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than a benefit, as the world has no right to know him in any other capacity than as a trader risking a certain sum for a profit, and not for a loss beyond it; and although the heaviest liabilities may be incurred by the partnership, far exceeding any reasonable proportion of credit which the subscribed capital would justify, the limited partner, without any interference in the management, could scarcely be expected as a moral duty, to protect the interests of creditors who are supposed to have informed themselves as to the conditions on which they risked their money, while he himself was a loser to the whole extent of his subscribed capital, without the advantage which they possessed, of deriving a dividend from the estate.

On the whole, limited liability in trading part nerships cannot be otherwise than detrimental to the interests of creditors; not only with respect to such partnerships themselves, but from the injury it would inflict on other partnerships or individuals trading on a principle of unlimited liability, and whose losses, arising from an overstocked market, the inevitable result of active competition, would recoil on those who supplied the goods.

2nd. On Managing Partners?

In partnerships en commandite, liability is only limited in the instance of those partners who are willing to risk the entire loss of a sum of money, from the hope of deriving from its employment a profit much larger than may be obtained under ordinary circumstances. If the power is given by law to take such risks, this question involves the consideration whether it might not lead to a spirit of gambling under the guise of trade, and whether this would not be injurious to the interests of the managing partners themselves (who are liable for the whole debts of the partnership), by reducing the chances of their skill and experience obtaining a suitable reward. It is no good reason to affirm that they may be possessed of little or no property of their own to lose, and that an opportunity is presented to them of turning to profitable account that knowledge and experience which they would not otherwise have the means of commanding. It ought to be remembered that knowledge and skill form a part, and not the least important part, of the capital; and that it is from that ingredient rather than from the mere money, that the profit is really to be de.. rived: money in itself would do very little in securing the success of any business in the absence of mind to direct it; where knowledge with skill therefore is the only property which managing partners have at command, they can less afford to risk the loss of it than a limited partner can, the small sum he is tempted to subscribe, and which is only a part, not the whole, of his property. Again, money capital has a controlling influence over skill and labour, which it is beyond the power of the latter to shake off until it acquires independence by the accumulation of wealth. Managing partners therefore must, in the first instance, be at the command of monied partners; and if they have no better means of advancing their individual interest, they must submit to the conditions it may suit monied

managing partners were sufficiently known to obtain an advance of money capital either on their own responsibility or on the security of their friends, it would not be for their interest to enter into partnerships at all, on the principle of commandite, unless they received such a share of the profit as to promise a fitting reward. But, as every man whose existence depends on his own exertions is likely to avail himself of every reasonable opportunity which offers itself for the improvement of his condition, he must be the best as well as the only judge as to the future prospects of such partnerships in which he may become a managing partner. It is just possi. ble that the hope of temporary subsistence, if not of future benefit, may tempt him to induce capitalists to form such partnerships, or that the desire to increase his own share may lead him into some inconsiderate or reckless speculation; but this is to be regarded as one of the evils attending partnerships en commandite, as it affords such opportunities without any sufficiently controlling power to prevent them, although it might be admitted that such a course is more likely to be the exception than the rule, as it is generally found that men qualified for management are men of prudence and principle, likely to act on the maxim that "that which is safest is best for all parties."

It follows that if a change in the law would lead, as it is not unlikely to do, to a great increase in trading partnerships, and to a corresponding increase in commercial competition (already felt to be so large as to endanger the safety of trade), it would be injurious to managing partners themselves, inasmuch as it would occasion the discontinuance of such partnerships as could not sustain themselves successfully against their competitors in the market. 3rd. On special partners of such partnerships, and on ordinary unlimited partnerships competing with them?

If it is true, that in this country, there is already more money capital in trade than is really required, that there is a vast amount of unemployed capital seeking investment, which the relaxation of the Usury Laws can turn advantageously into commercial channels, and that banking establishments throughout the kingdom, already afford every reasonable facility for promoting the extension of trade where it is felt prudent to do so, it follows, that (although, in many cases, partnerships en commandite, could not fail of success) to establish a principle of limited liability where the special partners had no voice in the management, would be inju. rious to special partners themselves, as it would force trade beyond its natural boundaries, and lead to losses in which they could not but participate. The same consequences would undoubtedly follow in the case of all other parties trading on a principle of unlimited liability; their property would be lessened by increased competition-and competition of an unjust and unnatural kind. It is for the interest of all the members of a community that capital should possess the most perfect freedom of action, as it calls for the universal employment of labour; but that action must be natural, and will

partners to prescribe, however unfavourable these be always at hand when the wants of the commuconditions may be to their future expectations. If nity require it. It is not for the interests of the the safe operation of partnerships with limited liability, exclusive of trading partnerships, with the exceptions before noticed.

community, or for limited partners themselves, that | gestions offer adequate protection to the public for a forced action should be conferred on capital, much less a special privilege, by establishing a principle of protection (which limited liability unquestionably is) altogether at variance with the freedom of trade or the spirit of legislation at the present day.

