3rd. As to varying the Rules and Orders of affidavit on which the summons to such trader

Bankruptcy Bill.-Criminal Justice (Metropolis) Bill.

s. 233, limiting the time within which a person adjudged bankrupt may dispute the adjudication, shall, on or after September 1, 1854, be construed as if the words "two calendar months" were therein inserted in lieu of the words "twenty-one days;" (s. 26).

197

ance for any diminution in value in such articles, occasioned by his having continued to use them since the bankruptcy, as the Commissioner may think reasonable (to be either paid by the bankrupt in money or the amount thereof in value retained in goods); (s. 29).

This Act shall be construed together with the Bankrupt Law Consolidation Act, 1849, as one Act, and may be cited as "The Bankruptcy Act, 1854;" (s. 30).

BILL.

Every bankrupt shall be entitled to retain such articles of household furniture, and tools, implements of trade, and other like necessaries, as he shall specify, not exceeding in the whole the value of 201.; and such excepted articles shall not be subject to be sold or taken in execution at the suit of any creditor; and there CRIMINAL JUSTICE (METROPOLIS) shall be filed an inventory of such excepted articles, with a valuation of the same and a certificate by the appraiser, attesting the truth thereof, and stating when and where such articles were valued; and the reasonable ex-vember 2 next, proposes to enact as follows:penses and charge of such valuation when taxed shall be paid to the appraiser by the official assignee out of the proceeds of the estate; (s. 27).

6th. Postponement of Sale of Furniture, &c.,

and Allowance to Bankrupt.

THIS Bill, which is to commence after No

Whenever a magistrate shall commit to custody or hold to bail any person for trial at the Central Criminal Court or Session of the Peace, an information shall be filed in lieu of a bill of indictment presented to the grand jury (s. 1); and which shall have the same effect in all respects as an indictment as to trial or otherwise; (s. 2).

No information shall be quashed, nor acthat the offence quittal taken, by reason charged differs in its legal definition from the tainer, or for which the party was held to bail; offence specified in the commitment or deprovided the information apply to some act or

offence disclosed or to be inferred from the

The messenger of the Court, upon taking possession of the remainder of the bankrupt's household furniture, tools, and implements of trade, shall make an inventory and valuation thereof, and deliver the same to the official assignee; and where the bankrupt shall, by writing under his hand, request the assignees not to dispose of such household furniture, tools, or implements of trade, the same shall not be disposed of without previous order of depositions or from the commitment or rethe Commissioner; and the Commissioner Cognizance; and provided that the commitmay, upon the application of the bankrupt, ting magistrate or the Court shall have power postpone the removal and sale of the same for to direct an indictment in any case; (s. 3). such time as he shall think fit, having regard to the probable value of the other property of the bankrupt, and may permit the same to remain in the use and occupation of the bankrupt, upon such terms and conditions and with such security as may seem proper, so as to protect the same from being sold for the payment of any rent, rates, or taxes which might become due thereafter, or of any debt, claim, or demand whatsoever; and the Commissioner may, at any time when he shall think it necessary, order the same to be taken by the messenger or assignee, and to be sold for the benefit of the creditors; (s. 28).

If the other effects of the bankrupt shall pay to the creditors such an amount of dividend as shall entitle the bankrupt to an allowance in money, and the household furniture, tools, and implements of trade shall not have been sold, the bankrupt shall accept the same at the valuation originally put on the same, or a sufficient portion thereof, to be selected by him, with the approbation of the assignees, as and for his allowance instead of money; and such articles so accepted shall be delivered to, and revest in the bankrupt as his own property, and the official assignee shall sell for the benefit of the creditors such portions as the bankrupt shall not be entitled to retain, and such deduction may be made from his allow

No objection shall be allowed to any information, except such as may be made to indictments, and it shall not be necessary in the information or in making up the record to set forth any proceeding before the magistrate; (s. 4).

Nothing in the Act shall extend to authorise any information to be filed in cases of treason or misprision of treason, or offences against the Queen's title, prerogative, person, or government, or against either House of Parlia ment; (s. 5).

It shall not be necessary to summon a grand jury at every session of the Central Criminal Court, or of the Peace for the metropolitan district, but only at such sessions as the judges and justices or any two of them may think necessary, not being fewer than four sessions in every year; nor at the sessions for London and Southwark unless 16 days before there shall be any business to render the attendance of the jury in the opinion of two justices necessary; (s. 6).

shall mean every judge, person, or Court The word " 'magistrate" and "justice" having power to commit or hold to bail for trial for any criminal offence.

