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greater number contract, and which has for its object to trade under the name of a firm.
'21. The names of the partners only, can be made use of in the firm.
'22. The partners en nom collectif, mentioned in the Deed of Partnership, are individually liable (solidaires) for all the engagements of the partnership, though but one of the partners have signed, provided it be in the name of the firm.
On The Partnership En Commandite.
'23. The partnership en commandite is contracted between one or more partners, being individually liable for all the engagements of the partnership, and one or more partners who are simply holders of funds in the firm, who are called coramanditaires or partners en commandite. It is conducted under a partnership name, which must necessarily be that of one or more of the partners responsible and solidaires.*
'24. Where there are several partners, solidaires et en nom, whether they all act together, or one or more acts for all, the partnership is at the same time a partnership en nom collectif with regard to themselves, and a partnership en commandite with regard to the mere holders of funds.
'25. The names of the commanditaires partners cannot be used in the style of the firm.
'26. The commanditaire partner is only liable to the loss of the amount of the funds that lie has placed, or ought to place in the Partnership.
'27. The commanditaire partner cannot perform any act of management, nor be employed in the affairs of the Partnership, even by procuration. /
'28. In case of contravening the prohibition mentioned in the preceding article, the commanditaire partner becomes liable, solidairement,+ with the partners en nom collectif for all the debts and engagements of the Partnership.
On The Anontme Partnerships.
'29. The anonymc Partnership is not carried on under a partnership name; it is not designated by the name of any one of its partners.
'32. The Directors are only responsible for the execution of the mandatory office they have received. They do not contract by reason of their direction any personal obligations relatively to the engagements of the Partnership Society.
'33. The partners are only liable to the loss of the amount of their interest in the Partnership.
Proofs Of Partnerships.
• 42. The extract from the Deed of Partnership en nom collectif, and en commandite, must be transmitted within a fortnight of their date to
* That is, individually liable for the engagements of the Partnership. f Individually liable for all the engagements of the Partnership.
the Kegister of the Tribunal of Commerce of the district in which the house of commercial partnership is established, to be transcribed on the register, and posted up during three months in the audience-room. If the partnership have several houses of business situated in different districts, the transmission, the transcription, and the posting up of the extract, must be made at the Tribunal of Commerce of each district. Each year, in the first fortnight of January, the Tribunal of Commerce shall designate at the chief place of their jurisdiction one or more newspapers, and in default of such, at the nearest town (where they are published), in which shall be inserted, within a fortnight of their date, the extracts from the Deeds of Partnership en nom collectif or en commandite, and shall regulate the price of the impression of these extracts. This insertion may be proved by a copy of the newspaper, certified by the printer, legalised by the Mayor, and registered within three months of its date. These formalities shall be observed under pain of nullity with regard to the parties interested, but the omission of any of them cannot be set up as against third persons by the partners.
'43. The extract must contain—the surnames, Christian names, professions, and residences of the partners, other than the shareholders or commanditaires—the style or commercial firm of the partnership—the signature of those of the parties authorised to act, direct, and sign for the partnership—the amount of the capital furnished, or to be furnished, by shares or en commandite—the period at which the partnership should begin, and at which it should expire.
'44. The extract from the Deed of Partnership is signed as to the public acts by which the notaries, and as to the acts under private signature by all the parties, if the partnership be en nom collectif—and by the acting and solidaires partners, if the partnership be commandite, whether the capital be divided or not in shares.
Liquidation, Division, And Prescription.
'64. All actions against unliquidating partners, and their widows, heirs, or assigns, are limited to five years after the termination or dissolution of a partnership, if the act of partnership which fixes its duration, or the act of dissolution has been posted up and registered, in conformity with articles 42, 43, 44, and 46, and if, since this formality so complied with, the prescription has not been interrupted, with regard to them, by any judicial proceeding.'
Such is the French code as contra-distinguished from our own. The impression of its value, as limiting liability, has led many English capitalists to commence joint-stock companies in Paris and Brussels, which would otherwise have been carried on in London. They go to unnecessary expense in another land. They encounter the risks of revolutionary changes, and the sweeping away of their invested capital, though this sacrifice is not small, and though those changes are neither few nor far between, in order to escape the greater evil of the English law of unlimited liability. They have two boards of directors where only one is necessary—two staffs of officers and clerks—two establishments—divided responsibility —the want of unity of action, and the impossibility of daily supervision, rather than incur the possibility of greater disasters to their own private fortunes. Is this necessary? Is it wise? Ought it to continue?