As to the expediency of transferring shares, -it may be considered, whether limited partnerships, with non-transferable shares, should only be allowed; or, those with shares transferrable at the will of the holder.

There seems no good reason why shareholders in partnerships with limited liability should not have the privilege of transferring their shares, provided the company has been established for public objects, and that a statement of the affairs of the company has been lodged in conformity with regulations to that effect to be determined by law. If such a privilege were not allowed, there would be few subscribers to such partnerships; and, as a great object with the public is to have the power of making temporary investments, to prohibit transfers of shares would deprive them of that advantage.

But, if private partnerships on the principle of limited liability should be allowed for trading purposes, it would be highly dangerous to admit shares in them to be transferable. It is not to be supposed that the Legislature would ever require a periodical balance sheet of such partnerships to be submitted, as it would never be tolerated by traders that an inquisition should be held over their affairs, and it would only lead to evasion or falsehood; there would, therefore, be no security or certainty that the business was not a losing one. Besides,

to admit of such transfer of shares would have the effect of injuring the credit of the partnership. Were partners allowed to withdraw before the expiration of the term defined by the contract, it would be construed by the public as well as the creditors of the partnership as an evidence that the business was unsuccessful and not trustworthy.

Partnerships comprehending small capitals and numerous partners could scarcely be beneficial either to the public or themselves. If the undertaking promised to be profitable, it would readily be taken up by one or two capitalists alone, who were likely to conduct the business more advantageously than a large proprietary could possibly do. If such partnerships could not be prohibited, it is very doubtful whether their formation ought to be encouraged, as they would attract a class of share holders (possibly working men) not possessed of the qualities of management to ensure success, and who could not afford to lose their means. If such partnerships were formed by persons in humble life (the partners being numerous, and each investing a small amount only), there seems scarcely any means to guard them against the consequences, as the management in such cases would probably devolve upon the promoters, who themselves possessing nothing, may have got up the company for objects of

their own.

But a great point for consideration is, What shall be the checks and safeguards for regulating the due operation of the system of limited partnership? It appears to me that the following sug.

1st. That a public board or tribunal be formed, which shall have the power of determining, by evidence in open court, whether a projected Joint Stock Company ought to be allowed on the principle of limited liability.

2nd. That at least one-third of the nominal ca pital shall be paid up before the company be allowed to commence operations.

3rd. That a complete annual registration be made of the shareholders and managers of the company.

4th. That the proprietors shall be liable to the whole extent of their respective shares, whether such shares are fully called up or not.

5th. That a balance sheet of the company shall be lodged with such public board for the purpose of public inspection, at the end of each year, subject to certain penalties in case of a fraudulent representation of the company's affairs.

6th. That an inspector from the Board shall be authorised at all times to examine the affairs of such public company in case of need, on being required to do so by a majority of shareholders present at any meeting called for the purpose.

7th. That the company shall be declared dis. solved when it is found that two-thirds of the nominal or subscribed capital is lost.

It has been suggested by Mr. John Brooke, that in the event of failure, the liability of shareholders should be limited " to 2, 3, 4, 5, 6, or any number of times the amount of the capital actually paid up according to the number of shares held." This principle is already acknowledged in the instance of certain colonial banks. But it is submitted that if the regulations stated above, are stringently enforced, the public will enjoy complete protection without involving the shareholders in loss, beyond the amount of their respective shares. It would seem unjust towards shareholders, who invest their money on the faith of limited liability, to hold them responsible to a greater extent than the amount of their individual shares, as by the spirit of the law the shareholder is entitled to protection as well as the creditor, seeing that by these regulations the creditor would be provided with the means of protecting himself. Mr. Lowe, who is altogether in favour of limited liability, thinks "the State ought to offer its aid to authenticate the amount of capital, and to audit and certify their annual balance sheet; and as the evading this authentication would be a sign of fraud, I see no objection to making it compulsory." This opinion expresses that principle of safety on which a law of limited liability ought to be permitted, although it would scarcely be expedient to adopt it in cases of trading partnerships. It may be disputed that the State ought to possess such a power of interference with private enterprise, unless where the compact is malum in se; but the country has experienced so often the evil consequences of excessive speculation, by the frequent occurrence of monetary crises, that it may fairly be assumed as a principle, based on self-preservation, that the State has an inherent right to protect itself.

