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Pastor of Veilby, The
151, 213 Reform Bill, The New .

. 183
Pierced Skull, The
734 Reformation Era, The

563
Political Register 253, 309, 371, 434, 494, 564, 692, 753 Reminiscence of a Bow-street Officer, A

407
President, The, the Priests, and an Empire of Peace 676 Reminiscences of Limousin

163
Preventable Death, On

129
Prison-scene during the Reign of Terror, A .
Public Companies, 64, 191, 256, 320, 384, 447, 511, 574 David Macbeth Moir (Delta)

327
640, 704, 764 Ideas and Opinions of Napoleonism

287
Punch and Judy Men, The
369 Memoirs of Dr. Chalmers

403
Money and Morals

518
POETRY:-

Leith and its Antiquities

561
Cheap Books

391
Rev. John Aiton in the East, The

599
Daughter of James I., The

664
Sanctuary, The

455
Day of the White Mountain, The

610
Dirge, A

Schwarzenburg, Prince Felix, and Austrian
691

334
Infant Cain, The

Diplomacy
402

284
Last of the Draggones, The. A Romaunt

Scotch Appellate Jurisdiction, The

743
Lay of the Brunswick, The

Shopkeeper, A, to the Conductors of “Blackwood's
480

80
Life's Lamentations

Magazine"

752
Lines by a Fellow-Not of Brazenose

Sir Andrew Wood of Largo, A Memoir of 208, 264

304
Mansfield's Riders: a Song of the Thirty Years'

Swiss Note-book, Hints from a

417
549
• Times" The, and the Poets

18
Melancholy Musings
750 United Kingdom, The Condition of the

228
Ode to a Female Mummy .

336 United States, The, and the British American
Sheepish Shepherd, The
411 Fisheries

547
There's something left of the old face yet

49
Water Question, The

52
Thirtieth of April, The, 1632
325 Wellington, The Great Duke of

630
Willow-branch, A

108

Working Man's Way in the World, The 41, 110, 164, 219
Railways, Record of, &c.
255

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TAIT'S EDINBURGH MAGAZINE.

JANUARY, 1852.

THE LAW OF PARTNERSHIP. LAW-REFORM is now the great question of the day. was acquired or usurped in the feudal ages; yet The public mind is fairly awakened to its impor- it still remains, a triumph of clerical craft over the tance, and the alterations and amendments which superstitious fears of mankind. Is there one subhave recently been made may only be considered stantial reason why this anomaly should be suffered as the prelude to more sweeping changes. More, to continue ? Is there one substantial reason why perhaps, has been done within the last five years in the ordinary legal tribunals should not decide upon the way of legal and judicial reforms than through- all those questions which are now settled by a out the previous century. The establishment of much more expensive and dilatory process at County-courts in England, the modification of Doctors' Commons? Some twenty years ago the entails in Scotland, and the recent alteration in the Consistorial Courts in Scotland, which possessed a law of evidence, by means of which principals are jurisdiction analogous to that of the English not only permitted but compellable to give testi- Ecclesiastical Courts, were abolished, and the mony in the superior tribunals of the former functions exercised by them are now performed by country, are perhaps the most important measures, the Court of Session to the entire satisfaction of as far as the public are concerned, that have re- the public. The change was made in accordance ceived the sanction of the Legislature during the with the progressive spirit of the age in which we period in question. On the two first public opinion live, and we doubt not that a similar change in has already pronounced its verdict. The County- England would be attended with similar results. courts in England have at length rendered justice of the Court of Chancery and its gigantic abuses accessible to the poor man; and the abolition of we shall not at present speak. It still continues, the pernicious entail law, which for nearly two in the emphatic words of Sydney Smith, " to centuries has enabled any owner of land in Scot- weigh heavily upon the energies of mankind.” land to fix it irrevocably in the possession of a The peddling reforms of the last session are a certain family or series of families, has already mere concession to the loudly and justly-expressed been the means of transferring thousands of ill popular discontent. They do not touch, or profess cultivated acres from the hands of penniless pro- to touch, the root of the evil. The public, moreprietors to those who have both the means and the over, seem to have lost all faith in Chancery will to improve them. Of the recently-introduced Reform; and while Lord John Russell and his rule of evidence, by which both parties to an action colleagues have been busy creating new Courts of may be personally examined, it would be prema- Appeal, with newly-invented titles for their judges, ture to speak. One result, however, can hardly an opinion has rapidly been gaining ground among fail to ensue from its adoption. If the law stand all classes of society that Courts of Equity, as at -as stand we believe it will—it must hasten the present constituted, are an anomaly and a nuisance, downfall of all subordinate devices for the defeat and that if not speedily remodelled they must of justice. It must lead to a total revolution in inevitably be swept away. the procedure of the Common-law Courts; in other The commercial law of Great Britain— for, pracwords, to the abolition of special pleading, with all tically speaking, the mercantile law of England is its scholastic absurdities, and the substitution in its also that of Scotland-calls less for the attention of place of forms of process which, like those of the the law-reformer than any of the other departrecently-promulgated New York code, shall be ments of jurisprudence to which we have referred. short, simple, and intelligible to all the world. The reason of this is obvious enough. The mer

