DUBLIN, JULY 29, 1854. 36. We notice in the reports of the recent Circuits in England the committal to prison by Mr. Justice Wightman of a respectable female for the offence of refusing to take an oath, the objection being made on the ground of conscientious scruples. The learned judge first referred the fair recusant to the arguments of the sheriff's chaplain, but that functionary having failed to answer the difficulties of the non-juror, a committal for contempt was the result. We are not aware what was likely to be the duration of the term of imprisonment, probably not very extended, nor are we at all inclined specially to find fault with Mr. Justice Wightman, who probably felt that he was discharging a painful, and, as the law now stands, an imperative duty. It is probable, however, that his Lordship will be somewhat roughly handled by certain myrmidons of the Press, who in their zeal for the liberty of the subject would have the Bench, in cases of hardship, to dispense with the laws which they are sworn to administer. Our quarrel at present is with the existing state of the law itself, which exposes persons of tender consciences to a quasi persecution. It is a strange coincidence that this singular occurrence should have taken place while a Bill was actually before Parliament containing a clause, that "if any person called as a witness shall refuse, from alleged COURT OF EXCHEQUER: CLARKE V. ROE. Libel-Privileged communication -Bona fides-Receiver-Trover-Excessive distress-Agistment-Election of counts. 369 conscientious motives, to be sworn, it shall be lawful for the court or judge, or other presiding officer, upon being satisfied of the sincerity of such objection, to permit such witness, in place of being sworn, to make his or her solemn affirmation or declaration in the words following, &c., which solemn affirmation and declaration shall be of the same force and effect as if such person had taken an oath in the usual form." This is one of the clauses of the English Common Law Bill now going through its stages in the House. It is earnestly to be desired that this portion of the measure, at least, should forthwith pass into law, and further that it be expressly extended to Scotland and Ireland, thus obviating the danger of the future occurrence of any such incident as that to which we have alluded. THE MERCANTILE LAWS, AND THE LAW OF PARTNERSHIP. OPINION OF MR. BRAMWELL. (Continued from page 211.) 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 injurious con would be-that business would be carried on recklessly and unwisely. Why should this happen? The partner whose liability is limited has his sub sequences 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 gen-scribed capital to lose. But it is said that he might tlemen 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 that they should not be interfered with. It must not be forgotten that there are names of practical men of as 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 urged are, that mischiefs would arise from such partnerships 1st, To the members; 2nd, To those who deal with them; 3rd, To the public; i.e., all persons not included in the first and second classes. I protest entirely against entertaining the first and second of these objections, even supposing them to exist. I will not say the State has no right, because to that expression no determinate idea is annexed; but I do say that it ought not to interfere to prevent, for their own sakes, any persons from entering into any engagement they may be willing to form. There may be real or apparent exceptions to this rule, as where the thing agreed to be done is malum in se; but for the purpose of protecting the parties themselves, I say the State ought not to interfere, but to leave every man to the most zealous and best informed of all protectors, himself. 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 £1 to receive £1,000 if his house should be burned. It is more than 1,000 to 1 that his £1 is lost without any return that his house is not burned, and that he had better have kept his £1 in his pocket. But does any one call him rash in such an outlay? Is it rash or wrong to venture £1,000 on an enterprise which nine times in ten fails, if, on the tenth, £20,000 are the return for the £1,000? 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 £1,000; 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 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 the probabilities of success and failure, and the probable amounts of both, are not an equivalent. I can understand why he should refuse to risk his all on the wisest speculation; viz., because no possible gain could equal the possible loss. A. B. has an estate of £1,000 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 pru dent in him to subscribe £1,000 to the £10,000, 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. This shows, it may be said, that there may be more speculative enterprises with a system of limited liability than at present. I admit it, and see no subject of regret in that. The unlimited partner has his capital, if he has any, the use of his partner's, and his own character and position at stake to induce him to be careful. I cannot see that limited liability is likely to lead to unwise speculations; and I think it no objection that it may lead to hazardous, provided they are prudent speculations. But I desire further to say, that it does not follow that such speculations would be multiplied. At present they exist, with