UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 ^w
 
 M A N UA L 
 
 MEECANTILE LAW 
 
 <§wat ^rititin anb fttlanb: 
 
 COMPRISING 
 
 INTERNATIONAL COMMERCE. JOINT-STOCK AND BANKING 
 RESTRAINTS ON TRADE : COMPANIES. 
 
 PATENTS. THE LAW OF PARTNERSHIPS. 
 
 COPYRIGHT. BILLS OF EXCHANGE. 
 
 WITH 
 
 REMARKS ON PARTNERSHIP WITH LIMITED LIABILITY. 
 
 BY LEONE LEVI, 
 
 LECTURER ON COMMERCIAL LAW AT KING'S COLLEGE, LONDON; 
 
 AUTHOR OF "COMMERCIAL LAW OF THE WORLD," ETC. ETC. 
 
 HON. MEMBER OF THE LIVERPOOL AND LEEDS CHAMBERS OF COMMERCE ; FELLOW OF THE 
 
 STATISTICAL SOCIETY OF LONDON; ASSOCIATE OF THE INSTITUTE OF ACTUARIES; 
 
 MEMBER OF THE LAW AMENDMENT SOCIETY; AND OF THE SOCIETY 
 
 OF ARTS, MANUFACTURES, AND COMMERCE, ETC. 
 
 Les lois du commerce perfectionnent les mceurs, par la m6me raisori que ces merries lois 
 perdent les mceurs." — Esprit des Loi.v. 
 
 LONDON: 
 
 SMITH, ELDER & CO. CORNHILL. 
 
 1854.
 
 T 
 
 LONDON : 
 •R. CIAY, PRINTER, BREAD STREET HILL.
 
 r 
 
 U. 
 
 TO THE 
 
 RIGHT HONOURABLE SIR JAMES PARKE, 
 
 KNIGHT, ETC. ETC. 
 
 ONE OF THE BARONS OF HER MAJESTTS COURT 
 OF EXCHEQUER. 
 
 My Lord, 
 
 The privilege of dedicating this Work 
 to your Lordship is an honour which I value 
 beyond measure ; but when I consider the high 
 position which your Lordship so eminently fills, 
 I feel some diffidence in submitting to your 
 matured judgment these my humble labours. 
 
 It is superfluous for me to bear testimony to 
 the learning and rectitude of those who preside 
 over our Courts of Justice. Whatever defect 
 may exist in the Laws of England, Ireland, or 
 Scotland, that defect is far outweighed by the 
 spirit of integrity with which justice is admi- 
 nistered throughout the United Kingdom — 
 
 a 2
 
 IV DEDICATION. 
 
 the purity and independence of our Tribunals 
 have found an echo in every clime, and their 
 justice and impartiality have become proverbial 
 throughout the world. 
 
 That your Lordship may long be spared 
 to enlighten by your intelligence, and benefit 
 by your experience, the whole system of Juris- 
 prudence, and that British Tribunals may ever 
 preserve their high character for enunciating 
 the dictates of right reason, and establishing 
 the precepts of sound morality, is the fervent 
 prayer of, 
 
 My Lord, 
 
 Your Lordship's 
 Most obedient and humble Servant, 
 
 LEONE LEVI. 
 
 ]2, The College, 
 
 Doctors' Commons, London, 
 November 1854.
 
 PEEFACE, 
 
 It has been suggested to me to prepare a Manual 
 of Mercantile Law, less compendious than my former 
 work. In undertaking such a labour, and with a view 
 to simplify a subject of so much importance, my aim 
 has been to be explicit and practical. I have endea- 
 voured to avoid technicalities, and, with as much 
 brevity as was compatible with clearness, I have ex- 
 pounded the substance of Mercantile Law, relating 
 to the subjects passed under review, as it is now in 
 force in England, Ireland, and Scotland. 
 
 The discrepancies existing between the Mercantile 
 Laws of different parts of the United Kingdom will, 
 it is hoped, be speedily remedied, a Royal Commission 
 having been issued for that purpose. I trust that the
 
 vi PREFACE. 
 
 labours of the eminent Commissioners will also be 
 directed to the British Colonies ; the Mercantile Laws 
 of which are in an anomalous and ambiguous state. 
 
 I have deemed it essential to illustrate the subject 
 by allusions to the laws of foreign countries; inas- 
 much as the commercial relations of this great empire 
 extend over every portion of the globe, and thus 
 British capital is embarked in undertakings of a most 
 varied character in all countries. In truth, we appear to 
 be daily approaching that state of community amongst 
 nations, by which God has designed to unite all the 
 families of the earth. 
 
 British and American jurisprudence still stand in 
 want of Codification. The great principles of our law 
 are yet buried in thousands of volumes, and much dross 
 must be removed in order to extract the smallest par- 
 ticle of ore. This is to be lamented. It may be ad- 
 mitted that the Codification of the law can never limit 
 the multifarious exigencies which constantly give rise 
 to new principles, or to modifications and expan- 
 sions of those already settled. But there are certain 
 principles which, proceeding from natural law and being 
 founded on pure ethics, are fixed and immutable.
 
 PREFACE. Vll 
 
 These are daily applied in the solution of intricate 
 mercantile questions in our Courts of Justice, and by 
 none with more acuteness and cogency than by the 
 eminent Judge to whom this Work is dedicated. Codi- 
 fication would render these great principles familiar 
 to commercial men, whilst a more extended knowledge 
 of them would tend to introduce greater certainty in 
 mercantile transactions. 
 
 Treatises and Manuals may, to a certain extent, supply 
 the want of a Code. What better summary of the Law 
 of Shipping can we possess, than the learned work of 
 Lord Tenterden? or what exposition of the Law of 
 Contracts can be more complete, than the treatises of 
 Chitty and Addison ? The learned and comprehensive 
 work, known as Smith on Mercantile Law, is in itself 
 a valuable substitute for a Code ; and, without naming 
 many other writers on the different branches of Com- 
 mercial Law, it may be truly stated that both English 
 and American jurists have done all that labour and 
 ingenuity could effect, towards reducing into a system 
 the vast amount of juridical learning. 
 
 The simplification of the Law will also contribute to 
 its becoming more attractive as a branch of liberal
 
 Vlii PREFACE. 
 
 education. Time was, when Law formed part of the 
 general education of a Gentleman ; and it is rational that 
 Commercial Law should form one of the most essential 
 elements of the education of the Merchant. It is a 
 matter of gratification that the Council of King's 
 College, one of the principal Educational Institutions 
 of the metropolis of the commercial world, have added 
 this to the many branches of science there taught. 
 It may be hoped that such an auspicious commencement 
 may be instrumental in establishing Professorships of 
 Commerce and Commercial Law in all our Seats of 
 Learning. 
 
 Although this Work is intended to be a Manual, and 
 a Class-book, of the Law as it now stands, suggestions 
 for the amendment of some portions of our Mercantile 
 Jurisprudence are submitted, in the form of notes. 
 It is not without great deference that any individual 
 should venture to suggest changes in any of our time- 
 honoured Institutions; yet it is only by constant pruning, 
 and by the introduction of fertilizing elements, that we 
 may be enabled to maintain the growth of our legisla- 
 tion in a healthy and vigorous state. From the many 
 idioms with which the English language abounds, and 
 from the many forensic technicalities to be met with in
 
 PREFACE. IX 
 
 legal research, it would have been a task of some diffi- 
 culty to have expressed myself in terms sufficiently 
 accurate, had I not freely availed myself of text-books, 
 and of the lucid language of our Judges. Much I owe 
 to those master-pieces of legal composition, the Works 
 of Mr. Justice Story ; they are, indeed, enriched with 
 jewels of classical learning, but their inherent worth 
 becomes even more brilliant from the elegance of style 
 and purity of diction in which they are inlaid. 
 
 The present volume contains the Laws which affect 
 International Commerce, Individuals who exercise the 
 Mercantile Profession, Partnerships and Companies 
 formed for Commercial or Banking operations, and the 
 most useful of all Mercantile Instruments, Bills of Ex- 
 change and Promissory Notes. A future volume will be 
 devoted to the relation of Agency, Shipping, Insurance, 
 and other branches of Commercial Law. 
 
 Acknowledgments of gratitude are due from me to 
 many eminent individuals who have kindly afforded 
 me their valued countenance, amongst whom I would 
 especially name that distinguished nobleman, the Earl of 
 Ilarrowby. The Swiney Prize, for the best published 
 Treatise on Jurisprudence, awarded to me after a
 
 X PREFACE. 
 
 competition opened to Authors of every Nation ; toge- 
 ther with the honourable marks of distinction bestowed 
 on me by the Sovereigns of Austria and Prussia, have 
 operated as powerful incentives towards the prosecution 
 of my labours. These latter tokens of approbation 
 encourage me to renewed energy in the promotion of 
 whatever may tend to remove the barriers which still 
 obstruct the expansion of trade, and to cement the 
 universal relations of amity and commerce. 
 
 LEONE LEVI.
 
 TABLE OE CONTENTS. 
 
 Dedication - - 
 
 Preface - - 
 
 Table of Contents - 
 
 List of Authorities - - - - 
 
 Table of Cases - - 
 
 Abbreviations of Authorities and Reports - 
 
 PAGE 
 
 iii 
 
 v 
 
 xi 
 
 xv i 
 
 xvii 
 
 xxiii 
 
 BOOK I. 
 
 ON COMMERCE. 
 
 CHAPTER I. 
 
 progress of commerce 
 
 CHAPTER II. 
 
 international commercial law 
 
 IS 
 
 CHAPTER III. 
 
 NATURE, SPIRIT, AND HISTORY OF COMMERCIAL LAW 
 
 23
 
 Xll CONTENTS. 
 
 BOOK II. 
 
 RESTRAINTS OF TRADE. 
 
 CHAPTER I. 
 
 OF MERCHANTS. 
 
 PAGE 
 
 Sect. 1. Definition of Merchant - - - 34 
 
 2. Obligations not to Trade - - - - 35 
 
 3. Rank and Profession incompatible with Trading 36 
 
 4. National Character of the Merchant - - 37 
 
 5. Forms and Effects of Foreign Contracts - 39 
 
 6. Aliens - -42 
 
 7. Minors ----- 44 
 
 8. Married Females — Idiots — Drunkards - - 47 
 
 CHAPTER II. 
 
 RESTRAINTS ON TRADE BY REGULATIONS AND PRIVILEGES - 49 
 
 CHAPTER III. 
 
 LAW OF PATENT. 
 
 Sect. 1. Nature and Policy of Patent Law - -52 
 
 2. Subject-matter of a Patent - 54 
 
 3. Priority of Invention - - - -56 
 
 4. Proceeding to obtain a Patent - - - 57 
 
 5. Title and Specification of a Patent - - 59 
 
 6. Notice of Alteration in a Patent - 60 
 
 7. Property in Patents and Assignment - 61 
 
 8. Remedies against Infringement - 62
 
 CONTENTS. xiii 
 CHAPTER IV. 
 
 LAW OF COPYEIGHT. 
 
 PAGE 
 
 Sect. 1. Nature and History of Copyright - - '!) 
 
 2. Delivery of Copies to Public Libraries - - G7 
 
 3. Registry of Stationers' Hall, and Assignment - 68 
 
 4. Foreign Copyright - - - - 70 
 
 5. Copyright in Works of Art and Manufacture - 71 
 G. Infringement of Copyright - - - 73 
 7. International Copyright 76 
 
 CHAPTER V. 
 
 RESTRAINTS ON TRADE IN TIME OF WAR — INTERNATIONAL LAW. 
 
 Sect. 1. Nature of International Law - - - 81 
 
 2. Rights of Belligerents ... 83 
 
 3. Licences - - - - - 87 
 
 4. Right of Search ... 88 
 
 5. Right of Capture - - - - - 90 
 
 6. Right of Blockade - - - - 96 
 
 7. Rights and Duties of Neutrals - - 98 
 
 BOOK III. 
 
 ON MERCANTILE CONTRACTS. 
 
 CHAPTER I. 
 
 OF CONTRACTS. 
 
 Sect. 1. Nature of Contract - - - - 101 
 
 2. The Consent, - - - - - 101 
 
 3. Capacity of the Parties, Subject-matter, and Con- 
 
 sideration - - - - 104 
 
 4. Form of the Contract ... - 105 
 
 5. Limitation of Action - 107
 
 XIV ((INTENTS. 
 
 CHAPTER II. 
 
 OF PARTNERSHIP. 
 
 PAflK 
 
 Sect. 1. Constitution of Partnership - - - 109 
 
 2. Who may be a Partner - - - 116 
 
 3. Kinds of Partnership - - - - 118 
 
 4. Formation of the Contract - - - 122 
 
 5. Common Firm and Status of the Partnership - 128 
 
 6. Partnership Property - - - - 130 
 
 7. Interest of the Partners in the Property and the 
 
 Profits - - - - - - 131 
 
 8. Duties of Partners - - - - 133 
 
 9. Extent of Liability of Partners - - 1 34 
 
 10. Rights and Authorities of Partners - - 139 
 
 11. Remedies between Partners - - - 144 
 
 12. Remedies against Third Persons - - 150 
 
 13. Liability of Retiring Partners - - - 153 
 
 14. Dissolution of Partnership - - - 155 
 
 15. Effects of Dissolution as among the Pai*tners - 163 
 
 16. Effects of Dissolution with respect to Creditors 165 
 
 CHAPTER III. 
 
 OF CHARTERED AND TRADING COMPANIES. 
 
 Sect. 1. Nature and Origin of Joint-Stock Companies - 168 
 
 2. Companies by Letters Patent or Charter - 169 
 
 3. Progress of Joint-Stock Companies - - 172 
 
 4. Joint-Stock Companies Act - - - 176 
 
 (a.) Registration of Joint-Stock Companies - 176 
 (b.) Provisional Registration - - - 177 
 (c.) Liability of Promoters of Companies Pro- 
 visionally Registered - - - 178 
 (d.) Complete Registration - - - 181 
 (e.) Accounts - - - - - 182 
 (f.) Rights of Shareholders - - - 183 
 (g.) Contracts - - - - - 184 
 (h.) Liability of Shareholders - - 185
 
 CONTENTS. XV 
 
 PAOR 
 
 Sect. 5. Companies for Public Works - - - 186 
 
 6. Mining Companies, and Companies npon the Cost- 
 
 Book System .... 189 
 
 7. Insurance Companies - - - - 193 
 
 8. Winding up of Joint-Stock Companies - - 195 
 
 CHAPTER IV. 
 
 OF BANKS AND BANKING COMPANIES. 
 
 Sect. 1. History of Banking - - - - 199 
 
 2. The Bank of England - - - - 200 
 
 3. The Banks of Scotland, Ireland, and France - 205 
 
 4. Banking Companies ... - 206 
 
 5. Joint-Stock Banking Companies - - 209 
 
 6. Relations of Bankers and their Customers - - 212 
 
 REMARKS ON PARTNERSHIP WITH LIMITED LIABILITY - 215 
 
 CHAPTER V. 
 
 ON BILLS OF EXCHANGE. 
 
 Sect. 1. Nature and Form of Bills and Notes - - 232 
 
 2. Stamp Duties on Bills and Notes - - 238 
 
 3. Parties to a Bill or Note - - - - 242 
 
 4. Endorsement - 243 
 
 5. Presentment for Acceptance - - - 246 
 
 6. Acceptance - 247 
 
 7. Presentation for Payment - - - - 249 
 
 8. Protest - - 253 
 
 9. Notice of Dishonour - - 254 
 
 10. Payment ... - - 256 
 
 11. Bank Cheques - - - 259 
 
 Postscript - - - - - - 263 
 
 Index ------- 267
 
 LIST OF AUTHORITIES 
 REFERRED TO IN THIS VOLUME. 
 
 Acts of Congress of the United 
 States of America. 
 
 Addison on Contracts. 
 
 Bacon's Observations on a Libel. 
 
 Bailey on Bills of Exchange. 
 
 Bell's Principles of the Law of 
 Scotland. 
 
 Commentaries on ditto. 
 
 Bentham's Principles of Legisla- 
 tion. 
 
 Bright, on Husband and Wife. 
 
 Bunyon, on Life Insurance. 
 
 Burke's Supplement to Godson on 
 Copyright. 
 
 Byles on Bills of Exchange. 
 
 Child's Letters to R. B. Crowder. 
 
 Chitty's Practical Statutes. 
 
 Code, Civil, French. 
 
 Austrian. 
 
 Dutch. 
 
 Code of Commerce, French. 
 Spanish 
 
 — Portuguese. 
 
 — Austrian. 
 
 Consolato del Mare. 
 
 Corpus Juris Civilis. 
 
 Dalloz, Jurisprudence. 
 
 Domat, Civil Lav/. 
 
 Duer, on Insurance. 
 
 Fraser, on Personal and Domestic 
 Relations. 
 
 Gentilis Albericus, De Jure Belli 
 Comm. 
 
 Gilbart's Practical Treatise on 
 Banking. 
 
 Grotius, De Jure Belli et Pacis. 
 
 Mare Liberum. 
 
 Hallam's Literature of Europe. 
 
 History of the Middle 
 
 Ages. 
 
 Journal of the Society of Arts. 
 
 of the Statistical Society. 
 
 Kent's Commentaries on Ameri- 
 can Law. 
 
 Mackintosh, Sir James, Dis- 
 course on the Law of Nature 
 and Nations. 
 
 Masse, Droit Commercial. 
 
 Marten's Precis du Droit des Gens. 
 
 M'Culloch's Commercial Diction- 
 ary. 
 
 Molesworth's, Sir William, Speech. 
 
 Norman, on Patent Law. 
 
 Pardessus, Collection des Loix Ma- 
 ritimes. 
 
 Phillimore, Dr. R., on Domicile. 
 
 ■ Commentaries 
 
 on International Law. 
 
 Pothier, (Euvres de. 
 
 Puffendorfius, De Jure Naturre et 
 Gentium. 
 
 Queries of the Mercantile Law 
 Commissioners. 
 
 Reddie on Maritime Law. 
 
 on International Law. 
 
 Report, First, of the Royal Com- 
 mission appointed to inquire 
 and ascertain how far the Mer- 
 cantile Law of the United King- 
 dom of Great Britain and Ire- 
 land may be assimilated. 
 
 Report of the Juries of the Great 
 Exhibition, 1851. 
 
 of the Committee of the 
 
 House of Lords on Patent Law, 
 1851. 
 
 Report of the Committee of the 
 House of Commons on the Law 
 of Partnership, 1851. 
 
 Russian Swod. 
 
 Shaw's Digest of the Law of Scot- 
 land. 
 
 Smith's Mercantile Law. 
 
 Spence's Equity Jurisprudence. 
 
 Stair's Institutes of the Law of 
 Scotland. 
 
 Starkie, on Evidence. 
 
 Story, on Partnership. 
 
 on Equity Jurisprudence. 
 
 on Conflict of Law. 
 
 's Miscellaneous Writings. 
 
 Taylor, on Joint-Stock Companies. 
 
 Vattel, Droit des Gens. 
 
 Wheaton's International Law. 
 
 Williams on Personal Property. 
 
 on Real Property.
 
 TABLE OE CASES 
 
 FROM THE 
 
 ENGLISH, SCOTCH, IRISH, AMERICAN, AND FRENCH REPORTS. 
 
 Abel v. Sutton, 154, 163. 
 Adam v. Lindsell, 102. 
 Adams v. Bingley, 154. 
 Adelaide, the, 97. 
 Alexander v. Barker, 151. 
 
 v. Thomas, 235. 
 
