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Court af Exchequer.

Superior Courts: Exchequer.

London and North Western Railway Company v. Sharp. Nov. 7, 1854.

ACTION AGAINST ATTORNEY FOR NEGLECT ING TO KEEP AND DELIVER UP CLIENTS'

PAPERS IN REASONABLE ORDER.

Held, refusing a rule nisi on leave reserved to enter the verdict for the defendant, that it is the duty of an attorney to keep the papers of his clients in proper order, and, when called on, to deliver them up in a reasonable order and condition; and an action for neglecting so to keep and deliver up the papers is maintainable. THIS was a motion, pursuant to leave reserved, for a rule nisi to set aside the verdict for the plaintiffs and enter it for the defendant in this action, which was brought against him as the plaintiffs' attorney for neglecting to keep their papers and delivering up the same when called upon in a reasonable manner. It appeared, on the trial before Crowder, J., at the last Lancaster Assizes, that upon the defendant being removed from the office of solicitor to the plaintiffs, he had delivered over the papers in great confusion, and they had been put to great expense in arranging them. The jury found for the plaintiffs, but with is. damages, on the ground of laches in bringing the

action.

Watson in support.

The Court held, that an attorney was bound to keep his client's papers in proper order, and to deliver them up when called on in a reasonable order and condition, and the question whether they had been given up in a reasonable order was for the jury. The plaintiffs were therefore entitled to a verdict, and the rule would be refused.

leave to exhibit on behalf of the defendant

interrogatories to the plaintiff before pleading to the declaration, on the ground that he was colluding to enforce payment of the bill with his son, who had signed a deed of composition together with six-sevenths of the defendant's creditors.

Aspland showed cause in the first instance, on the ground that the application was premature.

The Court, without deciding the question as to the construction of the Act, said, that the rule would be refused, as the affidavits did not disclose a case of sufficient urgency to call for the interference of the Court. Although it might be convenient for a defendant to obtain all the facts before he pleaded, it was better that the interrogatories should not be filed before the plea, when the Court could tell what the issues were and determine as to the points on which the party should be examined. The rule would be refused.

Hamilton v. Bell and others. Nov. 18, 1854.

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The plaintiff had at various times purchased and paid for clocks of a clockmaker, and had not removed them as they were to be cleaned, but the shop-tickets were taken off them: Held, that on a bankruptcy such clocks did not pass to the assignees as being in the possession and reputed ownership of the bankrupt.

THIS was a motion, pursuant to leave reserved, for a rule nisi to set aside the verdict for the plaintiff, and enter a nonsuit in this action, which was brought against the assig nees of a bankrupt to recover possession of certain clocks which had been purchased by the plaintiff at various periods before the pe COMMON LAW PROCEDURE ACT, 1854.tition of adjudication, but had not been reMOTION UNDER s. 51 TO EXHIBIT IN

Martin v. Heming. Nov. 16, 1854.

TERROGATORIES BEFORE PLEA.

Quære, whether the Court has power under the 17 & 18 Vict. c. 125, s. 51, to give the defendant leave to exhibit interrogatories to the plaintiff before pleading to the declaration; but a motion for such order was refused where the affidavits did not disclose a case of sufficient urgency to call for the interference of the Court.

THIS was an action to recover the amount of

a bill of exchange drawn by the plaintiff's son and accepted by the defendant.

Quain now appeared in support of a motion under the 17 & 18 Vict. c. 125, s, 51,' for

moved from the premises as they were to be cleaned, but the shop tickets had been taken off. On the trial, before Martin, B., the plaintiff obtained a verdict, subject to this motion.

Lush in support.

The Court said, that the rule as to reputed ownership was not applicable where goods were allowed to remain in the possession of a tradesman whose business required him to have in his shop the goods of others for the having them ought not per se to give him any purpose of repair, &c., and the fact of his so unfounded credit with others so as to render them liable on his bankruptcy. The rule would accordingly be refused.

