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Superior Courts : Exchequer.
Court of Erchequer.

leave to exhibit on behalf of the defendant London and North Western Railway Company interrogatories to the plaintiff before pleading v. Sharp. Nov. 7, 1854.

to the declaration, on the ground that he was ACTION AGAINST ATTORNEY FOR NEGLECT; his son, who had signed a deed of coinposition

colluding to enforce payment of the bill with ING TO KEEP AND DELIVER UP CLIENTS' together with six-sevenths of the defendant's PAPERS IN REASONABLE ORDER.

creditors. Held, refusing a rule pisi on leare reserved to

Aspland showed cause in the first instance, enter the verdict for the defendant, that it on the ground that the application was preis the duty of an attorney to keep the mature. papers of his clients in proper order, and, The Court, without deciding the question as when called on, to deliver them up in a to the construction of the Act, said, that the reasonable order and condition; and an rule would be refused, as the affidavits did action for neglecting so to keep and de- not disclose a case of sufficient urgency to call

liver up the papers is maintainable. for the interference of the Court. Although it This was a motion, pursuant to leave re- might be convenient for a defendant to obtain served, for a rule nisi to set aside the verdict all the facts before he pleaded, it was better for the plaintiffe and enter it for the defendant that the interrogatories should not be filed bein this action, which was brought against him fore the plea, when the Court could tell what as the plaintiffs'attorney for neglecting to keep the issues were and determine as to the points their papers and delivering up the same when on which the party should be examined. The called upon in a reasonable manner. It ap- rule would be refused. peared, on the trial before Crowder, J., at the last Lancaster Assizes, that upon the defend. Hamilton v. Bell and others. Nov. 18, 1854. ant being removed from the office of solicitor BANKRUPT. GOODS IN POSSESSION AND to the plaintiffs, he had delivered over the


Or.-RIGHT OF papers in great confusion, and they had been

ASSIGNEES. put to great expense in arranging them. The

The plaintiff had at various times purchased jury found for the plaintiffs, but with Is. dá- and paid for clocks of a clockmaker, and mages, on the ground of laches in bringing the

had not removed them as they were to be action.

cleaned, but the shop-tickets were taken of Watson in support.

them : Held, that on a bankruptcy such The Court held, that an attorney was bound

clocks did not pass to the ussignees as being to keep his client's papers in proper order, and to deliver them up when called on in a reason

in the possession and reputed ownership of

the bankrupt. able order and condition, and the question

This was a motion, pursuant to leave rewhether they had been given up in a reason served, for a rule nisi to set aside the verdict able order was for the jury. The plaintiffs for the plaintiff, and enter a nonsuit in this were therefore entitled to a verdict, and the action, which was brought against the assig. rule would be refused.

nees of a bankrupt to recover possession of

certain clocks which had been purchased by Martin v. Heming. Nov. 16, 1854.

the plaintiff at various periods before the peCOM

ACT, 1854.tition of adjudication, but had not been reMOTION UNDER S. 51 TO EXHIBIT IN: moved from the premises as they were to be TERROGATORIES BEFORE PLEA.

cleaned, but the shop tickets had been taken Quære, whether the Court has power under off: On the trial, before Martin, B., the

the 17 & 18 Vict. c. 125, s. 51, to give the plaintiff obtained a verdiet, subject
defendant leave to exhibit interrogatories to motion.
the plaintif before pleading to the declara-

Lash in support. tion ; but a motion for such order was re

The Court said, that the rule as to reputed fused where the affidavits did not disclose ownership was not applicable where goods a case of sufficient urgeney to call for the were allowed to remain in the possession of a interference of the Court.

tradesman whose business required him to This was an action to recover the amount of

have in his shop the goods of others for the a bill of exchange drawn by the plaintiff's son having them ought not per se to give him any

purpose of repair, &c., and the fact of his so and accepted by the defendant.

unfounded credit with others so as to render Quain now appeared in support of a motion them liable on his bankruptcy. The rule under the 17 & 18 Vict. c. 125, s, 51,' for would accordingly be refused.