 Allen v. Rawson, 55. 
 Alves v. Hodgson, 40. 
 Anderson v. Tomkins, 131. 
 
 v. Weston, 235. 
 
 Ann Green, the, 85. 
 Appleton v. Binks, 142. 
 Archer v. Bank of England, 244. 
 Arden v. Sharpe, 140. 
 
 Aspinal v. L. & K W. R. Co., 161. 
 Ault v. Goodrich, 153. 
 
 B. 
 
 Bagster p. Earl of Portsmouth, 48. 
 
 Bailey v. Porter, 255. 
 
 Baker v. Charlton, 117, 120. 
 
 Baring v. Dix, 160. 
 
 Barker v. Hudson, 86. 
 
 Barough v. White, 259. 
 
 Barton v. Williams, 139. 
 
 Barry v. Nesham, 111, 115. 
 
 Battley v. Bailey, 126. 
 
 Beard v. Webb, 117. 
 
 v. Egerton, 56. 
 
 Beckford v. Wade, 150. 
 Becquet v. M'Carthy, 41. 
 Bedford r. Dakin, 154. 
 Bellamy v. Majoribanks, 261. 
 
 Belton v. Hodges, 44. 
 Bennett v. Goude, 152. 
 Bensley v. Bignold, 110. 
 Berry's Patent, in re, 59. 
 Betsey, the, 97, 98. 
 Bignold v. Waterhouse, 142 
 Bishop v. the Countess of Jersey, 
 
 141. 
 Blackenhagen v. Blundell, 417. 
 Blackett v. Roy. Exch. Assur. 
 
 Comp., 25. 
 Blackney r. Dufaur, 149. 
 Blake v. Nutter, 131. 
 Blessard v. Hurst, 247. 
 Blissett v. Daniel, 128. 
 Block v. Bell, 234. 
 Blofeld v. Payne, 62. 
 Bloxam v. Bell, 155. 
 Bloxham v. Wilhams, 50. 
 Boehm v. Sterling, 245. 
 Bcedes Lust, the, 84. 
 Bolton v. Pullen, 143. 
 
 v. King, 234. 
 
 Bond v. Hanbury, 139. 
 
 v. Pittard, 112, 
 
 v. Gibson, 139. 
 
 Bonfield v. Smith, 143. 
 Boosey v. Jefferys, 71. 
 
 v. Purday, 70. 
 
 Boidton v. Bull, 54, 55. 
 Bourne v. Frith, 126. 
 Boussmaker, ex parte, 85. 
 Boviil v. Hammond, 148. 
 
 v. Moore, 55. 
 
 Bowman v. Nicol, 242. 
 Branch r. E^-ington, 45. 
 Brooke v. Enderby, 153, 155. 
 b
 
 XV111 
 
 TABLE OF CASKS. 
 
 Brooks v. Mitcham, 259. 
 Brown v. Tapscott, 147. 
 
 v. Davies, 245. 
 
 v. Harreden, 250. 
 
 i,i re, 259. 
 
 Bryson v. Whitehead, 36. 
 Buckley v. Barber, 131. 
 Buller v. Crisp, 21). 
 Burchfield v. Moore, 237. 
 Burlton, ex parte, 153. 
 Burton v. Wookey, 134. 
 
 C. 
 
 Carlen v. Drury, 135. 
 Carlos r. Fancourt, 234. 
 Carr v. Smith, 147. 
 Carter v. Mureot, 21. 
 Catherine Maria, the, 88. 
 Chadwick v. Allen, 234. 
 Chapman v. Keane, 255. 
 Charlton v. Poulter, 149. 
 Charnley v. Winstanley, 48. 
 Chapeler v. Durant, 86. 
 Cheap v. Crammond, 115, 142.' 
 Chester & Birkenhead, in re, 197- 
 Chrichton v. Gibson, 243. 
 Chuck, ex parte, 116. 
 Clayton's Case, 155. 
 Clegg v. Levy, 40. 
 Cleworth v. Pickford, 142. 
 Coffey v. Ryan, 147. 
 Cogg v. Bernard, 29. 
 Colehard v. Cooke, 235. 
 Colley v. Smith, 180. 
 Collins v. Young, 162. 
 Collins v. Storry, 160. 
 
 Columbia, the, 96. 
 
 Const v. Harris, 127. 
 
 Cook v. Collingridge, 128. 
 
 Coope v. Eyre, 110, 111. 
 
 Cooper v. Webb, 180. 
 
 Cork & Bandon Rail. Comp. v. 
 Cazenove, 46. 
 
 Cosio v. De Bernales, 117. 
 
 Cosmopolite, the, 87. 
 
 Cothay v. Fennell, 151. 
 
 Cos v. Troy, 249. 
 
 Crawshay v. Collins, 131, 134, 156. 
 
 , v. Maule, 111, 154, 158. 
 
 Crossley v. Beverley, 56. 
 
 Cruikshank v. M'Vicar, 126, 148. 
 
 Crutnell v. Lye, 131. 
 
 Cumming v. Forrester, 151. 
 
 D. 
 
 D'Almaine v. Boosey, 75, 76. 
 Dale v. Hamilton, 110. 
 Dalhousic /•. M'Uouall, 37. 
 Darbishire v. Parker, 255. 
 Daukbarheit, the, 87. 
 Davenport v. Rackstraw, 151. 
 Dawkes v. Earl de Loraine, 235. 
 De Bergareche v. Pillins, 252. 
 De la Courtier v. Bellamy, 235. 
 De la Vega v. Vianna, 41. 
 Dee, ex parte, 196. 
 Diana, the, 38. 
 Dickinson v. Valpy, 126, 140. 
 Dingwall v. Dunster, 249. 
 Dolman v. Orchard, 153. 
 Downs v. Collins, 111. 
 Drury v. Macaulay, 235. 
 Dry v. Boswell, 112, 113. 
 Dufaur v. Oxenden, 248. 
 Duke v. Drive, 180. 
 
 v. Forbes, 180. 
 
 Duncan v. Lowndes, 141. 
 Dutton v. Morrison, 160. 
 
 E. 
 
 Edelsten v. Vick, 62. 
 
 Edie v. East India Comp., 24, 234. 
 
 Elgie v. Webster, 116. 
 
 Eliza Ann, the, 84. 
 
 Ellis v. Ellis, 236. 
 
 Emerson v. Davies, 116. 
 
 Emily v. Lye, 143. 
 
 England v. Curling, 124. 
 
 Esdaile v. Sowerby, 253, 250. 
 
 Europa, the, 88. 
 
 Evans v. Bennett, 113. 
 
 v. Drummond, 154. 
 
 Fairclough V. Sterling, 245. 
 Faith p. Richmond, 140, 143. 
 Farrar v. Beswick, 132. 
 Fayle v. Bird, 253. 
 Featherstonhaugh v. Fenwick, 128, 
 131, 134, 158. 
 
 — v. Hunt, 154. 
 
 Felicity, the, 96.
 
 TABLE OF CASES. 
 
 
 Fenn v. Harrisson, 245. 
 Fentum v. Pocock, 249. 
 Ferguson v. Fvffe, 41. 
 
 v. Belsh, 2.34. 
 
 Fisher, ex ports, 196. 
 
 v. Leslie, 236. 
 
 Foster p. Jolly, 238. 
 Fox v. Haubury, 130, 152, 159. 
 Franklin r. Thomas, J 52. 
 Frederick, the, 39. 
 Fromont v. Coupland, 147. 
 
 G. 
 
 Gabriell ». Evill, 126. 
 Gale v. Leckie, 127. 
 
 v. Walsh, 254. 
 
 Galway v. Mathew, 143. 
 
 Garnock (Viscount) v. Duke of 
 
 Queensberry, 234. 
 Garrett v. Handley, 152. 
 Gavelle le Sieur, 117. 
 Geary v. Physic, 284. 
 Geddes v. Wallace, 124. 
 Gellar v. Hutchinson, 122. 
 General Steam Navigation Comp. 
 
 v. Guillou, 41. 
 Gerish v. Lockhead, 122. 
 Gibson v. Lupton, 110. 
 Giles v. Bourne, 235. 
 GiU v. Cubitt, 244. 
 Gilpin r. Enderby, 166. 
 Glassington v. Thwaites, 134. 
 Godfrey v. Turnbull, 153. 
 Goode v. Harrison, 44—46, 117. 
 Goodman v. Whitcomb, 149, 159. 
 
 v. Greenwood, 147. 
 
 v. Harvey, 244. 
 
 Gouthwaite v. Dickworth, 144. 
 Grace v. Smith, 115, 116, 155. 
 Grant v. Hunt, 249. 
 
 Gray v. Cookson, '45. 
 
 Green v. Davies, 234. 
 
 Griswold v. Waddington, 117, 160. 
 
 Grove v. Dubois, 151. 
 
 Guidon v. Robson, 120, 121, 151. 
 
 Gute Hoffnung, the, 87. 
 
 II 
 
 Hale v. Hale, 154, 158, 159. 
 Halket v. ]\Ierchant Traders Ins. 
 
 Comp. 138. 
 Hallett v. Dowdale, 135, 138. 
 
 Hall, ex parte, re N. of Eng. J. S. 
 
 Banking Comp., 197. 
 Hamper, ex parte, 1 1 •!, 117. I .' I. 
 Hambridge v. De la Crouee, 142. 
 Harker r. Anderson, 259. 
 Harman v. Johnson, 140. 
 Harmony, the, 38. 
 Harris v. Wall, 46. 
 
 ex parte, 124. 
 
 v. Farwell, J 5 1, 161. 
 
 Harrison v. Jackson, 142. 
 
 v. Eose, 255. 
 
 Hart r. Alexander, \~> !. 
 v. Prendergast, 108. 
 
 v. Stevens, 246. 
 
 Hartley v. Wilkinson, 2:55. 
 Hassell r. M. T. Ship. L. & Ins. 
 
 Assoc, 138. 
 Hatch r. Searles, 237. 
 Hawken v. Bourne, 139. 
 Hay v. Mair, 154. 
 Heath r. Sansom, 153, 158, 159. 
 Hedley v. Bainbridge, 140. 
 Henrietta, the, 88. 
 Hesketh v. Blanchard, 120. 
 • Heward v. Wheatley, 165. 
 Heylin v. Adamson, 234. 
 Hill v. Koleister, 121. 
 Hitchcock v. Coker, 35. 
 Hoare v. Dawes, 110, 111. 
 
 v. Cazenove, 249. 
 
 Hoffnung, the, 96. 
 Holland v. King, 161. 
 
 v. Clark, 108. 
 
 Holmes v. Blogg, 117. 
 
 v. Higgins, 148, 180. 
 
 Hooper r. Lusby, 139. 
 Hoop, the, 86. 
 
 Hope v. Gust, 141. 
 Horsley r. Rush, 142. 
 Howe v. Bowes, 253. 
 Hunt v. Massey, 46. 
 Hurtige Hane, the, 98. 
 
 I. 
 
 Indian Chief, the, 37, 39. 
 Israel v. Israel, 236. 
 
 Jacaud v. French, 151. 
 Jackson v. Jackson, 131.
 
 XX 
 
 TABLE OF CASES. 
 
 Jackson v. Sedgwick, 124. 
 
 v. Stopkerd, 147 
 
 James v. Catkerwood, 40. 
 Jeffreys v. Bodsey, 71. 
 Jerbruida, tke, 84. 
 Jokanna Tholen, tke, 98. 
 Jones v. Askburnkam, 105. 
 v. Yates, 151. 
 
 v. Noy, 117, 160. 
 
 r, O'Brien, 256. 
 
 v . Ryde, 245. 
 
 Jonge Jokannes, tke, 88. 
 
 Klassina, tke, 38. 
 
 Margareta, tke, 99. 
 
 Tobias, tke, 99. 
 
 K. 
 
 Katck v. Sckenck, 112. 
 Kell r. HoUister, 124. 
 Kenrick & Maria, tke, 96. 
 Kilgour v. Finlayson, 163. 
 Kirk v. Blurton, 140. 
 Kirwan v. Kirwan, 144, 154. 
 Kuill r. Williams, 242. 
 Kuper's Case, 197. 
 
 Lady Jane, tke, 86. 
 
 Lancaster Canal Co. ex 'parte, 186. 
 
 Langdale, ex parte, 113, 120. 
 
 Lavie v. Pnillips, 48. 
 
 Lawson v. Weston, 244. 
 
 Laycock v. Joknson, 233. 
 
 Leaf, ex parte, 153. 
 
 Lean v. Sckultz, 117. 
 
 Lee v. Stone, 106. 
 
 Leeds & Tkirsk Rail. Co. v. Fearn- 
 
 ley, 46. 
 Liddiard, ex parte, 154. 
 Likbarrow r. Mason, 30. 
 Lloyd v. Arckbowle, 151. 
 
 v. Askby, 144. 
 
 v. Freskfield, 143. 
 
 ex parte, 142. 
 
 Loscombe v. Russell, 148, 159. 
 Louis, tke, 21. 
 Louisa Ckarlotte, tke, 88. 
 Lusk r. Elder, 15. 
 
 M. 
 
 Maclae v. Sutkerland, 140. 
 Makoney v. Askem, 247. 
 Mair v. Glennie, 112, 114. 
 Mallan v. May, 35, 106. 
 Marguand v. N. York Man. Co. 
 
 159. 
 Maria, tke, 89. 
 
 Marskall v. Coleman, 148, 149. 
 Martin v. Ckauntry, 234. 
 Martin v. Nicolls, 41. 
 Mason v. Morgan, 245. 
 Master v. Miller, 238. 
 M'Pkerson, 50. 
 Meigk v. Clinton, 126. 
 Mellisk v. Rawdon, 246. 
 Mercurius, tke, 99. 
 Meyer v. Skaipe, 112, 114. 
 Millbank v. Revett, 149. 
 Miller v. Aitken, 45. 
 
 v. Race, 244. 
 
 Milner v. Harewood, 44. 
 Minet v. Gibson, 233, 236. 
 Minter v. Wells, 58. 
 Mitckel v. Reynolds, 35. 
 Mitckell v. Baring, 254. 
 Montague v. Perkins, 236. 
 Moravia v. Levi, 147. 
 Morgan v. Marquis, 160. 
 Morrison v. Moat, 124. 
 Morris v. Barrett, 131. 
 Morton v. Burn, 105. 
 Muilman v. D Eguino, 246 — 254. 
 Mulleck v. Radakisson, 247. 
 Miulett v. Hutckison, 140. 
 Mullins v. Hart, 56. 
 Munroe v. Douglas, 39. 
 Mmkead v. Salter, 112. 
 
 N. 
 
 Natusk r. Irving, 127. 
 Nerot p. Burnand, 156, 160. 
 Neptunus, tke, 96, 97, 98. 
 Newmarsk v. Clay, 122. 
 Newton v. Boodle, 140. 
 Newsome v. Coles, 153. 
 Kickolson v. Goutket, 250. 
 Noble v. Durall, 25. 
 Nockels v. Crosby, 147. 
 N.West. Rail. Co. v. M'Mickael, 46. 
 Nye v. Beale, 110.
 
 TABLE OF CASES. 
 
 XXI 
 
 O. 
 
 Oldaker v. Lavender, 127. 
 Oliphant, 50. 
 Oliver v. Hamilton, 149. 
 Orozenibo, the, 39. 
 Osborne p. Harper, 152. 
 
 I 1 . 
 
 Parkyn v. Fry, 180. 
 
 Parker v. Carruthers, 153. 
 
 Parsons v. Crosby, 151. 
 
 Paterson v. Zechariab, 154. 
 
 Peacock v. Peacock, 1 32, 156. 
 
 Pearce v. Pearce, 160. 
 
 Pease v. Hirst, 152. 
 
 Pears v. Piper, 158. 
 
 Peele, ex parte, 140. 
 
 Perry v. Skinner, 60. 
 
 Peto v. Reynolds, 234. 
 
 Philips v. Astling, 253. 
 
 Pierson v. Dunlop, 248. 
 
 Pillans v. Van-Mierop, 248. 
 
 Pirie v. Smith, 236. 
 
 Pitchford v. Davis, 180. 
 
 Pleylyn v. Adamson, 244. 
 
 Pocock, ex parte, re Direct. Lond. 
 
 & Man. Rail. Co. 192. 
 Portland, the, 38. 
 Pott v. Eyton, 113. 
 Potts v. Bell, 86. 
 Price v. Neal, 249. 
 
 R. 
 
 Raba v. Ryland, 139. 
 Rapid, the, 86. 
 Rapp v. Latham, 139, 142. 
 Rawlinson v. Clarke, 112. 
 
 v. Stone, 246. 
 
 Regende Jacob, the, 99. 
 Reg. v. Inhab. of North wingfi eld, 
 105. 
 
 v. Cutler, 55. 
 
 Reid v. Hollinshead, 114, 139. 
 
 v. Allan, 138. 
 
 Rex r. Dodd, 135. 
 
 v. Mill, 60. 
 
 v. Wheeler, 55. 
 
 Rex v. Box, 236. 
 Richardson v. Gilbert, 66. 
 Roberts v. Peake, 234. 
 Robertson v. French, 106. 
 Robinson v. Wilkinson, 122. 
 Robson v. Drummond, 152. 
 Rogers p. Herron, 254. 
 Rousego v. Conne, 255. 
 Rose v. Himley, 41. 
 Rothschild v. Corney, 259. 
 Rowlandson, ex parte, 112, 113. 
 Rugby re Warw. & Wore. Rail. Co. 
 
 197. 
 Russell v. Smith, 69. 
 
 v. Langstaffe, 253. 
 
 v. Kitchen, 233. 
 
 S. 
 
 Sainsbury v. Parkinson, 243. 
 
 Sanderson v. Brooksbank, 142. 
 
 Sander v. Sander, 160. 
 
 Sandiland v. Marsh, 140 — 142. 
 
 Santa Cruz, the, 85. 
 
 Saunderson v. Piper, 234. 
 
 Saville v. Robertson, 141, 144. 
 
 Sayer v. Bennett, 117, 160. 
 
 Sea & Fire Ass. Soc. ex parte Har- 
 vey, 138, 165. 
 
 Serle v. Norton, 235. 
 
 Shackle v. Baker, 131. 
 
 Sharpe i\ Price, 255. 
 
 Shireff r. Wilks, 140, 144. 
 
 Shuttleworth v. Stevens, 234. 
 
 Sigourney v. Lloyd, 244. 
 
 Sinclair v. Baggaley, 235. 
 
 Skinner r. Stocks, 151. 
 
 Smith v. Barrow, 147. 
 
 v. Craven, 140. 
 
 ;\ Jeffreys, 107. 
 
 v. Wilson, 107. 
 
 v. Watson, 112. 
 
 v. Kendall, 243. 
 
 Solomons v. Bank of England, 244. 
 
 Somerville v. Mackay, 149. 
 
 Spackman, ex parte, in re Agr. Cat. 
 In. Comp. 196. 
 
 St. Antonius, the, 96. 
 
 Stead v. Salt, 142. 
 
 v. Carey, 60. 
 
 Stewart v. Forbes, 132, 133. 
 
 Stocker v. Brocklebank, 112. 
 
 Stone v. Marsh, 142.
 
 xxn 
 
 TABLE OF CASKS. 
 
 Storm v. Sterling, 236. 
 Strange v. Price, 255. 
 Street v. Rugby, 124. 
 Swan-o. Steele, 140. 
 Sykes v. Sykes, 02. 
 
 Tallis v. Tallis, 35, 36. 
 Tatersall v. Grote, 124. 
 Tatlock v. Harris, 236. 
 Taylor v. Croker, 47. 
 
 v. Field, 152. 
 
 r. Dobbins, 399. 
 
