Notice that these letters say that the mem bers may offer and sell the bonds without restriction as to territory. If banking houses located in different cities compose the syndi cate, the agreement sometimes restricts the selling of each member to that member's special territory. Assuming that Brown & Company have their principal office in New York City, Jones & Company in Boston, Smith & Company in Philadelphia, and Rob inson & Company in Chicago, then Jones & Company might have all of New England reserved for them, Brown & Company have the City and State of New York and northern New Jersey; Smith & Company, the State of Pennsylvania and southern New Jersey; Robinson & Company, Ohio, Illinois, Michi gan, and Wisconsin. Any member would be free to sell in the unrestricted territory. Un der such an arrangement the syndicate might agree that each member should do its own advertising and in its own name only. Gen erally syndicates do not restrict their mem bers territorially. The larger houses have offices in several cities and find their clientele over a rather large area. If their territory were restricted they would not be able to exert their full selling power. Besides, it is rather problematical how many more bonds a house would sell by reason of having reserved territory.
Unless otherwise expressly stipulated the syndicate comes to an end when its purpose is accomplished by the sale of all the securi ties. By mutual agreement the account may be closed at any time, and the agreement forming the account ought to stipulate that the vote of a majority, or a majority in inter est, should govern for this as well as for other questions that may arise.
Recapitulating the considerations entering into the formation and carrying out of a joint-account transaction, we may consider it then as represented by the agreement form ing the account and the supplementary agree ment providing for what we may call the rules of the account, and summarize them by an outline of the matters that need be taken care of.
Agreement forming the Account should provide for these Matters: 1. Name.
The name or names in which the purchase is made and the order in which they are to appear.
R.' Purchase price.
3. Carrying.
Divided, undivided, or special.
4. Liability.
Unlimited, limited, or limited but unlim ited as to selling; and option to limit and proportional lessening.
All other matters of the account are to be provided for in rules of the account expressed in a supplementary agreement.
Rules of the Account should provide for: 1. Selling price.
2. Broker's commission.
3. Member's selling commission.
Shall there be any at all? If a commission, shall it begin at once? Or only after the member has sold his proportion? 4. Duration of account.
To continue until securities are sold, un less sooner terminated by agreement of members.
To continue for a definite period and to be terminated at the end of that period, unless members agree to extend.
5. Take-down price.
Selling price.
Or selling price less member's commission. Purchase price less any pro rata already paid by members.
Selling price less any pro rata already paid by members.
Selling price less commission and any pro rata already paid by members.
6. Delivery.
Only on manager's order.
Without manager's order.
7. Territory.
Unrestricted.
Restricted.
8. Advertising.
By manager in name of all at expense of account.
Or by each in the name of all and at his individual expense.
Or by each in his own name and at his own expense.
Since a joint account is one of the common est transactions with our bond houses, it speaks well for the general good faith and mutual understanding with which these un dertakings are carried out that the cases which express the law applicable to them do not arise out of the joint accounts of the bond houses. Such cases have their origin in almost any other form of endeavor carried on by joint effort. In its legal aspects the joint account comes under the special classifica tion of "Joint Adventure." So far as it is discussed in general treatises on the law it is dealt with in works on "Partnership." Even the most extensive of these works, however, hardly more than mentions it.
A joint adventure, or "joint account," as the bond houses call their particular form of joint adventure, may, indeed, properly be considered as a special form of partnership, and the legal considerations governing it may be considered as differing from those of the general law of partnership only as the special nature of joint adventure requires them to differ.
Frequently the cases point out, by way of stating a general principle to cover some special point in issue, that, though a joint adventure is not in a strict legal sense a co partnership, the rules of law applicable to the partnership relation govern the rights and duties of those jointly engaged.
Ordinarily, in the cases of joint adventure the rules of a general partnership apply to the questions involved, and the court prop erly limits itself to the remark that, though a joint adventure is not fully a copartnership, the law of partnership applies. The court has no occasion to discriminate more precisely. However, some of the distinctions are in teresting and important. Since the general treatises afford little help to a clear under standing of the law of joint adventure as ap plied to the joint account, it may be helpful to present a brief discussion of some of the legal issues involved in the entering into, and conduct of, a joint-account transaction.