1 Which enacts, that “in all causes in any of and examined as a witness upon such matter), the Superior Courts, by order of the Court or interrogatories in writing upon any matter as a Judge, the plaintiff may with the declaration, to which discovery may be sought, and require and the defendant may with the plea, or either such party, or in the case of a body corporate of them by leave of the Court or a Judge, may any of the officers of any such body corporate at any other time deliver to the opposite party, within 10 days to answer the questions in writor his attorney (provided such party, if not a ing by affidavit to be sworn and filed in the orbody corporate, would be liable to be called dinary way."




to this

The Legal Observer,



Still attorneyed at your service."-Shakespeare.


LIMITED LIABILITY PARTNER- Under the proposed amendment of the law, SHIPS.

this expense would be saved. The deed of

partnership would be prepared by the soIn another part of the present Number licitor, registered at moderate cost, and will be found a brief analysis of the evi- notified to the public under the provisions dence given before, or transmitted to, the of the Act. Mercantile Law Commissioners, on the The question, after all that may be urged subject of limited liability partnerships ; against it, is one merely of amount and and it will be observed by our readers that mode of proceeding, not of principle. It various classes of witnesses have given seems to be admitted that if a projected entheir opinions on this important subject. terprise required 100,0001. to conduct and Amongst them we find bankers, merchants, carry it into effect, the capital might be and bill brokers of London and many other raised in shares, and such shares held in great cities and towns; members also of se- unequal proportions by different individuals, veral chambers of commerce, solicitors of and each liable only for the amount he subextensive practice, and scientific men. scribed. Now the extent of capital will, of

The witnesses who are in favour of course, depend on the nature of the underlimited liability, of course, accompany their taking. A large capital may be required in opinion with a recommendation that all the management of a business which, by such partnerships should be sufficiently ordinary skill and diligence, is liable to registered, in order that the public may be little risk, and there would be no difficulty fully acquainted with the names of every in finding a competent number of persons partner, whether his liability be limited or to subscribe for the requisite funds. There unlimited. If limited, the extent of the may, however, be numerous projects which limitation must be precisely stated, and can be carried into effect for 20,0001. or each limited partner will, of course, be less, and yet are of so uncertain a nature, liable to the creditors of the firm or com- or perhaps hazardous a description, that pany for any part of his share of the sub- few individuals will embark in them, withscribed capital which may not have been out the assistance of funds raised from a

somewhat numerous body of subscribers or Several of the witnesses who support the proprietors. general principle, would confine its applica- It may be asked, why should these entertion to undertakings of an extensive kind, prises be abandoned, which, if successful, such as railways and mines. The general will benefit both the public and the proprinciple is indeed recognised and adopted jectors, because in the present state of the in numerous societies as well as companies, law each partner in the transaction, though the joint stock or capital of which is held deriving a small share only of the profits, is in shares, some of the proprietors holding a liable, in case of loss, to the whole extent of few and others many shares. These part. his property ? He may legally lend 1,0001. nerships, it will be recollected, are consti- and exact 201. per cent. interest, and take tuted and established at great expense by such security as will give him a preference Acte of Parliament and Royal charters. over other creditors, and yet he is proVOL. XLIX. No. 1,395.




Limited Liability Partnerships. hibited from putting the 1,0001. into the missioner Holroyd support the measure, joint-stock of the company and taking a and we are not aware of any opposing Comshare of the net profit, because, if the con- missioner either of the London or Country cern fail and his partners cannot pay their districts. share of the loss, he must make up the Several eminent Counsel have also exdeficiency.

pressed a favourable view of the propoThis state of things appears to be really sition. Amongst these are Mr. Swanston, prejudicial to the creditors whom the op- Q. C.; Mr. Lowe, M. P.; Mr. Richards, ponents of the measure seek to protect. It the Speaker's Counsel and Professor of is supposed, that if more capital could be Political Economy in the University of obtained by altering the law, than is now Oxford ; Mr. James Stewart, Secretary to forthcoming, there would be an increase of the Copyhold Commission ; Mr. Vansittart “ reckless trading,” and that creditors Neale ; and Mr. Ludlow. would not take the trouble to ascertain the Mr. Bellenden Ker is also in favour of limits of the several partner's liability, the limitation under certain safeguards and debts would be incurred to a ruinous which he suggests. amount. We hold, however, that the Le- The Solicitors in favour of the plan are gislature will have sufficiently discharged as follow :its duty, if it provide creditors with the Mr. Cotterill approves of the alteration, means of easily ascertaining the several subject, in case of failure of a firm, to the amounts of liability of each partner ; and if payment of the full amount of the partners