The subject has been frequently before the legislature, but with the dilatoriness which is our national pride, and which retarded the abolition of slavery sixty years after its abominations had been proved, and reform in parliament nearly fifty years after the younger Pitt brought it forward, we have not yet come to the conclusion that this great commercial nuisance should be abated—this incubus upon all healthy enterprise removed. It is true noble efforts have been made, and statesmen of the highest standing have expressed their conviction that it was full of evil, but it still remains with hecatombs of victims in the year of grace 185-2. We have pored over at least a hundred volumes of Hansard to peruse the various debates on the subject, but have laboured in vain to find the existence of a fact or the shadow of an argument why men of property should be frightened away from embarking in useful undertakings, and men of no property, schemers and adventurers, who have nothing to lose, enabled and encouraged to ruin the project, and swindle the public. Among those who think as we do, we find the late cool and calculating Alexander Baring, afterwards Lord Ashburton; the clear-sighted, far-seeing, and eminently prudent William Huskisson; the strictly 'practical' Lord Liverpool; 'honest' Lord Althorp; the philosophical Mr. Mill; the philanthropic Mr. Slaney; the equally philanthropic Lord Ashley, now Earl of Shaftesbury ; the sound and sensible Sir William Clay; Mr. Headlam, in an unanswerable speech of surpassing ability; Mr. Labouchere, proverbially slow and considerate; the cautious statesman Sir George Grey, who promised, that 'measures would shortly be taken by government for obtaining charters with limited liability,' and yet nothing is done. We must go to France to concoct our English joint-stock companies, or form them at home with one or two gudgeons of capital, and myriads of puffing minnows.
In order that our readers may see the grounds we have for bringing forward these witnesses, we will give extracts from a few of their speeches:—
Mr. Alexander Baring said, 'If persons were allowed to combine on condition of limiting their liability, plenty of individuals would engage. Landed gentlemen would put down their £5000, £10,000, or £20,000. Solid establishments would be created, with which prudent men would connect themselves.'
Mr. Huskisson said, 'It would be a great improvement, if, under a proper system, limited liability were granted.'
Sir William Clay expressed himself in favour of limited liability for joint-stock banks.
The late Lord Althorp had been of the same opinion. In 1791 and 1792, 100 banks with unlimited liability were swept away. From 1809 to 1819, 174 more—from 1819 to 1821, 99 more. 'How far, then, can unlimited liability afford a security against stopping payment. Not only does it not, but it tends inevitably to augment the risk: the grand remedy is limited liability, paid up capital, and perfect publicity. By the permission of limited liability, we should acquire the most important of all securities—viz., a certainty that the most respectable persons would become parties.'*
Mr. Headlam, on a motion for limited liability to joint-stock banks, said 'the tendency of the present law is gradually to place the whole controul of the banking system in a speculating class of men.'t
Mr. Slaney said, 'If a number of persons joined together, and one of them chose to advance a sum of money, he was liable, in the words of the late Lord Eldon, "to his last shilling and his last acre." This prevented the distribution of capital in the rural districts, and the employment of the people. Erec* tions of lodging-houses could not be effected without a charter, and a charter costs £1000, which took away all profit. Thus unlimited liability prevented enterprize and employment, and kept down wages. The late Lord Sydenham, in 1837, spoke decidedly in favour of limited liability. He was happy to say, that in Italy, France, Holland, and the United States, the limitation of liability worked admirably.'!
Lord Ashley (now Earl of Shaftesbury) said—i It would be very desirable to remove impediments in the way of associations to be formed with limited liability, but the expense of a charter was an insuperable objection.'§
Mr. Labouchere 'was ready to admit that the laws which related to limited liability might be altered, and might be so modified as to render the investment of capital safer and easier.'
Now, with this host of witnesses before us, to which many more might be added, nothing whatever has been done; nay. the present government, a few weeks ago, refused a charter of limited liability to an undertaking of the greatest public importance, by which the farmers (and the present government are especially, in profession at least, the 'farmers' friends') would have received at least ten millions a-year, which are now sent out for foreign produce; the manufacturers would have been rendered independent of occasional scarcity and high and ruinous prices; and the philanthropist (the present government are soi-disant 'philanthropists') would have dealt the greatest practical blow to slavery that has ever been inflicted. Nay, more, the promoters of the undertaking could incur no debts, and were out of the category of companies against which the public might claim to be protected. Nomatter, unlimited liability was the law, and Mr. Henley and Lord Colchester would grant no exceptions!
* Hansard, vol. xxxiii., p. 842. t Ibid., vol. cv., p. 121.
I Ibid., vol. civ., p. 846. § Ibid., vol. cxvi., p. 1268.
When measures of relief are pertinaciously refused, and capital is struggling for a legitimate vent, men are apt to set their wits to work to evade a law they despair of seeing repealed. Hence, in the very teeth of government and the legislature, certain Insurance Companies have discovered a mode of obtaining limited liability, which the Courts of Queen's Bench and the Exchequer of Fleas have sanctioned. It appears, that if in those contracts, called policies of assurance, a clause be inserted expressly in terms, that the only remedy under the policy, and against the office, shall be upon the capital stock of the company, and not upon the directors or shareholders individually, that such intention, so expressed, shall be binding; and that limited liability may be acquired without the assistance of either a charter or an act of parliament.
As this is a highly important matter, we shall give a few extracts from cases reported in the 'Law Journal.'
1849, July 11th.—Halket v. The Merchant Traders Ship Loan and Assurance Association.
Note—Company—Joint-Stock Company—Registration Act, 7th and 8th Victoria, c. 110—Execution on Motion against Shareholder—Policy of Insurance—Limitation of Individual Liability.
A poiicy of insurance duly executed by three directors of an insurance company contained a provision that the policy should not be construed to render liable the proprietors of the company beyond the amount of their respective shares, but that the capital stock of the company should alone be liable to answer all claims in respect of the policy. The plaintiff having obtained judgment against the company,—Held that by the terms of the