The Sun.
London, England, 1855-06-30 00:00:00

LAW OF PARTNERSHIP.

(Prom the Times of this clay.)
Trading in this country is a very awful affair. If
any body doubts it let him read Mr. Bouverie's speech,
and he will see what a gulf it is that separates the gentle.
man and .the trader. When a gentleman feels any
temptation to trade—that is, to share the profits of a
commercial enterprise, the law comes to him like a cer-
tain unmentionable 'personage, and requires him to as-
sign, if not his body and soul, at least everything else
he can call his nwn. Indeed, until lately, any man who
once came under an agreemer t to divide the proceeds of
a venture did so at the risk of his personal liberty to
the end of his days, as well as his estate. His very
body belonged to his creditors. No doubt Jack Cade
had good reasons for his suspicions of penmanship ; if
he had signed his name to a trading contract he might
very reasonably never feel himself his own man again.
In no other country bas there been so manifest an in•
tention in the law that the gentleman shall not be a
trader, and the only parallel to the rigour of our com-
mercial code is found in some local and exceptional
rules of nobility. There is a pretty story somewhere
of a gentleman in some province of France, before the
Revolution, who, having become penniless, and having
no other means of recruiting his fortune, was driven
to trade. Before he could do this, he had to pre-
sent himself to some local assemblage of gentry and
deliver up his sword, which he did with no little dis-
tress. Some twenty years afterwards an old man, whom
few present could recognise, so great had been the
change in himself and those around him, presented him-
self again at the same place, and, after producing
vouchers, demanded back his sword. When it was once
more in his hand, he examined it closely- and passed his
hand down it, as if he thought it had contracted some
rust, not by ill keeping, but by the temporary degrada-
tion of the owner, so strongly did even he feel that any
mercantile employment was a stain upon a gentleman's
name. The law of this country on this point evidently
takes its tone from the traditions of noblesse. The
jealousy, indeed, by this time has changed sides, as
jealousies often do. It is not so much that the gentry
are afraid of commercial contamination as that the
trading classes have hitherto been suspicious of a gentle-
man trader. They do not want to deal with anybody
who does not commit himself absolutely and wholly to
the chances of the game.

This is the common law of the question. We start with
the grand principle that a man who shares the profits is
a partner, and, if a partner, he is committed to all the
acts and all the responsibilities of his fellow-partners. If
a man, having money in a business, gibes up active con-
cern in it, but leaves his money, with the condition of
sharing the profits, he is liable to lose not only the 5,0001.
0r50,0001. he leaves in the partnership, but everything else
he has in the world. If a partner dies, leaving his widow
and children interested in the profits of a business, till
the affairs are settled they are liable any day to find them-
selves utterly ruined by the loss, not only of their share
in the business, but of all their other property. If a
gentleman, wishing to encourage an industrious trades-
man, or to give scope to an ingenious projector, or to
develope the resources of a district, advances a sum of
money on any condition depending on success,. he may
lose not only his venture, but his all. In fact, he ven-
tures his all by the act. The law is such that no gentle-
man in his senses should touch a tradesman, so to speak,
with a pair of tongs. He must communicate with the
intervention of an experienced attorney, who will gene-
rally advise him to cut the concern altogether, Nor are
gentlemen the only people affected by these disabilities,
nor are they, indeed, the principal sufferers. It is the
case of all capitalists, and there are capitalists of 51. as
well as capitalists of 50,0001. If twenty artisans sub-
scribe 51. a-piece to open a shop, they are all liable for
the debts of the shop to the whole of their property. It
is the same if they are joint owners of a lace machine,
or a row of houses, or a fishing-boat, or anything ese that
invites co-operation. The law is unlimited liability. But,
while this is the rule, the exceptions are numberless.
One would think that our legislation on the subject had
been devised by the ingenious authors of Propria quo
maribus and As in prcesenti, which, professing to give
schoolboys a number of rules, are actually lists of
exceptions. Parliament, by separate acts and by
the intervention of the Board of Trade, has created a
great number of limited liabilities for railways and canals,
for banks, for docks, for gas and water works, and for
other purposes that can make out a special case for as-
sociated enterprise. Of course, the greater the number.
of exceptions the greater the hardbip of the rule, for the
privileged exceptions draw to themselves that capital
which the rule deprives of a more general application.
No other reason can he assigned for keeping up a pro-
hibition peculiar to this country than that limited I:ae
bility is liable to abuse. Just as much reason could be
given for not allowing unlimited liability ; for no abuse
is greater than that recklessness which both partners
and creditors will often fall into from the consideration
that they have the whole estate of every partner to draw
upon. Thui the extravagant confidence felt in the bank
which failed the other day was owing, not to the known
prudence of the bank, not to any particular knowledp;e,
of its affairs, but simply and solely to the mistaken belie
that there were two or three large private fortunes in the
firm. The same thing has happened in thous finds of in-
stances, and so much has the British public got into the
way of looking at the private fortunes embarked in a
business that the partners are compelled to keep up a
show beyond their means, in order to ,ustain the credit of
the firm. But the worst evil of unlimited liability is the un-
limited power it gives to a clever, speculative manfor prey-
ing on the fortunes of his partner,. He has them in his
pocket, and can always keep enougl: ahead of their sur-
veillance to prevent their rescuing their property from
his grasp in time. When unlimited liability is open to
such abuses it matters little to insist on the abuses to
which limited liability is also exposed. The question
should be decided on positive, not on .negative grounds.
Is limited liability a useful form of commercial under-
taking ? Parliament itself replies that it is, for it is no
small part of the occupation of Parliament to investigate,
select, improve, and sanction schemes of limited liability.
It only hesitates to throw open this avenue of commerce
to small capitalists and ordinary enterprises ; yet the
whole commercial world, both of Europe and America, is
dead against us. Every other State has decided long
ago in favour of limited liability, and sees in the results
no reason for change.