effects; or supposing a trading corporation to become wholly insolvent, the individual members and proprietors will only lose their stock or share in the capital of the body corporate, and do not become answerable for the debt in their individual capacities." We have also seen that "it is far otherwise with the members of unincorporated partnerships who may be made answerable for the debts of the firm, to use an expression of the Lord Chancellor, even to their last shilling, and their last acre.' "(y)

It was this unbounded liability, in common with other inconveniences attending general trading partnerships composed of a large number of partners, that induced associations formed for trading purposes to apply to the crown for a charter of incorporation. Various companies and associations, guilds, and fraternities, were at a very early period of our commercial history incorporated for trading purposes by the crown, and as trade and commerce increased, the number of these trading corporations increased, and many of them failing in their trading speculations and becoming insolvent, the immunity enjoyed by the members from liability in respect of the debts of the company was found to be greatly abused to the prejudice of the public. The creditors could obtain no satisfaction of their claims against the body corporate, although the individual members thereof were rolling in wealth; and many honest tradesmen who had supplied their goods, and advanced their money to the corporation upon the aggregate credit of the individual members thereof, known to them, although not known to the law, found, when they proceeded against the company, that there was no property which they could attach, and they got, consequently, "nothing but a skeleton picked clean by the ants."

These abuses of corporate privileges naturally caused great reluctance on the part of the crown to grant charters of incorporation; and an attempt was made to secure for trading associations such corporate privileges as were useful and necessary for them to possess, accompanied with a proper amount of individual responsibility; and it was accordingly enacted, by 7 Geo. 4, c. 46, that in any charter thereafter to be granted for the incorporation of any company or body of persons, it should be lawful to provide that the members of such corporation should be individually liable in their persons and property for the debts, contracts, and engagements of the corporation, and to such extent and subject to such regulations and restrictions as the sovereign should deem fit and proper, and as should be declared and limited in and by such charter.

(y) George on Joint Stock Companies, 29.

This act has been repealed by 7 Wm. 4, and 1 Vict. c. 73, which enables the crown, by letters patent under the great seal, to grant to any company or body of persons associated together for trading or other purposes, and to the heirs, executors, administrators, and assigns, of any such persons, although not incorporated by such letters patent, any privilege or privileges which, according to the rules of the common law, it would be competent to her Majesty, her heirs and successors, to grant to any such company or body of persons, in and by any charter of incorporation.

It is enacted also, (s. 3,) that in any such letters patent it shall be lawful for the crown, either expressly or by a general or special reference to the act, to provide that all suits and proceedings by or on behalf of such company or association, or any persons as trustees for the company, against any persons, whether bodies politic or others, and whether members or not of the company, shall be commenced and prosecuted in the name of one of two officers appointed to sue (2) and be sued in behalf of the company, and registered in the manner provided by the act; and that all suits and proceedings against the company shall be commenced and prosecuted against one of such officers; or if there shall be no such officer for the time being, then against any member of the company. (a)

And by the fourth section of the statute it is enacted, that it shall be lawful for the crown, in and by such letters patent, to declare and provide that the members of the company, or body of persons so associated together for trading purposes, shall be individually liable in their persons and property for the debts, contracts, and engagements of the company, to such extent only per share as shall be declared and limited by the letters patent such liability to be enforced in the manner provided by the act. Provision is then made for the form and execution of a deed of partnership by the members and shareholders of the company, dividing the capital into shares, and setting forth the name and purpose of the company; the date of its commencement; the names, and styles of the members thereof; the place of carrying on the business; and containing an appointment of officers to sue and be sued in the name of the company (s. 5). Provision is then made for the making of returns to the Enrolment Office of the Court of Chancery of the number of the shares in the company, of the amount and extent to which, by the letters patent, each share is to render the holder thereof responsible; of the names and places of abode of such bolders of shares; of all transfers of shares and changes in the shareholders, and of divers other matters connected with the constitution and

(2) Ante, 289, 290.

(a) Steward v. Dunn, 12 M. & W. 655.

Timms v. Williams, 3 Ad. & E. N. s. 413.

organization of the company. (b) By the 24th section of the act, provision is made for the execution against the persons or property of individual shareholders, of judgments and decrees obtained against the company, within the limits prescribed by the letters patent; and it is enacted, that where the extent per share of the liability of the individual member shall have been limited by the letters patent, no execution shall be issued against any existing or former member of the company,(c) for a greater sum than the residue, if any, of the amount for which, by virtue of the letters patent, such member shall be liable in respect of the shares then or theretofore held by him, after deducting therefrom the amount, if any, which shall appear by the register to have been advanced and paid in respect of such shares, under and by virtue of any former execution, and not repaid at the time of issuing such subsequent execution.

Notice of the application to the crown for letters patent is required to be inserted three times in the London Gazette, and in one or more of the local papers of the district where the company's place of business is established. Companies and partnerships consequently established in this way under letters patent, are of a mixed character, partaking in some respects of the incidents and peculiarities of a corporation, and in others. of an ordinary partnership.

