2 anything due him on account of the partnership business. The remedy is in equity. It was formerly held in England that if a number of persons associate themselves together for the purpose of promoting a corporation on the terms that each is to have an interest in it, they become partners in the enterprise; and if one of them give his services in furtherance of the common object and the others fail to indemnify him, he cannot maintain an action at law against one of them—for instance, against the chairman of the committee for such indemnity. If, however, the defendant personally undertook to pay the plaintiff, the result would, of course, be different. Accordingly, where a solicitor had rendered services at the request of the committee of a company organized for building a bridge, had taken shares in the company, not in his own name, but in the name of a man of straw, whom he had procured to act for that purpose, it was held that he could not recover at law in an action against the chairman of the committee for the value of his services, for the reason that he really was a partner in the concern.3 But one who had entered into a contract to perform work and furnish materials with a committee associated together for the purpose of obtaining an act of Parliament for making a turnpike road, was not precluded from maintaining such an action by the fact that, subsequently to such contract, he became a shareholder in the company; though it would prevent him from recovering for the valne of any services rendered subsequently to the time when he became a shareholder. So, if a person who is an inventor of a scheme, gets gentlemen to act as a committee, with the intention of forming a joint-stock company to carry it into effect, and he himself acts as secretary to the committee, he cannot maintain an action against one of the committee for his services as such secretary, or for his trouble, or for journeys which he undertakes in furtherance of the execution of the scheme, unless upon express evidence that the member of the committee whom he sues, employed him.5 The 1 Milburn v. Codd, 7 Barn. & Cres. 419; s. c. 1 Man. & Ry. 238. 'Holmes v. Higgins, 1 Barn. & Cres. 74; s. c. (a better report) 2 Dow. & Ry. 196; Goddard v. Hodges, 3 Tyrwh. 209; s. c. 1 Cromp. & Mees. reader must continually bear in mind, in considering these earlier English cases, that they related, not to full corporations, but to joint-stock companies, which were partnerships. For instance, the doctrine in a case above cited1 would not apply to an American corporation; for such a corporation is so far distinct from each of its stockholders that there is no obstacle, even in a court of law, to an action by the stockholder against the corporation, to recover money advanced to, or the value of services rendered for it. The reader will also note that the English courts subsequently settled upon the rule that persons do not make themselves partners by the mere act of joining together to organize a corporation. 3 From § 430. Unless under Exceptional Circumstances. what has preceded, it is obvious that special circumstances may exist under which one promoter of an abortive company will be entitled to maintain an action against the others for contribution. Thus, if promoters have, by special agreements, among themselves, rendered themselves jointly liable, and, in order to discharge this liability one of them has paid the whole debt, he will be entitled to contribution from the others. Thus, A., B. and C. hired premises of D., for the purpose of a company, of which A., B. and C. were the contract committee-men. The company having suffered the rent to get in arrear, D. sued and recovered it of A. It was held that A. could maintain separate actions at law against B. and C. for contribution. Again, twelve provisional committee-men became jointly liable for a debt contracted in respect of the scheme. One of them having paid the whole debt, it was held that he was entitled to maintain actions at law against the others. The measure of his recovery against each was an aliquot part of the sum of money he had been compelled to pay, in respect of the original number of the joint undertakers, without reference to the number of them liable at law at the time of payment. Accordingly, although two of them had died, he could recover against each of the survivors but one-twelfth, and not one-tenth, of the sum he had paid. Again, where a party had 4 Boulter v. Peplow, 9 C. B. 493. 5 Batard v. Hawes, 2 El. & Bl. 287. See to the same effect, Edger v. Knapp, 7 Jur. 583. 2 incurred and paid costs, in bringing actions against committeemen to recover the amount of his claim, at the request of another committee-man, it was held that he might recover such cost from the committee-man at whose instance he sued, under the common count for money paid. Of course, a promoter may make bimself liable to another by express contract; and such contracts have frequently been before the courts. A contract for the payment of money when an incorporated company, which the parties propose to form, shall be organized, requires a legal incorporation before the money can be considered due. The condition is not satisfied by any proceedings or arrangements preliminary to filing the certificate directed by the statute; nor can the courts sustain an action upon such agreement, commenced before such filing, upon the ground that, in virtue of any inchoate arrangements, the parties are to be deemed a corporation de facto, as among themselves.2 § 431. Liability of Committee-man Subsequently Joining. From the rule that provisional committee-men are not liable as partners, it would seem to follow, as a matter of course, that one who joins such a committee would not be bound by contracts entered into by its members before his joining, although such contracts were in part executed subsequently to that time; and it has been so held. Even an incoming partner would not be so bound, unless the circumstances were such as to indicate an adoption of the contract made by the prior partners-as where a firm of carriers enter into a contract for the carriage of goods which is in part executed after the incoming of another partner. Accordingly, where it appeared that the defendants were members of a provisional committee which had entered into a certain contract with the plaintiff for the supply of certain machinery before M., another defendant, had joined the committee; that, under this contract, the plaintiff was to have 1 Bailey Macaulay, 13 Ad. & El. (N. 8.) 