issued policies, and made them payable out of its funds, a policy holder whose policy had not become payable was held entitled to an injunction to restrain the company from amalgamating with and transferring its funds to another company, such amalgamation and transfer not being warranted by the deed of settlement of the first company. (p) It has, however, been held (g) that a contract to pay a policy out of particular funds does not amount to a contract to carry on business, nor to a contract not to hand over the funds to other persons (r); and that a policy holder whose policy is not due cannot support an action for damages which he fears he will sustain, but which possibly he will not. The last ground is perhaps the most satisfactory, and has the advantage of rendering the decision in equity consistent with that at law *It is, however, by no means uncommon for an insurance company to limit its liability to policy holders and annuitants to its fund, and to have in its deed of settlement pany has power or articles of association power to transfer its funds and its business to another company. Where this occurs, a transfer of the funds cannot be prevented by a policy holder or annuitant; and upon a proper transfer being made, pursuant to the power in the deed of settlement or articles of association, the policy holders and annuitants cease to have any claims against the transferring company. (8) *381 Where the com to transfer its funds. Extent of members' liability. 2. With respect to the extent of the liability of the members of a company upon contracts in which it is specially stipulated that the funds of the company alone shall be answerable, and that no member shall be liable beyond the amount of his share, the limit set by contract is the limit of liability: and 1 DeG. J. & Sm. 634; Athenæum Life Insurance Society, Johns. 80 & 633, and 3 DeG. & J. 660; Law v. London Indisputable Life Policy Co. 1 K. & J. 223. These cases will be adverted to hereafter, when the winding up of companies is being considered. (p) Kearns v. Leaf, 1 Hem. & M. 681; Aldebert v. Leaf, ib. (g) King v. Accumulative Life Assur. Co. 3 C. B. N. S. 151. See, also, Lethbridge v. Adams, 13 Eq. 547. (r) See, also, Rhodes v. Forwood, 1 Com App. Ca. 256, where an agent of a col- (s) See, as to policy holds, Hort's case, 1 Ch. D. 307; Grain's case, ib.; Harman's case, ib. 326; Cocker's case, 3 Ch. D. 1; and as to annuitants, Dowse's case, ib. 384. company is in Where the company is an incorporated company, there never was any difficulty in giving effect even at law to all the (a) Where the terms of the contract; and in the case of companies corporated. registered under the act 7 & 8 Vict. c. 110, it was held that the members were not liable to have execution issued against them upon judgments obtained against the company on a contract of the description in question; but that the property of the company was alone liable to make good the demands of the judgment creditor; and this was held at law even in cases where the subscribed capital had been exhausted, but the whole capital had not been paid up. (t) The same principle was acted on in equity, except that a Court of equity compelled the shareholders to pay up rateably so much of the capital as had not already been subscribed. (u) This can now be done by a properly constituted action. In all these cases, however, it must be borne in mind that *the liabilities which are limited to the funds of the com- *382 pany, are those only which are expressly so limited by the contracts with the creditors; the liabilities to other persons are unlimited. (x) governed by Companies governed by the Companies act, 1862, may, although unlimited, limit their liability by special contract (y), Companies and where they do so the principles above adverted the act of 1862. to will be applicable. But as under the Companies act, 1862, judgments against a company cannot be enforced against its members, questions as to their individual liability can scarcely arise except when a company is being wound up. As regards unincorporated companies, it was extremely difficult, if not impossible, before the passing of the Judicature (b) Where the Acts, to enforce by action at law a contract limiting incorporated. their liability to their funds. (2) (t) Halket v. The Merchant Traders' Loan and Insurance Assoc. 13 Q. B. 960; Hassell v. The Same, 4 Ex. 525; Durham's case, 4 K. & J. 517; Re the Athenæum Life Soc. Johns. 