 Teagne v. Hubbard, 147. 
 Templeton v. Macfarlane, 55. 
 Thickness v. Bromilow, 139, 140. 
 Thornton v. Illingworth, 152. 
 Tindall v. Brown, 254. 
 Turner v. Hayden, 253. 
 Twee Gebroeders, the, 22. 
 
 U. 
 
 United States Bank v. Binney, 119, 
 137. 
 
 v. Mason, 139. 
 
 Universal Salvage Comp. in re, 197. 
 
 Venning v. Leekie, 147. 
 Vere v. Ashby, 139. 
 Vice v. Fleury, 135. 
 Vigilantia, the, 39. 
 Vookey v. Poole, 244. 
 Vriendschap, the, 88. 
 Vrow, the, 88. 
 
 Judith, the, 96. 
 
 Elizabeth, the, 39. 
 
 W. 
 
 Walstab v. Spottiswoode, 132, 180. 
 Walker v. Witter, 41. 
 Walton v. Dodson, 152. 
 
 v. Potter, 55. 
 
 Wallworth v. Holt, 148. 
 Warwick v. Bruce, 47. 
 Waters v. Taylor, 117, 150, 159. 
 Waugh v. Carver, 115, 120. 
 Wedderburn v. Wedderburn, 107. 
 Wheatley v. Williams, 235. 
 Wheaton v. Peter, 64. 
 Wiffen v. Roberts, 250. 
 Wilhelmsberg, the, 95. 
 Williams, the, 86, 95. 
 Williams v. Jones, 106, 126, 144. 
 
 v . Keats, 153. 
 
 p. Noble, 159. 
 
 v. Germaine, 249. 
 
 o. Van Mierop, 248. 
 
 Wilke v. Wilson, 245 
 Wilkinson v. Frazier, 113. 
 Wilsford v. Wood, 152. 
 Wilson v. Cutting, 147. 
 
 v. Greenwood, 149. 
 
 - v. Whitehead, 141. 
 ex parte, 116. 
 
 W indie v. Andrews, 254. 
 Wintle v. Crowther, 122. 
 Winter ?>. Innes, 154. 
 Wish v. Small, 114. 
 Wolff v. Oxhonlin, 85. 
 Wood v. Braddick, 142, 153. 
 Woode v. Fenwick, 45. 
 Wray v. Milstone, 147. 
 Wrexham v. Huddlestou, 48, 160. 
 Wynne v. Raikes, 248. 
 
 Yates v. Boen, 48. 
 
 v. Sherrington, 246. 
 
 Young v. Axtell, 122, 155.
 
 ABBREVIATIONS OF AUTHORITIES AND OF REPORTS 
 OF CASES. 
 
 A. & E Adolphus & Ellis, Queen's Bench. 
 
 Acton .... Acton, Admiralty. 
 
 B. & Ad. . . . Barnwell & Adolphus, Queen's Bench, New Cases. 
 B. & A. or B. & Aid. Barnwell & Alderson, King's Bench. 
 
 B. & B Broderip & Bingham, Common Pleas. 
 
 B. & C Barnwell & Creswell, King's Bench. 
 
 B. & P Bosanquet & Pullar, Common Pleas. 
 
 Beav Beavan, Chancery. 
 
 Bing Biugham, Common Pleas. 
 
 Bing. N. C. . . Ditto, New Cases, Common Pleas. 
 
 Bligh Bligh, House of Lords. 
 
 Burr Burroughs, Common Pleas. 
 
 C. & Fin. N. S. . Clark & Finlay, New Series. 
 
 C. & J Crompton & Jervis, Exchequer. 
 
 C. & M Crompton & Meeson, Exchequer. 
 
 C. & P Carrington & Paine, Queen's Bench. 
 
 Camp Campbell, Nisi Prius. 
 
 Car. & Kirw. . . Carrington & Kirwan, ditto. 
 
 C. B Common Bench, Manning, Granger & Scott. 
 
 CI. & Finl. . . Clark & Finlay, House of Lords. 
 
 Com. Dig. . . . Comyn's Digest of the Law. 
 
 Cowp Cowper, Queen's Bench. 
 
 Cranch . . . . Cranch, American Reports. 
 
 Deac Deacon, Bankruptcy. 
 
 Dods Dodson, Admiralty. 
 
 Doug Douglas. 
 
 Dow Dow, House of Lards. 
 
 Dow. & Ry. . . Dowling & Ryland, King's Bench. 
 
 East East, King's Bench. 
 
 Edw Edwards, Admiralty. 
 
 Eq. Dig. . . . Common Law and Equity Report. 
 
 Esp Espinasse, Nisi Prius. 
 
 Exch Exchequer Reports, Crompton, Meeson & Roscoe. 
 
 Gallis Gallison, American Reports.
 
 XXIV • ABBREVIATIONS. 
 
 Hagg Haggard, Admiralty. 
 
 Hare Hare, Chancery. 
 
 H. Bl Henry Blackstone, Common Pleas. 
 
 W. Bl William Blackstone, Common Pleas. 
 
 Jao. & Walk. . . Jacob & Walker, Chancery. 
 
 Jer Jeremiah, Bible. 
 
 John John, American Reports. 
 
 L. J. C. P. . . . Law Journal, Common Pleas. 
 
 L. J. C. C. . . . Ditto, Chancery. 
 
 L. J. Q. B. . . . Law Journal, Queen's Bench. 
 
 L. J. N. S. Q.'B. . Law Journal, New Series, Queen's Bench. 
 
 L. T Law Times. 
 
 M. & G Manning & Granger, Common Pleas. 
 
 M. & M Moody & Malkin, Nisi Prius. 
 
 M. & Ry- . . . Moody & Ryan, Nisi Prius. 
 
 M. & S Maule & Selwyn, King's Bench. 
 
 M. & W. ... Meeson & Welsby, Exchequer. 
 
 Mad Maddock, Chancery. 
 
 Marsh Marshall, Common Pleas. 
 
 Mason .... Mason, American Reports. 
 
 Mer Merivale, Chancery. 
 
 Mod Modern Cases in Law and Equity. 
 
 Moore, Rep. P. C. . Moore's Privy Council Reports. 
 
 My. & C. ... Mylne & Craig, Chancery. 
 
 Nehem Nehemiah, Bible. 
 
 Nev. & Perry . . Neville & Perry, Queen's Bench. 
 
 Peters .... Peters, American Reports. 
 
 Q. B Adolphus & Ellis, Queen's Bench, New Cases. 
 
 Rob Robinson, Admiralty. 
 
 Rose Rose, Bankruptcy. 
 
 Russ Russell, Chancery. 
 
 Sim Simons, Chancery. 
 
 Sim. & Stu. . . Simons & Stuart, ditto. 
 
 Smith's Lead. C. . Smith's Leading Cases. 
 
 Stark Starkie, Nisi Prius. 
 
 Story .... Story, American Reports. 
 
 Swanst Swanston, Chancery. 
 
 Taunt Taunton, Common Pleas. 
 
 T. R Durnford & East, Term Reports, King's Bench. 
 
 Tyrwh Tyrwhitt in the Exchequer. 
 
 Ves Vesey, Chancery. 
 
 Ves. & Beav. . . Vesey & Beavan, Chancery. 
 
 ■\y. Bl William Blackstone, Common Pleas. 
 
 Wheat Wheaton, American Roports. 
 
 Y. & C. C. . . . Young & Colher, Chancery.
 
 MANUAL OF MERCANTILE LAW. 
 
 BOOK I. 
 
 ON COMMERCE. 
 
 CHAPTER I. 
 PROGRESS OF COMMERCE. 
 
 I. The Author of the universe has wisely scattered his gifts 
 over the surface of the earth. Differences of soil and climate, 
 multifarious wants, and various degrees of talent, knowledge, 
 and skill, all contribute to render mutual dependence one 
 of the essential elements of society. By means of commerce — 
 that is, the relation of mutual interests by which things 
 or rights may be acquired or exchanged — provisions are 
 equally distributed among countries, the comforts and enjoy- 
 ments of life are richly provided, civilization and progress are 
 promoted and extended, and the powers and capacities of 
 man and countries are called forth, to minister to the great 
 sum of human happiness. Limited at first to the mere ex- 
 change of what was superfluous for what was needful, and 
 between families and families, it gradually extended from 
 family to tribe, from tribe to people, and from country to 
 country ; whilst new wants, successful adventures, curiosity, 
 enterprise, and interest, led commerce to overstep the boun- 
 daries of inland territories, and to encompass the world as the 
 unlimited field of its action. 
 
 2. Assyria, Phenicia, Carthage, and Egypt, rich in their 
 productions and prodigal in their use of luxuries, were the first 
 nations which cultivated commerce. Greece, surrounded and 
 intersected by seas, with spacious bays and commodious
 
 2 PROGRESS OF COMMERCE. 
 
 harbours, possessed abundant scope for mercantile adventure ; 
 nevertheless her commerce was circumscribed to the Mediter- 
 ranean, and seldom extended to the ports of Egypt, or the 
 countries around the Euxine sea. Athens, proud of her mari- 
 time conquests, claimed the sovereignty of the sea ; and 
 Corinth, the metropolis of Grecian art, carried on an exten- 
 sive commerce in the merchandise of Asia and Italy. Led by 
 the valorous arms of Alexander, the Greeks enlarged their 
 power in the East, and Alexandria was founded, destined to 
 become the centre of the future commerce of the world. The 
 Phenicians and Carthaginians, notwithstanding the smallness 
 of their ships and their imperfect knowledge of navigation, 
 sailed along the coasts of Spain to the Pyrenees, where they 
 found gold and silver mines. In search of other metals, 
 they risked their expeditions to the Cassiterides Islands, or 
 Stilly, and thus discovered Great Britain. 1 Carthage, mistress 
 of the African coasts in the Mediterranean, rivalled Marseilles, 
 already eminent in her commercial enterprise, and they were 
 often at issue on the question of their fisheries ; until, strong 
 in the protection of the Romans, the power of Marseilles 
 predominated, and was further increased by the fall of Car- 
 thage and Corinth. 
 
 3. The military spirit of the Romans, the form of their go- 
 vernment, and their passion for glory, were unfavourable to 
 the sober pursuits of trade and commerce. Agriculture, which 
 was the cradle of their captains, was the only art they culti- 
 vated, and they prohibited commerce to their nobles and 
 senators : 2 even Cicero regarded it as being inconsistent with 
 the dignity of the masters of the world. 3 But their increasing- 
 wants, their alliance with maritime countries, and the ex- 
 ample of other nations attaining immense wealth by com- 
 merce, led them ultimately to dismiss their prejudices, and to 
 pursue it with ardour and success. Rome, exhausted by pro- 
 fusion and luxury, depressed by military despotism, and with 
 scattered possessions, bound to her by scarcely any ties of 
 
 i Strabo, lib. iii. p. 265. 2 Code iv. 63. 3. 
 
 3 Cicero, Orat. in Verrem, lib. v. § 18.
 
 PROGRESS OP COMMERCE. 
 
 common interest, gradually crumbled, and her power ceased 
 to control the destinies of the world. In the fourth century 
 of the Christian era Constantine removed the seat of govern- 
 ment from Rome to Constantinople, and thenceforth the Roman 
 empire was divided into the Eastern and Western empire. 
 Taking advantage of this fatal division, the Visigoths com- 
 menced their inroads into the northern provinces, and, to- 
 gether with the Burgundians, Franks, and Vandals, they 
 succeeded in pillaging Rome itself. The invasion of the 
 barbarians brought devastation over Europe, and commerce 
 became all but extinct. It was then that the right of wreck 
 was barbarously assumed ; but, as all strangers were regarded 
 as enemies, they were deemed to deserve neither justice 
 nor pity. 
 
 4. The subversion of the Roman empire — which embraced 
 for nearly four hundred years all Italy, Spain, France, Eng- 
 land, large portions of Austria and Germany, Sicily, Greece, 
 the Mediterranean islands, Turkey, Africa, and Egypt — 
 caused Europe to be parcelled out into many small, indepen- 
 dent, and even rival communities. All communications were 
 intercepted by an atrocious brigandage, and swarms of pirates 
 infested the seas. Whilst Constantinople was still preserved to 
 the Romans, Egypt was torn from the Eastern empire by the 
 Arabs, and much of the Eastern commerce fell into the hands 
 of the barbarians. The Venets, an ancient people possessing 
 the fertile country watered by the " Po," suffered in common 
 with others from the cruelties and ravages committed by the 
 invaders, and were driven to find a refuge in some small 
 muddy islands in the northern extremities of the Adriatic — 
 the humble origin of the illustrious Venice. Italy now rose 
 from the torpor it had fallen into ; Genoa, Florence, and Pisa, 
 became great commercial cities, and rivalled each other in 
 the extension of their trade and in the superiority of their 
 manufactures. They carried on prosperously the commerce of 
 the Morea, the Levant, the Black Sea, and that of India and 
 Arabia, by Alexandria. Flanders was during this period the 
 general warehouse of the north of Germany, England, and 
 
 n2
 
 4 PROGRESS OF COMMERCE. 
 
 France, and the depository for the exports of Italy north- 
 ward. The benefits of commerce were early appreciated 
 in England ; Athelstan bestowed the privilege of a Thane on 
 every merchant who made three voyages over the sea with a 
 vessel and cargo of his own. 
 
 5. The commencement of the eleventh century witnessed 
 the rise of a singular phenomenon in the feeling and attitude 
 of Europe. The frantic zeal of an hermit, and the cogent 
 appeals of Urban II., excited the lately converted Christian 
 nations to a crusade to drive the Turks from Jerusalem. 
 Eeligious enthusiasm pervaded all classes ; property was sacri- 
 ficed, and the feudal lords, to provide for their equipment, 
 disposed of their lands and of their suzerainty over vassal 
 towns. Hundreds of thousands flocked to the Italian cities, 
 for the Holy Land — a rich harvest to Venice, Amalfi, Flo- 
 rence, Pisa, Marseilles, and Naples, whose commerce acquired 
 thereby a new and powerful impulse. 
 
 6. Although the revival of commerce increased the comforts 
 and enjoyments of all classes, and liberalised and expanded 
 their ideas, Europe had not yet emerged from the chaos of 
 barbarism and oppression which found a new element in the 
 prevailing ignorance and superstition. The Jews — the ready 
 victims of capricious rulers, and objects of contempt to the 
 barons and lords — were alternately cajoled, persecuted, courted, 
 and chased from State to State. Their knowledge of mer- 
 chandise, and their skill in acquiring wealth, together with 
 their dealing in money (then proscribed by the theologians) , 
 excited unremitted jealousy; and, being driven to rescue their 
 wealth from the rapacious hands of their persecutors, they 
 invented bills of exchange. The origin of these instruments 
 is variously ascribed. It is probable that several causes con- 
 currently tended towards the invention and full appreciation of 
 such documents. The necessity of remitting money to other 
 places, and the difficulty of carrying back large amounts of coin 
 from public fairs, may have probably led to the use of letters 
 of credit, and, by a natural transition, to bills of exchange. 
 Some writers ascribe the invention to the Florentines ; who,
 
 PROGRESS OF COMMERCE. 5 
 
 driven from their country by the Tuscan factions and the civil 
 wars between the Guelphs and Ghibelines, took refuge in 
 France and Amsterdam, where they used exchanges to with- 
 draw with as little expense as possible the rents of their 
 property. Towards the thirteenth century the mariner's com- 
 pass was in common use among the Mediterranean States. 
 The invention of this invaluable instrument is attributed to 
 Flavio Gioja, a citizen of the commercial city of Amalfi. 
 
 7. Gradually the tide of European commerce flowed north- 
 ward. Already the Baltic ports had acquired some importance. 
 The commerce of Britain was then by no means inconsiderable, 
 and several maritime ordinances were enacted on the borders 
 of the Atlantic Ocean. The Roles d'Ole'ron, ascribed to 
 Richard I. on his return from the crusade, but which really 
 emanated from Eleonore de Guyenne, were afterwards acknow- 
 ledged as part of the common law of England, in the reign of 
 Edward III., 1 in the celebrated Inquest of Queenborough. The 
 Boles d'Oleron possess some remarkable regulations to repress 
 the enormities committed under the barbarous right of wreck. 
 As pilots, to ingratiate themselves with their lords, wilfully 
 ran the ships upon the rocks, the ordinance declared such pilots 
 accursed and excommunicated, and inflicted upon them and 
 their lords condign punishment. 
 
 8. Europe now breathed a more tranquil atmosphere, but 
 commerce greatly suffered from general insecurity. Cities were 
 destroyed by pirates and robbers, and inland carriage was ex- 
 posed to constant rapine. It was to offer armed resistance to 
 this wanton invasion of private right, and to protect their own 
 trading, that Lubeck and Hamburg formed an association for 
 mutual defence, which gave rise to the Hanseatic League — 
 a confederacy powerful and flourishing, and which, previously 
 
 1 Edward III. was a bold commercial legislator. His reign was fruitful in 
 experiments to foster, by artificial means, the industry and commerce of 
 England. This was an era of protective enactments ; restrictive regulations 
 were made against forestalling, regrating and engrossing, and the price of sale of 
 certain articles was fixed by law. Wool was then the staple of England ; cattle - 
 and salmon were the principal articles of export from Scotland; and Ireland 
 possessed considerable manufactures, and exported large quantities of grain.
 
 G PROGRESS OF COMMERCE. 
 
 to the end of the thirteenth century, embraced the most opulent 
 commercial cities of Europe. The league comprised seventy- 
 two separate states, divided into four circles, of which Lubeck, 
 Cologne, Brunswick, and Dantzig, were the presiding cities ; 
 and it possessed four great factories — at London, Bruges, 
 Bergen, and Novogorod. This mercantile association assumed 
 the sovereign rights of a powerful confederation, formed 
 treaties of commerce, fitted out an armed navy, and its mer- 
 chants enjoyed privileges in all countries. When foreigners 
 were prohibited in England from acting as brokers or selling- 
 goods by retail, the Hanse merchants were excepted, and their 
 franchise and ancient privileges were guarded and confirmed. 
 At this period the whole commerce of Europe was carried on 
 by the Hanseatic League in the north, and by the Italian or 
 Mediterranean States in the south. 
 