The truth is, that although we have done much cantile law is entirely of modern growth; and it of late, the work of law-reform is but in its infancy. has its foundations, not in the arbitrary principles Look at the Ecclesiastical Courts, which in England of feudalism, but in the experience and the necesstill retain a monkish jurisdiction over our wills

, sities of mankind. As at present administered, our marriages and our divorces. This jurisdiction the law.merchants of England may be said to

VOL. XIX.-NO. COXVII.

B

have grown up almost entirely within the last | law, to be afterwards submitted to Parliament and hundred years. During that period many distin- the public. In making this recommendation, thereguished jurists have occupied the bench, through fore, Mr. Slaney's Committee have virtually conwhose judicial labours, with some capricious aid demned the present law of partnership in toto, from the Legislature, its principles have gradually although we could have wished that they had exbeen developed and established. It must be ad- pressed their meaning in less equivocal terms. The mitted that through these means the commercial chief object of their inquiry appeared to be to ascerlaw, whatever may be its inherent defects, has ac- tain, as far as possible, the working of the present quired a great amount of certainty and precision. law of unlimited liability, and it was disapproved But there is one branch of this extensive depart- by every person who was called before them with one ment which has lately been the subject of especial solitary exception. We shall consider at once the animadversion. We allude to the law of partner- arguments adduced by this Conservative witness ship, which it has been proposed, by a large and in favour of the existing law. We may premise influential section of the public, to remodel on an that he had been Governor for three years of the entirely new basis.

Bank of England; and a Governor of the Bank of There are two points in the law of partner- England has certainly a right to be heard upon ship which, according to these reformers, call such a subject. The witness in question was Mr. loudly for amendment. The first is the principle W. Cotton. of unlimited liability, which renders any one part- To this gentleman the chairman of the Comner, however small his share in any commercial mittee put the following question : “Do you think undertaking may be, responsible to the public to that the existing laws of this country give equally his uttermost farthing. The second is the defective fair play to parties of small capitals and moderate state of the law in as far as regards the remedies capitals, as to great capitalists of large accumulated provided for partners against each other. It may wealth ?” “I think they do,” replied the exnot be amiss to inform our Scottish readers, that in governor of the Bank ; " because there are hardly England one partner can only proceed against any joint-stock companies in which a party may another in the Court of Chancery. That high tri- not, if he likes, buy a small share. Although adbunal possesses the sole privilege, no matter how vantages, under particular circumstances, might acquired, of deciding all partnership disputes, what- result to some parties from a proposed change in ever may be their magnitude or their insignificance. the law, I believe that the mischief which would Its jurisdiction in such matters is universal ; and result would be infinitely greater than any advanit extends equally over the shareholders of our tage, and that great frauds would be committed by greatest public companies as over the joint pro- those who would project a variety of companies, prietors of a suburban soup-kitchen. The practi- promising great advantages, and who would induce cal consequence is that, as far as the poor man is many persons to advance their money upon specuconcerned, there is a positive denial of justice, and lative undertakings." he may therefore be robbed by a fraudulent part- The ex-governor means, in other words, that it ner with almost certain impunity. These are the is only a combination of great capitalists who can main objections which have been made the pre- carry on with safety an success any important sent law of partnership; and it will be seen at once commercial undertaking. This doctrine, which we that they deserve the serious attention of every have little doubt very faithfully represents the man who is engaged in business, from the humblest opinions in the Bank parlour, is more fully explained tradesman to the millionaire. And not of the when the following question is put :busy classes alone; for every person who has money “Do you think that a moderate capitalist, a man to invest, whether its amount be great or small, is worth from 5001. to 10001., has equally fair play directly interested in the subject.

