(6)
of the contemplated structure, subject to Mr Jardine's prior right to There was thus an 5 per cent. on the $50,000 he had advanced. element of private enterprise in this undertaking, which, though subordinate to its main object, has an important legal effect. The Committee are not it appears in possession of evidence showing how the names of Messrs. Turing, McDouall and Ryrie came to be inserted in the Crown Lease; but inevitable inference from all the circumstances is that they executed the lease as nominees and agents for the Committee. As to the two of them who had signed the "shares," they necessarily took the lease subject to the rights of the shareholders, and there is no room for reasonable doubt that Mr. Ryrie, who must have had full knowledge of all that occurred, stands on precisely the same footing in this particular, as his co-Lessees.
Now this Crown Lease is, through some misconception, printed in the Government Gazette of the 11th September, 1880, under the Title of the "Trust Deed of the City Hall," and it is, I presume, in this misconception, that the somewhat confused notions as to Mr. Ryrie's powers which find their place in the C. S. O. already alluded to have had their origin. Mr. Ryrie does not, as there alleged, "stand in the position of a trustee for the purposes for which the lease was granted by the Government;" but when he executed the lease he became by operation of law arising out of the circumstances of the case one of three trustees for the Shareholders who as he knew had subscribed their money, and his "legal estate" became and is subject to their beneficial interests; which is a very different thing.
Turning now for a moment to this Lease, which bears date the 6th day of March, 1866, I find that, in consideration of five current Dollars then paid to the Crown, and subject to an annual rental of one dollar, the Crown assigned to the three above-named Lessees, their Executors, Administrators and Assigns, the land on which the City Hall structure now stands for a term of 999 years, the lessees covenanting to build upon it a building costing not less than $10,000 within a specified time, and not to use the said demised premises otherwise than as and for a City Hall," there being a proviso for re-entry by the Crown for breach of such covenant, preceded by a recital that the demise had been made in order to provide a fit and proper site solely The Lease also contains a for the purposes of the said City Hall. covenant not to let, underlet, mortgage or otherwise assign over the
(7)
land. With the foregoing exceptions the lease is an ordinary Crown Lease. The relationship established by it between the Crown and the lessees is simply that of Landlord and Tenant, and so long as the conditions and covenants of the Lease are observed, the Crown has no concern with the building, its internal affairs or its mode of management. The mixed purposes which the City Hall was intended to subserve and the mode under which the money had been subscribed no doubt dictated this form of lease, which under the circumstances, was a very correct one, for, if the land had been conveyed in trust, the very delicate questions might have arisen, which the Executive has now sought to raise. Happily such complications seem to have been foreseen, and provided against.
Now what are the rights of the shareholders in this building ? are they, in view of the shareholders being more than 20 in number, having no corporate existence and being engaged in an enterprise from which the element of private gain is not absent, such as can be legally recognized or legally enforced?
I have no doubt they can. There never having been any agreement inter se, among the shareholders, they are not partners, and though their money was subscribed for a common purpose, there has never been any such association between them for the carrying out of that purpose as required the shareholders to be registered as a company. Doubtless it must be taken to have been the intention of the shareholders to divide the profits from the use of the Hall, if there were any, among themselves rateably; but it is now settled law that part owners who divide what is obtained by the use of the thing owned are not thereby constituted partners. (See Smith v. Anderson-Times, 17th July, 1880.)
It has been held that if tenants in common of a house let it and divide the rent among themselves they are not on that account partners, although they may pay for the repairs out of the rent before dividing it, The rights and obligations of the shareholders in the City Hall are those of co-owners, each shareholder having a right to transfer his interest in the building without the consent of his co-owners, and having no liability for the debts incurred in the management of the concern, beyond what he has specially undertaken to defray. Rights such as these are enforceable in equity (see Taylor v. Salmon, 4 Mylne and Craig, 134) and amount to a beneficial interest in the property, giving each shareholder
27
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Dec.