than a benefit, as the world has no right to know managing partners were sufficiently known to obhim in any other capacity than as a trader risking tain an advance of money capital either on their a certain sum for a profit, and not for a loss beyond own responsibility or on the security of their friends, it; and although the heaviest liabilities may be in- it would not be for their interest to enter into partcurred by the partnership, far exceeding any reason-nerships at all, on the principle of commandite, able 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.

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, be 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 capital

On the whole, limited liability in trading partists to form such partnerships, or that the desire to 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.

community, or for limited partners themselves, that 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 I will of the holder.

gestions offer adequate protection to the public for the safe operation of partnerships with limited liability, exclusive of trading partnerships, with the exceptions before noticed.

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.

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 pri- 5th. That a balance sheet of the company shall vilege were not allowed, there would be few sub- be lodged with such public board for the purpose scribers to such partnerships; and, as a great ob- of public inspection, at the end of each year, subject with the public is to have the power of mak-ject to certain penalties in case of a fraudulent reing temporary investments, to prohibit transfers of presentation of the company's affairs. 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 undertak ing 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 shareholders (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.

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 liabi lity 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 specula

But a great point for consideration is,— What shall be the checks and safeguards for regulation, by the frequent occurrence of monetary criting the due operation of the system of limited partnership? It appears to me that the following sug.

ses, 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 that the master should bestow a bonus on some on the profits of the business. The present relaxed honourable understanding, which his own interest state of the Usury Laws enables a lender to fix his would best dictate without being governed by any own terms for the use of his money, and the bor- other condition, not in the shape of a per-centage, rower need not submit to these terms if he can ob- but as a reward for extra or successful exertion. tain accommodation at a lower price. In such cases Nothing can be more objectionable to the interthe higher the remuneration demanded and complied ests of traders as well as of their creditors, than with, the greater the risk; and a mere lender to a the operation of the existing law, in cases of distrader in business, would prefer exacting the high-putes arising between partners, as the expense and est rate he could obtain, rather than make the re- 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 prescribed by the articles of partnership or not. would be more for the advantage of the borrower The public board already suggested seems a natural that a fixed rate of interest were agreed on, as he and proper provision for contingencies of this kind, would know more distinctly the extent and charac. and under certain regulations, to be defined by law, ter of his obligations. Even if an arrangement could might meet all difficulties likely to present thembe entered into, by which the interest on the loan selves. When the importance and magnitude of would be in proportion to the profits, without in- the interests involved in such questions are cousivolving the lender as a partner, a fixed rate would dered, (both as regards public and private partnerbe preferrable, as it would prevent investigation ships,) there seems great reason for recommending into the trader's affairs at the instance of the len- the establishment of such a board to the considerader, an inquisition which could not fail to be inju- tion of the Legislature. rious 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 himself liable to the creditors for his master's trade obligations. As the law now stands, a per-centage on profits, is considered as constituting a partnership, and this in some description of business is obviated by a per-centage or commission on cash receipts, 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

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 hoard already suggested, to take into consideration the expediency of authorizing the formation of joint stock partnerships on the principle of limited liability, such a new board (composed of both legal and mercantile members), would seem to be the proper tribunal for granting charters of incorporation, as well as for adjudicating upon all partnership quesRo. SLATER.

tions.

DUBLIN, AUGUST 19, 1854.

389

COURT OF EXCHEQUER CHAMBER:

EARL OF MOUNTCASHEL V. EARL O'NEILL. Timber Acts-Registry of trees-Landlord and Tenant-Affidavit of Agent-23 & 24 Geo. 3, c. 39, (Ir ).....

393

We have no doubt but that

to that of the disease. the press will raise a howl against the scheme of It is understood that a commission is about to be consolidation. The term "Chancery" has, in fact, issued for the purpose of taking into considera- become a "household word" of evil omen; and the tion the propriety of uniting the jurisdiction of masses will ever confound offensive names with of the Incumbered Estates Court with that of the fensive realities. It is, however, to us quite astoCourt of Chancery. Fully alive to the wisdom nishing, that those who set up for teachers of the which dictated the establishment of the recent tri- public should so perversely misrepresent facts, as bunal, and grateful, as we are, to the staff of func- they constantly are in the habit of doing. Instead tionaries, both judicial and ministerial, connected of guiding public opinion, it appears rather to be with that court, for the zeal, energy, and ability with their aim to follow it, especially when this opinion which they have discharged their most arduous and is based on ignorance. Surely, candour would recritical duties, still we have always entertained the quire them to admit that the most sweeping reforms opinion, that it was a tribunal of an exceptional have of late years been effected in the administracharacter, and only adapted for an emergency, and tion of equity in both countries, but especially in that as soon as the primary object of its creation Ireland; that the Act of Parliament which reconhad been generally achieved, its separate existence structed the Court of Chancery in Ireland in 1850, ought to terminate. It was a bold experiment, and was the work of the same lawyers who framed the that experiment has well succeeded; but we think Incumbered Estates Act, and that the procedure of that the time has come when it may now safely both the Court of Chancery and the latter court are merge into the ordinary equity judicature. The equally simple, though differing in details, the main occasion which demanded the creation of a court feature of the latter being the power of conferring invested with arbitrary functions for the enfran- a Parliamentary title. How uncandid is it, therechisement of land, was nearly as urgent as the need fore, for the newspaper press to cite in illustration for a military tribunal during the quelling of an in- of the delays of our Court of Chancery, an imaginary surrection. Now that our country, under the bless- case of Jarndyce v. Jarndyce—a figment of a popuing of Providence, is restored to comparative lar novel writer, written to gratify the vulgar spleen 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