SECTION IV.

JOINT STOCK BANKING COMPANIES.

Of the creation and establishment of Joint Stock Banking Companies. By 7 and 8 Vict. c. 113, s. 1, it is enacted, that it shall not be lawful for any company of more than six persons to carry on the trade or business of bankers in England, under any agreement or covenant of copartnership, unless by virtue of letters patent to be granted by her Majesty.

(b) Clowes v. Brettel, 11 M. & W. 461. Bradley v. Eyre, ib. 432; ib. 452, 456.

(c) Esdaile v. Lund, 1 D. & L. 607. Rans

ford v. Bosanquet, 2 Ad. & E. N. s. 972. Crellin v. Calvert, 14 M. & W. 11. Powles v. Page, 10 Jur. 526.

The act provides (ss. 44, 45) for the remodelling of existing banking companies, and the reconstruction and incorporation of them under letters patent, to be granted by the crown. And as regards all future companies afterwards to be formed, it is enacted, (s. 2,) that before beginning to exercise the business of bankers, every such company shall present a petition to her Majesty in council, praying that her Majesty will be graciously pleased to grant to them letters patent under that act; which petition is to be signed by seven at least of the company, and is to set forth the following particulars; viz. the names and additions, and residences, of all the partners of the company-the proposed name of the bank-the name of the street, square, or the local description of the place where the business of the bank is to be carried on-the proposed amount of the capital stock not being in any case less than one hundred thousand pounds, and the means by which it is to be raised-the amount of capital then paid up, and where and how invested the proposed number of shares in the business-and the amount of each share, not being less than one hundred pounds each.

Every such petition is to be referred to the committee of privy council for trade, and her Majesty is empowered, as soon as the Lords of the Committee have reported that the provisions of the act have been complied with, to grant letters patent incorporating the company.

The deed of partnership of every such company must be prepared according to a form to be approved by the Lords of the Committee for trade, and must contain certain provisions and particulars specified and set forth in the fourth section of the act, and must be executed by the holders of at least one-half of the shares on which £10 per cent. has been paid up. This deed is to be annexed to the petition, and the provisions of it are to be set forth in the letters patent.

INCORPORATION of the COMPANY.-By the sixth section of the act, her Majesty is empowered to grant, by the letters patent, that the persons by whom such deed of partnership shall have been executed, and all other persons who shall thereafter become shareholders in the banking business, their executors, administrators, successors, and assigns respectively, shall be one body politic and corporate, by such name as shall be given to them by the letters patent, for the purpose of carrying on their banking business, and by that name shall have perpetual succession and a common seal, and have power to purchase and hold lands of such annual value as shall be expressed in such letters patent. But before the company begins to carry on business as bankers, and within three months after the grant of the letters patent, an account or memorial is to be made out in the

form prescribed by the act, of the true title or firm of the company, the names and places of abodes of the members, directors, and managers thereof, the name or firm of every bank established by the company, and of every town or place where its business is carried on, and a new memorial of the same particulars in the form prescribed by the act (s. 18) is to be made every year between the 8th of February and the 25th of March, and oftener if occasion requires, and is to be filed and kept in the stamp office for the inspection of the public. (ss. 16, 17.) And the persons whose names appear in the last delivered memorial, and their legal representatives are to be liable (s. 21) in all legal proceedings, as the existing shareholders of the company, and are entitled to be reimbursed as such out of the funds or property of the company for losses sustained in consequence thereof.

The transfer of shares is regulated by rules and provisions similar to those of the Joint Stock Companies' Act; (s. 54, ante, ch. 19,) and the authentication of the transmission of the interest in the shares by death, marriage, bankruptcy or insolvency, is required to be made in a way similar to that prescribed in the Companies' Clauses Consolidation Act, (ante, 555.) Provision is made for the forfeiture and sale of shares in case of the non-payment of calls. (s. 37-42.) If any money be payable to any shareholder, being a minor, idiot, or lunatic, the receipt of the guardian of such minor, or of the committee of such idiot, or lunatic, is to be a sufficient discharge (s. 29) to the company for the same. The company moreover is not bound to see to the execution of any trust, (s. 30,) whether express, implied, or constructive, to which any of the shares may be subject, and the receipts of the party in whose name any such share shall stand in the books of the company, is to be a sufficient discharge to the company for any dividend or other sum of money payable in respect of the share, notwithstanding any trusts to which such share may then be subject, whether the company have had notice of such trusts or not; and the company is not bound to see to the application of the money paid on such receipt.

Liabilities of the shareholders.-It is also provided (s. 8) that no action or suit, by or against the company, shall be in anywise affected by reason of the plaintiff or defendant therein being a shareholder or former shareholder of the company; but any such shareholder, either alone or jointly with another person, as against the company, or the company as against any such shareholder, either alone or jointly with any other person, shall have the same action and remedy in respect of any cause of action or