Acquisitions made by a Partner relating to the Society. - Contribution of Pains instead of Stock. - Nature of the Stock of a Company.
Neilson v. Rae
Date: 19 November 1742 Case No. No. 13.
Nature of stock.
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A partner in a company having become bankrupt, some of his creditors used arrestment in the hands of the company; and he dying soon after, others confirmed his interest in the company. In a competition of these creditors, the nature of a partner's stock in a trading company was the subject of much, consideration, and it was particulaly questioned whether it was a corpus subject: to arrestment, or only a right or claim, which is; neither the subject of detention nor custody, and consequently not affectable by that diligence.
This last, which was the argument urged against the arresters, was thus answered. A partner's stock is a proper jus crediti, which he purchases with his money that goes into the company's stock, similar to a bond of borrowed money purchased with a sum, the property of which is transferred to the debtor; differing only in the following particular, that, instead of a certain yearly profit, the profits are casual, depending on the success of the company-trade. That the company is the debtor; for a proper action lies against the company, at the instance of every partner, to make his stock effectual, whether by accounting for the profits, or by delivering to him a proportion of the company's stock. Were not the company debtor to each particular partner, no action could lie against the company communi dividundo; nor an action to account for profits, but only against the intromitters with the company's stock and profits. Hence it was inferred, that a partner's stock, being properly a company-debt, is arrestable, and may be ordained to be detained by the company till called for in an action of forthcoming. The Lords, considering that a right of partnership after a partner's death may be confirmed, to the end of pursuing a division of the company's effects, were of opinion, That an arrestment, with a decree of forthcoming, will carry every subject which can be confirmed, and found accordingly. But here it was not understood, that an arrestment can carry a right of partnership to any other effect than to pursue a division. The court was not of opinion, that an arrester is entitled to be a partner in place of his debtor. Hence it may be inferred, that an arrestment of a partner's stock will not carry the benefit of any new adventure begun after the date of the arrestment.
Fol. Dic. v. 4. p. 285. C. Home. Rem. Dec. Kilkerran.