' merchants, manufacturers, and traders will subscription without deducting previous give credit without inquiry, they must abide payments. the consequences. If the firm of “ Jones Mr. Hollams, of the firm of Marten, Brown, and Company” obtain credit from Thomas, and Hollams, suggests that the an incautious dealer, who imagines that limited capital of each partner should not under this high-sounding firm there are be less than 1,0001., and that there should several rich partners, and it turns out that not be more than 25 partners. the company consists onl of Mr. Jones Mr. Baker, of the firm of Baker, Ruck, Brown, can he justly complain of the law and Jennings, also supports the alteration. for the loss he may sustain ? Neither can Mr. Hesp, of Huddersfield, and Mr. he blame any one but himself, if he gives Smith, of Sheffield, are also in farour of credit to a company which he supposes to limited liability. be unlimited, when the register will show It is right to add, that Mr. Freshfield, him the contrary. Besides, in these limited the Bank Solicitor, would limit the partpartnerships, it may be provided that the nerships in question to undertakings of word “registered" or "limited” shall be long duration and requiring a large perused in the name or style of the firm, so as manent outlay. to give constant notice to those who deal The Bank Directors are not agreed : Mr. with it, however incautious or indolent they Cotton and Mr. Latham are against the pro

position, and Mr. Norman and Mr. Hankey

in its favour. Mr. Hubbard, the Governor, It

may be useful to refer particularly to supports it in a modified form, as to loans the opinions of some of the lawyers, as well for trading purposes, and Mr. Weguelin, the as bankers and others, who have been exa- Deputy Governor, is favourably inclined. mined. We shall select in the first place

The Chambers of Commerce in various the Masters in Chancery and Commis- places also hold different opinions on the şioners in Bankruptcy.

subject. Mr. Farrer, the late Master in Chancery,

Lord Overstone and Mr. Prescott the suggests that limited responsibility should Banker, are against it, except as to combe adopted only where there are more panies formed under the authority of the than six partners holding shares of a cer.

Board of Trade or Parliament. tain amount, and the business being sub- The proposition is also supported by the ject to periodical inspection.

following men of scientific eminence :-ProSir George Rose also gives in his ad- fessor Babbage, of the University of Camhesion to the proposed change in the Law bridge ; Mr. Leone Levi, Lecturer at King's of Partnership. It is proper to mention, College, Londen; and Professor More, of however, that Mr. Tinney is on the oppo- the University of Edinburgh. site side.

Mr. Commissioner Fane and Mr. Com

may be.

effect :

Evidence on Limited Liability Partnerships.

83 EVIDENCE ON LIMITED LIABILITY out special authorisation, (14) to agreed adPARTNERSHIPS.

vance; in certain cases creditor of partnership may recal profits received since his debt was

contracted, but not beyond six years. 16. The large parliamentary volume pub- Shares transferable, but liability of transferer lished on this subject, with the evidence at the time of transfer to continue. 18. No submitted to the Mercantile Law Commis- compulsory dissolution op loss. 19. French sioners, has been read, we believe, by very law of non-interference by limited partner too few of our brethren; and it may therefore strict. 20. Registration of deed of settlement, be useful, as the Session of Parliament


of names of acting partners, and if liable for proaches, to notice the substance of the calls, of the limited partners also. 21, 22. No answers which have been transmitted to the compulsory publicity of accounts.

J.'S. A. 3, 11. Companies with very large Commissioners on the question of Limited capitals (say 1,000,0001.) to require sanction of Liability Partnerships.

Board of Trade. Act of Parliament unnecesThe communications made by witnesses sary, Lastly, present Joint-Stock Companies' in the United Kingdom are to the following Registration Act contains impracticable re


No. 59A. Barber, James Henry, manager of No. 5. Anderson, James Andrew, late ma- the Sheffield Banking Company, Sheffield. nager of the Union Bank of Scotland, Glasgow.