 9. But a great revolution was soon to give an unparal- 
 leled activity and extension to European commerce. Por- 
 tugal, animated by a spirit of adventure, and influenced by 
 a missionary fervour, lent her might to maritime discoveries 
 and conquests. The possibility of sailing round Africa being 
 established by tradition, observation, and experience, King 
 John ardently sought the accomplishment of this great object. 
 The command of three small vessels for the purpose was given 
 to Bartholomew Diaz, and in 1493 the little squadron suc- 
 ceeded in sailing round the southern promontory of Africa ; 
 the tremendous Cape which Diaz denominated II Capo dos 
 Tormentos, but which the exulting king called by a more 
 appropriate name, II Capo del Bueno Esperanza. The dis- 
 covery of the great Indian continent was left by King John 
 as a bequest to his successor Emmanuel. The expedition was 
 confided, in 1497, to Vasco de Gama, who, bold, intrepid and 
 persevering, was destined to become the instrument of opening 
 that unexhausted vein of wealth, those myriads of people, 
 and that fruitful field for science, to the energy, enterprise, 
 and research of European civilization. About this time the 
 great Italian mariner, Christopher Columbus, conceived the 
 bold idea of ascertaining the existence of a new world ;
 
 PROGRESS OF COMMERCE. i 
 
 and, in despite of ridicule, apathy, and contumely, lie suc- 
 ceeded in discovering in the American hemisphere a land rich 
 and beautiful. These discoveries inflamed the Spaniards and 
 Portuguese with extravagant ideas. Wealth they deemed 
 synonymous with money, scarcely conceiving it to consist of 
 anything useful or agreeable possessing an exchangeable 
 value; for the acquisition of gold they therefore wholly 
 neglected the arts and manufactures. Yet, however mistaken 
 the value they attached to gold, it was a wonderful discovery, 
 which enriched Europe with a metal so eminently fitted to be 
 the instrument of commerce and the measure of value. From 
 the discovery of America in 1492, to the end of 1803, the 
 gold and silver imported into Europe from that country, is 
 estimated to have amounted to 1,122,997,475/., and from 
 1804 to 1848, a period of forty-five years, to 360,579,545/,, 
 or in all not less than 1,483,577,020/. ' This immense amount 
 of wealth was further increased in 1848, by the discovery 
 of gold in California. From the colonization of America 
 and India may be dated the commencement of the modern 
 colonial system, which was subsequently so eagerly extended 
 by European nations. The success of Spain and Portugal 
 stimulated England to attempt the discovery of unknown 
 countries. Henry VII., who had neglected the proposal of 
 Columbus, granted a patent to John Cabot, a citizen of Venice 
 residing at Bristol, and his sons, authorizing them to " seek 
 out and discover all islands, regions, and provinces whatsoever, 
 that may belong to heathen and infidels, and to subdue, occupy, 
 and possess their territories, as his vassals and lieutenants :" 
 they accordingly set out with four ships, and discovered the 
 coast of Labrador. 
 
 10. Italy, which had hitherto monopolised the commerce of 
 India through Egypt, soon found that the Portuguese dis- 
 covery of a sea-passage to that country robbed her of that 
 important trade, and she was compelled to mourn the depar- 
 ture of the times when Venice, and Genoa, and Pisa, covered 
 the Mediterranean with their galle ys. France felt the invi - 
 1 See Journal of the Statistical Society, vol. xiv. p. 44.
 
 8 PROGRESS OF COMMEECE. 
 
 gorating influence of trade ; Amsterdam and Antwerp became 
 great marts of merchandise, and England commenced her 
 career of commercial greatness, in which she carried the palm 
 over all nations. Owing to the new direction of mercantile 
 enterprise, the Hanseatic League, which since the middle of 
 the fifteeth century began to decline, now dwindled into in- 
 significance : its immunities were withdrawn, and city after 
 city disclaimed their allegiance. The free Hanseatic cities, 
 recognised by the treaty of Vienna of 1815 as portions of the 
 Germanic confederation, are to this day a standing monument 
 of their once powerful influence. Their commerce and ship- 
 ping are still not unimportant ; the exports of British produce 
 to the free towns, in 1852, being 6,872,753Z., or nearly nine 
 per cent, of the total exports of the United Kingdom. The 
 decline of the commercial power of the Hanseatic League 
 was succeeded by the increasing influence of the Dutch, 
 who extended their colonial acquisitions, whilst Russia also 
 assumed a highly commercial character. During the six- 
 teenth century the power and commerce of England attained 
 paramount importance. Her maritime discoveries, and the 
 enterprise of her merchants, had secured large markets for 
 her produce and manufactures ; and her colonial possessions 
 extended over North America, the West Indies, and South 
 Africa. 
 
 11. In 1600 the East India Company was formed. This 
 company, whose military exploits have eclipsed its mercantile 
 achievements, has gradually extended the power of England 
 over a vast territory, having an area of 748,000 miles, and 
 a population of 104,000,000 inhabitants. The civil dissen- 
 sions during the reign of the Stuarts gave place to the British 
 Commonwealth, under its Protector Cromwell. The com- 
 mercial prosperity of the Dutch excited his jealousy, and he 
 directed the most vigorous efforts to subdue their naval power. 
 Hence the great Navigation Charter of 1651, by which the 
 trade with Asia, Africa, and America, was restricted to British 
 ships, and to those belonging to their own countries. The 
 European trade was put on the same footing, except for
 
 PROGRESS OF COMMERCE. 
 
 certain enumerated articles, and the trade with the colonies 
 was entirely reserved to Great Britain, as also the coasting 
 trade and the fisheries. This charter was confirmed and 
 enacted by Charles II. in 16G0. 
 
 12. France, during the reign of Louis XIV., possessed the 
 great Colbert, whose enlightened mind laid the most solid 
 foundation for her commercial prosperity. It was under the 
 auspices of this illustrious legislator that the Ordinances de la 
 Marine et de Commerce were constructed, in 1681— the first 
 systematic and complete body of laws relating to commerce 
 by sea and by land published in Europe, and which be- 
 came immediately the basis of the maritime legislation of 
 Europe. Unfortunately the French court was under the in- 
 fluence of religious bigotry, and lent its power to one of the 
 most nefarious and injurious acts of oppression ever com- 
 mitted against its citizens. The large number of members of 
 the Eeformed Church had, since the accession of Henry IV. 
 to the throne of France, enjoyed privileges guaranteed to them 
 by the State. These were withdrawn by Louis XIV. in 1685 ; 
 and with the revocation of the Edict of Nantes more than 
 three hundred thousand persons, working-men and manu- 
 facturers, abandoned their country, to find among strangers 
 hospitality and religious liberty : they spread themselves 
 over the north of Germany, the Netherlands, and England, 
 which countries were enriched by their arts, manufactures, 
 and industry. 
 
 13. The eighteenth century found trade steadily advancing 
 throughout Europe ; and treaties of commerce had been formed 
 between its States. England and Scotland were united into 
 one kingdom — an union which proved most auspicious to 
 the subjects of both States, and whereby they entered into a 
 perfect communion of all the rights, privileges, and advan- 
 tages belonging to the subjects of either kingdom. Shortly 
 after this period, in 1720, extraordinary schemes were pro- 
 pounded in Great Britain and France, for supplying the State 
 with large sums of money, by granting privileges to trading 
 companies. The South Sea Company in this country, and 
 the Mississippi Company in France, introduced a spirit of
 
 10 PROGRESS OF COMMERCE. 
 
 inordinate speculation, which ended in disappointment and 
 grievous disasters. Meanwhile the commerce of Europe was 
 constantly opening up fresh sources of development, by the 
 discovery of new articles of traffic, and by the increase of 
 resources among all classes. 
 
 14. Navigation was also making considerable progress, and 
 attempts were made in England in 1736, by Jonathan Hull, 
 for applying the steam-engine to the purpose of propelling 
 vessels. It was during this same period, in 1747-8, that the 
 first American cotton was shipped to Europe from Charleston. 
 a trade which afterwards, owing to the immense stimulus 
 given to the consumption of cotton manufactures by the in- 
 vention of spinning-engines in 1768, enlarged to an enormous 
 extent. The commerce of Great Britain with the American 
 colonies was in 1765 completely arrested by the obnoxious 
 stamp-duties imposed on them. This mistaken policy caused 
 the declaration of independence by the United States in 1776, 
 and was followed by the American war, which was only brought 
 to a final termination in 1783. Thenceforth the youthful 
 republic — fertile in resources, with a population industrious, 
 energetic and enterprising — attained a position second to none 
 in the rank of civilized States. The population, which in 1790 
 numbered only 3,929,827, had increased in 1850 to 23,246,301. 
 
 15. The American war was the forerunner of the French 
 revolution, which was succeeded by the unparalleled triumphs 
 of Napoleon : these convulsed the whole of Europe, and 
 kindled a war the fierceness and extent of which far exceeded 
 all former ones. During its progress trade was diverted from 
 its usual course, and the belligerents resorted to most extreme 
 means in order to destroy each other's power. Whilst, how- 
 ever, France was the crater of such volcanic commotions, the 
 genius of Napoleon was laying the foundation of a complete 
 reform in the legislation of Europe ; his Codes became a 
 patrimony of invaluable wealth, for which all nations became 
 indebted to the valorous commander who proved to be also 
 a sagacious legislator. The treaty of Vienna having put an 
 end to the wars which for so long a time devastated Europe, 
 a new era was opened in international commerce. The appli-
 
 PROGRESS OF COMMERCE. 11 
 
 cation of steam power to navigation and railways, and the 
 invention of the electric telegraph, have combined to give to 
 commerce, during a peace of nearly forty years, a rapid and 
 unparalleled extension. 
 
 16. If the fifteenth century offers the two greatest land- 
 marks in the history of commerce — the discovery of a 
 passage to the East Indies by the Cape of Good Hope, and 
 the discovery of America, which opened to Europe new and 
 inexhaustible markets — the nineteenth century is remarkable 
 for the invention of those means by which the most distant 
 nations are brought into closer contact, their resources easily 
 distributed, and civilization and commerce largely promoted. 
 After several fruitless attempts, the application of the steam 
 engine to the purpose of propelling vessels was successfully 
 carried out by Fulton, of the United States, in 1807, and 
 Henry Bell, on the Clyde, in 1812 ; and with it a change 
 full of promise has come over the world, such as neither 
 philosophers nor statesmen of former times could have 
 anticipated. The navigation of the Atlantic, hitherto most 
 uncertain and dangerous, has become easier than a voyage 
 to the Mediterranean ; and instead of fifty and even a hundred 
 days formerly expended in the voyage from Liverpool to New 
 York, steamers now make the passage in nine or ten days. 
 A speculative mania characterised the years 1825-26, when 
 numerous schemes of foreign loans, mines, canals, &c. were 
 projected, requiring a capital of about 350,000,000?. The 
 modern railway system of Europe dates from 1830, when 
 the opening of the line between Liverpool and Manchester 
 inaugurated a wonderful change in inland travelling and 
 traffic. In 1827 the first union of German States originated 
 in der Mittel Verein, or Central Association of Thuringia, 
 which, in 1833, expanded into the celebrated convention 
 styled the Zoll-verein, or union of customs, comprising all 
 the northern and south-western German States. A new 
 article of commerce was introduced in 1841, by the importa- 
 tion of guano into the United Kingdom, from Chili, Peru, 
 and Bolivia : the article proved to be a most excellent 
 manure, and became the object of extensive operations.
 
 12 
 
 PROGRESS OF COMMERCE. 
 
 17. At this period a momentous event occurred in the 
 history of civilization. The Chinese, a people whose annals 
 date from the remotest antiquity, had hitherto succeeded in 
 remaining isolated from European contact. They loved their 
 own seclusion, but British enterprise did not allow them to 
 enjoy it. A war followed between China and Britain in 1839, 
 on the subject of the opium trade, which was interdicted by 
 the Chinese Government since 1834 ; and the successes of the 
 British arms, in 1842, resulted in five important ports of 
 China being thrown open to the commerce of the world. A 
 revolution has recently occurred, which all but subverted the 
 Tartar dynasty, and is on the eve of effecting a total reform in 
 the religion, habits, and intercourse of the Chinese empire. 
 
 18. In 1845-46 the railway mania commenced, and the 
 value of all descriptions of shares rapidly rose to an exorbitant 
 height. A monetary crisis ensued, and they were subjected 
 to a serious depreciation. But as soon as the temporary 
 derangement ceased, railway property became a permanent 
 and solid source of investment. 1 The enthusiastic activity 
 with which line after line was projected and constructed in 
 the United Kingdom soon extended to Europe, and has been 
 rivalled by America. 2 
 
 
 
 PROGRESS OF THE RA1 
 
 LW 
 
 AY SYSTEM. 
 
 Miles 
 
 Number of 
 
 Receipts from 
 
 Receipts from 
 
 Total 
 
 Date. open. 
 
 Passengers. 
 
 Passengers. 
 
 Goods. 
 
 Receipts. 
 
 
 
 
 £ 
 
 £ 
 
 £ 
 
 1843 
 
 1,952 
 
 23,466,896 
 
 3,110,257 
 
 1,424,932 
 
 4,535,189 
 
 1844 
 
 2,148 
 
 27,763,602 
 
 3,439,294 
 
 1,635,380 
 
 5,074,674 
 
 1845 
 
 2,343 
 
 33,791,253 
 
 3,976,341 
 
 2,233,373 
 
 6,209,714 
 
 1846 
 
 2,765 
 
 43,790,984 
 
 4,725,216 
 
 2,840,353 
 
 7,565,569 
 
 1847 
 
 3,603 
 
 51,352,163 
 
 5,148,002 
 
 3,362,883 
 
 8,510,886 
 
 1848 
 
 4,478 
 
 57,965,070 
 
 5,720,382 
 
 4,213,169 
 
 9,933,552 
 
 1849 
 
 5,447 
 
 60,398,159 
 
 6,105,975 
 
 5,094,925 
 
 11,200,9M 
 
 1850 
 
 0,308 
 
 66,840,175 
 
 6,465,576 
 
 5,942,276 
 
 12,407,852 
 
 1851 
 
 6,698 
 
 78,969,623 
 
 7,177,341 
 
 6,719,559 
 
 13,896,900 
 
 1852 
 
 7,076 
 
 86,758,997 
 
 7,984,652 
 
 7,464,159 
 
 15,448,811 
 
 CAPITAL. 
 
 
 
 i 
 
 Authorised 
 
 Date. 
 
 By Shares. 
 
 Loans. 
 
 Total. previous to 
 Dee. 31, 1852. 
 
 
 £ 
 
 £ 
 
 
 £ 
 
 £ 
 
 1848 
 
 156,508,578 
 
 43,664,480 
 
 2 
 
 00,173,058 
 
 — 
 
 1849 
 
 178,412,025 
 
 51,335,154 
 
 2 
 
 29,747,779 
 
 — 
 
 1850 
 
 184,763,677 
 
 55,507,068 
 
 2 
 
 40,270,745 
 
 — 
 
 1851 
 
 189,554,179 
 
 58,686,717 
 
 2 
 
 (8,240,896 
 
 — 
 
 1852 
 
 200,101,012 
 
 04,064,668 
 
 2 
 
 64,165,680 356,610,456 
 
 2 The number of miles of railway in operation in the United States of
 
 PROGRESS OF COMMERCE. L3 
 
 19. A deficient harvest in the United Kingdom, in 1845, 
 caused the great question of the Corn Laws, which had for 
 several years been agitated, to "become the subject of animated 
 discussion, and they were entirely repealed in 1846. Thence- 
 forth the free-trade policy, which had been introduced since 
 1842 by Sir Robert Peel, became permanently established. 
 The restrictions of the Navigation Laws, which remained in 
 force since the Charter of 1651, had already been partially 
 rescinded in 1815, by the reciprocity system called forth by 
 the retaliatory measures adopted first by the American 
 Congress. Reciprocity treaties were also concluded with most 
 States of Europe and America, until, in 1848, as a necessary 
 complement of the great measure for abolishing the Corn 
 Laws, all artificial hindrances respecting navigation were 
 removed from international commerce ; and even the protec- 
 tion of the coasting trade was formally abandoned in 1854.' 
 The discovery of gold in California and Australia, during 1849 
 and 1851, introduced a sudden change in the prospects of 
 commerce. Whilst the amount of gold and silver produced 
 in 1846, was 12,362,677/., the present annual supply has 
 risen to about 47,000,000?. sterling. This unprecedented influx 
 of the precious metals gave rise to theoretical speculations 
 as to the probable effects it would have on the public funds, 
 prices of labour, produce, and articles of manufacture, and on 
 the value of fixed property. A temporary alarm was spread 
 as to the possible rejection of the gold standard, in view of 
 the altered relative value of gold to silver, and in some States 
 gold was no longer held a legal tender. But if the production 
 of the precious metals increased four-fold, a considerable aug- 
 mentation took place in the consumption of them. With the 
 increase of commerce, extensive emigration, high wages, and 
 the improving condition of the masses, the amount of cur- 
 rency required is considerably larger, whilst extensive ship- 
 ments are also made to India, China, and Australia. The 
 
 America, in 1851, was 10,2S9, and the cost of construction was 66,644,907?. 
 In 1853 the number of miles in operation was 13.315, and in process of con- 
 struction 13,029 miles. 
 1 17 Vict. c. 5.
 
 14 PROGRESS OF COMMEECE. 
 
 coinage of the most important countries in the world, in the 
 last six years, amounted to 166,793,579/. Of this, the gold 
 coinage was about 113,000,000/'. ; from which deducting 
 18,000,000?. estimated to have "been re-coined, we have 
 95,000,000/. as the gold coinage added to circulation from 
 1848 to 1853, but the greater portion in the last three years. 
 
 20. The golden discoveries suddenly creating a new empire 
 in our antipodes, gave an immense stimulus to British com- 
 merce, and the exports of produce and manufacture from 
 the United Kingdom rose, in 1853, to the enormous sum of 
 98,933,781/. ; which, compared with 1846, when they amounted 
 to 57,786,876/., shows an increase of about 32 per cent. The 
 same extension is observable in all other branches of trade. 
 The tonnage of British and foreign vessels entered and cleared 
 at ports in the United Kingdom, in 1846, was 12,415,586 
 tons; in 1853 it reached 18,390,710 tons. The quantity 
 of cotton imported, during the same years, increased from 
 467,856,274 lbs. to 895,266,780 lbs., and of wool from 
 65,255,462 lbs. to 119,396,445 lbs. ; whilst the importation 
 of all kinds of grains, which in former periods was most 
 irregular and limited, has increased, since 1846, to an annual 
 average of 9,000,000 quarters. The extent and character of 
 international commerce could not be better exhibited and 
 illustrated than by the following tables, showing the amount 
 and distribution of the (1) Exports of the United Kingdom, 
 (2) the United States of America, and (3) France, in the 
 year 1852, arranged according to their importance, and with 
 the proportion which they bear to each special trade. 
 
 From this brief historical glance of the progress of com- 
 mercial enterprise to the present times, it will be seen how 
 much has been accomplished in the advancement of science, 
 arts, manufactures, navigation, and commerce, during a long- 
 period of peace. The produce of the earth is now swiftly 
 interchanged between all nations ; the power of the elements 
 has been partially subdued ; space is all but annihilated ; 
 and, with the rapidity of lightning, we communicate thought 
 to the furthest regions : in effect, the whole world has become 
 a vast commercial commonwealth.
 
 PROGRESS OF COMMERC] 
 
 I.— THE UNITED KINGDOM. 
 
 ].-> 
 
 COUNTRIES. 
 
 1. 
 
 United States and California 
 
 2. 
 
 East Indies 
 
 3. 
 
 Hanse Towns 
 
 4. 
 
 Australia 
 
 5. 
 
 Holland 
 
 6. 
 
 Brazil 
 
 7. 
 
 North American Colonies 
 
 8. 
 
 France 
 
 9. 
 
 China 
 
 10. 
 
 Turkey 
 
 11. 
 
 West Indies 
 
 12. 
 
 Spain 
 
 13. 
 
 Chili 
 
 14. 
 
 Portugal 
 
 15. 
 
 Russia 
 
 ig. 
 
 Belgium 
 
 17. 
 
 Cape of Good Hope 
 
 18. 
 
 Cuba 
 
 19. 
 
 Peru 
 
 20. 
 
 Egypt 
 
 21. 
 
 Sardinia 
 
 22. 
 
 Two Sicilies 
 
 23. 
 
 Buenos Ayres 
 
 24. 
 
 Tuscany 
 
 25. 
 
 Austria 
 
 26. 
 
 Java and Sumatra 
 
 27. 
 
 Urughay 
 
 28. 
 
 Prussia 
 
 29. 
 
 Channel Islands 
 
 30. 
 
 West Coast of Africa ... 
 
 31. 
 
 Syria and Palestine 
 
 32. 
 