this difference-they are now constantly in the hands of rash and dishohonest 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 inust 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 £1,000; they risk it in an enterprise where it is an even chance whether they lose £10,000, or gain £20,000; an obviously good spe culation. If they win, they gain £9,500 each; if they lose, B. loses £1,000, A. nothing, and the creditors £9,000. Here is obviously a prudent specu lation 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 injured. That, however, is an injury which no law, no restriction will prevent, but which he could much better guard against if he could refer to some registry, learn the nature of A's 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 experience in courts of justice knows that frauds are never long from their origin to their maturity, and it would be always easy to detect any sudden change in the general aspect of the affairs of the partnership. But why should the unlimited partner be guilty of this supposed fraud? Would his inclination or opportunity be greater than under other forms of partnership? He always has himself, often wife, children, relatives, to protect, quite as near to him as his limited partner. His regard, therefore, for the person to be served would be no greater 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 profitable 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 the 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 nugatory. I do not believe that that will be the result, but if it were to be anticipated, the experiment should be tried. Because, although I fully feel the inconvenience of changes in the law, I think it due, in the present case, to the authority of those who advocate it, that an opportunity should be afforded of forming these partnerships; it being merely an additional power to that possessed already, and one which nobody need exercise. But to be consistent, if there is anything in the first and second objections, why do not similar considerations cause an interference with private partnerships with unlimited liability? Admitting that limited liability will lead to more, it cannot be denied that unlimited will and does lead to some mischiefs. Why are not such partnerships superintended? It may be said, they cannot be reached; they have no favour to ask. That could easily be managed. Prohibit all trade and partnerships except by licence, say from the Board of Trade, and then their proposed proceedings could be reviewed; or tax every proposing trader, as a preliminary to his right of trading; or punish him if he failed. No doubt, rash speculation would thereby be somewhat checked. It will be said, the public would not endure it. I agree. Nor if it had once enjoyed the right of forming partnerships with limited liability, would it tolerate that right being denied it. The reason for not interfering in such cases is, that it is felt that persons judge best for themselves. The State, after all, acts by its officers; and they cannot know each man's private interest as well as he does himself; while the interference with private affairs in cases of proposed partnerships with limited liability, and the belief in its utility, exist merely from the opportunity which the law at present affords of exercising it. As to the third objection, it is one which in principle is opposed to all the great corporations chartered by the Crown or Parliament. They are, on the principle contended for, all exceptional and wrong. The liability is limited, and they preclude the possibility of competition by private persons. No reason is given for permitting them, that I know, except that without them works executed by them would not be executed at all, while other enterprises are; which is in effect to say that how done is immaterial, provided they are done somehow. There is another argument against our adopting limited liability partnerships-that they may do well in a new or poor country, but not in a rich or old old one like this. It is said, we have abundance of capital; witness the price of land and of the public funds. It has been well asked, when did this become the case in England? At what period did the desirableness of limited liability partnerships cease with us? I ask, what is the meaning of the expression "we have abundant capital ?" Does it mean we have too much, and should be better off by destroying part, or exactly enough, so that we thing in our laws, habits, or usages to make it should be worse off if one pound richer or poorer? otherwise. Capital is the means of future earnings; the more I think not. It is impossible for any law to be capital the more gains by the whole body of the in a worse condition than our law of partnership. community; the more ways of employing capital, From the liability of the private partnership to the the more ways of making those gains; consequently, last acre and shilling, up to the entire absence of I should say we never can have too much of it. all liability in the members of some incorporated And so far from thinking the objection under con- companies, there is every variety of liability, on sideration well founded, the direct opposite of it the extent and nature of which no one, not even seems to me to be the truth. I am inclined to think the most accomplished lawyer, can speak with certhat limited liability partnerships are more desirable tainty. No doubt we are not called on to consider in a country where profits are low than where they the