourably situated than those between the company and strangers. The theory, therefore, of the law of Scotland appears to be as follows:-An unincorporated association, not being a proper person, can only appear judicially where the units constituting its membership are before the Court; but inasmuch as it is a quasi person, that condition will generally be satisfied by equivalents. We shall afterwards point out the cases in which the principle, that all the partners must be present, is enforced even to the letter with all the rigour of the English common law, where this rigour is demanded by the substantial interests of justice. We shall meanwhile proceed to consider the ordinary modes in which unincorporated (a) Lindley, p. 383 et seq.; Coll. 457 et seq., 768 et seq.; Thring 9 et seq. (b) Lindley, p. 718 et seq.; Coll. 566 et seq., 768 and 771 et seq.; Thring 9 et seq. (c) Last references. mercantile associations sue and defend, and in which the law of Scotland, without losing sight of the fundamental distinction between corporate and unincorporate societies, avoids the embarrassments and injustice that have manifested themselves in English law. modes of suing The ordinary modes in which unincorporated mercantile associa- Ordinary tions sue and are sued in Scotland are twofold, and are available and being sued. according to the circumstances of the company. 1. An unincorporated association may sue and be sued without appearance of all the members, where, in addition to the descriptive name, there are given the names of at least three partners. This may be termed appearance by the descriptive name, with joinder of partners. 2. A private partnership may sue and be sued without calling all the partners, if the company name comprise the names of persons only, as Carrick, Brown, and Company,' in opposition to such names as 'The Sea Insurance Company,' 'The Culcreuch Cotton Company,' which are termed descriptive. This mode of suing and being sued is generally known as that in the social name. These two modes have, by long usage and well-proved utility, come to be regarded as the ordinary forms in which unincorporated associations having gain for their object sue and are sued; and it will be observed, that in both of them two elements are present, viz. the individuality of the members, and the aggregation which constitutes the quasi person. We shall now proceed to consider these two modes in detail. APPEARANCE IN THE DESCRIPTIVE NAME, WITH JOINDER OF PARTNERS. This method of suing and being sued, though casily deducible Origin of. from the theory of Scottish law in relation to unincorporated associations, appears only to have received the sanction of the tribunals with difficulty, and by slow degrees. At first, it seems to have been recognised only where the company was called as defenders, though it was afterwards extended by parity of reasoning to cases where the company sued. When company defends. When company sues. In 1757, it was held that the Arran Fishery Company,' being unincorporate, could not sue in its descriptive name; but an opinion was indicated, that an action might have been maintained in the names of the directors (a). Subsequently to this, numerous suits were raised at the instance of the York Buildings Company,' and that of an individual name as governor, without any objection having been taken to the instance. But in this case the company was really incorporated by Act of Parliament, though it might be doubted whether it was a corporation to the effect of holding land in Scotland (b). We then come to the case of the Sea Insurance Company v. Gavin, 1827 (no decisions of importance being reported in the interval), where the Court sustained an action against a company in its descriptive name, with joinder of the manager and three of the directors (c). But in this case, the four individuals named had signed the policy upon which proceedings were taken. In Cabbell v. Brock, 1828, the House of Lords expressed grave doubts whether a bank could sue in name of its officials (d); but in the immediately subsequent case of the Commercial Bank, that appellate tribunal, after making full inquiry into the practice, ultimately held, that in accordance with the existing law of Scotland, a company unincorporate might sue and be sued in its descriptive name, in conjunction with the names of several of the individual partners (e). To much the same effect was the decision in Maclean v. Rose (f), 1836. Hitherto the number of partners necessary to be joined along with the descriptive name had remained doubtful, and no direct authority could be shown in favour of extending this mode of libelling to cases in which the company appeared as pursuer; but in the London and Edinburgh Shipping Co., 1841 (g), while it was held that a mercantile company could not sue by a descriptive name with joinder of one person only as a manager or partner, an opinion was intimated that three partners in conjunction with the descriptive name would have been sufficient either for suing or being sued. After some intermediate cases which did not materially (a) M. 14560. (b) Opinion of Lord Alloway in Sea Insurance Co., 1827, 5 S. 352. (c) 5 S. 348. (d) 3 W. and S. 75. (e) 3 W. and S. 365. See also Shotts Iron Co. v. Hopkirk, 1828, 6 S. 399. (f) 15 S. 236. affect the question, it was in 1848 held by the Lord Ordinary, and apparently acquiesced in by the Court, that a joint-stock company may sue under its descriptive name, with joinder of three or more of the individual members (a). From this period the practice has been constant and uniform to sue as well as be sued in this manner, and it may therefore now be held as fixed in the law of Scotland (b). APPEARANCE IN THE SOCIAL NAME. This mode of suing and being sued is of very old standing in Origin of. the law of Scotland, and appears to have been adopted from the old French law, which, among other kinds of mercantile associations, recognised La Société en nom collectif (c). All through the last century perpetually recurring examples of suing and being sued in the social name are to be found in the decisions of Kames, Elchies, Falconer, and Kilkerran ; and when such cases were brought under review of the House of Lords, no objection appears to have been taken to this mode of libelling. It was not till the close of the century, when the minds of Scottish lawyers began to be tinged with notions derived from English pleadings, that doubts came to be entertained of the competency of this mode of libelling a company. The question appears to have been first raised in the case of Douglas, Heron, and Co. v. Gordon, 1792, when it was objected that an action could not be sustained in the social name; but after a minute examination into the practice, the objection was ultimately repelled, both by the Court of Session and the House of Lords (d). After this the question was not again directly raised till 1832, though in the interval numerous cases occurred in which the Court incidentally referred to the practice of suing and being sued in the social name as fully established (e). In that year, in the case of Aitchison and Co. v. Burnside's Trustees, a doubt was thrown out by (a) National Exch. Co. v. Drew, 11 D. 179. See also opinions of judges in Lond. and Edin. Ship. Co., supra. (b) See Mercantile Law Com., p. 96. (c) See Les Ordonnances de 1673, 1681, and 1687, respectively, from which the Code de Commerce is chiefly a compilation. (d) Referred to in Lord Medwyn's opinion in Forsyth v. Hare, 13 S. 50, 3 (e) Thomson v. Liddell and Co., |