Which enacts, that "in all causes in any of and examined as a witness upon such matter), the Superior Courts, by order of the Court or interrogatories in writing upon any matter as a Judge, the plaintiff may with the declaration, to which discovery may be sought, and require and the defendant may with the plea, or either such party, or in the case of a body corporate of them by leave of the Court or a Judge, may any of the officers of any such body corporate, at any other time deliver to the opposite party, within 10 days to answer the questions in writ or his attorney (provided such party, if not a ing by affidavit to be sworn and filed in the orbody corporate, would be liable to be called dinary way."

The Legal Observer,

AND

SOLICITORS' JOURNAL.

-"Still attorneyed at your service."-Shakespeare.

SATURDAY, DECEMBER 2, 1854.

LIMITED LIABILITY PARTNER

SHIPS.

Under the proposed amendment of the law, this expense would be saved. The deed of partnership would be prepared by the solicitor, registered at moderate cost, and notified to the public under the provisions of the Act.

In another part of the present Number will be found a brief analysis of the evidence given before, or transmitted to, the Mercantile Law Commissioners, on the The question, after all that may be urged subject of limited liability partnerships; against it, is one merely of amount and and it will be observed by our readers that mode of proceeding, not of principle. It various classes of witnesses have given seems to be admitted that if a projected entheir opinions on this important subject. terprise required 100,000l. to conduct and Amongst them we find bankers, merchants, carry it into effect, the capital might be and bill brokers of London and many other raised in shares, and such shares held in great cities and towns; members also of se- unequal proportions by different individuals, veral chambers of commerce, solicitors of and each liable only for the amount he subextensive practice, and scientific men. scribed. Now the extent of capital will, of The witnesses who are in favour of course, depend on the nature of the underlimited liability, of course, accompany their taking. A large capital may be required in opinion with a recommendation that all the management of a business which, by such partnerships should be sufficiently registered, in order that the public may be fully acquainted with the names of every partner, whether his liability be limited or unlimited. If limited, the extent of the limitation must be precisely stated, and each limited partner will, of course, be liable to the creditors of the firm or company for any part of his share of the subscribed capital which may not have been

paid up.

ordinary skill and diligence, is liable to little risk, and there would be no difficulty in finding a competent number of persons to subscribe for the requisite funds. There may, however, be numerous projects which can be carried into effect for 20,000l. or less, and yet are of so uncertain a nature, or perhaps hazardous a description, that few individuals will embark in them, without the assistance of funds raised from a somewhat numerous body of subscribers or proprietors.

Several of the witnesses who support the general principle, would confine its applica- It may be asked, why should these entertion to undertakings of an extensive kind, prises be abandoned, which, if successful, such as railways and mines. The general will benefit both the public and the proprinciple is indeed recognised and adopted jectors, because in the present state of the in numerous societies as well as companies, law each partner in the transaction, though the joint stock or capital of which is held in shares, some of the proprietors holding a few and others many shares. These partnerships, it will be recollected, are constituted and established at great expense by Acts of Parliament and Royal charters. VOL. XLIX. No. 1,395.

deriving a small share only of the profits, is liable, in case of loss, to the whole extent of his property? He may legally lend 1,000l. and exact 201. per cent. interest, and take such security as will give him a preference over other creditors, and yet he is pro

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Limited Liability Partnerships.

hibited from putting the 1,0007. into the missioner Holroyd support the measure, joint-stock of the company and taking a and we are not aware of any opposing Comshare of the net profit, because, if the con- missioner either of the London or Country cern fail and his partners cannot pay their districts. share of the loss, he must make up the deficiency.

Several eminent Counsel have also expressed a favourable view of the propoThis state of things appears to be really sition. Amongst these are Mr. Swanston, prejudicial to the creditors whom the op- Q. C.; Mr. Lowe, M. P.; Mr. Richards, ponents of the measure seek to protect. It the Speaker's Counsel and Professor of is supposed, that if more capital could be Political Economy in the University of obtained by altering the law, than is now Oxford; Mr. James Stewart, Secretary to forthcoming, there would be an increase of the Copyhold Commission; Mr. Vansittart "reckless trading," and that creditors Neale; and Mr. Ludlow.

The Solicitors in favour of the plan are as follow:

Mr. Cotterill approves of the alteration, subject, in case of failure of a firm, to the payment of the full amount of the partners' subscription without deducting previous payments.