by our law of unlimited liability with a man who First, then, as to the question of unlimited lia- has a very large capital, and can carry on a large bility, we shall briefly consider the main objections enterprise in combination with two or three others, which have been urged against this long-fixed whereas the smaller capitalist requires a considerprinciple of British law. Most of our readers are able number of others to do the same thing, and probably aware that, during the last session of Par- has not the same facilities, by reason of the law of liament, a Committee was appointed to inquire unlimited liability and the present state of the law into the present state of the law of partnership; of partnership, which affords no practical method and although this tribunal does not appear to have of deciding disputes between partners ?”. “I bearrived at any very definite conclusions upon the lieve," says Mr. Cotton, in reply, “ that the result matter, the evidence which they have published is of such combinations amongst parties would be both valuable and interesting, and taken altogether almost certain loss; they would be subject to such it furnishes convincing proof of the seriously-defec- severe losses by having the means of forming those tive state of the existing system. The Committee small joint-stock companies, to be under the mahave contented themselves, however, with pointing nagement of one or two individuals, that the injury out its leading anomalies, without suggesting any which would result would be infinitely greater scheme of amendment. Instead of venturing to than any benefit which they could derive from this propose any sweeping changes, they recommend investment of their capital.” “You do not think," that the whole subject shall be further investigated continues the chairman, “ that they might be left to by a Government Commission appointed for the their own prudence and discretion to select their purpose, which shall be empowered to frame a new own managers, from their knowledge of the intelligence, experience and integrity of the persons monopoly which they now enjoy must necessarily whom they might so choose ?" "I think,” replies be regarded with unfriendly eyes

. We may adă the witness, “it is not possible for them to have a that Mr. Cotton does not furnish us with any facts sufficient knowledge either of their intelligence or illustrative of the truth of his opinions. Without of their experience, to be competent judges whe- asserting that our present system is perfect, he ther their money can be safely intrusted to them." contents himself with assuming that any change In other words, Mr. Cotton thinks that rich men must necessarily be for the worse. Has not this alone are to be trusted with the management of been the language of the opponents of reform in commercial associations. It is very natural that every country and in every age? such exclusive opinions should be entertained by a We shall now turn to the evidence of another man in his position. But unfortunately, his theo. witness who was examined at great length before retical objections are flatly contradicted by the ex- the Committee; we mean Mr. Commissioner Fane, perience of the United States, where, under a law whose experience as a judge of the Court of of limited liability, innumerable industrial under- Bankruptcy gives him peculiar facilities for obtakings are successfully carried on solely by small serving the operation of the existing law. Now capitalists. When reminded by the chairman of this active functionary is directly at variance with the Committee of this important fact, he remarks, the ex-governor of the Bank as to its results. He “ I think it is very probable that in a small thinks that instead of preventing fraud it directly town, where people are all known to one another, promotes and encourages it. Mr. Cotton tells us that there might be an advantage in those little corpo- if we introduce the law of limited liability which rations which would not exist in England.” now exists in America, and we may add in every