general law of partnership; but it is important are high; as where profits are low less inducement to refer to its condition to ascertain how far the exists for saving, and the consequent accumulation proposed change would be a change-how far a and augmentation of the wealth of the commuity, novelty to the public, and what present mischief it than where they are high. The argument is, we might prevent. Now the law does at this moment do well enough, and so need not do better. permit partnerships with limited liability. Many insurance companies, though unchartered, are carried on in that principle; and I conceive all other trades or businesses theoretically may be so conducted. In point of law, I believe that A and B might buy 100 quarters of corn of C, on the terms that C should be paid by A alone, or out of an ascertained fund only. Practically this cannot be done, because it is impossible, in every case of dealing, to bring home to the creditor knowledge of the partnership terms. The present proposal, therefore, is only to allow that practically, which may be done theoretically in all cases, and is done in many. Again, creditors under the present system often find another species of limited liability, as, where directors of joint-stock companies act ultra vires, for instance, trade on credit without authority, the shareholders are held not liable; cases which would be diminished if a more wholesome law of partnership existed. Railway companies, and others incorparated in like way, are partnerships with limited liability. There is another objection, which appeals more to the ear than the understanding. When stated with precision it seems to be this: that there is a natural justice in, or connexion between, buying goods and paying for them. I ask, why should a man who buys goods goods pay for them? Either he has undertaken to do so, or he has not. If he has, make him liable to the extent of his undertak ing; to his last shilling and acre, if he has pledged them. But if he has not, if he has not undertaken at all, or if he has limited his liability, I not only see no reason why he should be called on to do that which he has not engaged to do, but I think it a positive dishonesty to attempt to make him. I take the case of a dormant partner as an example: A has entered into a partnership with B; he has bargained that B shall not pledge his credit; he has agreed to find certain capital; he has performed his engagement faithfully. C has sold goods to B; B's fraud, folly, or misfortune makes him insolvent. The existence of the partnership is discovered, and A is called on by C, who had never heard of him, and never trusted him, to pay. This claim is, in my judgment, inconsistent with common sense and common honesty. Again, it is said, that as profits would have gone to pay a debt, he who takes them ought to pay it. If he did not undertake to do so, why should he use a profit on a transaction with A to make good the loss on another with B? I do not, therefore, concur in the objections which have been urged. No doubt some mischiefs may ensue, for it would indeed be a wonderful law that was unattended with any; but they must be contrasted with the advantages on the other side. These I have refrained from giving, as they are to be found stated in the evidence. There is another argument which is suggested by the present state of the law. Money may be lent at any rate of interest, without a partnership being constituted; say 50 per cent. per annum. It may, I suppose, be lent at that rate, with a stipulation that it shall be reduced in proportion as the profits of the business it was used in, fall; or, as I infer from Lord Eldon's dictum in Ex parte Hamper, it may be lent to be paid for by a sum proportioned to the profits, though not by a portion of them, and in neither case is a partnership formed thereby. If, however, this is so, why should not a portion of the profits be allowable? It may be said, a jury would find such an arrangement to be colourable, and to be a partnership; but they ought not to do so if they regarded their oaths, for by the If I had to choose between the proved and anti-hypothesis it is not colourable, which, I apprehend, cipated advantages and disadvantages of the prohi- is the case only where one thing is said and another bition or permission of limited liability partnerships, meant. What is the difference between such cases I should unhesitatingly decide in favour of the per- and a partnership? It is said that in a partnership mission; but I repeat, I think no one can predict all the partners jointly are owners of the partnerthe amount of benefit to be derived from leaving ship assets, their goods and debts; but so in effect persons to act for themselves; and it is to the value is a lender to the extent of his interest. If A owes of that principle, and to the probable results of its me £1000, and is worth £1000, he is not in a very application, that I attach the greatest importance. distinguishable situation from that of being my I think, therefore, the permission to form partner-partner, our assets being £1000, and our capital ships with limited liability desirable intrinsically. also being £1,000, which I have furnished, and It remains to be considered whether there is any- for which he has to account. The only difference I can perceive as regards the trader and his credit-persons will join them in the belief of a limited liaors is, that the lender of money is better off than bility, and be unjustly made liable to claims by