815; s. c. Thomp. Off. Corp. 136. 2 Childs v. Smith, 55 Barb. (N. Y.) 45, 53. 3 Beale v. Mouls, 10 Q. B. 976; s. c. 5 Ry. Cas. 105; 11 Jur. 845; 16 L. J. (Q. B.) 410. 4 Helsby v. Mears, 5 Barn. & Cres. 504. Compare Woods v. Russell, 5 Barn. & Ald. 942; Story on Part., § 152. monthly payments on account of the work while in progress, not exceeding the price of the work done and materials supplied for the time being; that, after M. joined the committee, several payments were made on account of the work, and several alterations were made in the work with his sanction; and that he took an active part in superintending the work and making experiments with it; it was held that M. was not liable to the plaintiff, either upon the special contract, or upon a common count for goods sold and delivered. If the property, in the successive portions of the machinery, passed from time to time by the payments on account while the work was in progress, it passed according to the terms of the special contract, to which M. was not a party.1 § 432. Members of Provisional Committee not Liable for Contracts of Managing Committee. - During the era of railway building in England, the business of promoting or organizing railway companies, assumed a somewhat definite form. Without undertaking to state in detail the process which was generally gone through, it may be said that the first step was to raise a provisional committee. After the scheme had somewhat crystallized, this provisional committee appointed what was termed a managing committee. This managing committee necessarily incurred expenses; and when the scheme became abortive, and there were no corporate funds out of which these expenses could be paid, it became a question what person should pay them. It was held that the provisional committee was not, ex vi termini, responsible for expenses incurred by the managing committee.2 The managing committee were not the agents of the provisional committee, but of the future company. In actions against a 1 Beale v. Mouls, supra. Compare Whitehead v. Barron, 2 Mood. & Rob. 248; Maudslay v. LeBlanc, 2 Car. & P. 409, n; Ex parte Peele, 6 Ves. 602; Ex parte Jackson, 1 Ves. Jr. 131; Clarke v. Spence, 4 Ad. & El. 448. 2 Williams v. Piggott, 2 Exch. 201. 3 Where the provisional committee appointed a managing committee of eight persons, and directed them to take the most energetic measures for carrying on the scheme, but the resolution did not authorize any less number than the whole of the committee to act, a provisional committee-man was not bound by a contract made by six of such managing committee, in the absence of proof of an intention on his part to be bound by a less number than the whole. Brown v. Andrew, 13 Jur. 938; s. c. 18 L. J. (Q. B.) 153. member of the provisional committee, on a contract entered into by the managing committee, it was a question of fact for the jury, whether the provisional committee, in appointing the managing committee, gave them power to pledge the credit of the members of the provisional committee.1 § 433. Judgment and Satisfaction against One may be Pleaded in Abatement by Another. If judgments are obtained in separate actions against persons who are jointly liable, for the same subject-matter, a satisfaction of one judgment is, in effect, a satisfaction of both. If, therefore, separate actions are brought against several committee-men of a projected corporation upon a demand for which they are jointly liable, and, pending such actions, one of them pays the whole debt and the costs in the suit against himself, the others will be entitled to have the proceedings against them stayed, without payment of costs. "A plaintiff who, to multiply his chances of success, brings several actions for a joint debt against the co-contractors, has no reason to complain, if his success in obtaining payment of the debt and costs in one, deprives him of the right to recover costs in the other actions." Joint contractors are entitled, under this rule, to be discharged without payments of costs, even after verdict; if judgment against them has not been signed. Nor does it make any difference that separate evidence may be necessary to establish the joint liability of each of the committeemen separately sued; for it frequently happens, where actions on joint contracts are brought against several, that it is necessary to establish the case against each by separate evidence." 1 § 434. Evidence to Charge Committee-men. In order to charge a member of such a committee, it is, therefore, necessary to show that the contract on which he is sought to be charged was his personal contract, entered into by him in person or by 1 Williams v. Piggott, 2 Exch. 201; s. c. 5 Ry. Cas. 544; 12 Jur. 313; 17 L. J. (Exch.) 196. 2 Turner v. Davies, note (1), 2 Wms. Saund. 148, 148a, 6th ed.; Bailey v. Haynes, 15 Ad. & El. (N. s.) 533, 539. 3 Newton v. Blunt, 3 C. B. 675. Bailey v. Haynes, 15 Ad. & El. (N. 8.) 533, 538, per Lord Campbell, C. J. Bailey v. Haynes, 15 Ad. & El. (N. 8.) 533. |