as a partner, with a writ of summons, and has failed

to appear.

Debts owing from a firm carrying on business within the jurisdiction may be attached, although one or more members of such firm may be resident abroad; provided that any person having the control or management of the partnership business or any member of the firm within the jurisdiction is served with the garnishee order.

LIMITED PARTNERSHIPS

By the Limited Partnerships Act, 1907, the liability of partners may be limited to a considerable extent. Limited partnerships may be formed which, like ordinary partnerships, must not consist of more than ten persons for the business of banking, or of more than twenty persons for any other business. There must be one or more persons called general partners, and one or more persons called limited partners. Any person capable of becoming a member of an ordinary partnership may become a member of a limited partnership. The general partners are liable for all the debts and obligations of the firm; and the limited partners, who contribute at the time of entering the partnership a certain sum, or property valued at a stated amount as capital, are not liable for the debts and obligations in excess of this amount, although, of course, to that extent they are liable for debts and for any torts of other partners as general partners are. A general partner may subsequently become a limited partner, and a limited partner may become a general partner, provided that one partner of each class remains in existence in the Limited Partnership. But if a general partner becomes a limited partner the change should be advertised and notified to customers in the usual way.

A limited partner must not, during the continuance of the partnership, draw out or receive back any part of his contribution, and if he does so he will be held liable up to the amount so drawn out and received back for the debts of the firm. But he may assign his share, subject to the assent of the general partners and necessary registration and advertisement. Neither can a limited partner bind the firm or interfere in any way with the working or management of the business; if he does so, he will be liable as a general partner for debts incurred while he so takes part in the business. A limited partner cannot object to the introduction of another partner. Limited partnerships must be registered and, until registered, each limited partner will be liable as a general partner. A limited partnership must have a firm name, and that name must also be registered, although the name need not disclose the fact that the partnership is limited. Registration is effected

by filing particulars with the Registrar of Joint Stock Companies. The statement filed must be signed by all the members-general and limited—and must contain the following particulars—

(1) The firm name.

(2) The general nature of the business.

(3) The principal place of business.

(4) The full name of each partner.

(5) The term, if any, for which the partnership is entered into, and the date of commencement. If no term is fixed, any other conditions of existence must be given. (6) A statement that the partnership is limited, and the description of every limited partner as such.

(7) The sum contributed by each limited partner, and a statement as to whether paid in cash or otherwise.

Any changes in the partnership must be similarly registered. The statement sent to the Registrar of any change may be signed by the firm and not necessarily by each partner.

The registered particulars may be inspected by any person, and copies obtained on payment of a small fee.

A limited partnership is not dissolved by the death or bankruptcy of a limited partner, and his lunacy will only be a ground for dissolution if his share cannot be ascertained and realized otherwise, neither can the limited partner apply for dissolution of the partnership.

A limited partnership has an advantage over an ordinary partnership in that the liability of some members can be limited, but it has the disadvantage that certain particulars of the firm are available to the public. But it appears to have no advantages over a Private Limited Liability Company under the Companies Acts, 1908-17. In the latter method of carrying on business, the liability of all the members is limited, and very few more particulars are available to the world at large. In addition, the power to borrow money by means of Debentures is very useful to a Private Company, and there is no corresponding power in a Limited Partnership. In view, therefore, of the facilities for the creation of private companies with limited liability (p) very few partnerships are registered or are likely to be registered as limited partnerships.

Limited partnerships may be wound up by the Court in the exercise of its ordinary jurisdiction, like ordinary partnerships, or under the provisions of the Companies (Consolidation) Act, 1908, on the same grounds as those on which ordinary partnerships could thus be wound up, or in the case of lunacy, by the Judge in Lunacy.

(p) See post, p. 255.

CHAPTER 6

SECURITIES

In Chapter 4 consideration was given to the transfer of rights in goods with the intention that the ownership shall vest absolutely in the transferee. In this chapter it is proposed to deal with the transfer of rights in property of all kinds with the intention, even when ownership is transferred, that the ownership shall be re-transferred on the happening of certain events, i.e., the satisfaction of liabilities.

Where documents of title to goods or to rights, e.g., deeds, bills of lading, share certificates, etc., are in existence, they are often deposited with a banker or other person to secure a loan of money. This is usually done by way of Mortgage.

Where there are no documents of title and it is desired that the borrower shall retain possession of the goods on the security of which he desires a loan, it is usually carried out by means of a Bill of Sale.