It is exceedingly doubtful how far it would be tion, either as to the price of the goods or the perexpedient or desirable to render the remuneration sons to whom they are sold. The safest course is,

to be given for the use of money lent, dependent on the profits of the business. The present relaxed state of the Usury Laws enables a lender to fix his own terms for the use of his money, and the borrower need not submit to these terms if he can obtain accommodation at a lower price. In such cases the higher the remuneration demanded and complied with, the greater the risk; and a mere lender to a trader in business, would prefer exacting the highest rate he could obtain, rather than make the re

that the master should bestow a bonus on some honourable understanding, which his own interest would best dictate without being governed by any other condition, not in the shape of a per-centage, but as a reward for extra or successful exertion.

Nothing can be more objectionable to the interests of traders as well as of their creditors, than the operation of the existing law, in cases of disputes arising between partners, as the expense and delay attending litigation materially reduce the

muneration dependent on profits; as, in the event common stock, and occasion in many instances the of failure, he might become involved as partner. In destruction of the business. In such cases it would a business about to be newly established and requir- be a great boon conferred on trade were a system ing capital, similar motives might or might not in- of arbitration rendered compulsory, whether it was

fluence a party who has money to lend; but it would be more for the advantage of the borrower that a fixed rate of interest were agreed on, as he would know more distinctly the extent and charac. ter of his obligations. Even if an arrangement could be entered into, by which the interest on the loan would be in proportion to the profits, without involving the lender as a partner, a fixed rate would be preferrable, as it would prevent investigation into the trader's affairs at the instance of the lender, an inquisition which could not fail to be injurious to the trader, if the lender's confidence was shaken in the business, on examination of the balance sheet; and be injurious likewise to creditors, if from the lender's knowledge of the affairs, he might succeed in obtaining a preference in favour of his own debt.

It is not unusual to reward services rendered in a business, by a per-centage, in addition to a fixed salary; but unless great care is taken, the principle on which such per-centage is paid, might justify a claim on the part of the servant, to be acknowledged a partner against the will of his master; or render

prescribed by the articles of partnership or not. The public board already suggested seems a natural and proper provision for contingencies of this kind, and under certain regulations, to be defined by law, might meet all difficulties likely to present themselves. When the importance and magnitude of the interests involved in such questions are considered, (both as regards public and private partnerships,) there seems great reason for recommending the establishment of such a board to the consideration of the Legislature.

The judicial character of many questions arising in partnerships, is better calculated for the administration of a special tribunal than of the Board of Trade, whose functions are of a widely different nature. Looking at its political constitution, it may reasonably be supposed that it would be a great relief to that board, as well as an advantage to the public, were questions relating to partnerships, and the power of conferring charters of incorporation altogether removed from it. As it would be the duty of the public partnership board already suggested, to take into consideration the

himself liable to the creditors for his master's trade expediency of authorizing the formation of joint obligations. As the law now stands, a per-centage stock partnerships on the principle of limited liabion profits, is considered as constituting a partnership, lity, such a new board (composed of both legal and and this in some description of business is obviated mercantile members), would seem to be the proper by a per-centage or commission on cash receipts, tribunal for granting charters of incorporation, as or on amount of goods sold; but these are both liable to grave objections, as they may lead to a reckless trading on the part of the servant, and to an augmentation of sales without proper discrimina

well as for adjudicating upon all partnership ques

tions.

RO. SLATER.

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NEW LAW RULES.

Just Published, price 10s. 6d., free by Post,

THE COMMON LAW PROCEDURE ACT,

with EXPLANATORY COMMENTARY, PRACTICAL NOTES, and FULL INDEX, by WILLIAM D. FERGUSON, Esq., Barrister. at. Law.

"Mr. Ferguson, in the very able and lucid work before us, has presented the profession and the public with an accurate representation of the law as it now stands."-Dublin Evening Post.

on the present treatise is deserving of the reputation which Mr. Fergu.

son has acquired by his previous works."-Saunders.

