The Sun.
London, England, 1856-07-05 00:00:00

some imeans might be provided for giving facilities to
commerce and trade, and f ,r preventingimpunity in fraud.
The house divided, when there apim.-,red—
For coing into committee

Avant it
Majority —l4
The house then went into committee on the bill.
On clause 1,

Mr. CRAUFURD proposed the following amendment
—To leave out clauses 1,2, 3, and 4, and in lieu thereof
insert the following clauses : -The advance of capital or
money, to :be used is any trade or undertaking, not being
the trade of a banker, upon a contact with the person
carrying an such trade or undertaking, that the person
making such advance shall receive a share of, or a rate
of interest varying with, the profits of the trade or un-
dertaking, shell not, of itself, render the person making
such advance a partner. in such trade or undertaking.
Toe- person making such advance shall be entitled to call
r an account of the profits of such trade or undertak-
ing, but•shall not, as against creditors, have any right
or title to the property or assets of the trade or under-
taking ; 'Mad in Case_of the bankruptcy or insolvency of
the 'periiin carrying on such trade or undertaking, the
person making such advance shall be c ,mpellable to
pay to the assignees any share of capital or money which
he has undertaken to provide.. Any such capital or
money withdrawn by the person making such advance
shall, if withdrawn within six months prior to the bank-
ruptcy or insolvency of the person carrying on such trade
or tindertaltmg, be recoverable by the assignees. No con-
tract for the remuneration of a servant, or agent of any
person engaged iu any trade or undertaking, by a share of
the profits of such trade or undertaking, shall of itself
render such servant or agent a partner therein, but such
servant or agent shall:be entitled to call for an account
of the profits of such trade or undertaking. The hon.
member observed that those who were brought up
under the old system would never get it out of their
heads that persons touching the profits of a concern
must necessarily be. partners in that concern: As re-
garded registration, the law of America had been referred
to. The principle of that law was analogous to the
French law, where'some partners were active and some
dormant, but all were subject to registration. But in
the proposed bill the lenders of money were not to be
considered as partners, so that the analogy did not ap-
ply. Toe clauses which he should propose were drawn
up by the committee of the Law Amendment Society
with the exception of a single clause. The effect of his
clauses was, that white a lender only took a share in the
profits, and took no part in the management, should not
be considered a partner, but in cases. of insolvency or
bankruptcy he should not be allowed to take out his
money till the other creditors were satisfied—that he
should, in fact, be postponed to the other creditors. He
was a friend to the bill as it, stood, if he thought it could
be carried ; but he proposed his amendment with the
view of enabling the bill to pass in the present session.
He moved that the clause be omitted.

The c'au4r, however, was agreed to without a division.
Oil clause 3,

Mr. GREGSON moved the following addition
"But no p6rtiOri of such loan as aforesaid shall be re-
„coverable until after all other creditors shall have been
fully sa•iFfied as to theirlawful clairus,on said business."
Mr. LOWE opposed the motion.
Mr. MALINS said that this was reverting to the old
idea of partuership, that participation in profits involved
participation in loss. If the addition were adopted they
might as well throw•out the bill. The object I.)f the bill
was to enable the fair trader to obtain loans without ex-
posing the lender. to the risk of sharing in the losses of
the concern.
Mr. lIINDLEY approved of the aldition.

Mr. SPOQNEII bad no objection to the addition if it
were made, to apply only to cases at insolvency. He
should move an amendment to the addition to that effect.

The, suggestion was .adopted, and the ,-a,ddation, ai
amended by Mr.,_ Spooner, was.put from the' chair.

AIITCLIELI4. said that under this bill men might
be made,partners unawares,, as they without knowing it
might commit some act which- woul,l put them into the
position of partnership. The Government should clearly
define whar-constituted a partner.
Mr. VANCE said, in corroboration of this view, that
firms often c trried on a totally' different busibeis from that
which they,professed. Firms might 'lend money to each
other under the act, without any of them doing any act to
constitute a partnership ; so that no partnership in effect
would exist in the business.
Mr. M. CHAMBERS said that' the bill constituted a
partnership between two men--one of whom having money
and the other skill—the first proposed to lend Money to the
other. , By this, unless there was some restriction, the' ca-
pitalist would be enabled so to lend his money, that he
might gain when there was gain,: and lose when there was
loss. The amendment proposed that he should run soma
risk Corresponding to his chances of gain, and he thought
the principle only what was fair.
Mr. LO WE had been asked: what constituted a-partner.
He was not an authority on law matters, but he thought
that joint owner hip of property, or the parties being joint
contractors, or the 'existenceof the " delectus personae,"
when there Was the power of claeize or refusal of those Who
were to enter into the concern, constituted a partnership.
Besides this, there mist be share profit. This was the only
one of the conditions of partnership which was affected by
the present bill: It had hitherto been commonly ,consi7
dered the criterion of partnership to share in the profit,
and the object of the bill was to remove that Criterion.