“If,” continues the chairman, “ such towns other civilised country, it will give rise to innushould turn out to be New York and Boston, with merable knavish schemes. But according to the 300,000 people in the one and 150,000 in the experience of Mr. Fane, nothing can be more other, and that system works well there, you would favourable to the fraudulent projector than the probably be surprised at that result ?” “I should existing law. With respect to the rise and pronot be surprised," replies the ex-governor; “I do gress of bubble companies, of which the records not think they would work so badly in our large of this court doubtless contain a variety of curious towns here as they would in our smaller towns. details, he expresses himself as follows: It is in our smaller towns that the greatest “The great evil of the present law, besides its frauds would be practised."

tendency to check enterprise and impede the proWe must leave our readers to reconcile these gress of inventions useful to the public, is twofold; two last answers as they best can. The ex- first, that by fastening too much personal liability governor tells us first of all that in small towns to creditors on individual promoters of a public there might be an advantage in those little corpo- enterprise, it deters men of fortune and sense rations, yet he assures us in the same breath that from coming forward as promoters, or, as they are it is in these very localities that the greatest frauds called, provisional committee-men, and thus leaves would be practised! The only possible solution the stage clear for adventurers and lenaves ; and which we can attach to his words is, that the in- secondly, that it encourages creditors to give an herent knavery of the British provincial is so unreasonable credit to adventurers, and thus enables great that it would be out of the question to allow them to delude foolish people. him the same freedom of action as his American “The present law deters men of fortune and cousin. Mr. Cotton tells us that he was, for the sense from coming forward'; for such inen say, “If space of three years, Governor of the Bank of I even venture into the room where the subject is England, and, for aught we know to the contrary, being discussed, I don't know but what the law he may have presided with consummate ability may hereafter tell me that I have made myself over the affairs of that mighty corporation; but liable for the rent of the room and any amount of it says little either for his taste or his judgment supplies that any one of my co-provisional comthat he should have thus inferentially calumniated mittee-men has ordered in. Thus," continues Mr. 80 large a body of his countrymen. We presume, Fane, “the public is deprived of the protection of however, that the evidence of this gentleman may men of sense and honour, who stay away, and falls be taken as a fair sample of the opinions of his into the hands of a very inferior class, who are class. The present law of partnership touches not only too willing to come." the great capitalist, for with his means and his With respect to the mode in which credit is obexperience he knows how to avoid its security. tained from tradesmen by these embryo companies, Nay more, it directly and powerfully tends to in- Mr. Fane gives the following graphic account. crease the influence of the moneyed power, by We believe his description is by no means overtotally preventing the competition of small capi- coloured :talists, who, if the law allowed, would naturally “ If the adventurers can get but one man of combine for a variety of commercial purposes, and known substance to put down his name as a comthus curtail the profits of the leviathans of trade. mittee-man under the delusive statement that he We need feel no surprise, therefore, that an ex- is not liable, the bubble is started and

the delusion governor of the Bank is enamoured of the present set going. The needy adventurers want an office, system and distrustful of any change. Capitalists but have no ready money. No house-landlord will are proverbially the most timid of mankind; and trust them. They then say, “Sir Thomas any measure which threatens to circumscribe the has joined us. Very well,' says the landlord, that will do;' and the office is obtained. They is an inventor. The difficulty which an inventor then go to the maker of brass-plates, then to the finds in getting at capital involves him in all sorts painter to paint the offices, then to the coal-mer- of embarrassments, and he ultimately is for the most chant, then to the stationer, and lastly to that most part a ruined man, and somebody else gets possesmischievous of creditors, the advertising agent, by sion of his invention." whose aid the project is floated. Each trusts Sir But do they manage these things better else

Thomas —~, and the bubble has all the currency where? Much better, especially in France. Sethat boldness, falsehoods, a showy brass plate, paint veral witnesses were examined as to the working and advertising can give it."