 Gibraltar 
 
 33. 
 
 New Granada 
 
 34. 
 
 Denmark 
 
 35. 
 
 Sweden and Norway ... 
 
 36. 
 
 Mexico ... 
 
 37. 
 
 Hanover 
 
 38. 
 
 Venezuela 
 
 39. 
 
 Wallachia and Moldavia 
 
 40. 
 
 Malta 
 
 41. 
 
 Hayti 
 
 42. 
 
 Mauritius 
 
 43. 
 
 Papal States 
 
 44. 
 
 Greece 
 
 45. 
 
 Ionian Islands 
 
 46 
 
 Philippine Islands 
 
 47. 
 
 Morocco 
 
 48. 
 
 Azores, Madeira 
 
 49. 
 
 Canary Islands 
 
 50. 
 
 Other Countries 
 
 51. 
 
 Other Possessions 
 
 Proportional 
 
 
 per cm 
 
 
 exported 
 
 Declared Value. 
 
 to dim rent 
 
 
 countries. 
 
 
 
 £ 
 
 21.2197 
 
 1G, 567,737 
 
 9.4125 
 
 7, .152,907 
 
 8.8025 
 
 0,872,753 
 
 5.4077 
 
 4,222,205 
 
 5.2639 
 
 4,109,976 
 
 4.4037 
 
 3,4G4,394 
 
 3.9212 
 
 3,063,364 
 
 3.49S2 
 
 2,781,286 
 
 3.2065 
 
 2.503,599 
 
 2.0639 
 
 2,079,913 
 
 2.4445 
 
 1,H08,552 
 
 1.G0C0 
 
 1,253,957 
 
 1.4S24 
 
 1,107,494 
 
 1.4042 
 
 1,104,213 
 
 1.40S7 
 
 1,099,917 
 
 1.3787 
 
 1.076,499 
 
 1.3606 
 
 1,064,283 
 
 1.3231 
 
 1,033,396 
 
 1.3111 
 
 1,024,007 
 
 1.2249 
 
 955,701 
 
 1.1833 
 
 924,225 
 
 1.1672 
 
 911,658 
 
 1.0S52 
 
 837,513 
 
 0.8SS2 
 
 69S.749 
 
 0.8635 
 
 674,423 
 
 0.7928 
 
 619,185 
 
 0.7SS0 
 
 G 15,453 
 
 0.7450 
 
 581,834 
 
 0.7227 
 
 564,453 
 
 0.GSG7 
 
 536,358 
 
 O.GG72 
 
 511,096 
 
 0.G541 
 
 510,889 
 
 0.6428 
 
 502,128 
 
 5793 
 
 452,436 
 
 0.5G21 
 
 439,010 
 
 C.4680 
 
 366,020 
 
 0.4084 
 
 365,843 
 
 0.3504 
 
 273,738 
 
 0.3450 
 
 269,533 
 
 0.3288 
 
 256,867 
 
 0.3219 
 
 251,409 
 
 0.2941 
 
 229,093 
 
 0.2410 
 
 18S.231 
 
 0.1953 
 
 152,527 
 
 0.1775 
 
 13S.642 
 
 0.1426 
 
 115,303 
 
 0.1411 
 
 110.126 
 
 0.1348 
 
 105,304 
 
 0.0507 
 
 89,641 
 
 1.27S1 
 
 998,260 
 
 0.2S9G 
 
 183,104 
 
 7S,076,854 
 
 From the above table it follows that the largest proportion of the exports of the United 
 Kingdom were sent to the United States of America. Between 1S42 and 1853 the exports to 
 that country increased from 3,528,S07/. to 23.658,427/. Next in importance are the East 
 Indies, which between the same dates increased from 6,023,192/. to 7,352,907/.; but they had 
 decreased in 1848 to 5,077,247/. The Hanse Towns, being the outports of Germany, take- 
 nearly 9 percent, of the whole British exports, while Holland and Australia stood nearly 
 equal. But the exports to Australia in 1853 were 14,506,532/., or 14£ per cent, of the 
 whole exports, which amounted to 98,933,781/. In 1844 the export's to that country 
 amounted to 791,993/. The British exports to Turkey were double those to Russia. It 
 appears also that 70 per cent, of the exports from the United Kingdom are distributed among 
 eleven countries, and 30 per cent, among forty to fifty countries. 
 
 The principal articles of British and Irish produce exported from the United Kingdom 
 consisted in cotton and cotton manufactures, the value of which in 1853 amounted to 
 32,709,385/. ; iron and steel, 10,848,080/.; woollen manufactures and woollen yarn, 11,626,2201 : 
 apparel and haberdashery, 6,923,190; and linen manufactures and linen yarn, 5, 910. .155/.
 
 lb' 
 
 PROGBESS OF COMMERCE. 
 
 II.— THE UNITED STATES. 
 
 COUNTRIES. 
 
 1. United Kingdom 
 
 2. France 
 
 3. Hanse Towns 
 
 4. Canada 
 
 5. Cuba 
 
 6. Belgium 
 
 7. British American Colonies ... 
 
 8. British West Indies 
 
 9. Spain 
 
 10. Brazil 
 
 11. Trieste and Austrian Ports ... 
 
 12. China 
 
 13. Holland 
 
 14. Chili 
 
 15. Mexico 
 
 16. Italy 
 
 17. Hayti 
 
 18. New Granada 
 
 19. South Seas 
 
 20. Bussia 
 
 21. Spanish West Indies 
 
 22. Danish ditto 
 
 23. Sardinia 
 
 21. Argentine Republic 
 
 25. Venezuela 
 
 26. British Guiana 
 
 27. Sweden and Norway 
 
 28. British East Indies 
 
 29. Central America 
 
 30. British Honduras 
 
 31. Peru 
 
 32. South America 
 
 33. Dutch East Indies 
 
 34. Dutch West Indies 
 
 35. Turkey 
 
 36. Gibraltar 
 
 37. Portugal 
 
 38. Cape of Good Hope 
 
 39. Manilla and Philippine Islands 
 
 40. Bolivia 
 
 41. Australia 
 
 42. Cisplatine Republic 
 
 43. Denmark 
 
 44. Malta 
 
 45. Madeira 
 
 46. Prussia 
 
 47. Swedish West Indies 
 
 48. Dutch Guiana 
 
 49. West Indies generally 
 
 50. Sicily 
 
 51. French Guiana 
 
 52. Cape De Verde Island 
 
 53. Other Countries 
 
 Froportional 
 per centage 
 
 exported 
 
 Declared Value. 
 
 to different 
 
 
 countries. 
 
 
 
 £ 
 
 54.7206 
 
 24,077,078 
 
 11.3592 
 
 4,998,051 
 
 3.2561 
 
 1,432,699 
 
 3.1804 
 
 1,399,387 
 
 3.0859 
 
 1,357,823 
 
 1.9904 
 
 875,785 
 
 1.7954 
 
 789,987 
 
 1.6894 
 
 748,351 
 
 1.5908 
 
 699,950 
 
 1.4315 
 
 629,883 
 
 l.!!942 
 
 569,462 
 
 1.2611 
 
 554,911 
 
 1.1825 
 
 520,318 
 
 1.1075 
 
 487,319 
 
 1.0818 
 
 476,026 
 
 0.8187 
 
 360,248 
 
 0.8138 
 
 358,104 
 
 0.7176 
 
 315,790 
 
 0.5900 
 
 259,612 
 
 0.5683 
 
 250,100 
 
 0.4995 
 
 219,813 
 
 0.4408 
 
 193,986 
 
 0.3842 
 
 169,061 
 
 0.37S3 
 
 166,482 
 
 0.3756 
 
 165,294 
 
 0.3600 
 
 158,472 
 
 0.3589 
 
 157,952 
 
 0.2862 
 
 125,937 
 
 0.2242 
 
 98,649 
 
 0.1714 
 
 75,43! 
 
 0.1684 
 
 74,133 
 
 0.1578 
 
 69,459 
 
 0.1535 
 
 67,537 
 
 0.1503 
 
 66,134 
 
 0.1497 
 
 65,874 
 
 0.1318 
 
 58,012 
 
 0.1127 
 
 49,612 
 
 0.1068 
 
 47,073 
 
 0.1049 
 
 46,191 
 
 0.0997 
 
 43,896 
 
 0.0986 
 
 43,3SS 
 
 0.0914 
 
 40,223 
 
 0.0547 
 
 24,094 
 
 0.0536 
 
 23,608 
 
 0.0451 
 
 19,877 
 
 0.0442 
 
 19,455 
 
 0.0439 
 
 19,332 
 
 0.0431 
 
 19,007 
 
 0.0341 
 
 15,043 
 
 0.0315 
 
 13,862 
 
 0.0312 
 
 13,755 
 
 0.0303 
 
 13,349 
 
 0.3044 
 
 133,951 
 
 43,678,826 
 
 The exports of the United States are divided into— the produce of the sea, the forest, 
 agriculture, and manufacture -, and they were mostly directed to the United Kingdom, in the 
 proportion of 60 per cent, of the whole ; and to France, about 11 per cent. 
 
 The value of the produce of the fisheries exported in the year ending June 30, 1852, 
 amounted'to 475,487/.; that of the forest, including woods of all kinds, skins, &c, to 
 1450,700/.'; and that of agriculture, 1,317,380/.; the products of animals, 4,143,000/.; 
 vegetable food, 2,090,000/. ; tobacco, 18,316,000/. ; cotton goods, 1,600,000/. ; gold and silver 
 coin, 7,800,000/.
 
 PROGRESS OF COMMERCE. 
 
 17 
 
 III.— FRANCE. 
 
 
 Proportional 
 
 
 
 per centage 
 
 
 COUNTRIES. 
 
 exported 
 to different 
 countries. 
 
 Declared Value. 
 
 1. United Kingdom 
 
 20.4427 
 
 £ 
 
 10,016,832 
 
 2. United States 
 
 13.2996 
 
 6,516,830 
 
 3. Belgium 
 
 9.9244 
 
 4,862,959 
 
 4. Algeria 
 
 8.4401 
 
 4,135,660 
 
 5. Sardinian States 
 
 5.8855 
 
 2,883,907 
 
 6. Spain 
 
 5.3164 
 
 2,605,074 
 
 7. Switzerland 
 
 4.7875 
 
 2,345,922 
 
 8. German Union 
 
 3.4704 
 
 1,700,498 
 
 9. Brazil 
 
 2.4897 
 
 1,219,994 
 
 10. Martinique 
 
 2.0483 
 
 1,003,700 
 
 11. Turkey 
 
 1.6863 
 
 826,298 
 
 12. Guadaloupe 
 
 1.6695 
 
 818,082 
 
 13. Bourbon... 
 
 1.4978 
 
 733,931 
 
 14. Peru 
 
 1.4954 
 
 732,749 
 
 15. Tuscany 
 
 1.2867 
 
 630,524 
 
 16. Spanish West Indies 
 
 1.2579 
 
 616,417 
 
 17. Two Sicilies ; 
 
 1.2502 
 
 612,598 
 
 18. Holland 
 
 1.2359 
 
 605,606 
 
 19. Chili 
 
 1.2164 
 
 596,081 
 
 20. Mexico 
 
 1.1924 
 
 584,304 
 
 21. Rio de la Plata 
 
 1.1362 
 
 556,750 
 
 22. Hanse Towns 
 
 1.0506 
 
 514,842 
 
 23. Russia, Baltic, and White Sea 
 
 0.94S4 
 
 464,726 
 
 24. Uruguay 
 
 0.7563 
 
 370,597 
 
 25 Senegal 
 
 0.6807 
 
 333,546 
 
 26. Hayti 
 
 0.5402 
 
 264,701 
 
 27. Danish West Indies 
 
 0.4951 
 
 242,600 
 
 28. Egypt 
 
 0.4781 
 
 234,305 
 
 29. St. Pierre and French Fisheries 
 
 0.4726 
 
 231,618 
 
 3D. Cape of Good Hope 
 
 0.4278 
 
 209,628 
 
 31. Venezuela 
 
 0.4106 
 
 201,239 
 
 32. Austria and Lombardo- Venetian Kingdom 
 
 0.4037 
 
 197,819 
 
 33. Portugal 
 
 0.3377 
 
 165,509 
 
 34. French Guiana 
 
 0.3229 
 
 158,231 
 
 35. Barbary States 
 
 0.3131 
 
 153,454 
 
 36. British East Indies, and New South Wales 
 
 0.2924 
 
 143,281 
 
 37. Roman States, Lucca 
 
 0.2S67 
 
 140,502 
 
 38. New Granada 
 
 0.2713 
 
 132,951 
 
 39. Russia, Black Sea 
 
 0.2045 
 
 100,217 
 
 40. Norway 
 
 0.1540 
 
 75,496 
 
 41. Greece 
 
 0.1406 
 
 6«,924 
 
 42. West Coast, exclusive of Senegal 
 
 0.1231 
 
 60,340 
 
 43. Denmark 
 
 0.099+ 
 
 48,746 
 
 44. Sweden 
 
 0.0770 
 
 35,575 
 
 45. West Indies, British 
 
 0.0745 
 
 34,504 
 
 46. Guatemala 
 
 0.0691 
 
 33,901 
 
 47. Dutch East Indies 
 
 0.0546 
 
 20. 762 
 
 48. Hanover 
 
 0.0420 
 
 20.618 
 
 49. French Possessions in India ... 
 
 0.0394 
 
 19,336 
 
 50. St. Mrrie de Madagascar 
 
 0.0222 
 
 10,915 
 
 51. China, Cochin China, and South Sea Islands 
 
 0.0163 
 
 7,990 
 
 58. Equator 
 
 0.0135 
 
 6,6 41 
 
 53. Philippine Islands 
 
 0.0101 
 
 4,968 
 
 54. Bolivia 
 
 0.0100 
 
 4,938 
 
 55. Mecklenburg Schwerin 
 
 0.0093 
 
 4,564 
 
 56. Other parts of Africa, including Madagascar 
 
 0.0062 
 
 3.091 
 
 57. Dutch West Indies 
 
 0.0034 
 
 1,709 
 
 49,333,500 
 
 The exports from France in 1853 amounted to 54,520,000/. of French produce, and 
 20,120,000/. of foreign produce.
 
 18 INTERNATIONAL 
 
 CHAPTER IT. 
 
 INTERNATIONAL COMMERCIAL LAW. 
 
 21. The most essential characteristics of commerce are its 
 elasticity and expansiveness. It is founded on mutual wants, 
 and stimulated by individual interest. Trading, being a 
 necessary result of a state of society and of the institution of 
 property, it becomes a right, consistent with the law of 
 nature and acknowledged by the law of nations. Yet it is 
 not a perfect right : a person cannot be forced to purchase or 
 to sell against his will, although he has a right to purchase 
 or to sell at his pleasure. It is the same with nations as 
 with individuals. A nation, considered as a moral person, 
 has a right to permit or prohibit the import and export of 
 merchandise, or to hinder it by taxation, either for purposes 
 of finance or for protection ; but it ha3 not a right to compel 
 another Slate to receive its commodities, and give others in 
 exchange : at the same time no nation has a right to exclude 
 the whole merchandise of one single country, except in case 
 of war. The security of merchants and navigators, and the 
 facilities of commercial transactions, are the objects of treaties 
 of commerce ; whilst the rights of a nation to impose restric- 
 tions on commerce are within the province of the Law of 
 Nations. The expediency of such restrictions, as a measure 
 of public policy, is a question for political economy to 
 resolve. 
 
 22. Many are the causes which occasion the importation
 
 • OMMERCIAL LAW. l!) 
 
 of articles from foreign countries. It may be because they 
 cannot be produced at home, or because other nations can 
 produce them cheaper. By international exchanges the 
 physical incapacities of one country are met by corresponding 
 advantages in others, and thus the productive forces of the 
 world are most efficiently developed. Yet, owing to erroneous 
 doctrines of political economy, the natural course of commerce 
 has been obstructed by legislative interference : restraints 
 and encouragements were given to importation and exporta- 
 tion, with a view to the attainment of a favourable balance 
 of Trade. This fallacious doctrine, founded on the notion 
 that wealth consisted in gold and silver, regarded any excess 
 of imports above exports to be tantamount to a diminution of 
 so much wealth as was required to be sent abroad for payment 
 in gold : and so conversely. Adam Smith exploded this 
 doctrine of the commercial system, and thenceforth the 
 principles of commerce were put on a firmer foundation. 
 
 23. Another object sought by these restrictions was the 
 protection of native industry, by granting monopolies to home 
 produce or manufactures : so that the advantage of a class or 
 of individuals was secured at the expense of the privileges of 
 the masses. Such restrictions were also conceded in order to 
 foster any particular trade or industry. Thus the Navigation 
 Laws gave to the shipping interest an extensive monopoly, 
 with a view to the maintenance of the naval power of the 
 country. The Corn Laws were enacted to protect the British 
 grower against the competition of foreign grain. But high 
 duties discourage importation ; prices run high, and labour 
 becomes scarce, as the power of consumption diminishes. Cus- 
 toms duties are not of recent invention. The Eomans resorted 
 to restrictions and prohibitions, and this was the case also in 
 the middle ages, but simply as a means of revenue : as such 
 they are not altogether objectionable. When native industry 
 is subjected to heavy taxation, foreign merchandise may 
 reasonably be put on an equal footing. By the commercial 
 reforms inaugurated by Sir Robert Peel, and sedulously main- 
 tained by Lord John Russell, the principle of protection, in 
 
 c 2
 
 20 INTERNATIONAL 
 
 the commercial legislation of the United Kingdom, was alto- 
 gether abandoned, and, by a series of provident measures, un- 
 limited freedom was allowed to British commerce. In other 
 countries the protective system has not yet been relaxed; but 
 a more enlightened policy is gradually being introduced. 
 
 24. In the United States of America, customs duties are 
 raised almost exclusively for protection. After manifold 
 attempts to bolster up the manufacturing interests of the 
 country by artificial support, a more liberal tariff was intro- 
 duced in 1846, and in 1853 it was proposed to admit all 
 the raw materials of manufacture duty free : which, however, 
 has not yet passed into law. France has long been the 
 victim of the protective system. With a view of becoming 
 independent of foreign produce, she resorted to the expedient 
 of imposing heavy import duties ; she refused to receive 
 British iron, because the forest proprietors would feel the 
 effect of competition ; but by her restrictive system she in- 
 flicted also irreparable injury upon her export trade. Some 
 important steps have recently been taken by the French 
 Government to remove the restrictions which have shackled 
 the industry and impeded the material progress of France. 
 
 25. Besides the import and export duties, there are 
 others especially affecting navigation, the object of which is 
 to charge merchant vessels with the expenses of repairing 
 light-houses and landmarks, or for services given in sea-ports 
 to the profit of foreigners as well as natives. In some 
 countries duties are also imposed on articles in transitu, as 
 there is no obligation on a sovereign to admit the entrance of 
 foreign merchandise into his territory. The warehousing 
 system of the United Kingdom affords the greatest advantage 
 to foreign commerce, by allowing articles to be imported and 
 lodged in public warehouses, at a moderate rent, without 
 paying duties until they are entered for consumption, and 
 when not so entered, to be re-exported without paying any 
 duties. 1 
 
 1 16 and 17 Vict. c. 107, § 58.
 
