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policy, the plaintiff was precluded from taking legal proceedings against the indioidual subscribers, and could not, therefore, issue execution against an individual shareholder, under 7 and 8 Vict. c. 110, s. 68.
In this case a rule had been obtained, calling on Lord Talbot to show cause why execution should not issue against his person or his property or effects, pursuant to the stat. 7 and 8 Vict., c. 110. The rule was obtained on reading (amongst other things) the plaintiff's affidavit, the office copy judgment in the above action, the office copy writ of fi. fa., and the sheriff's return thereto.
It appeared by the plaintiff's affidavit that the action was brought upon a policy of assurance on the ship 'William Mitchell,' which policy was signed by E. G. Winthorp and S. Price, two of the directors of the company, which was completely registered under the 7 and 8 Vict. c. 110. The policy was set out in the declaration, as appeared in the office copy of the judgment, and contained the following clause :—' Provided always, and it is hereby expressly declared and agreed between and by the said company and the assured, that the said policy and anything therein contained shall in no case extend or be deemed or construed to extend to charge or render liable the respective proprietors of the said company, or any of them, or any of their heirs, executors, or administrators, to any claim or demand whatsoever in respect of the said policy, or of the insurance thereby made, beyond the amount of their, his, or her / respective individual shares or share in the capital stock of the
said company, but that the capital stock and funds of the said company shall alone be charged and liable to answer all claims and demands, by virtue of the said assurance or incident thereto.'
The judgment of the court was delivered by Lord Denman, C. J.—' This was a rule calling on Lord Talbot to show cause why execution should not issue against him, upon a judgment recovered by the plaintiff against the company. The policy on which the action was brought, contains a clause that it shall not make subscribers liable beyond the amount of their respective shares, but that the company's funds shall alone be liable. 'It is plain that no action would have lain against Lord Talbot on this policy, to which he is not individually a party. What liability, if any, the clause in the policy was intended to throw on the individual subscribers it is difficult to understand. We suppose that all policies effected with this company are in the same form. The words would seem to regulate only the amount of liability; and so every subscriber would be made liable somehow to every holder of a policy to the amount of his shares; for there is Bo provision that if he has paid one assured to such amount, he shall not be liable to pay another to the same amount; or that if he has paid up to the company the full amount of the shares, he shall not be liable to the assured. In truth, they have no sensible meaning at all; unless it be this, that the assured shall look to the funds of the company alone, so far as any remedy at law extends; and that the individual subscribers shall be liable only to contribute to the funds of the company to the amount of their respective shares, which liability must be enforced by the company, against the subscribers, cither at law or in equity, as the case may be, and the enforcement of which liability may possibly be compelled, by the assured, by some proceeding against the company.
'We think, therefore, that, by the contract itself (the policy,) the plaintiff is precluded from taking any legal proceedings against the individual subscribers. This being so, we think that the C6th and 68th sections of 7 and 8 Vict. c. 110, under which this rule was obtained, do not apply; for that act was not intended to do away with the effect of any special contract entered into with companies, but only to enable parties who had recovered on a general contract with the company, not restricted in its terms as to the remedy upon it, to enforce a judgment against the company, by execution against the individual members of it, after due diligence used to obtain satisfaction from the funds of the company. Here, it is true that due diligence had been used, for a Jieri facias was issued against the company, but no effects found; a fiat in bankruptcy was issued against the company, under 7 and 8 Vict. c. Ill, but no assets obtained; and it does not appear that any steps have been taken under 11 and 12 Vict. c. 45, to wind up the affairs of the company, so as to make it necessary for the plaintiff to show that the provisions of that act have been complied with; but we are of opinion that the terms of the policy itself preclude the plaintiff from any remedy at law against the individual subscribers, and this ride must be discharged wirii costs.'
Rule discharged, with costs.*
The length of the above extracts precludes us from quoting another case in the Exchequer of Pleas, in which a similar judgment is delivered by Baron Parke (confessedly one of the ablest lawyers on the bench), with the concurrence of the Lord Chief Baron and the whole of the other barons, which may be perused with advantage by all who feel interested in the subject in the 19th volume of the 'Law Journal,' under the head * Exchequer of Pleas.'
• 'Law Journal,' vol. six. Court of Queen's Bench, p. 59, &c.
It is clear, therefore, from these recent decisions, that by certain clauses and contrivances, limited liability may by very many joint stock companies be acquired without either charters or acts of parliament. But another important question arises. Would it be right and wise in the estimation of the honourable British merchant, the high-toned moralist, and the public generally, that such evasions (and they are only evasions) should be had recourse to, in preference to altering the general principle of the law by express statute? We say, certainly not. Many persons in the hurry of business may not mark the clause or proviso which limits the responsibility, and indemnifies the uninvested property of those with whom they are dealing. Though by these decisions every shareholder may be compelled to pay up the full amount of his shares to meet the liabilities of the company, the individual suing has no adequate means of learning who these parties are, and whether they can pay or not. With the avowed intention, therefore, of those who are the advocates of unlimited liability in protecting the public and the creditor, we recommend, by a process that would at once give greater publicity to the one, and greater security to the other, to obviate the present, and to prevent all future evils.