3, 8, 10, 12. That joint-stock banks have P. P.' 1' General law of unlimited liability been advancing, and private banks receding, should not be changed or modified. J.S.A. 2. In enterprises of too great magni: on part

must be chiefly owing to feeling of confidence

depositors and public, arising from tude for private adventure (except banking and unlimited responsibility of shareholders, with insurance companies), liability may be limited which feeling limitation of liability would do at the discretion of Parliament, or, under cer- away. When joint-stock banks fail the sharetain limitations, of the Board of Trade.

holders are the parties who ought to bear the No. 41. Armitage, George, woollen cloth ma- loss. nufacturer and merchant, Huddersfield. (Se- No. 11. Baxter, Davis, merchant, Dundee. lected by the Chamber of Commerce of Hud- (Selected by the Chamber of Commerce of dersfield).

Dundee). P.P. 1, 5. No limitation of liability. 16. P. P. 1. The principle of limited liability in General registry of partnerships, annual. associations for mercantile purposes should not

J.S. A. 3, 11. Limitation of liability of all be admitted. or any partners only by special Act of Parlia

J.S. A. 12. Power of conferring charters ment, (14) to double amount subscribed. 20. of limited liability should not be in Board of Registration of names and amount of shares, Trade; Parliament alone should confer it, and annual.

for national or local public purposes only. No. 51. Ashworth, Henry, spinner and ma

No. 34A. Report by Chamber of Commerce, nufacturer, Manchester. (Selected by the Cham- Belfast. ber of Commerce of Manchester).

Approves American Special Partnerhips Act P.P. Present unlimited responsibility to be preferable to the continental commandite in no degree changed.

partnership law, because, under former, special J.S. A. Exception in favour of limited lia- partners' capital to be paid up at once.

Conbility allowable where large masses of capital, tracts in partnership articles to refer disputes beyond individual means, required for large to arbitration should be enforced. public undertakings.

No. 47. Bousfield, Charles, merchant, Leeds. No. 38. Babbage, Charles, late Lucasian (Selected by the Chamber of Commerce of Professor, Cambridge.

Leeds. Favourable to alterations permitting limitation of liability,

P.P. 1. Liability not to be limited in any

partnership for trade. No. 69. Baker, Thomas, of the firm of Ba

J.S. A. 11. For draining or other like obker, Ruck, and Jennings, solicitors. Limejects, Board of Trade may be empowered to Street, London.

confer limited liability. P.P. and J.S.A. 3. Liability of non-acting Lastly. All partnerships to be registered. partners may be limited in any business (except,

No. 35, Bristow, James, director of the perhaps at first, banking and insurance), with. Northern Banking Company, Belfast. (A

Vice-President of and selected by Chamber of Private partnerships.

Commerce, Belfast.) * These numbers refer to the replies, which 1, 2. Unfavourable to any limitation to liacontain the principal matters recommended by bility of partners. 3. If admitted at all

, to be the respondents. Of such matters an abstract strictly confined to enterprises not likely to be is here given. It was feared that an abstract | undertaken by few individuals. 11. Charters of arguments and views could not be given confirming limited liability may be granted with the necessary conciseness,

without risk of when approved of by Board of Trade. an imperfect statement of the views of the re- No. 39. Brooke, John, of the firm of John spondents. 9 Joint-Stock Associations. Brooke and Sons, woollen cloth manufacturers



Evidence on Limited Liability Partnerships. and merchants, Huddersfield. (Selected by the be limited in any business without special auChamber of Commerce of Huddersfield.) thorisation, (4) but so that at the time of fail

P.P. 1,3. No limitation of liability in these. ure each limited partner shall be liable to pay Registration of all actual partners.

his full subscription without reference to preJ. S. A. 3. If more than six partners, a vious payments or receipts; (12) in banks capital of 30,0001. at least to be paid into Bank issuing notes payable to bearer (which should of England, and not withdrawn till registration not be permitted), any partner to be liable certified. Liability of all shareholders may be without limitation on the notes. 16. Shares limited to a fixed multiple (say three times) the transferable with registration. 18. No comcapital paid up. 14. Provision for surplus pulsory dissolution on loss. 20. Registration fund out of profits. 16. Shares transferable of partners' names and limited contributions, with registration. 18. No compulsory disso (21) not of accounts. lution on loss. 22. •Registration of names, not J. S. A. 6 and 11. May be formed without of accounts.

special authorisation, but registering officer No. 12. Brown, Joseph, merchant, Dundee. should ascertain that each partner understands (Selected by the Chamber of Commerce of the partnership agreement. Dundee.)