 COMMERCIAL LAW. 21 
 
 26. The sovereign rights of a nation do not extend beyond 
 its own territory* The limits of territory on land are prescribed 
 by treaties ; the maritime territory extends to the ports, har- 
 bours, bays, mouths of large rivers, and adjacent parts of the 
 sea enclosed by headlands, belonging to the same State, as far 
 as a cannon-shot from the shore, along all the coasts of the 
 State. The coasts include the natural appendages of the ter- 
 ritory which rise out of the water, to the distance of about 
 three miles from the shore. Sometimes, for domestic purposes 
 and particularly for fiscal or defensive regulations, large terri- 
 torial jurisdiction has been asserted. 1 Such are the Hovering 
 Laws of the United Kingdom and of the United States, 
 which assumed a jurisdiction of four leagues from the coasts. 
 The sea, the common highway of nations, out of reach of 
 cannon-shot, is of universal use. 2 Rivers flowing through 
 adjacent States, are presumed to be of common use to the 
 different States : this was specially admitted by the Treaty 
 of Vienna, of 1815, with respect to the great European Rivers. 
 And the right of the common use of the waters will include 
 the right of the shores, for the purposes necessary to the 
 navigation of the river. So in respect to fishery, Lord Mans- 
 field said, " In rivers not navigable the proprietors of the land 
 have the right of fishing on their respective sides, but on 
 navigable rivers the proprietors of the land on each side have 
 it not, the fishery is common ; it is prima facie in the king, 
 and is public." 3 Yet in both the sea and rivers there may, 
 by legal possibility, exist a peculiar property, excluding the 
 universal or common use. Portions of the sea are claimed 
 in virtue of long custom ; so are rivers flowing through 
 contiguous States. The banks on one side may have been 
 first settled, by which the possession and property may have 
 
 1 1 Wheaton, p. 218 ; 9 Geo. II. c. 5. Le Louis, 2 Dods. 247. 
 
 2 The Roman Law held common to mankind— the air, running waters, the 
 sea, and even the shores of the sea. Grotius, in his " Mare Liberum," 
 vindicated the freedom and community of the sea, and Selden, in his " Mare 
 Clausum," powerfully maintained the contrary. 
 
 3 Instit. lib. xi. tit. i. § 2. Carter v. Mureot, 4 Burr. 2162.
 
 22 INTERNATIONAL COMMERCIAL LAW. 
 
 been acquired, or cessions may have taken place upon con- 
 quests or other events. But the general presumption bears 
 strongly against such exclusive rights, and the title is a 
 matter to be established on the part of those claiming under 
 it, in the same manner as all other legal demands are to be 
 substantiated by clear and competent evidence. 1 Claims upon 
 portions of the sea, founded upon prescription or long custom, 
 have been asserted by different nations. The Republic of 
 Venice claimed the sovereignty of the Adriatic, and Great 
 Britain claimed sovereignty over the narrow seas ; but such 
 sovereignty has never been acknowledged. Roads, bays, and 
 straits of small extent, are capable of possession ; but not 
 those which comprise great tracts of sea, such as Hudson's 
 Bay and the Straits of Magellan, over which no empire or 
 right of property can extend. When a strait serves as a com- 
 munication between two seas, the navigation of which is 
 common to all, such as the Sound which connects the Baltic 
 with the German Ocean, the country which commands the 
 pass may impose certain duties, on account of the trouble and 
 expense connected with its protection. A regular tariff of 
 the Sound dues was subscribed in 1841, by Danish, British, 
 and Swedish-Norwegian commissioners.' 2 
 
 1 Per Lord Stowell, The Twee Gebroeders, 3 Rob. 339; Phillimore's Inter- 
 national Law, vol. i. p. 171. 
 
 3 See MeCullock'* Dictionary, "Elsineur."
 
 NATURE, SPIRIT, AND HISTORY OP COMMERCIAL LAW, 28 
 
 CHAPTER III. 
 
 NATURE, SPIRIT, AND HISTORY OF COMMERCIAL LAW. 
 
 27. The Lex Mercatoria, or Merchant Law, of any par- 
 ticular country, has been defined to be a system of principles 
 or rules peculiarly regulating mercantile transactions, derived 
 principally from the customs of merchants in different nations ; 
 from the usages, either general or local of the merchants, 
 which have been judicially sanctioned ; and, lastly, from ex- 
 press legislative enactments. Commercial Law is also a 
 branch of the civil law. It comprises the respective and rela- 
 tive rights of individuals in regard to their mercantile trans- 
 actions. And it is a branch of the law of nations, inasmuch 
 as its chief provisions apply to merchants, natives as well as 
 foreigners, and involve international questions both between 
 nations and nations, and between individuals of different 
 countries. Mr. Justice Duer, in his Treatise on Insurance, said, 
 " The Law Merchant resembles the LaAv of Nations, properly 
 so called, in the sources whence it is chiefly derived, the rules 
 of natural equity and justice, and its general adoption by 
 civilized Powers, but differs from it widely in the nature of 
 the obligation which it imposes, and of the sanction by which 
 it is enforced." The Law of Nations is binding on States by 
 treaties, international equity, and the tacit acknowledgment 
 of rights ; the Law Merchant is binding, because most of its 
 provisions are derived from natural law, which is the supreme, 
 invariable, and uncontrollable rule of conduct to all men.
 
 24 NATURE, SPIRIT, AND HISTORY 
 
 Therefore it is that Commercial Law partakes less than any 
 other branch of law, of the influences of local circumstances, 
 and is susceptible of general acceptance and application. The 
 judicial decisions of England, founded on general principles, 
 and proceeding on extended views of commercial usage and 
 expediency, are held as authorities in Scotland, and vice versa; 
 and so the American decisions are now received in the British 
 Courts as authorities, and vice versa. Such is the nature and 
 spirit of commercial law. " The merchants of all nations form 
 a single society, and have one single language common to 
 all." It is to this branch of law that Lord Mansfield applied, 
 with great propriety, the noble aphorism of Cicero, when 
 speaking of the eternal law of justice: Nee erit alia lex 
 Roma alia Athenis ; alia nunc, alia posthac; sed et omnes 
 gentes et ornni tempore una lex et sempiterna, et immutabilis 
 continebit. 1 
 
 28. The Law Merchant is a peculiar system, which pre- 
 vailed in England throughout the whole of the Anglo- 
 Saxon times ; it was especially recognised in the time of 
 Edward III. : when the staple was ordained, a mayor was to 
 be chosen, in each town, skilled in the Law Merchant, to do 
 right to every man according to that law. 2 The modern Law 
 Merchant is composed of three distinct elements; viz. the 
 customs of merchants, the ordinances of foreign States, and 
 the Statute Law. As art precedes science, so custom pre- 
 cedes law. Long are these customs practised before they are 
 committed to writing. But though not written or declared 
 by the legislative power, they acquire all the authority of 
 law, and are gradually engrafted upon the common law of 
 the country. The customs of merchants are part of the law 
 of England. Judicial determinations settle what is the cus- 
 tom of merchants, and they become the Lex Mercatoria as to 
 the different questions. 3 In order that a custom be binding, it 
 
 1 Frag, de Repub. lib. iii. Luke v. Lyde, 2 Burr. 882. 
 
 2 4 Inst. 237, Spence, Eq. Juris, vol. i. p. 247. 
 
 3 Edie v. E. India Comp. 2 Burr. 1228.
 
 OF COMMERCIAL LAW. 25 
 
 must be cither the usage of the whole mercantile world, or 
 of a particular trade universally known as such. An usage 
 of a particular place, or of a particular class of persons, would 
 not be binding on other persons, unless these were acquainted 
 with those usages and adopted them. 1 In all cases, how- 
 ever, no custom can be set against an express Act of 
 Parliament. 2 
 
 29. Besides the customs of trade, another source of com- 
 mercial laws are the ordinances of foreign States, which con- 
 stitute the body of maritime laws of nations. These stand, 
 with respect to the Law Merchant of this country, in the 
 same relation as the Civil or Canon Law. They have not 
 the force of law or enactment, nor any state authority, but 
 possess the authority due to reason and common sense, 
 sanctioned by custom. Indeed, some of the best principles 
 of our mercantile jurisprudence were imported from foreign 
 countries, where commerce was of much earlier growth. The 
 rules of the Consolato del Mare are to this day the foundation 
 of our maritime law; and the celebrated Lord Mansfield did 
 not consider it derogatory to the honour of British jurispru- 
 dence to borrow whatever was good, either from the Civil 
 Law, the Law of Nations, or the Maritime Law of any 
 country with which he was conversant. The Law of Marine 
 Insurance, especially, is almost entirely derived from foreign 
 sources. Mr. Justice Story, commenting on the Growth of 
 the Commercial Law/ said, "It is most manifest that the 
 English law, working as it does into the business of a nation 
 crowded with commerce and manufactures, must for ever be 
 in search of equitable principles, to be applied to the neAV 
 combinations of circumstances which are daily springing up 
 to perplex its courts. In adopting new rules, it is indis- 
 pensable to look to public convenience, mutual equities, the 
 course of trade, and even foreign intercourse. It is plain that 
 in such inquiries the customary and positive law of foreign 
 
 1 Blackett v. Royal Exchange Assurance Comp. 2 C. & J. 250. 
 
 2 Noble v. Durell, 3 T. R. 271. 
 
 3 Story's Miscellaneous Writings, p. 279.
 
 26 NATURE, SPIRIT, AND HISTORY 
 
 countries, as the result of extensive experience, must be of 
 great utility. No nation can be so vain as to imagine that she 
 possesses all wisdom and all excellence. No civilized nation 
 is so humble that her usages, laws, and regulations do not 
 present many things for instruction, and some for imitation." 
 30. The last source of the Commercial Law of the United 
 Kingdom is the Statute Law. The Law on Joint Stock 
 Companies and Banking, Navigation Law, and Bankruptcy, 
 are almost exclusively regulated by statutes. It is to be 
 regretted that the statute law of the United Kingdom is 
 wanting in system, brevity, and clearness. The number of 
 Public General Acts in the Statute Book, down to the close 
 of the 16th and 17th Vic. was given by the Statute Law 
 Commission as 16,579, mixed up with 9,285 Local and Per- 
 sonal Acts, and 14,268 Private Acts; of the public acts only 
 2,509 were in force in 1853, relating some to the United 
 Kingdom generally, others exclusively to England, others to 
 Great Britain, and some few to England and Ireland. The 
 defects of the statute law arose from the promiscuousness of 
 the subjects of the statutes, and from the only partial repeal 
 of statutes by new legislation. The differences of the laws 
 of the United Kingdom, especially those existing between 
 the laws of England and Scotland, are found productive of 
 much inconvenience, in the extended relations between the 
 two countries. Scotland was, by the Act of Union, declared, 
 from the 1st May, 1707, united to England. By that union 
 the two countries entered into a communion of all rights, 
 privileges, and advantages belonging to the subjects of 
 either country ; but with respect to the law then in force 
 in Scotland, or which would thenceforth be enacted for the 
 United Kingdom, it was provided by the 18th article, that 
 the former should remain in the same force as before, but 
 alterable by Parliament ; and further, that the laws concern- 
 ing public right, policy, and civil government may be made 
 the same throughout the United Kingdom ; but that no 
 alteration be made in the laws that govern private rights, 
 except for the evident utility of the subjects within Scotland:
 
 OF COMMERCIAL LAW. 27 
 
 consequently the municipal law of England is not in force 
 in Scotland, and vice versa. In June 1853, in consequence 
 of a Conference of Deputies from all the Chambers of Com- 
 merce, and other Mercantile and Legal Associations in 
 England, Ireland, and Scotland, a Royal Commission was 
 issued, to consider the best mode of assimilating the Mercan- 
 tile Law of the United Kingdom. The Colonies of the 
 British Empire are subject to the common law of England, 
 a certain part of the statutes of England, and the enactments 
 of their own legislature; except that British Guiana, which 
 was capitulated to the English by the Dutch, is governed by 
 the Dutch law ; Trinidad, surrendered by the Spaniards, re- 
 tains the Spanish law ; St. Lucia, taken from the French, the 
 Canadas, and Mauritius, have the French law ; the Cape of 
 Good Hope, and Ceylon, the Boman Dutch law. 
 
 31. The history of Commercial Law has already been 
 traced, in the brief sketch of the progress of commerce. 
 The ancients left us but small fragments of their commercial 
 legislation ; the laws of the Athenians are but incidentally 
 quoted by their classics, Demosthenes, iEschines, Thucy- 
 dides, &c. ; and the only relic we possess are the brief but 
 invaluable maritime laws of the Bhodians, which were subse- 
 quently incorporated into the Roman law.' Of the maritime 
 law of the Romans no general code was formed, but the Digest 
 contains some material principles and provisions relative to 
 maritime rights. At the eve of the impending ruin of that 
 colossal empire, and whilst the scene of internal discord and 
 external usurpation, Justinian constructed the noble fabric 
 of Roman jurisprudence. The exquisite perception of moral 
 duties, and the comprehensiveness and depth of learning of 
 
 1 A case having been submitted to the decision of Antoninus Pius, the fol- 
 lowing was his rescript : " The earth is subject to my dominion ; the sea to 
 that of the law. Let the case be determined by the Rhodian Law on Naval 
 Affairs, the provisions of which I direct to be observed in future in all cases 
 where they are not repugnant to the laws of Rome. The same decision wis 
 formerly made by Divine Augustus." ^Dig. lib. xiv. tit. ii. 1, 9.) Duer on 
 Insurance, vol. i. p. 25.
 
 28 NATURE, SPIEIT, AND HISTORY 
 
 the Roman jurists, had for centimes reflected the greatest 
 lustre on that empire ; but the Roman laws and usages, added 
 to the numerous Eastern codes, had grown to an enormous 
 extent, and it was only when they were embodied into a 
 complete code, that these precious materials exhibited their 
 priceless value. 
 
 32. The body of general maritime law dates, it is true, from 
 the middle ages, when the Mediterranean States first rose into 
 commercial importance ; but it must not be forgotten that the 
 revival of the Roman law, by the labours of its learned com- 
 mentators, caused an enlarged familiarity with the principles of 
 natural equity ; and it is owing to the introduction of these in 
 the Maritime Ordinances that they acquired the character of 
 " jus maritimum universale." Of these, the Amalphitan Table, 
 compiled in Italy towards the end of the eleventh century, is 
 perhaps the earliest. But the most complete collection of iSea 
 Laws, as venerable for its antiquity as wonderful for the wisdom 
 of its provisions, is the Consolato del Mare. It is a produc- 
 tion which in vain exercised the ingenuity and defeated the 
 researches of learned jurists to ascertain the time of its publi- 
 cation, the name of its author, and the authority which it 
 carried. From the conflicting opinions advanced on the sub- 
 ject, the Consolato seems to have been published at Barcelona, 
 towards the end of the thirteenth century, and in the Catalo- 
 nian dialect ; but the honour of its compilation is claimed, 
 with equal learning and argument, by Italy, Spain, and 
 France. 1 The Consolato contains doctrines on the owner- 
 ship, building, and equipment of ships, — the duties and 
 authorities of the owner, master, and mariners, — the earning, 
 payment, and loss of freight and wages, — and also on average 
 jettisons and captures. Since the publication of the Con- 
 solato, other ordinances emanated in the north-western coasts 
 
 1 Although such is the conclusion arrived at by the learned researches 
 of Pardessus, and subsequently strengthened by Mr. Reddie, the title of the 
 Consolato is Italian, and its associations point out Italy as its birthplace. 
 Azuni vindicates the claim of Pisa to it, and his reasonings would establish 
 the eleventh century as the date of its publication.
 
 OF COMMERCIAL LAW. 29 
 
 of Europe, such as the Guidon de la Mer, afterward in- 
 cluded in the Us et Coutumes de la Mer, by the learned 
 Cleirac, in 1667 ; the Boles d'Oldron, the Usages de Damme, 
 and the Ordinances of the Hanseatic League. But the 
 publication of the famous French ordinance of 1681, first 
 gave completeness and system to the maritime law of Europe. 
 In England, except a short abridgment of the Sea Laws of 
 foreign countries, by Welwood, the first work on Commercial 
 Law was Malyne's Lex Mercatoria, in 1622 ; and no other 
 work of importance appeared till Molloy published his work, 
 De Jure Maritimo et Navali, fifty years after. A singular 
 instance of the tardy progress of commercial law in England 
 may be produced. Notwithstanding that promissory notes 
 had been introduced into this country for thirty years, 
 their negotiability was stubbornly denied. It is recorded 
 that Lord Holt, giving judgment in the case of Buller v. 
 Crisp, 1 said, " I remember when actions upon inland bills 
 did first begin, and then they laid a particular custom be- 
 tween London and Bristol." The defendant's counsel would 
 put them to prove the custom, at which Chief Justice Hale 
 " laughed," and said, " they had a hopeful case of it." After- 
 wardj by the statute of Anne, promissory notes were put on 
 the same footing as bills of exchange. Lord Holt, in his 
 famous decision in Cogg v. Bernard, 2 introduced the whole of 
 the doctrines of the Civil Law of Bailment in the English 
 mercantile law. 
 
 33. But it is to Lord Mansfield that we are indebted for 
 the sudden development of this branch of science. The 
 judicial decisions of this eminent judge, characterized by a 
 thorough acquaintance with the learning and commercial 
 experience of other nations, and replete with maxims of the 
 most scrupulous morality, introduced a new era in the annals 
 of British jurisprudence. Chief Justice Buller, describing 
 the change which was produced in the commercial law of 
 England since the accession of Lord Mansfield, said, " Before 
 
 1 6 Mod. Rep. 29. 2 2 Lord Raymond, 917.
 
 36 NATURE. SPIKIT, AND HISTORY 
 
 that period we find that in courts of law all the evidence in 
 mercantile cases was thrown together, they were left generally 
 to a jury, and they produced no established principle. From 
 that time we all know the great study has been to find out 
 some certain general principles which shall be known to all 
 mankind, not only to rule the particular case then under con- 
 sideration, but to serve as a guide for the future. Most of us 
 have heard those principles stated, reasoned upon, enlarged 
 and explained, till we have been lost in admiration at the 
 strength and stretch of the human understanding." J Contem- 
 porary with this eminent judge were Pothier and Emerigon, 
 who enriched the world with the masterly products of their 
 genius and research. During the European conflict conse- 
 quent on the French Revolution, the eminent Lord Stowell 
 presided over the English Court of Prizes. The principles 
 of international jurisprudence, — first expounded by Gentilis, 
 systematized by the illustrious Grotius and Puffendorf, and 
 rendered both popular and attractive by the methodic treatises 
 of Vattel, and the learned labours of Sir James Mackintosh, — 
 received at the hand of Lord Stowell most practical applica- 
 tion. In the words of Mr. Justice Story, " With him the grave 
 learning of Grotius, the acute, bold, and somewhat vehement 
 discussions of Bynkershoek, the reverend testimonies of the 
 Consolato del Mare, the collections of Cleirac, the busy, prac- 
 tical sense of Roccus, the brief but clear text of Heineccius, 
 the various and exhausting labours of Casaregis, the argu- 
 mentative commentaries and luminous treatises of French 
 jurists, appear as perfectly familiar as the writers of his own 
 age and country." 
 