dishe would have been as a limited partner. I say, honest creditors, who will declare that they always therefore, that our present law not only presents thought the defendant a partner, that he conducted no objection to the proposed alteration, but sanc- himself as such, and that they had no means of tions it by its own theory, in some cases by its knowing his liability was limited. The last topic practice, and only not in all, by the difficulty which will be taken away, or at least diminished, by a reexists of giving actual notice to the parties dealing gistry. with the partnership of the limited authority of each partner; and that it urgently requires alteration, to obviate the mischiefs and injustice which at present exists, and to prevent those cruel cases we see in practice, as, for instance, where unwary people holding a few shares in a bank have been wholly ruined by its stoppage, and reduced from plenty to want. All laws are objectionable which are of such a character, that those to be affected by them cannot be taught them; they are productive of suprises and hardships. This is the case with a part of our law of partnership. Anything more opposite to what would be supposed to be the law, than the case of Waugh v. Carver, I cannot conceive. Two separate firms, trading at different prices, bargained privately to share a part of the profits of the businesses which each separately carried on. On the insolvency of one firm, the other was held liable for its debts, on the ground that profits are the creditors' fund. I believe the decision was erroneous in point of law; but it has been too much followed to be now reversed, unless by the Legislature. How it is consistent with the rule, that partnership ques tions are questions of authority, it is difficult to see. A reasonable law based on an obvious principle is easily incorporated into the general knowledge of the people; but such a law as this, at the utmost, only inspires some with a vague alarm, that some how a man may be a partner without knowing or intending it; while many, for want of as much knowledge as that, have most unhappily so found themselves. I have made these observations in case my opinion should be desired in addition to the weighty authorities we have collected and referred to; and I wish to say, most sincerely, that I believe I have added nothing to what has been said and better said before, while I have omitted so much, that I fear, in an attempt to be brief, I may have prejudiced the case so ably made by others. If I am only required to give a verdict, I do it unhesitatingly in favour of a change in the law. The evidence and reasoning in its favour, in my judgment, infinitely preponderate; and the case of its advocates is conclusively made out. I recommend, therefore, 1st. That persons be allowed, as of right, to form partnerships limiting the liability of one or more or all of the partners. 2nd. That they be allowed to do so by private agreement among themselves, on registering their names, place, and nature of business, term of partnership, and capital subscribed by the limited partners. I think this registry desirable, for the sake of such partnerships; for the greatest apprehension of mischief I have from their being allowed is, that 3rd. That where the liability of all the partners is to be limited, the partnership should be incorporated, on registration. 4th. That the partnership name should be used, and in such way as to indicate the limited liability. In the case of corporations there is no difficulty; in the case where some partners are to be liable unlimitedly, there is perhaps a little practical difficulty, arising from the present permitted use of the names and styles of firms which do not truly describe those who use them. It may, however, be obviated in this way: if A B and C D are to be liable without limit, and others not, let the style of the firm be "A B, C D, and Co, with limited liability." The names of the unlimited partners being always specified; those of the others not. 5th. I need hardly say I would allow money and services to be paid for by a portion of profits. I would not prohibit interference by the limited partners, or advise or require return of profits, or additional liability, in case of insolvency of the general partner, or the publishing of accounts. I believe all those regulations to be useless, mischievous, and unjust. If any partner so conducts himself as to induce persons to trust the firm on his credit as a general partner, let him (as any one who is no partner now may,) be made liable to the debts so contracted. In that case, where one man has so acted as to induce another to trust him, and in the case where he has himself, or his actual agent has by his authority, pledged his credit, he ought to be liable, and in my judgment in those cases only I desire to add my entire concurrence in the views OPINION OF MR. ANDERSON. The question before us is "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?" The communications we have received in the course of our inquiries are directed, on the one hand, to support the proposition That the law of partnership, as it at present exists, should be retained in all its integrity; Or, on the other hand, that it should be altered by the introduction of one or other of the three following amendments: 1st. That in partnerships generally all or any number of the partners should be at liberty to carry on business on the footing of limited liability. 2nd. That one or more persons carrying on busi |