80, and 3 DeG. & J. 660, on appeal; Lethbridge v. Adams, 13 Eq. 547. (u) Talbot's case. 5 DeG. & Sm. 386; Durham's case, 4 K. & J. 517; Evans v. Coventry, 8 DeG. M. & G. 835. See clause 7 of the decree. company is not (x) See the Albert Life Ass. Co. 9 Eq. 706; Professional Life Ass. Co. 3 Eq. 668, and 3 Ch. 167; Lethbridge v. Adams, 13 Eq. 547. (y) See § 38, cl. 6. (z) See Hallett v. Dowdall, 18 Q. B. 2, and the observations of Mellish, L. J. in Hort's case, 1 Ch. D. 322; Alchorne v. Saville, 6 B. Moore, 202, note. Hallett v. Dowdall was noticed at length in the earlier editions of this treatise, but It was practically necessary to sue in equity. But now it is apprehended that an action could be maintained against the persons having the control of the funds and the persons liable to contribute to them, to enforce the liability to contribute, and the due application of the funds when raised. (a) Limited liabili 2. By statute. Passing now to the subject of limited liability by statute, the first point which has to be borne in mind is that the ty by statute. moment a society of any kind is incorporated, its members cease by common law to be in any way liable for the debts and engagements of the body corporate. Moreover, although by com mon law it has always been lawful for the Crown to create *383 *corporations, the Crown has no power by common law to create a corporation and at the same time to render its members individually liable for its debts. (b) The whole of that branch of the law of partnership which relates to the liability, as distinguished from the non-liability, of the members of incorporated companies for the debts and engagements of such companies, is of modern growth and is based upon statutory enactments.1 These it has not been thought necessary to reproduce the former observations on it. (a) See Law v. The London Indisputable Life Policy Co. 1 K. & J. 223; Talbot's case, 5 DeG. & Sm. 386; Durham's case, 4 K. & J. 517; Robson v. McCreight, 25 Beav. 272; Evans v. Coventry, 8 DeG. M. & G. 835. See, as to the effect of a transfer by the company of its business, Hort's case, 1 Ch. D. 307. (b) This power was conferred upon the Crown by 6 Geo. 4, c. 91, § 2, which was followed by 4 & 5 Will. 4, c. 94, and was with it repealed and replaced by 7 Will. 4 & 1 Vict. c. 73. 'The cases upon the subject of Limited Partnership, which exists by statute in most of the United States, may properly be considered in this connection. The first statute upon the subject in this country was enacted in the State of New York and was substantially copied from the French Code of Commerce. See 3 Kent Com. 35. The statute of New York, in turn, has served as the basis of the statutes upon the subject in the other States. See the nature, origin and history of limited partnerships examined at length by the court in Ames v. Downing, 1 Bradf. 321; Joacquin v. Buisson, 11 How. Pr. 385. No partnership attempted to be formed under these statutes with a limited liability of some of the partners is limited, but all the partners are liable as general partners, unless the statutes upon the subject are strictly, or as some cases say, substantially complied with. Richardson v. Hogg, 38 Penn. St. 153; Pierce v. Bryant, 5 Allen, 91; Haviland v. Chace, 39 Barb. 283; Holliday Union B. & P. Co. 3 Colo. 342; Vandike v. Rossbram, 67 Penn. St. 330; enactments will be examined hereafter in connection with the subjects of execution and winding up, but it may be useful to state generally in the present place that- Henkel v. Heyman, 91 Ill. 96; Pfirman v. Henkel, 1 Bradw. 146; Bowen v. Argall, 24 Wend. 496; Smith v. Argall, 6 Hill. 479; 3 Den. 435; Andrews v. Schott, 10 Penn. St. 47; Van Ingen v. Whitman, 62 N. Y. 513; Madison County Bank v. Gould, 5 Hill. 309. The statute of Illinois requires the certificate, acknowledgment and affidavit to be filed and left in the office of the clerk of the county court, and not merely left temporarily for record and then withdrawn. If taken away voluntarily on the neglect of the clerk to record the same, no limited partnership will be formed. And even if the object of filing such papers was temporary for the purpose of being recorded, if they are voluntarily taken away before being recorded, the neglect to file and record being attributable to the clerk, and the partners knowing such fact, no limited partnership will be created. Henkel v. Heyman, 91 Ill. 96; Pfirman v. Henkel, 1 Bradw. 145. M. entered a firm upon the understanding that he was to be a special partner, with limited liability. He paid a specified sum toward the capital stock, upon which he was to receive legal interest and one-fourth of the profits. The statute in relation to limited partnerships, was not complied with, but M.'s name did not appear in the firm, and he took no part in the management of the business. M. was induced to enter the firm by the fraudulent representations of his partners, and withdrew as soon as he discovered the fraud: Held, that M. was a general partner, and as such was liable for the contracts of the firm while he so remained. Tournade v. Hagedorn, 5 Thomp. & C. 288; Tournade v. Methfessel, 3 Hun, 144. Where the certificate of the formation of a limited partnership described the general partners as of "B, " and the special partner as "of J C: " Held, that this