Mr. Hollams, of the firm of Marten, Thomas, and Hollams, suggests that the limited capital of each partner should not be less than 1,000l., and that there should not be more than 25 partners.

would not take the trouble to ascertain the Mr. Bellenden Ker is also in favour of limits of the several partner's liability, the limitation under certain safeguards and debts would be incurred to a ruinous which he suggests. amount. We hold, however, that the Legislature will have sufficiently discharged its duty, if it provide creditors with the means of easily ascertaining the several amounts of liability of each partner; and if merchants, manufacturers, and traders will give credit without inquiry, they must abide the consequences. If the firm of "Jones Brown, and Company" obtain credit from an incautious dealer, who imagines that under this high-sounding firm there are several rich partners, and it turns out that the company consists only of Mr. Jones Brown, can he justly complain of the law for the loss he may sustain? Neither can he blame any one but himself, if he gives credit to a company which he supposes to be unlimited, when the register will show him the contrary. Besides, in these limited partnerships, it may be provided that the word "registered" or "limited" shall be used in the name or style of the firm, so as to give constant notice to those who deal with it, however incautious or indolent they may be.

It may be useful to refer particularly to the opinions of some of the lawyers, as well as bankers and others, who have been examined. We shall select in the first place the Masters in Chancery and Commissioners in Bankruptcy.

Mr. Farrer, the late Master in Chancery, suggests that limited responsibility should be adopted only where there are more than six partners holding shares of a cer tain amount, and the business being subject to periodical inspection.

Sir George Rose also gives in his adhesion to the proposed change in the Law of Partnership. It is proper to mention, however, that Mr. Tinney is on the oppo

site side.

Mr. Commissioner Fane and Mr. Com

Mr. Baker, of the firm of Baker, Ruck, and Jennings, also supports the alteration. Mr. Hesp, of Huddersfield, and Mr. Smith, of Sheffield, are also in favour of limited liability.

It is right to add, that Mr. Freshfield, the Bank Solicitor, would limit the partnerships in question to undertakings of long duration and requiring a large permanent outlay.

The Bank Directors are not agreed: Mr. Cotton and Mr. Latham are against the proposition, and Mr. Norman and Mr. Hankey in its favour. Mr. Hubbard, the Governor, supports it in a modified form, as to loans for trading purposes, and Mr. Weguelin, the Deputy Governor, is favourably inclined.

The Chambers of Commerce in various places also hold different opinions on the subject.

Lord Overstone and Mr. Prescott the Banker, are against it, except as to companies formed under the authority of the Board of Trade or Parliament.

The proposition is also supported by the following men of scientific eminence :-Professor Babbage, of the University of Carnbridge; Mr. Leone Levi, Lecturer at King's College, London; and Professor More, the University of Edinburgh.

of

Evidence on Limited Liability Partnerships.

83

EVIDENCE ON LIMITED LIABILITY out special authorisation, (14) to agreed ad

PARTNERSHIPS.

THE large parliamentary volume published on this subject, with the evidence submitted to the Mercantile Law Commissioners, has been read, we believe, by very few of our brethren; and it may therefore be useful, as the Session of Parliament approaches, to notice the substance of the answers which have been transmitted to the Commissioners on the question of Limited Liability Partnerships.

The communications made by witnesses in the United Kingdom are to the following effect :

No. 5. Anderson, James Andrew, late manager of the Union Bank of Scotland, Glasgow. P. P. 12 General law of unlimited liability should not be changed or modified.

J.S.A. 2. In enterprises of too great magnitude for private adventure (except banking and insurance companies), liability may be limited at the discretion of Parliament, or, under certain limitations, of the Board of Trade.

No. 41. Armitage, George, woollen cloth manufacturer and merchant, Huddersfield. (Selected by the Chamber of Commerce of Huddersfield).

P. P. 1, 5. No limitation of liability. 16. General registry of partnerships, annual.

J.S. A. 3, 11. Limitation of liability of all or any partners only by special Act of Parliament, (14) to double amount subscribed. 20. Registration of names and amount of shares, annual.

No. 51. Ashworth, Henry, spinner and manufacturer, Manchester. (Selected by the Chamber of Commerce of Manchester).

