The Sun.
London, England, 1854-06-28 00:00:00

THE LAW OF PARTNERSHIP.

The British law of partnership is so different from that
of the world at large, so little in character with our gene-
ral practice, and with so little to say for it, that it would
seem, to have originated in the interpretation of lawyers
rather than in custom or legislation. The principal sting
of that; law may be soon described. You may, forvariqus
unexceptionable reasons, wish to lend a thousand pounds
to a trader oil the condition, not quite of sharing the pro-
fits, but of receiving a small profit, or none, so long as the
business is unproductive, and a larger profit, enough to
make up fur the previous shortcoming, if the business
should prosper. If you do so, and if the trader should be-
come bankrupt either from misfortune, indiscretion, or
fraud, you find yourself drawn in to the whole amount, of
your property, land we might almost add, of your cha-
iracter, for you will see your name in the Gazette. That
hardly seems like English law, but English law it cer-
tainly is, and many a man has lost all his property
land ruined his family by the merest oversight in re-
spect of this law. You may do many things more
foolish or more mischievous. You may first settle your
property beyond the control of creditors, and lend
your name, and nothing besides, to a concern the success
of which depends on the credit f its partners. You may
give the prestige of your honesty and your talents to the
management of a railway, which you may job or neglect
as much as you please, and be only accountable to the ex-
tent of your shares in it, if any. Under the protection of
a charter, or an act, you may commit any folly or iniquity
and come off comparatively seathless. You may carry on
a flourishing. business for many years, with the reputation
of enormous capital, and it shall be found at your death,
or disappearance, or detection, that your huge wealth was
never anything else than a huge insolvency; but if you
should commit the little error of not defining exactly the
interest you are to receive for your assistance to' a concerti,
and have not stipulated for the same interest in good years
as in bad, you are Heide to utter ruin. Through that little
flaw your whole substance mayfly away, and you are at the
mercy of all the accidents that may happen to another per-
son not under your control. 'Let it be once proved in
court that, from a charitable slackness of dealing, or
from a conflict between prudence and kindness, you have
taken more interest in one year than another upon a debt
you have suffered to remain in the hands of the trader
owing it, and your doom is forthwith sealed, and you pay
the penalty of your whole estate. This trifling irregularity,
or rather variation in your dealings, makes, for all pecu-
niary purposes, a much closer union and- even identity
between you and the trader than the law creates between
husband and wife. The wife can have antenuptial settle.
meats to reserve a portion of her property from her hue-
band a extravagance or indiscretion. There can be no such
reserve in your case ; you are ingulfed whole and entire to
the last sixpence of your estate, if there can be found in
the books of your trading friend 3 per cent. paid to you on
the money due to you in one year, and 5 per cent. in
another.
The presumed objects of this law, or rather the reasons
alleged in its defence, are the protection of those pee-
sons who are supposed to be incapable of taking care of
themselves from hollow credits and from bad investments.
Under the present state of the law they have the secu-
rity that the persons they are called on to trust are
liable to the whole amount of their property ; and, on
commit
other hand, they are induced to pause ere they
comi
theinselves to a business or an undertaking thnt may cos
them the whole of their fortune. Neither of the ulecti
is actually attained in this country to an extent at all oer-
responding to our national character for prudence and
thrift. In no country in the world ler there sova4t 'an
amount of 'commercial imposture, and so many great names
that are nothing but names--mere bubbles, that will burst
at the next crisis; and in no country are the savings of the
industrious poor and the striving middle classes snore
h eletffiesc
terovri
pretended,
etdh,o
anEdngthlthre ilsaweveont
partnership
presumption that it has the contrary effect. We
i believe that it his. Most people, especially those who
generally (i inisptntetci.