Mr.,IINDLEY said that his Objections were not re-
moved by the definition of partnership just given.
Mr. WILLIAMS thought that frauds under the bill
vvonld prevail to an alarming extent, and that it would be
useless for the purposes for which it was intended.
Mr. E. BALL said that the simple question was thisL-
Whether a parson advancing' money to another person to
enable him to carry on trade, was to be in a worse position
than other creditors ? -It would be a very hard case if a
man who should lond a farmer money to extend his farming
were, if hard times should come, to be deprived of his claim
to repayment in his due proportion on that account. The
'amendment would deprive the tradesman of his proper
chance cf obtaining capital.
Mr. WILKINSON said. that the amendment was sup-
posed to be in favour of creditors. Now, he could not 800
how creditors would be, injured by any tradesman having
the means of obtaining necessary capital to carry on is
business.
Mr. BA.RROW said liat„tbe proper principle Was,, that
a-man who claimed an 'extraordinary amount of profit and
who did not enter the concern as ,a mare ordinary trader,
should also run the risk of loss. •

The committee divided, when there appeared—
For the amendmern, B3.
Against it
Majority

Mr. SPOONER then moved, as amendment, the fol-
lowing proviso :—That any person making a loan to any
tractor, and 'receiving a share of the profits as compensation
for such loan shall, in the event of the trader becoming in-
solvent, repay to the estate of such insolvent trader all
moneys drawn out by him either on account of the principal
of the loan so made as aforesaid, or on account of the pro-
fits received as aforesaid, Within the three years immedi-
ately prec .ding the insolvency of such trader.
Mr. MALINS said it was scarcely worth while, after the
division tbatharl taken place, to "discuss that amendment.
The committee had already decided that if a man borrowed
of two peisons,, one at 20 per cent. and the other upon a
participation of piofitsi the former got his money, hut the
latter might bo entirely deprived of his remedy. The re-
sult was that, the bill was rendered entirely valueleSs, and
it was notworth while devoting any more' attention to it.
Mr. MITNTZ.. quite agreed with his lion. and learned
friend that'the bill was not now worth a single farthin,g.
Why could they not follow, the example of their friends
on the other side of the Atlantic, and advertise the per-
s. n:irw.ilyhi:boogo• wereio‘:rujcsEl
,t-pgeo partners; the
ottgwir,
hdeeerr:aeoan liodrtiteet.
contraryttw hwoeouy
dtos
things
gnibnoos
gcirdiabtdcheoodaouttnithnehi
,
ld him
the.period-for which they were liable.
s
e
dasSeoion arrived at as a reason for giving up the bill:
Mr. HASTIE said that the principle of 'the aniendthent
of the hen. member for Warwickshire ( \tr. Spooner). had
been embrelied in every charter for limited liability that
•bacl. beed granted, and the law had wisely Exed threeyears
as the time that should be allUwed to ascertain the liabili-.
ties of the parties. He should •therefore vote for the
:amendment. •
Mr. GLYN Reposed that one year should he inserted
instead of three years. - • .
Mr. SPOONER, intimated that he had no objection to
that alteration. -

Mr, WILLI A.MS supported tho amendment of Mr. Glyn.
31r, M. CHAMBERS propesed that sir months should
be substituted fur one year, and that if the concern were
solvent the partylending money should be allowed to with.
draw it at any time.
Mr. SPOO NEB, thought that this would lead to litiga-
tion, in short to decide where the solvency left off and
the insolvency bevn.
The ATTORNEY-GENERAL said the real question
was whether a man who advanced, money was to be con.
.sidered 14 partner because he advanced money upon the
consideration of receiving a share of the profits. The
principle of the bill was that instead of receiving a certain
fixed rate of interest he should receive a certain share of
the profits. Now, if he were not to receive a fixed rate of
interest nothing would be more unjust than to place him
in a worse position than the man.who advanced his money
upon interest.
. Mr. CARDWELL said that the late division had mate-
rially altered the principle of the bill with regard to per
sods who had advanced money to private firms, because
the sums advanced were to be left in as tweets. He sup-
ported the proviso limiting the time to one year. •
Mr. HA NICE/. said he entirely agreed with the hon.
member for. Wallingford that the bill as originally pro-
posed would be most useful, but if fettered by any condi-
tions putting loans, on a different footing from partner-
it.wns perfectly useless.
Mr. MIeLINS said that-the house had-now thrown upon
the lender of money the most penal consequences of being
a partner, namely, a total forfeiture of his capital, and if
that clause were to be carried, he hoped the house would
see that it was useless-to proceed further with the bill.
Lord PALMERSTON said that the amendment making
the lender a partner must entirely defeat the principle of
the bill, and upon the result of that amendment must de-
pend the fate of the bill.
Tile committee divided. The numbers were—
For the amendment lO5
125
20
ClauAseg3ainni•sa,'"js°ittili.iteY'n agreed to:
Clauses 4 and 5 wereagreed to.

. The followiug clauses were added In cases where
any lender, agent, or servatit, or any annuitant, has con-
tracted (vith trader to receive a .portion of the profits
made by such trader in his business, and as• part of such'
contract has agrootr that the amount of profits made by
such trader, alai any other matterarising out of his such
contract, is in case of disputo.to be settled by arbitration;
such prevision as to the settlement of-the di pute by arhi-.
tratioralhall be imperative.. upon the, parties to the con-
tract ; and no court of law or of equity shall, as between
the parties to such contract, or any persons claiming
through them, take any account.of such profits or cogni-
sance of any matter within the scope. of-such arbitration.
7. In cases where the parties themselves have made provi-
sion as to tfie manner in which the Arbitration is tabs con-
ducted, the arbitration shall he conducted accordingly; but
in cases where no such provision has been made, arbitra-
tions shalt bedOnducted in manner directed by the Rail-
way Clauses Consolidation -Act, 1545 ; and all- the Provi-
sinus of such last-mentioned act, with respect to the settle.l
went of disputes. by arbitration,: except the sectione num-
bered '129 and 131 respectively, shall be incorporated with
this act. g. In cases. where the arbitrators appointed under
this ,act refuse, or for seven days after the request of either,
paity.to the arbitration neglect to appoint an umpire, any