 34. Whilst this eminent judge established the great 
 principles of international equity in the British tribunals, 
 Napoleon applied his genius and energy to the codification 
 of the law — a work which reflected so much honour on 
 French jurisprudence. The five codes succeeded each other 
 with wonderful rapidity, and they inaugurated a new era in 
 
 1 Likbarrow r. Mason, 2 T. R. 631. 1 Smith's Lead. Cases, 388.
 
 OF COMMERCIAL LAW. 31 
 
 the science of law. Codification acquired universal ascen- 
 dency, and almost all the Continental States soon after 
 enacted new codes, which were mostly based on the French 
 model. The American law, like the law of England, has 
 not been digested into a code. Its illustrious commentators, 
 Kent and Story, are the chief ornaments of American Juris- 
 prudence. In the United Kingdom, numerous treatises on 
 the several branches of the law, and the periodical Digests of 
 the principal decisions of all the Courts of Common Law, — 
 supply the want of a complete code. Measures are, however, 
 in progress towards the consolidation of the law, and we may 
 indulge in the hope that efforts will be made for the attain- 
 ment of what would prove an inestimable boon to the mer- 
 cantile world — a complete Code of Commercial Law, stripped 
 of all useless technicality, and such as may be adopted, in 
 the same manner as the Pandect of Justinian, or the Code 
 Napoleon, by all commercial nations. 
 
 35. The multiplicity of laws which govern the mercantile 
 transactions of the world, and the differences which prevail 
 in their principles, and in the modes of procedure, are 
 the sources of much ignorance and uncertainty, often pro- 
 ducing serious obstructions to the progress and security of 
 commerce. Considerable benefit would therefore accrue from 
 a general assimilation of the laws relating to merchants, 
 partnership, bills of exchange, insurance, bankruptcy, &c, 
 whereby merchants trading with all countries may know 
 that the same rights and obligations, with respect to their 
 mercantile transactions in force in their own country, are held 
 and respected everywhere. This assimilation may be effected 
 by the formation of an International Code of Commercial 
 Law, or by gradual reforms being introduced in any country 
 on any branches of the law, with a view to the attainment of 
 uniformity with the general law on the subject as it prevails 
 in other countries. Owing to the extension of communi- 
 cation and intercourse among nations, the formation of asso- 
 ciations for public undertakings with capital belonging to 
 different countries, and the rapid development of commerce,
 
 32 NATURE, SPIRIT, AND HISTORY OF COMMERCIAL LAW. 
 
 questions of international mercantile jurisprudence are more 
 frequent and of difficult solution. To attain even a partial 
 uniformity in the commercial legislation of all countries must 
 necessarily be the work of time ; yet the progress of the 
 science of law, combined with those elements in operation 
 which daily lessen the barriers now separating countries pro- 
 videntially destined to unite in their efforts for their physical 
 and moral advancement; and, above all, the increasing want 
 which will be experienced of such an assimilation, in propor- 
 tion as the relations of commerce increase between any two 
 countries, will operate in accelerating the realization of the 
 noble undertaking — the formation of one Code of Commercial 
 Law, sanctioned by all countries, and held as the sacred bond 
 of society between all families of the earth. 1 
 
 1 It is gratifying to the author to note, that the enunciation of these views 
 in his larger work, entitled " Commercial Law of the World," was followed 
 by the issuing of a Royal Commission, and by some legislative measures for 
 the assimilation of the mercantile laws of the United Kingdom. At the 
 Statistical Congress of official deputies and learned individuals from twenty- 
 six States, held at Brussels, in September 1853, a resolution was passed, 
 expressing a hope that the great differences now existing in the commercial 
 legislation of different countries may be diminished, and even removed 
 altogether.
 
 BOOK II. 
 
 RESTRAINTS OF TRADE. 
 
 36. In considering the nature and principles of commerce, 
 it has been observed that although it is founded on unlimited 
 freedom, there are obstructions to its expansion, resulting 
 from the right of States to impose duties for purposes of 
 revenue, or for protection. To these obstructions we must 
 now add 'the restraints which affect individuals ; as when 
 a person, for a consideration/ foregoes his right to trade in a 
 certain locality ; and those which proceed from personal dis- 
 qualifications, from legislative enactments, and from customs 
 of trade. Personal disqualifications are the result either of 
 the possession of a character which does not admit the con- 
 currence of the mercantile profession, of the nationality of 
 the merchant, or of his being incapacitated on account of age 
 or condition. Legislative enactments may restrain trade 
 by granting privileges, monopolies, patents, and copyright, 
 and also by imposing excise duties. Restraints of trade by 
 customs or bye-laws are void by statute, except the customs 
 of the city of London. Commerce is also restrained in time of 
 war, when all maritime countries assume the new character 
 of belligerents or neutrals, and some of their merchandises are 
 characterised as contraband of war. After the consideration 
 of those restrictions which affect trading, in time of peace and 
 in time of war, we shall enter into the examination of mer- 
 cantile contracts in their relation to partnership and agency, 
 mercantile instruments and mercantile property.
 
 34 OF MERCHANTS. 
 
 CHAPTER I. 
 
 OF MERCHANTS. 
 
 Section I.— DEFINITION OF MERCHANT. 
 
 37. A merchant 1 is one who exercises the mercantile 
 profession, and who intentionally and habitually deals as 
 such. All persons who, either for themselves or as agents 
 for others, seek their living by buying and selling, or by 
 buying and selling for hire, or by the workmanship of goods 
 and commodities ; all shipowners, warehousemen, and insur- 
 ance brokers, and all persons dealing by wholesale or by 
 retail, are traders under the jurisdiction of the Bankrupt 
 Law. 2 There is a difference between a transaction for private 
 purposes and one for purposes of commerce. The purchase 
 of provisions for one's own use is not trading ; but the pur- 
 chase of an article with a view to re-sell it, that is trading. 
 Certain operations are commercial in themselves — such as 
 banking, exchanges, shipping. For example, a person, not 
 a trader, by drawing a bill of exchange, would become a trader 
 with respect to that transaction. 3 
 
 38. Every man may be a trader unless personally dis- 
 qualified. This sound principle of the common law was 
 interfered with by the Statute of Apprenticeship, whereby 
 no man could exercise any trade or craft except he had served 
 seven years as apprentice. 4 The Courts of law, however, 
 
 1 The word " merchant " means one who traffics to remote countries ; and 
 " trader," one who engages in merchandise. " Many traders will necessitate 
 merchauts to trade for less profit, and consequently be more frugal." — 
 Johnson. Commerce is divided into Home trade and Foreign trade. 
 
 2 Bankrupt Consolidation Act, 12 and 13 Vict. c. 106, § lxv. 
 
 3 Com. Dig. Merchant. 
 
 4 5 Eliz. c. 4.
 
 OBLIGATIONS NOT TO TRADE. 35 
 
 being adverse to the spirit of this statute, limited materially 
 its application, and at last it was entirely repealed. 1 The pri- 
 vilege of trading, one of the most sacred principles of British 
 jurisprudence, is jealously secured by law ; and no person 
 may bind himself not to employ his talent, his industry, or 
 his capital, in any useful undertaking in the kingdom — such 
 voluntary restraint being considered illegal and void. 2 
 
 Section II.— RESTRAINTS BY OBLIGATIONS NOT TO TRADE. 
 
 39. There are, however, circumstances under which a per- 
 son may agree to a partial restraint of trade for a valuable 
 consideration ; and such an agreement would be good or bad, 
 according as the protection from opposition is necessary for 
 the bond fide purposes of the business. 3 But where the re- 
 straint is longer and wider than the protection of the party 
 with whom the contract is made can possibly require, such 
 restraint would be considered unreasonable in law, and the 
 contract which would enforce it would be held void. 4 For 
 example, an agreement between a druggist and his assistant, 
 by which the latter bound himself not to exercise at any time 
 thereafter the trade of chemist and druggist, in the town of 
 Taunton, or toithin three miles thereof, under a penalty of 5001., 
 was held valid, notwithstanding the restriction was infinite as 
 to duration. 5 An agreement between a surgeon-dentist and 
 his assistant for four years, the dentist engaging to instruct 
 him in the business, on condition that after the expiration 
 of the term the assistant should not carry on that business in 
 London, was considered reasonable, and not invalid. Two 
 parties, having been partners as publishers of books, on dis- 
 solution of partnership agreed that one of them should retain 
 the whole of the partnership stock, and should indemnify the 
 
 1 54 Geo. III. c. 96, § 1. 
 
 2 Mitchel v. Reynolds, 1 Smith's Lead. Cases, 171. 
 
 3 Tallis v. Tallis, 1 Ellis and Blackburn, 391. 
 
 4 Hitchcock v. Coker, 6 A. and E. 446. 
 
 5 Ibid. 
 
 6 Mallan v. May, 11 M. and W. 653. 
 
 d2
 
 30 OP MERCHANTS. 
 
 other against all liabilities, and pay him a large sum of 
 money, provided the latter would not directly or indirectly be 
 concerned in the canvassing trade, in London, or within L50 
 miles of the General Post-office; nor in Dublin or Edinburgh, 
 within fifty miles of either ; nor in any towns in (in at Britain 
 or In land, in which the continuing partner or his successors 
 might at the time have an establishment, or might have had one 
 within the six months preceding. The retiring partner having 
 broken the agreement, an action was brought, and the restric- 
 tion was not deemed unreasonable. 1 A trader may sell a 
 secret in his business, and restrain himself generally from 
 using it. 2 
 
 Section III.— RANK AND PROFESSIONS INCOMPATIBLE WITH 
 TRADING. 
 
 40. By the Eoman law, nobles and dignitaries were pro- 
 hibited from trading. No senator, or the father of a senator, 
 could possess a ship above 300 amphorae ; but privileges were 
 granted to merchants who imported provisions for the city. 3 
 By the Russian Swod, 4 nobles in the service of the empire 
 cannot be admitted to the guilds. In France, by an edict of 
 Louis XIV., noblemen were allowed to enter into partnership, 
 and be interested in merchant vessels, produce, and manufac- 
 tures, without losing on that account their titles to nobility, 
 provided they did not sell by retail. In the United King- 
 dom, there are numerous instances of peers being elected from 
 the mercantile profession, and of their continuing, after their 
 elevation to the peerage, to be interested in trade. 
 
 41. One of the Professions inconsistent with the respon- 
 sibilities and cares of a merchant is the military: soldiers 
 were prohibited by the Roman law from engaging in trade, 
 and are now prohibited by the Russian Swod. By the eccle- 
 siastical law, the clergy cannot engage in trade. The same 
 
 1 Taffis v. TalHs, 1 Ellis and Blackburn, 301. 
 
 2 Bryson v. Whitehead, 1 Sim. & Stu. 74. 
 
 3 See Dr. Taylor's Summary of the Roman Law. 
 
 4 Russian Swod, Tit. Merchant, 14.
 
 NATIONAL CHARACTER OF THE MERCHANT. 37 
 
 prohibition was adopted by the French law; but it has not 
 been introduced into the civil code. In Spain and Russia, 
 ecclesiastics cannot trade ; nor in the United Kingdom : 
 except that, by a recent statute, 1 they may be members of 
 joint-stock companies. There are other professions with 
 which trading could not be associated, such as magistrates, 
 judges, public functionaries, officers of customs, or members 
 of the legal profession. In France, brokers cannot trade 
 on their own account. It may be remarked, that whilst 
 such individuals are prohibited from trading, they are not 
 the less bound by their own engagements in trade. Their 
 possessing a rank or profession incompatible with trading- 
 does not produce any personal incapacity, and such parties 
 would be subjected for their acts of trade to the jurisdiction of 
 commercial tribunals, or other regular courts of justice. 
 
 Section IV.— NATIONAL CHARACTER OF THE MERCHANT. 
 
 42. Every person born in the British dominions, or of a 
 British mother, is a British subject. The children of foreign 
 subjects, born in the British dominions, are British subjects. 
 A person has a right of nationality by birth, and may acquire 
 it by naturalization. The domicile of birth or of origin is 
 retained until the party hath abandoned it, and hath acquired 
 another as his sole domicile. 2 The domicile of choice is 
 that which a person himself establishes. In time of war, the 
 domicile or national character of the merchant, of goods, 
 and of ships, becomes a matter of serious investigation. If 
 a person goes into another country, and engages in trade. 
 and resides there, he is by the law of nations considered as 
 a merchant of that country. 3 A person will acquire the 
 national character of the place where he resides, when the 
 purposes for which- he went to the country, the time he has 
 resided or intended to reside there, the extent of business, 
 
 1 1 and 2 Vict. c. 106, §§ 29—31. 
 
 2 Dalkousie v. McDouall, 7 CI. and Finl. 817. 
 
 3 Per Lord Stovvell, The Indian Chief, 3 Rob. 18. Phillimore on Domi- 
 cile, g eeiv.
 
 38 OF MERCHANTS. 
 
 or the familiar ties which he may have formed, are sufficient 
 to establish his domicile there. " Questions of residence or 
 domicile," said the learned Lord Stowell, 1 "are questions 
 of considerable difficulty, depending on a great variety of 
 circumstances, hardly capable of being defined by any general 
 precise rules. The active spirit of commerce now abroad in 
 the world still further increases the difficulty, by increasing 
 the variety of local situations in which the same indivi- 
 dual is to be found at no great distance of time, and by that 
 sort of extended circulation, by which the same transaction 
 communicates with different countries. Time is the grand 
 ingredient in constituting domicile. If a person goes to a place 
 only for a special purpose,— if the purpose be of a nature 
 that may probably, or does actually, detain the person for a 
 great length of time, — a general residence might grow upon 
 the special purpose. At the same time, though a person may 
 have resided in a place for only a short period, if he had 
 arrived there with the intention of permanent residence, that 
 would be sufficient. 2 
 
 43. A national character, with respect to certain trans- 
 actions, may be acquired even without permanently residing 
 at the place. A man may have mercantile concerns in two 
 countries ; and if he acts as a merchant in both, he might 
 be considered as a subject of both, with regard to the trans- 
 actions originating respectively in those countries. A count- 
 ing-house or fixed establishment is not essential to constitute 
 a man a merchant of any place ; if he is there himself, and 
 acts as a merchant of that place, it is sufficient. 3 A person 
 may reside in a neutral country, and trade in the hostile ; or 
 he may have connexions, and be a partner, in a house of trade 
 in the enemy's country. In that case, the transactions origi- 
 nating w T ith the house in the enemy's country would be hostile, 
 and those arising out of his other trade would be exonerated. 4 
 A merchant will be deemed to reside in a country so long 
 as he remains there. A mere intention to remove is not suf- 
 
 1 The Harmony, 2 Rob. 322. 2 The Diana, 5 Rob. 60. 
 
 3 The Jonge Klassina, 5 Rob. 303. * The Portland, 3 Rob. 41,
 
 FORMS AND EFFECTS OF FOREIGN CONTRACTS. 3 ( J 
 
 ficient without some overt act, some solid fact, showing that 
 the party is in the act of withdrawing. 1 The character of 
 consul would not protect that of merchant, united in the same 
 person. A consul residing in a country, and trading there, 
 would he deemed a subject of that country. In Eastern 
 countries, Europeans trading under the shelter and protection 
 of some factory, or national association of merchants, are pre- 
 sumed to take their national character from that association 
 under which they live and carry on their commerce. 2 
 
 44. The national character of a ship is determined by 
 the residence of the owner ; 3 but if she navigates under the 
 pass of a foreign country, she would be considered as bearing 
 the national character of that nation under whose pass she 
 sails. 4 So, if a ship were chartered to convey armed troops or 
 officers in the military service of the enemy, she would acquire 
 a hostile character. 3 The mariners are characterised from the 
 national character of the country in whose service they are 
 employed, and a master's national character is inferred from 
 his employment. 6 
 
 Sectiox V.— FORMS AND EFFECTS OF FOREIGN CONTRACTS. 
 
 45. When orders are sent to foreign countries, the con- 
 tracts, to be valid and obligatory, must be executed in certain 
 prescribed forms, which vary according to the law in different 
 places. It is often difficult to ascertain what law is to regulate 
 the contract, and, when the contract is entered into in one 
 place and executed in another, which law is to prevail. Much 
 learning has been bestowed on this important subject. The 
 first point to be determined is, where the contract is considered 
 as concluded ; and this is by no means of easy solution, espe- 
 cially where the contract is made by correspondence. Every 
 agreement consists of a proposal on the one side, and assent 
 on the other, and, until the terms of the contract are mutually 
 and finally agreed upon, either party may retract. As a 
 
 1 Munroe v. Douglas, 5 Mad. 379. 2 The Indian Chief, 3 Rob. 32. 
 
 3 The Vigilantia, 1 Rob. 13. 4 The Trow Elizabeth, 5 Rob. '2. 
 
 5 The Orozembo, 6 Rob. 433. 6 The Frederick, 5 Rob. 8.
 
 40 OF MERCHANTS. 
 
 general rule, the place in which the assent is given, is 
 deemed the place where the contract is made. Suppose a 
 merchant at Genoa, by letter or by agent, offers his goods to 
 a merchant in London, at a certain price, and the latter 
 agrees to purchase them at such price, the contract is deemed 
 as made in London. If, however, the London merchant re- 
 fused the goods at such a price, but offered to take them at a 
 lower price, and the merchant at Genoa acceded to that offer, 
 then the contract is deemed as concluded at Genoa. 
 
 46. If the contract be valid by the law of the place where 
 it is made, the same is valid everywhere; except that 
 no nation is bound to recognise contracts injurious to its 
 interests or convenience, or founded on moral or political tur- 
 pitude, although valid where they were made. So, vice versa, 
 a contract void or illegal where it is made, would be void 
 and illegal everywhere. 1 Therefore, if a contract be rendered 
 invalid by the want of the formalities or solemnities required 
 by the law of the place where it is made, the contract 
 would be invalid everywhere else. 2 This rule, however, 
 relates to the nature, the obligation, and the interpretation 
 of the contract. As, for example, in the case of a partner- 
 ship : if, by the law of the place where the contract is 
 made, partners would be liable in solido, although by the 
 taw of the domicile of the partnership they would only be 
 liable for a proportionate share, the law of the former would 
 follow the debt everywhere. Or, in other words, if a partner 
 of an American house, with limited liability, makes a con- 
 tract in England, where partners are liable to the whole 
 extent of their property, he would become liable for the debt 
 according to the law of England, unless the contract had been 
 entered into according to the law of America. 
 
 47. While the construction of contracts is governed by the 
 law of the place in which they are made, the remedy upon 
 
 1 Story, Conflict of Law, §§ 242, 243. Ibid. § 260. Ersk. Inst. b. iii. tit. 2, 
 §§ 39—41, pp. 514, 515. 
 
 2 Clegg v. Levy, 3 Camp. 166. Alvc, v. Hodgson, V T. II. 241. James v. 
 t'atberwood, 3 Dow. & Ry. 190.
 
 FORMS AND EFFECTS OF FOREIGN CONTRACTS. 41 
 
 them — such as the mode of suing, and the time of suing — 
 must be pursued by such means as the law points out where 
 the parties reside. 1 The lex loci acts upon the right, the 
 lex fori upon the remedy. So it is a rule, that a debt con- 
 tracted in a foreign country may be enforced wherever the 
 debtor or his property may be found, and according to the 
 law on debtor and creditor prevailing in that country. A 
 Spaniard and a Portuguese had some mercantile transactions 
 together in Portugal, by which the Portuguese became indebted 
 to the Spaniard. They afterwards came to England, and the 
 Spaniard caused the Portuguese to be arrested for the debt 
 stated to have accrued in Portugal. The Portuguese produced 
 evidence, showing that by the law of Portugal a debtor was 
 not liable to arrest, and therefore he claimed to be discharged 
 in this country. But Lord Tenterden decided that the Por- 
 tuguese was not entitled to the relief sought. When a suit is 
 instituted between parties in one country on a contract made 
 in another, the remedy must be taken according to the lex 
 domicilii, 2 
 
 48. All questions of minority or majority, incapacity con- 
 sequent on coverture, emancipation, and other personal qua- 
 lities and disabilities, arc governed by the lex loci contractus, 
 or the law of the place where the contract is made or the act 
 done. 3 Persons are presumed to contract by the law of the 
 place where they reside, unless the contrary is shown. As a 
 general rule, personal property follows the owner, and has no 
 locality, whilst real property is governed by the law of the 
 place where the property exists. With respect to foreign 
 judgments subject to examination, they are ground of action 
 everywhere, and cannot be questioned in the courts in this 
 country; and to render a judgment void, on the ground 
 that it is contrary to. the law of the country where given, it 
 must be shown clearly and unequivocally to be so. 4 England, 
 
 1 Story, Conflict of Law, § 556. Ferguson v. Fyffe, 8 CI. and Fin. 121. 
 Gener. Steam Navig. Co. v. Guillou, 11 M. and W. S77. 
 