have earned their money by labour or trade, are reluctant
to give up all hope, of profit, and to rest content with 3,
/
-ler cent. They 'desire come chance of improvement.
They wi.h to invest-in something more promising than the
funds, but have little choice. We have often enumerated
the various ways in which the small English capi-
talist too often invests and loses his money, and need
not now repeat them. Whenever he lends his money, he
must trust somebody; and that somebody is either a
speculative individual, or a speculative society existing by
charter or by act. In either, the ordinary inveater of his
few hundreds has no control over the conduct of the person
or society that he makes the depository of his money, and
is very apt to lose his all. Thus, by charter and act he
may be lured on to his ruin. What can he know, indeed,
about the prospects or the management of a railway com-
pany or a canal, especially when the company has twenty
or thirty different acts of Parliament, four or five htuidreet
miles of lino, and all sorts of complications with rival or
auxiliary lines? Certainly, if people could invest eb few
hundred pounds in a smaller concern more within' the
scope of their experience, and not too large for examina-
tion, they would have at least as good a chance of seeing
their money again as if they threw it into the capital of a
railway or the pocket of a speculative attorney. Hr.
Glyn, observed with triumph last night, that
neitherl indeed,
t the report of the, commissioners nor yet Mr.
Cobden had noticed an inipoitant' difficulty,—viz.,
how to prevent the frauds which would be certain
to occur under a system- of registration and limited liabi-
lity ; but, while noticing this omission, be made, himself,
the still more serious omission of not informing the house
reexlaxista,tiardlothoneepareskriesuhtowlawtheo:
how a fraudulent management of railway and other joint-
stock companies is ever to be prevented. Whatever evils
apprehendedfra°lremaday
are to be prevented. Indeed, they are assumed to be part
of the English character, and therefore contend
partnership,a are
they
re valuLto
against..
•
At the present period of the se • 944Fi'lJia 0;1'4
salon, acim
two conflicting reports from the Pirliaiaiktirifilifiltlss,u
on the subject—one from the real6iity-Otttlf at Wit
other froin a not.less respectable mit-04015i triV"--' ' AN
hardly to be expected that 'Mr. 'Conierleku ce:ea his`carry
resolution in such a form last night as to lead to immediate
action upon it. But the question is now settled. No law,
indeed, can stand long that condemns itself by the number
and the mode of its exceptions, that operates so much to the
prejudice of one trace as compared With ani_f_thetr,:ang,
with foreigners. that
places ' our merchants at such disatliT6plP;,. P°lPYarm
Why are the means r incorporation to
-
care conflict or a large sum of money,
besides' the preearious favour of a Ministerial officer ? Why
t id' the Board of Trade to grant any appli-
cationis one Presiden
,and the next to refuse every applica-
tion, for s ,
opinions may dictate? Why, should the
just as 1"-s that is of a railway company—be oon-
trade of a
partnershipcarrter
with limited liability, and not any
signed to a
braech of manufacture?
Why are foreign houses to in-
crease every day in the metropolis, and get possession of
our trade, all of them supported by capital advanced upon
conditions
.'own
trade forbidden in this country? Why is our own
to be fettered, and that of our competitors free! 'We
are content to press for some relaxation of the law imfA-
cient to enable us to compete on even terms. At all event*,
we shall not suffer more scandal and loss by spurious credits
and treacherous investment than we do already under the
operation of a law intended to spare us the trouble of
thinking for ourselves, —Times.

•
MESSRS. DAVIDSON AND GORDON'S SUSPENSION.—
The recent suspension of Messrs. Davidson and Gordon,
which is likely to prove very unfavourable as regards-
assets, has led to other difficulties, the bills:of ?desire.
Cole, Brothers, East India merchants and inetaldealers,
with whom they had extensive transactions;- having to.
day been dishonoured. The liabilities of Cole, Brothers,
have not transpired, but they are believed to be heavy.
The firm was partly formed from that of Johnson, Cole,
and Co., who failed during the crisis of 1847 for
153,000/., with assets which yielded under bankruptcy
only a tractional dividend.

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