omen for the future, that state legislation has been so much upheld in the Supreme Court of the United States. It is necessary, in such a system as ours, that the central government and judiciary should have some means of control over those of the states, but while such means exist, it is one of the surest signs of an harmonious and healthy action of the whole system, if it is exercised as seldom as possible at the expense of the subordinate power.

We must conclude this sketch with the closing words of the author:

"We may point to Judge Taney as one of our best specimens of the American lawyer and jurist. His whole life, from earliest manhood, has been professional. He is one of the few really eminent men of the country who have scarcely any political history. With the single exception of the brief period, during which he filled the office of Secretary of the Treasury, in the cabinet of General Jackson, he was never at any time entirely withdrawn from the studies connected with his profession. The few years of his service in the Maryland legislature, temporarily diverted his attention, but did not entirely interrupt his legal pursuits. His appointment as AttorneyGeneral of the United States, introduced him merely to a wider theatre of professional action. He came to the bench, a deeply read, and profoundly learned lawyer-a master of the principles, and thoroughly skilled in the practice, of the law. He brought with him large acquirements, and the fruits of a ripe experience, and the result has been, that he has sustained himself with ability and honour, as the head of the federal judiciary, and has proved himself, in the words of Mr. Clay, 'a worthy successor of Chief Justice Marshall.'

"Long may he continue to fill that place, and to enjoy that merited distinction. To one like him we may address, in no spirit of unmeaning adulation, the words of the Roman bard

"Serus in cœlum redeas."-p. 532.

ART. XIII,-UNLIMITED LIABILITY.

Q

UESTIONS of so much importance to the commerce of

the country have lately been the subject of such precipitate legislation, that we cannot too earnestly urge on the Government to stay further measures which may tend to alter mercantile relations and relax the safeguards of credit.

At any rate, let there be a breathing pause ere we adopt the example of America, and abolish the security of creditors by a rash statute passed at a period when the pressing external claims on attention are little likely to admit of a mature deliberation on measures of internal policy. Of all projects that of the limited liability of partners is perhaps the most important, and one which is the most likely to produce great effects on trade affairs, and, indeed, on the stability of our commercial welfare. Of all countries whose example we should least readily follow is that of America. And though we have every respect for Mr. Field, and for the general integrity of Americans, it is not exactly from the State or institutions which produced and enriched "the drab men of Pennsylvania" that we are inclined to copy facilities for "repudiation." It is a quarter whence we should be the rather circumspect and chary in borrowing patterns of laws for the maintenance of good faith in money matters.

What does limited liability mean? Most people imagine it means the liability of each partner to the other. Not so. There needs no law to enable this to be done. Any partners can effect it by their deed of partnership. It means that each partner shall cease to be responsible for the whole debts of the firm, not to each other, but to their creditors. It is proposed to limit this liability to the money invested by each partner in the concern.

Now, the benefits to public credit resulting from unlimited liability, as the law now stands, are, as it seems to us, chiefly these:

men of capital will not lend their names and embark in speculations without that species of moral certainty of success

essential to the safety of creditors; and without the names and guarantee afforded by capitalists, the credit will not be given as a general rule. Remove the responsibility of the wealthy partner, and reduce it to his mere investment in the concern, and you destroy this security of the creditor, and with it the credit itself. But this credit is indispensable to the furtherance of due commercial enterprise. It is indeed argued that if you release capitalists from their present liabilities, they will far more readily lend their names and money to commercial investments. There is no doubt of it; but that is precisely what we desire to prevent. Experience has shown that even with unlimited liability speculative enterprises are rife enough, and the follies of Capel Court are sufficiently recent to show that no more encouragement need be given to the rashness of monetary speculation. In fact, the case, pro and con, may be thus summarily put:-if any commercial enterprise be really sound and safe, there never has been, and there never will be, any lack of capitalists willing to pledge and risk their fortunes in it. If it be not sound or safe, the less men are invited by limiting their liability to set such enterprises afloat the better. To relax this safeguard of liability against rash or dishonest schemes and speculations is simply to rob the public and the creditor for the benefit of the speculator. As the Law Times well puts it, in a recent article, limited liability says to speculation, “You may pocket a thousand pounds; you cannot lose more than the twenty you have invested. You know the worst ; if the speculation succeeds, you will be rich. If it fails, why you cheat your creditors: but that is all.”