was a sufficient statement of the residences of the parties under the statute. Lachaise v. Marks, 4 E. D. Smith, 610. The statute authorizing the creation of limited partnerships (1 Rev. Stat. N. Y.. 764, as amended by Laws 1862, ch. 476), does not require that the certificate provided for the act should be filed cotemporaneously with its execution or with the formation of the partnership, in order to make the partnership a limited one as to those parties whose claims against the partnership accrue after the certificate is actually filed. Levy v. Lock, 5 Daly, 46; S. C. 47 How. Pr. 394. An unrecorded certificate of a limited partnership agreement, executed under New York laws, has no tendency to prove a general partnership, or any kind of partnership whatsoever, without evidence aliunde. Gray v. Gibson, 6 Mich. 300. A special partnership will, in New York, become a general partnership, and the special partners liable as general partners if the place of business is removed from the county in which it was established, without filing a new certificate in the clerk's office of the county to which it has been removed. Riper v. Poppenhausen, 43 N. Y. 69. So, if after the expiration of the time limited for the duration of the limited partnership, it is desired to renew the limited partnership, there must be a new certificate, publication, etc.; and if this is omitted, the partnership will become a general one. Andrews v. Schott, 10 Penn. St. 53; Lachaise v. Marks, 4; E. D. Smith, 620. 1. The liability of the members of a company governed by the Letters Patent act depends on the terms of its charter or letters patent, the Crown being empowered by the act in question to limit their liability or not. (See 7 Wm. 4 & 1 Vict. c. 73, §§ 4 & 29.) Chartered companies. See, also, Beers v. Reynolds, 12 Barb. 288; S. C. 11 N. Y. 97. Where a limited partnership fails to record in the manner prescribed by acts of the assembly an agreement for a renewal of the partnership, the liability of the special partner becomes general. Guillon v. Peterson, 7 Wkly. Notes of Cases, 268. A certificate filed with intent to create a limited partnership, which states that the intending special partner has contributed a certain sum in cash and certain value in goods, is not a compliance with 1 Rev. Stat. N. Y. 764, § 2, authorizing limited partnerships to be formed with special partners, who "shall contribute in actual cash payments a specific sum. Such certificate does not constitute a limited partnership, but the parties are general partners. In re Merrill, 12 Blatchf. 221; Van Ingen v. Whitman, 62 N. Y. 513. See infra. An affidavit to accompany a certificate of a limited partnership need not follow the exact words of the statute. If it clearly establishes the facts required by the statute, it is sufficient. And where the affidavit refers to the certificate, it may explained by the statements of the certificate. Johnson v. McDonald, 2 Abb. Pr. 290. Thus, a statement in an affidavit that the special partner has actually paid in "his proportion of the capital, is equivalent to stating that he has paid it in cash. Johnson v. McDonald, Sup. If the matters which the statute requires to be contained in the certificate, and affidavit to be made and filed in order to create a limited partnership are stated therein untruly, such a partner ship is not formed, and he who sought to confine his liability to that of a special, will become liable as a general partner. Durant v. Abendroth, 41 N. Y. Superior Ct. 53; Maginn v. Lawrence, 13 Jones & Sp. 235. In an action where a special partner is sought to be held liable under the provision of the statute, the affidavit and other papers required by the statute, are presumptive evidence of the formation of a limited partnership; but, after evidence has been given tending to falsify the affidavit, it cannot operate as rebutting proof, Van Ingen v. Whitman, 62 N. Y. 513. To bring the special partner within the provisions of the statute of New York, (§ 8), making all liable as general partners in case of any false statement in the affidavit required to be made and filed (§ 7), it is not necessary that the statement be intentionally false. The object of the statute is to give reasonable security to those likely to deal with the co-partnership, and this is thwarted by an unintentional, as well as by an intentional untruth. Van Ingen v. Whitman, Supra. Where the statute requires the special partners' capital to be paid in cash, if the affidavit that the special partners have paid in cash their amount of the capital is false, they will become liable as general partners. Haviland v. Chace, 39 Barb. 283. A special partner's payment in whole or in part of his amount of the capital, in goods, is not a compliance with the statute requiring such payment to be in cash. Haviland v. Chace, 39 Barb. 283. Richardson v. Hogg, 38 Penn. St. 153; |