It must be manifest to many of our mercantile readers that the French law en commandite, though possessing several excellent features, is susceptible of great improvements. To the societe anonyme we have the constitutional objection that it would throw too much power into the hands of government to be tolerated in this free community. It may be said of Trade as it has been irreverently said of Love—that it
, 'at sight of human ties,
Spreads its light wings, and in a moment flies.'
A system, not like the present dog-in-the-manger one of unlimited liability, preventing those who can pay, and encouraging those who cannot, to enter into joint-stock companies— not the French anonyme, giving government arbitrary powers of rejection or permission, but a system based on real capital; periodical publicity of the names of all the shareholders, and the amount of shares that each holds; the amount paid up and the amount guaranteed; and notice in every contract and every proposal for every contract that it is to the money and not to the men—to the joint-stock capital and not to the joint-stock capitalist, that all parties are to look for security and payment— ought to be enacted by parliament.
Let us quietly consider how such a system would work were it the law of the land. At present Rothschild, Baring, Gurney, and othergre at capitalists, who may be disposed to embark in highly-useful and remunerative undertakings, say to themselves, * Though we are inclined to take £10,000, or £5000, or £1000 eacn in one or other joint-stock company, what would be the inevitable result were it to fail? Not only is " our last shilling and last acre," as Lord Eldon has stated, liable to be seized for all the debts of the whole company, but there is a moral certainty that we should be the first to be pounced upon, in preference to those who are to have the same proportion of profit as ourselves, but who are less able to meet the losses.' Who could answer such an argument, and what sane man can expect, under such a system, that the real pillars of commercial and territorial wealth would uphold any joint-stock company whatever with unlimited liability.
Lord Bacon wisely remarks that 'measures without men are dead images.' There is no vitality in them; very excellent undertakings in theory, and very useful, if they could be put in practice, have been shipwrecked in the quicksands of unlimited liability. It was found that there was no sound bottom. Where the merchant princes of England might have been, and with limited liability would have been, they were not; and instead thereof, tricksters, gamblers, stock-jobbers, adventurers, schemers, and paupers, under plausible names and pretences, were quite ready to risk their all, simply because they had nothing to lose.
The misery that has occurred in these realms from this hollow system is beyond description. The ruined fortunes of those who have been taken in; the broken hearts; the homeless survivors; the sudden fall from gentility to beggary and insolvency —are not these things recorded in the annals of Basinghall-street and the schedules of Portugal-street? When is it to end?
Ajrt. VII.—TIte Life of Taou-Knang, late Emperor of China;
Memoirs of the Court of Peking. By the late Rev. Charles Gutzlaff.
Any work which casts light upon the history and habitudes of the Chinese people must be interesting to Europeans—to ourselves peculiarly so, because our relations with ' the flowery land' have been intimate and important. The civilized and Christian world gazes with astonishment at that singular race, who, while they arrogate a heavenly origination and attriN. s.—Vol. iv. e
butes, and look with supreme contempt on all other people, combine, at the same time, all the peculiarities of both ancient and modern barbarism. They are altogether a distinct world. The great antiquity of their empire, their peculiar customs, the wearisome idioms of their language, and the exceeding ingenuity and imitative cleverness of the entire people, entitle them to the respectful attention of the ethnologist. For many ages the Chinese empire has been a terra incognita to Europeans. Thither the thoughts of mediaeval statesmen and merchants were directed. The adventurer, wearied by the monotony of home-life, and seeking a new field of pleasure or advantage, dreamed of that'far Cathay,' where, it was thought, gems and gold were to be had almost for asking; where the people lived amid scenes of beauty and joy; and where the rulers of the land passed an elysian life in a happiness undisturbed by cares of state, and free from the common disquietudes and sorrows of humanity. Not a few goodly barques and their mariners perished in endeavouring to reach that sunny land whose realities were expected to surpass all the conceptions of romance; or—a circumstance by no means unusual in the history of the time—they who had sailed on that bold adventure cared not to return and to tell of their pains and disappointments. The Portuguese seamen seem to have arrived at the earliest knowledge of the celestial land, and a few of them gained a footing in the empire; but, generally, until within the present century, China and its people were almost unknown to the rest of the world. There can be no doubt, however, that the Chinese had approximated towards civilization, while the greater portion of mankind still slumbered in the night of ignorance and barbarity. After making all allowance for the characteristic exaggeration of the national chroniclers, it is clear that their records, such of them as are in existence, date from a very remote antiquity, and the traces of an early partial civilization are even now clearly discernible among them. Every year increases our knowledge of this remarkable nation; and, probably, when the influence of Christianity has been more powerfully exerted upon them—that silently but mightily-working leaven which gradually transforms the mass into which it is infused—we shall obtain information of the history, philosophies, and habits of this people, quite as full and as satisfactory as that which we are already gaining of the races of the Indian peninsula.
The lamented Dr. Gutzlaff has bequeathed us a charming volume, which we venture to assert will be a favourite with all who interest themselves in the present condition, and who speculate upon the future, of the Chinese people. The work, dedicated to Sir George Staunton, * the constant friend and patron