of the law of commandité, or limited liability, in To this it may no doubt be replied that Sir that country; and, among others, Mr. T. Townsend, Thomas ought either to make himself ac- who had been for twenty years connected with the quainted with the character of his colleagues and manufacturing town of St. Etienne. He explained the state of the law, or to suffer for his folly. But that in his opinion the law of commandité had this disposes of only one half the question. Un- worked successfully in France; and that it had fortunately, there have always been knaves and been especially advantageous to the manufacturing dupes in the world; and according to Mr. Fane, interest, by enabling the capitalist and the workthe present law of partnership offers every temp- man mutually to aid each other in carrying ont tation to the former, while it exposes the latter to fresh improvements. The result is thus explained: unnecessary peril. A set of fraudulent projectors “I believe,” says the Chairman of the Comhave only to take advantage of the inexperience, or mittee, “ that the factories and manufactories of the vanity, or it may be the benevolence of one which you speak, that are carried on by this law person of substance, to enable them either to ruin of limited liability, furnish some of the most beauhim or to plunder the public with impunity. It tiful ribbons in the world ?" “Yes, they do." is hardly necessary to add that it is in times of “They are those for which France is particularly commercial excitement that the evils of the present famous, are they not ?" “Yes." law are seen in their most glaring colours; and “ Is not the superiority, or at least the celebrity, from the recent activity in the share-market, with which these French ribbons have acquired, owing reference to Californian and Australian mines, it a good deal to the introduction of improved patis by no means improbable that such a period is terns and beautiful designs, and so forth, from far distant.

time to time?" "Yes, of course, it is.” Another point upon which Mr. Commissioner “And you think that that is encouraged and Fane dwells is, that the present law seriously assisted by the law of which you speak?" "Oi checks the progress of invention. Upon this sub-course it is, in a great measure.” ject, he observes, " There is in this great country, " It brings forward ingenious, clever, intelligent as exhibited in the Exhibition, a mass of ingenuity persons, who perhaps may not have capital, but afloat; and the ingenious persons who invent these who by these means have capital advanced to ingenious things are, generally speaking, persons them ?" “ There is not a doubt of it." who are entirely without capital; they are for the We should think not. And this circumstance most part workmen; then it is in the highest goes far to explain the degree of excellence which degree desirable (if I may use a fanciful phrase) has been attained in all those branches of manuto marry that industry to capital. The present law facturing industry in France which require a high absolutely forbids the banns. The present law

says, degree of skill. Does it not also explain the true if there happen to be a lawyer, one Mr. Fane, secret of the remarkable success of the exhibitors who, having begun life with little or nothing, has from that country in the recent competition in arrived at a certain degree of prosperity, and who Hyde Park? in consequence has surplus funds which he hardly The opinions of the last witness, as to the supeknows what to do with, and he is in consequence riority of the French law, were strongly corrodisposed to invest a few hundred pounds in carry- borated by several foreign merchants who were ing out an invention of some kind—the law steps examined by the Committee. A gentleman of in and says to Mr. Fane, You shall not invest great experience in the City of London, Mr. J. your money at a moderate risk ; if you invest it at Howell, à partner in the extensive establishment any risk, you must do so in conjunction with a large of Everington and Co. of Ludgate-hill, and who, number of persons, who all become partners with as member of a Committee for the amendment of you, and, according to the law of England, any one the law of debtor and creditor, had devoted much of those persons, being a partner, may involve you of his attention to the subject of partnership, also in liabilities of an unlimited amount, so unlimited expressed his unqualified approbation of the comthat, to use Lord Eldon's phrase, you may lose mandité system. To this witness the following every acre you possess and every shilling that you questions were addressed by Mr. Cobden: have in the world. The question is, Is it desirable “You think it (the commandité system) would that such a state of the law should exist, and that, be a very great benefit to able and intelligent by forbidding the banns (to use my former phrase) young men who are embarked in business, if they between capital and industry or ingenuity, you could enlist the aid of a moneyed partner, for a shall make that ingenuity lie dead and unproduc- limited sum, which partner would not have his tive? In the course of my professional life, as a whole property involved in the prosperity or adCommissioner of the Court of Bankruptcy, I have versity of the business ?” “I do. I think it is learned that the most unfortunate man in the world the most natural course in which money could

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