198

Chancery Procedure Amendment Bill.-Limited Liability Partnerships.

CHANCERY PROCEDURE AMEND

MENT BILL.

By this Bill, which was introduced by the Solicitor-General on the 10th July, to "Amend the Course of Procedure in the High Court of Chancery," it is proposed that in all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction against a breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract, or agreement, it shall be lawful for the same Court to award damages to the party injured, either in addition to or in substitution for such injunction or specific performance, and such damages may be assessed in such manner as the Court shall direct, and the powers given by the 15 & 16 Vict. c. 86, s. 63, of making general rules and orders, shall extend and apply to the mode in which such damages are to be assessed, and the course of procedure of

the Court in relation thereto.

LIMITED LIABILITY PARTNER

SHIPS.

MR. BRAMWELL'S OPINION.

HAVING in a recent Number (p. 157, ante), given the Commissioners' Report against the proposed alteration of the Law with regard to limited liability partnerships, we now lay before our readers the opinion of Mr. Bramwell, one of the Commissioners, who has come to an opposite conclusion. He says

"I will consider them in their order. 1st. Is it desirable to prohibit by law persons from entering into partnership, and to prohibit them and others from dealing together, on the terms that the liability of one or more or all of the It will perhaps partners should be limited? be said, this is not the question, as the law at present has no such prohibition. Theoretically it has not, but practically it has, by its rule, that one partner has presumably authority to bind another to an unlimited extent, and that such presumption cannot be rebutted in trading partnerships, except by proof of notice to the persons dealt with that the terms of partnership are to the contrary. If there were no such rule, and the actual authority given by one partner to another had to be looked to, there and trading with limited liability. The ques would be no difficulty in forming partnerships, tion therefore is, assuming the general rule referred to to be expedient, ought it to be so qualified as not to prohibit such partnerships statement of the question, that it is not proand trading? It will be observed from this posed that any compulsion should be put on any person; only that a restriction should not be imposed. No persons would be compelled to enter into such partnerships, no one to deal with them,—but all would be left free to do so or not, as suited their own judgments. That this would be so as to the partners is obvious; they would be undoubted volunteers. If those who dealt with them knew the terms of partnership, they would be so likewise; if they did not know, and did not inquire, it would be because they were content not to know: if misinformed, it would be assuredly because they had not inquired of those certain to know, viz., the partners, or had been fraudulently informed by them; a most improbable occurrence,—if legislated for, to be so penally, and moreover one which never need happen, if there were a registry.

"The question therefore is as I have stated, is it expedient that such partnerships_should "The difference of opinion which at present be prohibited? Ought A. and B. to be proexists and appears likely to continue between hibited from entering into partnership on terms the majority of the Commissioners and myself, with relation to any change in the Law of Partnership, has made me think in desirable to state the conclusions at which I have arrived on that subject, and the reasons which have led me to them; as well for the purpose of submitting them to the other Commissioners, as for that of putting them on record for what they are

worth.

"We are directed to inquire, whether it will be expedient that any and what alteration shall be made in the Law of Partnership, so far as relates to the limited or unlimited liability of partners.'

This, like all questions involving change in the law, may be divided into two. 1st. What ought to be the law, as an abstract question, unaffected by existing laws, habits, usages, and the inconvenience of change generally? 2nd. How far do these considerations affect the abstract question?

limiting the loss of B., or of both? Ought C. to be prevented from dealing with them on those terms? The burden of proving this is on those who assert it. This is not a technical view. It is desirable in all cases, and in this I believe most important, to see on whom is the burden of proof. For even if we had none of the valuable evidence which has been given to us as to the mischiefs of the present restriction, to my mind it would have required an exceedingly strong case to have established the propriety of the prohibition in question. If ever there was a rule established by reason, authority, and experience, it is that the interest of a community is best consulted by leaving to its members, as far as possible, the unrestrained and unfettered exercise of their own talents and industry. Our modern legislation has been founded on this principle, with the sanction of the immense majority of those whose opinions are of any value. The restraint on

Limited Liability Partnerships-Mr. Bramwell's Opinion.