Book debts are not chattels within the meaning of the Bills of Sale Act, 1882, and cannot be included in a Bill of Sale under that Act. But they may be mortgaged by assignment; and an assignment of all book debts due and owing, or which during the continuance of the security might become due and owing to the mortgagor, operates to pass the beneficial interest in a debt which comes into existence after the assignment.

If, however, the borrower has no objection to parting with possession of the goods, the transaction may be carried out by what is termed a Pledge or Pawn. In these instances, the person who borrows parts voluntarily with the ownership in the first case, and in the second with the possession of the goods or property.

But there is another form of security, termed Lien, which does not arise from the voluntary act of the owner of the goods or property. Lien arises where a creditor is lawfully in possession of the goods and he is entitled to hold them until certain charges due to him are paid.

The above are securities on property; but there is another form of security, termed "personal security," which is a personal

undertaking to pay a debt without the accompaniment of any charge on goods or property, e.g., a bond.

MORTGAGES

A mortgage is a conveyance of an interest in property to secure the repayment of money lent on the security of the property. The person who lends the money is called the mortgagee, and the borrower is termed the mortgagor.

As a rule, the term "mortgage" is applied to the conveyance of an interest in real property, i.e., land or interests therein, and a transfer of the right and property in goods is called a "bill of sale."

MORTGAGE. There are two forms that a mortgage may take, "legal" and "equitable."

A Legal Mortgage is usually entered into when the transaction is not regarded as of a temporary nature, or if a large sum in proportion to the value of the property is required to be borrowed, for, as a rule, in spite of the usual covenants to repay in six months, it is not the intention that the mortgage money shall be then repaid and, in fact, ordinarily, so long as the interest is punctually paid, the principal sum is not called in by the mortgagee, it being regarded by him as in the nature of an investment. An Equitable Mortgage is more usual where a loan of a temporary nature is required, or only a small sum in proportion to the value of the property. It is more to the advantage of the mortgagor, as he does not part with the legal ownership of his property and the transaction can be carried through very speedily, at very slight expense, practically the only expense being the stamp duty. A legal mortgage is better security for the mortgagee, but from the point of view of the mortgagor is not so satisfactory if he wishes for a speedy loan for a short space of time only, and it is much more expensive, as in addition to the stamp duties there are the legal charges for preparation of the deeds. The stamp duties on a legal mortgage are—

01232

8

3

6

9

5 0

0 6 3

0 7

6

Exceeding £300, for every £100 or part thereof 0

The stamp duty on an Equitable Mortgage is 1s. Od. for every £100 or part thereof.

Legal Mortgage.-In this form, the actual legal ownership of the land, or of an interest therein, is conveyed by deed to the mortgagee, who obtains all the deeds from the mortgagor, on the condition that, if the money lent thereon is paid on the due date, generally six months hence, together with the agreed interest, the mortgagee will re-convey the land or the interest therein to the mortgagor. This right to have the property re-conveyed, and of which the mortgagor cannot be deprived by any agreement which would prevent it so long as he observes the covenants, is called the "equity of redemption." Any agreement pretending to deprive the mortgagor of this right is called a "clog on redemption" and is void. As a general rule, the intention is not to pay off the sum borrowed at the end of the six months, and it is usually stipulated that the loan be allowed to stand so long as the interest is paid, but should either party wish to terminate the contract he can do so by giving the necessary notice.

Remedies of Mortgagee on Default of Mortgagor. Should the mortgagor not pay the interest when due, or the principal money at the end of the period of notice, the mortgagee has several remedies available, the principal of which are foreclosure and sale.

These remedies are

(1) Foreclosure. The mortgagee has to take proceedings and claim that the mortgagor be directed to pay the principal and interest due by a specified date to be appointed by the Court, and in default thereof that he may be foreclosed his equity of redemption. If the amount is not paid on the due date, an order will be made vesting in the mortgagee the full beneficial title to the property, which he can deal with as he pleases, and the mortgagor usually has no further interest therein. The Court may, however, order a sale instead of foreclosure.

(2) Sale. If the mortgagee has a power of sale under the mortgage, as is usual, he may sell the property. This he can do without reference to the Court. But he has no greater interest in the proceeds of the sale than he had in the property mortgaged, so after deducting principal, interest and costs, he must pay over the balance to the mortgagor. If the power of sale is not expressly given, or be excluded, by the mortgage deed, the mortgagee has a statutory right of sale under the Conveyancing Act, 1881, but in this case he cannot exercise his right unless and until