No. 4. Cotton, William, a director of the P.P. and J.S.A. 3. Liability of non-acting Bank of England, London. partners may be limited, without special au- P.P. No material alteration of the law as thorisation, in any business (14) to declared to liability of partners. contribution ; dividends to be received to be J.S. A. In undertakings of public import, retained. 16. Shares transferable when paid ance, limitation of liability should be provided up in full.

18. No compulsory dissolution on for by act or charter. loss. 20. In public companies compulsory re- No. 61. Cross, William, late manager of the gistration of contract of co-partnery in legal Liverpool Borough Bank, and now a partner form, (21) not of accounts.

in the firm of A. Dennistoun and Co., merNo. 32. Brown, William, M. P., of the firm chants, Liverpool. 'of Brown, Shipley, and Co., merchants, Liver. P. P. and J. S. A. 3, 19. Liability of all or pool. (Selected by the Chamber of Commerce any partners may be limited in any business of Liverpool.)

without special authorisation; (11, 20) to be 1. A change from present system of un- clearly set forth on all documents or bills of the limited liability would be injurious when private company; perfect publicity of names and subcapital is equal to the undertaking. Cases of scribed capital. 18. No compulsory dissoluextreme risk, as in mining, &c. and extensive tion on loss. 21. No compulsory publicity of railroads, &c., where individual capital not accounts. sufficient, should be exceptions. 11. Limited No. 66. Council of the Chamber of Commerce liability should be obtained from Parliament of Dublin. only; the power placed in Board of Trade dif- P. P. 3. Liability may be limited where not ficult and onerous.

more than two partners, one at least being un. No. 68. Burroughs, Jeremiah, merchant, limited, and each silent partner bringing in not Addle Street, London.

less than 1,0001., in private trade or manuP.P. 2, 3, 19. Liability of all or any of the facture only, not banks, insurance, or other partnere may be limited in any business, with- undertakings of a public or joint-stock characout special authorisation. 14. Capital to be ter, (14) to declared contribution ; profits paid up; profits accruing to commandite part- drawn out in previous two years to be liable to ners to be withdrawn only every three years. be refunded." 4, 20. Registration and publi16. Shares not transferable 18. Compulsory cation of firm, names of all partners, business, dissolution, or further liability, after loss of contributions of limited partners, and the term two-thirds of capital. 19. Limited partner to of partnership; the “firm” to indicate limitabe free to take active part, 20, 22. Registra- tion. 16. Shares not transferable. 18. Capital tion and publication of capital, and share of lost to be replaced out of profits, or by new inprofit. 21. No compulsory publicity of ac-vestment. i9. No restriction or interference counts.

by limited partners, except in purchasing or J.S.A. 11. One principle to apply to all; selling, receiving or giving payments, or writperhaps liability should extend to double the ing name of firm. 21. No compulsory publicity paid-up shares, and, (3) a minimum amount of of accounts. contribution fixed. 21. Half-yearly statements J.S.A. 11. For great public purposes may of accounts.

obtain limitation of liability by grant of Board No. 24. Clark, James, of the firm of James of Trade on merits of each case. 21. Publicity Finlay and Co., merchants, Glasgow. (A of accounts. member of the Chamber of Commerce of No. 52. Ede, Edward, merchant, Manchester, Glasgow.)

(Selected by the Chamber of Commerce of 1. The principle of unlimited liability should Manchester.) be maintained (3 and 11) without any excep- P. P. and J. S. A. 1. Unlimited responsi

. tion whatever.

bility should not be altered. 11. All should No. 9. Cotterill

, William Henry, solicitor, be on one common principle as to liability. Throgmorton Street, London.

No. 27. Ellis, William, manager of the InP. P. 3. Liability of non-acting partners may demnity Marine Insurance Company, London.

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