199

limited liability partnerships offends against "I protest entirely against entertaining the this rule; and I frankly own, that, whatever first and second of these objections, even supweight is due to the evidence given us I attach posing them to exist. I will not say the State more value to the operation of that general has no right, because to that expression no deprinciple, the extent of the effects of which no terminate idea is annexed; but I do say that one can foretell, and which has done so much it ought not to interfere to prevent, for their where permitted to act. If A. and B. are de- own sakes, any persons from entering into any sirous of entering into such a partnership, and engagement they may be willing to form. There C. of dealing with them on its terms, why may be real or apparent exceptions to this rule, should either of them be called on to give a as where the thing agreed to be done is malum reason for leave to do so,-beyond this, that in se; but for the purpose of protecting the they deem it for their interest, and that it is parties themselves, I say the State ought not their pleasure to do it, and their will? Who to interfere, but to leave every man to the most is likely to know better than themselves what zealous and best informed of all protectors, will be to their interests? Let the objector himself. make out his objection, and show why they should be prohibited.

"But besides the considerations arising from general principles, a great quantity of most valuable evidence has been furnished to us, which, as far as it goes to show the probable advantages of such partnerships in this country, is indeed speculative, but which, so far as it shows the mischiefs of their prohibition, is most positive and certain. We have also the result of the experience of other countries, comprising the most commercial communities in the world, and the testimony is uniform as to the utility of such partnerships. I say uniform, because no one says that, on the whole, they are found to be objectionable in the countries where they exist, with, I think, one exception; and for the opinion so expressed no reason is given, while it is abundantly contradicted by others more conversant with the facts upon which it is professedly founded.

"As I cannot, however, do justice to the benefits shown to have accrued from such partnerships elsewhere, and expected to result from them here, and to the mischiefs experienced from our prohibition of them, without great length, I must content myself with this general reference to the evidence.

"What, on the other hand, is the character of the testimony the other way? Certain in jurious consequences are foretold on the application of the law of limited liability to this country. Of course this kind of evidence is necessarily speculative and theoretical. The witnesses for the most part are gentlemen engaged in commerce. I do not say that to their disparagement. They are persons of the highest position, and I have unqualified confidence in their integrity; but it is reasonable to suppose that their judgments may be somewhat influenced by their natural satisfaction with things as they find them, and a wish they should not be interfered with. It must not be forgotten that there are names of practical men as of great weight on the other side; and the large majority of non-practical witnesses, the indifferent bystanders, writers of renown, and others, are in favour of the suggested change. "The objections are, that mischiefs would arise from such partnerships,"1st. To the members;

"2nd. To those who deal with them;

"Before considering the objections raised, it may be remarked that the prophecy of mischief is discredited by the experience of other countries, where the law, which is to cause them here, is to be found; and no reason is given why that law which does not cause them elsewhere, should cause them here.

Let us, however, consider the suggested mischiefs. It is said, 1st, the partners would enter into rash and hazardous speculations, and lose their money. What does this mean? Enterprises in which the probability of loss is great? But in one sense this is unobjectionable. Every prudent man constantly engages in such. A man pays 17. to receive 1,000l., if his house should be burned. Is it more than 1,000 to 1 that his 17. is lost without any return-that his house is not burned, and that he had better have kept his 17. in his pocket. But does any one call him rash in such an outlay? Is it rash or wrong to venture 1,000l. on an enterprise which in nine times in ten fails, if, on the tenth, 20,000l. are the return for the 1,000l.? Is it rash in A., B., C., and so on to the first ten letters of the alphabet, that each should do this? If so, make a partnership of the same number; let the whole ten do the same thing ten times; by the hypothesis each will have gained 1,000l.; and if it was right in the whole to do so, how was it wrong or rash in each? A most hazardous may still be a most wise speculation. The objection, therefore, that great and excessive risks would be run is worthless, unless it means they would be unwisely run; and this it is said they would be-that business would be carried on recklessly and unwisely. Why should this happen? The partner whose liability is limited has his subscribed capital to lose. But it is said that he might be willing to risk it where success would return it twenty times, and failure would simply lose him its amount, and make his partners insolvent. But I say this again supposes either that success is probable, or that it is proportionately improbable. In the latter case it is unwise; in the former it is wise and right. I do not think that any person would enter into a speculation which he thinks unwise, merely because he knows the extent of his loss;-why he should venture a given sum of money on disadvantageous terms, merely because his loss is fixed; terms which, taking

"3rd. To the public; i. e., all persons not the probabilities of success and failure, and the included in the first and second classes.