"Systematically compiled and arranged, most accurately and studiously noted, and fully elucidated by authorities."-Daily Express.

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The accuracy and fulness of the marginal notes of this edition, and the elaborate index, combine to afford all possible facility in studying and referring to the new statute, &c The novelty of issuing copies with blank interleaving, for the purpose of taking notes of cases, will be most accept. able to the legal profession."-Freeman's Journal.

"Mr. Ferguson has rendered good service to the general public, as well as to the legal profession, by the lucid manner in which he has placed Mr. Whiteside's Reform Measure before them. The Publisher, Mr. Milliken, has not been wanting on his part. The volume, for neatness and clearness of type, is creditable to the Irish press. "-Evening Mail.

"The book is a very valuable one to both professions, for Mr. Ferguson may be safely relied on as guide to the new practice," Freeman's Jour

nal.

NEW ORDERS IN CHANCERY.
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THE GENERAL ORDERS OF THE COURT OF

CHANCERY, dated the 31st of July, 1851, under the Chancery Regulation Act, 1850, as amended, and the MASTERS' GENERAL ORDERS under the Act, with Comments and Observations, and showing the Practice as now established in CAUSE PETITIONS; with an Analytical Index, By WILLIAM SMITH, Esq., Barrister.at-Law.

Also by the same Author, price 4s., by Post, 4s. 6d., or, bound with the Orders, price 6s., by Post, 6s. 6d.

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GULATION ACT, 1850, with PRACTICAL COMMENTS and

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Price 5s., by Post, 58, 6d. 'THE JUSTICES' MANUAL: -containingTHE JUSTICES PROTECTION ACT; THE SUMMARY JU RISDICTION ACT, 185!; THE PETTY SESSIONS ACT, 1851; and THE LAW OF EVIDENCE AMENDMENT ACT, with NOTE COMMENTS, and COPIOUS INDEX.

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THE

IRISH JURIST

No. 295. VOL. VI.

ROLLS COURT:

AUGUST 19, 1854. PRICE, per Annum, £1 10s

NAMES OF THE CASES REPORTED IN THIS NUMBER.

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to that of the disease. We have no doubt but that the press will raise a howl against the scheme of consolidation. The term "Chancery" has, in fact, become a "household word " of evil omen; and the masses will ever confound offensive names with offensive realities. It is, however, to us quite astonishing, that those who set up for teachers of the public should so perversely misrepresent facts, as they constantly are in the habit of doing. Instead of guiding public opinion, it appears rather to be their aim to follow it, especially when this opinion is based on ignorance. Surely, candour would require them to admit that the most sweeping reforms have of late years been effected in the administration of equity in both countries, but especially in Ireland; that the Act of Parliament which reconstructed the Court of Chancery in Ireland in 1850, was the work of the same lawyers who framed the Incumbered Estates Act, and that the procedure of both the Court of Chancery and the latter court are equally simple, though differing in details, the main feature of the latter being the power of conferring a Parliamentary title. How uncandid is it, therefore, for the newspaper press to cite in illustration of the delays of our Court of Chancery, an imaginary case of Jarndyce v. Jarndyce-a figment of a popular novel writer, written to gratify the vulgar spleen

It is understood that a commission is about to be issued for the purpose of taking into consideration the propriety of uniting the jurisdiction of the Incumbered Estates Court with that of the Court of Chancery. Fully alive to the wisdom which dictated the establishment of the recent tribunal, and grateful, as we are, to the staff of functionaries, both judicial and ministerial, connected with that court, for the zeal, energy, and ability with which they have discharged their most arduous and critical duties, still we have always entertained the opinion, that it was a tribunal of an exceptional character, and only adapted for an emergency, and that as soon as the primary object of its creation had been generally achieved, its separate existence ought to terminate. It was a bold experiment, and that experiment has well succeeded; but we think that the time has come when it may now safely merge into the ordinary equity judicature. The occasion which demanded the creation of a court invested with arbitrary functions for the enfranchisement of land, was nearly as urgent as the need for a military tribunal during the quelling of an insurrection. Now that our country, under the blessing of Providence, is restored to comparative health, we can afford to dispense with an institution of the English public, perhaps justly incensed at the which, as a remedy, was in its violence proportioned abuses of their own Court of Chancery. It is well

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