Fortunately enough, we have just had an example in point of how the system would work, to which it will be useful to give every publication, and we therefore record it in these pages.

Butt v. Monteaux, in V. C. Wood's Court (24 L. T. Rep. 106), was an application of the shareholders in a gold company, formed in France upon the French principle of limited liability, for the purpose of taking advantage of it, although, in fact, the shareholders appear to have been mostly Englishmen, and the business conducted in London. In these societies the acting partners, or “ gérants,” are alone liable to the full amount ; the

other partners are not liable beyond their shares, provided they do not interfere in the management of the business. Of course the gérant may be and often is a man who has nothing to lose, and who therefore really risks nothing whatever in the venture.

This case was a speculation in gold mines near Adelaide, and certain persons issued a prospectus of a company to be established in France as a société en commandite. Shares were taken and money received by the managing body, or conseil de surveillance. Some of the shareholders filed a bill against the conseil de surveillance, praying an account of the moneys received and of its application, and for a receiver and manager, for the dismissal of the conseil de surveillance, and of the gérant or manager, and for other purposes. The defendants demurred, and for cause averred that the company was a foreign and not an English company; that if it were an English company it required registration, and until registration was illegal; but the Court overruled the demurrer on these grounds, which we copy from the judgment delivered by V. C. Wood.

THE VICE-CHANCELLOR.-"The arguments offered to the court have been in some degree ingenious, but the facts may be reduced into a very narrow compass; they are these:-The plaintiffs aver the issuing of a prospectus by the defendants for a company to be formed as a société en commandite; that the statutes are signed, and then the defendants issue certain shares, of which some are taken up by the plaintiffs. They pay their money, and then they charge that that money has been laid out in the purchase of land; and by the 28th paragraph they allege that the defendants have applied, and intend to apply, the funds to their own personal benefit, and not to the purposes of the company; and paragraph thirty-two charges that defendants have actually received 66,000l., and that other large sums have come to their hands; and the prayer of the bill is simply for securing this money for the benefit of the company. The bill then goes on to pray that a receiver may be named, and a new gérant and conseil de surveillance may be appointed. There is then a charge that the statutes were merely colourable in order to enable the parties to establish a society such as they could not do by the law of England; but, as was remarked in the argument, with no averment that that had lately been discovered. In that state of circumstances it would be very difficult for the defendants to say, 'You, the plaintiffs, have been inveigled into

a society of this description, which is legal in France, but it was always intended to carry it on in England, and your only remedy is to file a bill to have your money paid back.' I think their remedy would go further, and that they would have a right against the land purchased and money in hand, either with reference to a continuance of the company, or otherwise. By the prayer of this bill all the defendants are called on to account for what they have received on behalf of the company. It is true, it goes on to ask for the appointment of a new gérant, and it is said that that is an agent unknown to this Court; but, if they could not get that, I feel strongly that they would be entitled to a receiver of the proceeds of the land purchased. This view of the case takes it out of that to which most of the argument has been addressed, namely, that, if not a French company, it must be registered, otherwise it was an illegal company. The term 'illegal' is a wide one, and one that can hardly be applied. It is quite new to me that, as between themselves, parties may not contract to subscribe capital not exceeding 21. each for any given object, though as between themselves and third parties such a contract cannot be set up. According to the averments in this bill, I think the society could not be registered, because by registering you would be binding the subscribers, who became such on the faith of a prospectus holding out quite a different species of partnership. If it had not been for that difficulty, I should have had very little doubt that a person would not be deprived of his right to file a bill because the promoters had not registered the company. The object of registration is to protect the shareholders. It would take a great deal to convince me that the shareholders would not be entitled to have back their money because the company was not registered; but I hardly think that is the present case. I think that the defendants have got the money on certain representations, and the plaintiffs have proceeded on the faith of those representations, and it is impossible to say that it is not to be secured for those who are entitled to it, though they may not be ultimately entitled to the relief which they originally intended to ask.

The demurrer must be overruled."

Now mark, if limited liability were the law here, this company would have been ostensibly, as it was in reality, an English company. They who do not wish to see the multiplication of similar trading societies in this country, and their obvious effects on commercial credit, will probably hesitate before they throw