P. P. Present unlimited responsibility to be in no degree changed.

J. S. A. Exception in favour of limited liability allowable where large masses of capital, beyond individual means, required for large public undertakings.

No. 38. Babbage, Charles, late Lucasian Professor, Cambridge.

Favourable to alterations permitting limitation of liability.

No. 69. Baker, Thomas, of the firm of Baker, Ruck, and Jennings, solicitors, Lime Street, London.

P. P. and J. S. A. 3. Liability of non-acting partners may be limited in any business (except, perhaps at first, banking and insurance),

Private partnerships.

vance; in certain cases creditor of partnership may recal profits received since his debt was contracted, but not beyond six years. 16. Shares transferable, but liability of transferer at the time of transfer to continue. 18. No compulsory dissolution on loss. 19. French law of non-interference by limited partner too strict. 20. Registration of deed of settlement, of names of acting partners, and if liable for calls, of the limited partners also. 21, 22. No compulsory publicity of accounts.

J. S. A. 3, 11. Companies with very large capitals (say 1,000,000l.) to require sanction of Board of Trade. Act of Parliament unnecessary, Lastly, present Joint-Stock Companies' Registration Act contains impracticable requirements.

No. 59A. Barber, James Henry, manager of the Sheffield Banking Company, Sheffield.

3, 8, 10, 12. That joint-stock banks have been advancing, and private banks receding, must be chiefly owing to feeling of confidence on part of depositors and public, arising from unlimited responsibility of shareholders, with which feeling limitation of liability would do away. When joint-stock banks fail the shareholders are the parties who ought to bear the loss.

No. 11. Baxter, David, merchant, Dundee. (Selected by the Chamber of Commerce of Dundee).

P. P. 1. The principle of limited liability in associations for mercantile purposes should not be admitted.

J. S. A. 12. Power of conferring charters of limited liability should not be in Board of Trade; Parliament alone should confer it, and for national or local public purposes only.

No. 34A. Report by Chamber of Commerce, Belfast.

Approves American Special Partnerhips Act preferable to the continental commandite partnership law, because, under former, special partners' capital to be paid up at once. tracts in partnership articles to refer disputes to arbitration should be enforced.

Con

No. 47. Bousfield, Charles, merchant, Leeds. (Selected by the Chamber of Commerce of

Leeds.

P. P. 1. Liability not to be limited in any partnership for trade.

J. S. A. 11. For draining or other like objects, Board of Trade may be empowered to confer limited liability.

Lastly. All partnerships to be registered. No. 35. Bristow, James, director of the with-Northern Banking Company, Belfast. (A Vice-President of and selected by Chamber of Commerce, Belfast.)

? These numbers refer to the replies, which contain the principal matters recommended by the respondents. Of such matters an abstract is here given. It was feared that an abstract of arguments and views could not be given with the necessary conciseness, without risk of an imperfect statement of the views of the respondents. "Joint-Stock Associations.

1, 2. Unfavourable to any limitation to liability of partners. 3. If admitted at all, to be strictly confined to enterprises not likely to be undertaken by few individuals. 11. Charters confirming limited liability may be granted when approved of by Board of Trade.

No. 39. Brooke, John, of the firm of John Brooke and Sons, woollen cloth manufacturers

F 2

84

Evidence on Limited Liability Partnerships.

and merchants, Huddersfield. (Selected by the be limited in any business without special au-
Chamber of Commerce of Huddersfield.)
P.P. 1, 3. No limitation of liability in these.
Registration of all actual partners.

J. S. A. 3. If more than six partners, a capital of 30,000l. at least to be paid into Bank of England, and not withdrawn till registration certified. Liability of all shareholders may be limited to a fixed multiple (say three times) the capital paid up. 14. Provision for surplus fund out of profits. 16. Shares transferable with registration. 18. No compulsory dissolution on loss. 22. Registration of names, not of accounts.

No. 12. Brown, Joseph, merchant, Dundee. (Selected by the Chamber of Commerce of Dundee.)