M 5

200

Limited Liability Partnerships-Mr. Bramwell's Opinion.

probable amounts of both, are not an equiva-jured. That, however, is an injury which no lent. I can understand why he should refuse law, no restriction, will prevent, but which he to risk his all on the wisest speculation; viz., could much better guard against if he could because no possible gain could equal the pos-refer to some registry, learn the nature of A.'s sible loss. A. B. has an estate of 1,000l. a year. There is every reason to believe that he has a coal mine, which, on an outlay of one 10,000., would return as much annually. It would be most prudent in him to subscribe 1,000l. to the 10,000l., if his liability stopped there; but if, as a consequence of that, he might possibly lose his estate, I can readily understand that he would be right not to do it.

trade, that he traded partly in commandite capital, and to what extent, instead of, as at present, being ignorant of what are A.'s business and means, and whether the appearances he makes is with his own or borrowed capital. But then it is said that on the insolvency of the firm the limited partner would be preferred, in fraud of the general creditor; that accounts and alleged profits and losses could be falsely stated. Now every one who has any experi "This shows, it may be said, that there may ence in courts of justice knows that frauds are be more speculative enterprises with a system never long from their origin to their maturity, of limited liability than at present. I admit it, and it would be always easy to detect any sudand see no subject of regret in that. The un- den change in the general aspect of the affairs limited partner has his capital, if he has any, of the partnership. But why should the unthe use of his partner's, and his own character limited partner be guilty of this supposed and position at stake to induce him to be care- fraud? Would his inclination or opportunity ful. I cannot see that limited liability is likely be greater than under other forms of partnerto lead to unwise speculations; and I think it ship? He always has himself, often wife, chilno objection that it may lead to hazardous, dren, relatives, to protect, quite as near to him provided they are prudent speculations. But as his limited partner. His regard, therefore, I desire further to say, it does not follow that for the person to be served would be no greater such speculations would be multiplied. At present they exist, with this difference,-they are now constantly in the hands of rash and dishonest persons, with no capital or character, instead of being in those of prudent and reputable, companies-partnerships-got up, not for the purpose of the speculation, but for the profit of the getting up and of the working of the partnership.

2nd. The next class that it is supposed to be necessary to take care of is the creditor; he who deals with the partnership. In the first place the creditor would prefer to decide for himself, instead of being taken care of. But if it be thought necessary to protect him in spite of himself, it must be asked, how is he to suffer? What mischief is he to be prevented from running into? Loss from the insolvency of the partnership? But where is there greater chance of insolvency than in unlimited partnerships, if there is no greater chance of unwise trading? It may be said there is in this way: A. and B. are partners; A. has nothing to lose; B. subscribes 1,000l.; they risk it in an enterprise where it is an even chance whether they lose 10,000l. or gain 20,000/; an obviously good speculation. If they win, they gain 9,500l. each; if they lose, B. loses 1,000l., A. nothing, and the creditors 9,000l. Here is obviously a prudent speculation for A. and B., though most injurious to the creditors. The case is an extreme one, and to the last degree improbable; and, after all, how is the creditor a sufferer, and what just ground of complaint has he? He knows the nature of the speculation, or he does not; if he does, he charges accordingly, and he becomes, in truth, a sharer in the risk. If he does not know its nature, and if he has not inquired, it is his own fault; if he has, and has been misinformed, he is defrauded. In the last case alone can he be justly said to be in

than at present. Then would the opportunity be greater? Are imaginary profits invented now in cases of money borrowed? Do we find that to avoid a charge of fraudulent preference such profits are imagined so as to warrant the repayment? I believe not; and it is to be remembered that such a proceeding, if both parties were privy to it, would be an indictable offence; and certainly it might be most powerfully checked by a provision that it should make the limited a general partner. While on this point I cannot help saying, that, as has been observed, there are dishonest creditors as well as debtors, and that limiting the liability of the latter might tend to the amendment of the former, and prevent the giving of credit, which is at present given in the belief that shareholders unacquainted with the mischief going on will ultimately have to pay for it.

"3rd. The public are to be taken care of. It is said that the competition with unlimited liability partnerships would be unfair on the latter. This is a strange argument to be used by those who say that limited liability partnerships would never be trusted; but I own I cannot understand it. The interest of the public is in unrestricted competition. If limited liability partnerships turn out to be more profit. able than others, or can profitably sell at lower rates than others, they are preferable to those others, and the sooner all are on the best footing the better. But the truth is, the objection is imaginary; the experience of other countries show that there will be some of each, as there are now some private and some joint-stock banks. Unlimited liability partnerships will be adopted by those who prefer them, and for purposes for which they are preferable. The limited will be resorted to on similar considerations. If no one finds them preferable for any purposes, they will not be used, and the permission to form them will be nagatory. I