P. P. and J. S. A. 3. Liability of non-acting partners may be limited, without special authorisation, in any business (14) to declared contribution; dividends to be received to be retained. 16. Shares transferable when paid up in full. 18. No compulsory dissolution on loss. 20. In public companies compulsory registration of contract of co-partnery in legal form, (21) not of accounts.

No. 32. Brown, William, M. P., of the firm 'of Brown, Shipley, and Co., merchants, Liverpool. (Selected by the Chamber of Commerce of Liverpool.)

1. A change from present system of unlimited liability would be injurious when private capital is equal to the undertaking. Cases of extreme risk, as in mining, &c. and extensive railroads, &c., where individual capital not sufficient, should be exceptions. 11. Limited liability should be obtained from Parliament only; the power placed in Board of Trade difficult and onerous.

No. 68. Burroughs, Jeremiah, merchant, Addle Street, London.

P. P. 2, 3, 19. Liability of all or any of the partners may be limited in any business, without special authorisation. 14. Capital to be paid up; profits accruing to commandite partners to be withdrawn only every three years. 16. Shares not transferable 18. Compulsory dissolution, or further liability, after loss of two-thirds of capital. 19. Limited partner to be free to take active part. 20, 22. Registration and publication of capital, and share of profit. 21. No compulsory publicity of ac

counts.

J. S. A. 11. One principle to apply to all; perhaps liability should extend to double the paid-up shares, and, (3) a minimum amount of contribution fixed. 21. Half-yearly statements of accounts.

No. 24. Clark, James, of the firm of James Finlay and Co., merchants, Glasgow. (A member of the Chamber of Commerce of Glasgow.)

1. The principle of unlimited liability should be maintained (3 and 11) without any excep. tion whatever.

No. 9. Cotterill, William Henry, solicitor, Throgmorton Street, London.

P. P. 3. Liability of non-acting partners may

thorisation, (4) but so that at the time of fail-
ure each limited partner shall be liable to pay
his full subscription without reference to pre-
vious payments or receipts; (12) in banks
issuing notes payable to bearer (which should
not be permitted), any partner to be liable
without limitation on the notes. 16. Shares
transferable with registration. 18. No com
pulsory dissolution on loss. 20. Registration
of partners' names and limited contributions,
(21) not of accounts.

J. S. A. 6 and 11. May be formed without
special authorisation, but registering officer
should ascertain that each partner understands
the partnership agreement.

No. 4. Cotton, William, a director of the
Bank of England, London.

P. P. No material alteration of the law as
to liability of partners.

J. S. A. In undertakings of public import ance, limitation of liability should be provided for by act or charter.

No. 61. Cross, William, late manager of the Liverpool Borough Bank, and now a partner in the firm of A. Dennistoun and Co., merchants, Liverpool.

P. P. and Ĵ. S. A. 3, 19. Liability of all or any partners may be limited in any business without special authorisation; (11, 20) to be clearly set forth on all documents or bills of the company; perfect publicity of names and subscribed capital. 18. No compulsory dissolu tion on loss. 21. No compulsory publicity of accounts.

No. 66. Council of the Chamber of Commerce of Dublin.

P. P. 3. Liability may be limited where not more than two partners, one at least being unlimited, and each silent partner bringing in not less than 1,000l., in private trade or manufacture only, not banks, insurance, or other undertakings of a public or joint-stock charac ter, (14) to declared contribution; profits drawn out in previous two years to be liable to be refunded. 4, 20. Registration and publication of firm, names of all partners, business, contributions of limited partners, and the term of partnership; the "firm" to indicate limitation. 16. Shares not transferable. 18. Capital lost to be replaced out of profits, or by new investment. 19. No restriction or interference by limited partners, except in purchasing or selling, receiving or giving payments, or writ ing name of firm. 21. No compulsory publicity of accounts.

J. S. A. 11. For great public purposes may obtain limitation of liability by grant of Board of Trade on merits of each case. 21. Publicity of accounts.

No. 52. Ede, Edward, merchant, Manchester. (Selected by the Chamber of Commerce of Manchester.)

P. P. and J. S. A. 1. Unlimited responsibility should not be altered. 11. All should be on one common principle as to liability.

No. 27. Ellis, William, manager of the Indemnity Marine Insurance Company, London.

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