 2 Do la Vega v. Vianna, 1 B. and Ad. 284. 
 
 3 Walker v. Witter. 1 Doug. 6, u. Martin v. Nicolls, 3 Sim. 44. 
 
 1 Becquet v. Mac Carthy, 2 B. & Ad. 951. Rose v. Himley, 4 Crunch, 269.
 
 42 OF MERCHANTS. 
 
 Scotland, and Ireland, though forming one integral kingdom, 
 are still foreign to each other with respect to their municipal 
 laws; consequently, a judgment obtained by the courts of 
 either country is not enforced by the courts of the other, and 
 a new action needs be introduced. A Bill has been brought 
 into the House of Commons to enable execution to issue in 
 any part of the United Kingdom, under a judgment obtained 
 in any court in England, Scotland, or Ireland. 
 
 Section VI.— ALIENS. 
 
 49. An alien is a person born out of the jurisdiction of the 
 British dominions. Aliens are either friends or enemies, 
 according as the country to which they belong is at peace 
 or war with this country. An alien enemy is forbidden to 
 trade, except by licence ; but an alien friend possesses the 
 same rights to trade as a native. A liberal policy is all but 
 universally adopted with respect to aliens ; all governments 
 having experienced that the prosperity of a country is greatly 
 promoted by the affluence of strangers, and by an unlimited 
 extension of foreign commerce. 
 
 50. In the United Kingdom, by Magna Charta and subse- 
 quent statutes, merchants were allowed freedom to depart, 
 come and carry, buy and sell, without any interruption, not- 
 withstanding any charter or usages to the contrary. The last 
 Statute 1 on Aliens establishes the right of aliens to take and 
 hold, by purchase, gift, or bequest, every species of personal 
 property ; and also to take and hold any land, houses or other 
 tenements, for the purpose of residence or of occupation, or for 
 the purpose of business, for any time not exceeding twenty-one 
 years, with the same rights, remedies, and privileges as if he 
 were a natural-born subject, except the right to vote at elections 
 for Members of Parliament. Aliens may become naturalized 
 by obtaining a certificate from the Secretary of State for the 
 Home Department, which grants them all the rights and 
 capacities of a natural-born subject, except the capacity of 
 
 1 7 & 8 Vict. c. 66.
 
 OF ALIENS. 43 
 
 being a member of the Privy Council, or of either House of 
 Parliament. The question whether a foreigner is entitled to 
 copyright, and right to patent, in this country, will be con- 
 sidered under the respective heads on those subjects. 
 
 51. In the United States of America, aliens are, by com- 
 mon law, under the same disabilities as in England, with 
 respect to real estate. But as after five years' residence they 
 and their families are entitled to the benefit of naturalization, 
 the rigorous and inhospitable doctrine of the common law is 
 practically superseded. 1 An alien may, by becoming natural- 
 ized, be entitled to all the privileges of natural-born subjects; 
 except that a residence of seven years is required to qualify an 
 alien for a member of Congress, and that no person except a 
 natural-born subject can be a governor of a State, or President 
 of the United States. By special statutes of several States, viz. 
 New York, Louisiana, Maryland, South Carolina, Delaware and 
 Missouri, Pennsylvania, Kentucky, Virginia, Michigan, New 
 Jersey, Illinois, Indiana, Ohio, North Carolina, Vermont, and 
 Connecticut, aliens have the privilege to take, hold, and 
 transmit real property. 2 A liberal policy has thus been adopted 
 towards foreigners, worthy to be followed by Great Britain 
 and other Continental States. In France, aliens may possess 
 both personal and real property ; yet they may not be brokers, 
 members of the tribunals of commerce, or prudhommes. In 
 the Two Sicilies, Sardinia, Spain, and Portugal, aliens have 
 the same rights as those granted to their subjects by the 
 governments of the countries to which such foreigners belong. 
 In Holland, a foreigner acquires the same rights as native 
 subjects, after six years' residence ; 3 in Austria, after ten 
 years, or by special authority. 4 In Russia, a foreigner, to be 
 able to trade, must take the oath of allegiance, and be enrolled 
 in one of the three .guilds. In Sweden, a foreigner must 
 first present himself before a burgomaster, and then he can 
 only trade wholesale. Having examined those restraints 
 which proceed from the possession of a character incompatible 
 
 i Kent's Comm. vol. ii. p. 24, 7th edit. 2 Ibid. p. 34. 
 
 3 Dutch Civil Code, N. 8, § 2. 4 Austr. Civil Code, No. 28, § 3.
 
 44 OF MERCHANTS. 
 
 with trading, and from the nationality of the merchant ; we 
 now pass to personal disqualifications resulting from inca- 
 pacity on account of age or condition. 
 
 Section VII.— OF MINORS. 
 
 52. The law of majority is a social institution, which varies 
 with the governments, the habits, and the climates of all 
 countries. But, above all, it is affected by the development 
 of moral organization, as natural capacity is the true measure 
 of legal capacity. Majority is fixed at twenty- one in the 
 United Kingdom, France, the two Indies, Sardinia, Bavaria, 
 Saxony, Russia, and the United States ; at twenty-three in 
 Holland ; at twenty-four in Austria and Prussia ; at twenty- 
 five in Denmark, Spain, Portugal, and in the Cape of Good 
 Hope. 
 
 53. A minor is a person under twenty-one years of age. 
 A person born on the 1st of January, 1830, would attain 
 his majority on the last day of December, 1851. A minor, 
 until he attains his majority, has no authority to enter into 
 any contract, because of his want of sufficient discernment 
 and understanding. He cannot bind himself by any bills 
 of exchange, drawn, accepted, or endorsed, in the course 
 of trade ; nor can he be made a bankrupt. 1 He cannot 
 bind himself by any deed, or alienate any land, goods, or 
 chattels ; and he would not be bound by an agreement to 
 refer disputes to arbitration. 2 Contracts by infants are either 
 good, void, or voidable. They are good, when entered into 
 for necessaries; void, when they are to their prejudice; and 
 voidable, when they are of an uncertain nature as to benefit or 
 prejudice. Thus a minor may, for beneficial purposes, be a 
 partner, and be entitled to all the benefits resulting from the 
 partnership, though he will not be liable for the losses, if he 
 choose to take advantage of his infancy. 3 He may also pur- 
 chase lands, and perform other functions, notwithstanding he 
 would not be liable for contracts entered into during his 
 
 1 Belton v. Hodges, 9 Bing. 365. 2 Miliier v. Harewood, 18 Ves. 274. 
 
 3 Goode v. Harrison, 5 B. & Aid. 156.
 
 OF MINORS. 45 
 
 minority. A minor may bind himself apprentice for seven 
 years, but it may be avoided by him at twenty-one : if, how- 
 ever, his father was a party to it, he would be bonnd. 1 
 
 54. In Scotland, minors of the age between fourteen and 
 twenty-one have greater latitude in their power to contract 
 than in England; and, on the principle that the disabilities 
 of the minor are, in fact, his privileges, it allows him power 
 to enter into any contract, to become a partner in a company, 
 grant bills or other personal securities, provided his inexpe- 
 rience be not taken advantage of, in which case the minor 
 would be entitled to complete restitution. 2 An infant in 
 Scotland may be the petitioning creditor in a sequestration, or 
 be himself made a bankrupt. 3 
 
 55. The infant, on his attaining his majority, may either 
 confirm or annul his previous acts ; but he must give notice of 
 his intention should he desire to renounce, otherwise he will 
 become liable. 4 Where a minor held himself out as in part- 
 nership with a person, and continued to act as such till within 
 a short period of his coming of age, his ceasing then to act as 
 a partner, or to purchase goods without giving notice to any- 
 body that he had so ceased to be a partner, would not be 
 sufficient to exonerate him from the liability of the partner- 
 ship. If there were a partnership continuing when he came 
 of age, that partnership must be taken still to have con- 
 
 1 Woode v. Fenwick, 10 M. & W. 195. Gray v. Cookson, 16 East 13. Branch 
 v. Ewington, 2 Doug. 518. 
 
 2 Fraser's Personal and Domestic Relations, vol. ii. p. 174. 
 
 3 Miller v. Aitken, 13th June, 1840, and ibid. The difference between the 
 law of England and Scotland, in the age at which a minor may act as a trader, 
 and be rendered responsible to his engagements, might be removed by fixing 
 for the United Kingdom eighteen years as the age at which a person may bind 
 himself by his acts of trade. When we consider the amount of information 
 generally possessed by young men devoted to mercantile pursuits, and the busi- 
 ness habits which they early acquire, the complete disability which attaches 
 till the age of twenty-one may prove in many cases most injurious. No in- 
 convenience was experienced in France when the age of majority was changed 
 from twenty-five to twenty-one; and such is the physical and mental develop- 
 ment now in progress in this and other countries, that a reform in this great 
 social institution may be rendered necessary. 
 
 4 Goode v. Harrison, 5 B. & Aid. 156.
 
 46 OF MERCHANTS. 
 
 tinued till something was done to dissolve it ; and no notice 
 having been given by the infant to dissolve the partnership, 
 he continued responsible for all the debts contracted by the 
 firm after he became of age. 1 Minors may, by statute, be 
 shareholders in joint-stock companies, and they are liable to 
 pay calls made whilst they were infants, unless they elect 
 to waive or disagree to the purchase altogether, either during 
 infancy or on attaining full age. 2 With a view to meet the 
 looseness of proof as to the fact of acknowledgment at majority 
 of deeds or obligations entered into during minority, it is re- 
 quired by statute law, 3 that in order to charge a person upon 
 a promise made after full age to pay any debt contracted 
 during infancy, or upon a ratification after full age of any 
 promise or single contract made during infancy, such pro- 
 mise or ratification must be in writing, signed by the party 
 himself. It is not, however, required that the sum or the date 
 be given ; it is enough if the ratification has a direct con- 
 nexion with the original deed. Massey accepted a bill of 
 exchange drawn by Hunt for 101?. in February 1832, payable 
 five months after date ; he being then under age ; he became of 
 age on the 19th of June, and the bill became due on the 4th 
 of July, 1832. Hunt sued Massey, who pleaded that he 
 was under age when he accepted the bill. The drawer of it 
 then produced a letter in Massey' s handwriting, purporting by 
 its date to have been written after he came of age, addressed 
 to his guardian, requesting him to pay the amount. This 
 letter was proved to have been delivered to Hunt's clerk, but 
 it did not appear when. It was decided that the letter must 
 be prima facie presumed to have been written on the day on 
 which it bore date, and that it amounted to a ratification of 
 the original promise to pay, according to the tenor and effect 
 of the bill of exchange. 4 The effect of a ratification is to set 
 up and give validity to an otherwise invalid contract, to 
 
 1 Good v. Harrison, 5 B. & Aid. 156. 
 
 2 North West. Railway Co. v. M'Michael, 5 Excli. 114. Leeds and Thirsk 
 Railway Co. v. Fearnley, 4 Exch. 26. Cork and Bandon Railway Co. v. 
 Cazenove, 10 Q. B. 935. 3 9 Geo. IV. c. 14, § 5. 
 
 4 Hunt v. Massey, 5 B. & Ad. 902. Harris v. Wall, 1 Exck. 122.
 
 OF MARRIED FEMALES— IDIOTS — DBUNKAEDS. 47 
 
 remove the Lav of infancy. It may be observed that the 
 privileges of a minor are personal privileges, and a person of 
 full age contracting with a minor would be bound by his 
 contract. 1 
 
 56. By the French law, minors emancipated, of the age of 
 eighteen years complete, may engage in trade, provided they 
 are authorized by their father or mother, or in case of death, 
 interdiction, or absence of the father, or, in the want of father 
 and mother, by a deliberation of a family council confirmed 
 by the civil tribunal, and provided also such act of authoriza- 
 tion has been registered and put up at the tribunal of com- 
 merce of the place where the minor wishes to establish his 
 domicile. By the authority to trade, a minor emancipated 
 acquires a right to buy and to sell, to sign bills, and even 
 to mortgage his property ; but it seems that he has no 
 authority to sell his real property. 
 
 Section VEX— MARRIED FEMALES— IDIOTS— DRUNKARDS. 
 
 57. The disability of married females to trade on their own 
 account arises from the fact that as by law all the property 
 of the wife is vested in her husband, she is deprived of the 
 means of satisfying private engagements. 2 Owing to the new 
 relations in which she stands, all transactions into which she 
 had entered before her marriage, which require a continued 
 
 1 Warwick v. Bruce, 2 M. and S. 205. Taylor v. Croker, 4 Esp. 187. 
 
 2 The inability of a married woman to hold property independent of her 
 husband is founded on the principle, that the legal existence of the woman 
 as a distinct person is suspended during marriage, and is incorporated with 
 that of her husband. In the United States of America, by recent legislation, 
 the relations of husband and wife in respect to the property of the latter 
 were essentially altered. By a statute of New York of 1848, and amended 
 in April 1840, it was enacted that the property of a woman thereafter 
 marrying, should continue her sole and separate property, as if she were a 
 single female, not liable to her husband's debts, nor subject to his disposal ; 
 that any married woman might inherit or take property by gift, &c, from 
 any person other than her husband, and hold the same to her separate use in 
 the same manner as if she were unmarried. — Kent's Comm. vol. ii. p. 109, 
 7th edit. A Bill has been introduced into the House of Commons this 
 present session (1854), to enable married women to dispose of reversionary 
 and other interests in personal estate.
 
 48 OF MERCHANTS. 
 
 assent to their subsistence, arc by the marriage brought to a 
 close. Thus, a submission to arbitration is avoided, a partner- 
 ship is dissolved, and an agency is thereby recalled. 1 The 
 disability of married women is even more conclusive than that 
 of infants, inasmuch as the acts of an infant are voidable only, 
 and they may be ratified at full age, but the acts of a married 
 woman are absolutely void. 
 
 58. In England a married woman living separate from her 
 husband, and having a separate maintenance, except where 
 the husband has abjured the realm, or has been transported, 
 cannot engage in trade ; and neither she nor her husband, 
 unless the latter had acquiesced to it, would be bound by 
 the engagements resulting from her trading. In Scotland, 
 engagements so contracted would be obligatory, and might 
 be enforced against herself and her husband. By the custom 
 of London, a married woman may trade as a single woman, 
 but the trade must be carried on in the city only, on the sole 
 account of the wife, and the husband cannot intermeddle with 
 it. As a necessary consequence of the wife's power to trade, 
 she may be made a bankrupt. 2 
 
 59. Incapacity to contract is also produced by lunacy and 
 drunkenness. Contracts made by idiots are void, because 
 there is a want of rational and deliberate assent. 3 Whenever 
 a person is not capable of understanding what he did when 
 the general object of it is explained to him, his acts are alto- 
 gether void. So it is in case of drunkenness : a bill of 
 exchange signed in a state of intoxication woidd not be valid. 
 If, however, when he is sober he confirms it, or does not dis- 
 prove it, he would become liable to it. 
 
 1 Charnley v. Winstanley, 5 East, 266. Wrexham v. Hudleston, 1 Swanst. 
 517 n. 
 
 2 Bright's Husband and Wife, vol. ii. p. 77 ; Lavie v. Phillips, 3 Burr. 
 1782 — .1785. The difference between the law of the two countries and the 
 custom of the city of London may be removed by allowing a married woman 
 to trade with the consent of her husband, and be bound by her obligations 
 with respect to it. 
 
 3 Yates r. Boen, 2 Str. 1104. Bagster v. Earl of Portsmouth, 5 B. and C. 170.
 
 OF RESTRAINTS OF TRADE. 49 
 
 CHAPTER II. 
 
 OF RESTRAINTS OF TRADE, BY REGULATIONS AND PRIVILEGES. 
 
 60. The liberty of trading is no longer fettered by mani- 
 fold regulations, nor restricted by the monopolies formerly 
 granted by the crown to- private individuals and companies. 
 It has been recognised in the United Kingdom that the 
 progress of commerce is intimately associated with unre- 
 stricted competition and complete freedom. Yet the principle 
 is but partially admitted in other countries. Commerce in 
 Russia is at the present day under a system of vexatious 
 interference. All merchants there must be enrolled in one 
 of the guilds : to be admitted to these guilds, a certain capital 
 proportioned to the guild is required : the merchants of the 
 first guild can trade to any amount ; those of the second 
 and third can only trade to a limited extent. A tax is also 
 imposed for the licences required, at a rate proportioned to 
 the character of each guild. In France, a similar system 
 existed till 1789, when all privileges were abolished, and every 
 one was allowed to carry on any trading, or exercise any 
 profession, art, or craft, as he may think proper. 
 
 61. Among the restraints of trade by legislative enactments, 
 may be classed the prohibition from contracting on Sundays or 
 holidays. The statute of Charles II. enacts, " that no trades- 
 man, artificer, workman, labourer, or other person whatsoever, 
 shall exercise any worldly labour, business, or work of their 
 ordinary callings upon the Lord's day, or any part thereof, 
 (works of necessity and charity only excepted,) and that every 
 person, being of the age of fourteen years or upwards, 
 
 E
 
 50 OF RESTRAINTS OF TRADE. 
 
 offending in the premises, shall for every such offence forfeit 
 the sum of five shillings ; and that no person shall publicly 
 cry, show forth, or expose to sale, any wares, merchandises, 
 fruit, herbs, goods, or chattels whatsoever, upon the Lord's 
 day, or any part thereof, upon pain that every person so 
 offending shall forfeit the same goods, so cried, or showed 
 forth, or exposed to sale." 1 Numerous decisions were given 
 upon this act, tending to establish that a sale of goods made 
 on a Sunday, which is not made in the exercise of the 
 ordinary calling of the seller or his agent, would not be void ; 
 the words "ordinary calling " implying that which the ordinary 
 duties of the calling bring into continued action. In order 
 to avoid the contract, the transaction must be completed on 
 Sunday. The mere inception of a contract on a Sunday is 
 not sufficient to avoid it, provided it be completed the next 
 day ; 2 but if there remains nothing to be done but to ap- 
 pend the signature on another day, the contract could not be 
 maintained. In Scotland, bargains or engagements made on 
 Sunday are not void, 3 but arrestment on the Lord's day is 
 null. 4 Although it is not in the province of the civil magis- 
 trate to enforce the observance of private religious duties, 
 the solemnization of the Sabbath, being both a Divine ordi- 
 nance and a necessary arrangement in the social economy, 
 ought to be jealously preserved as a national institution, and, 
 with wise discretion, the laws enacted against its infringement 
 ought not to be allowed to remain obsolete. 
 
 62. In France, by the law of 1814, all works and sales 
 were prohibited on Sundays and holidays. At that time, 
 however, the Charte declared the Roman Catholic religion to 
 be the religion of the State; whilst the Charte of 1830 declared 
 it to be only the religion of the majority of the French. 5 This 
 difference in the relative position of the religion of the State 
 
 1 29 Charles II. c. 7, § 1. See also 21 Geo. III. c. 49. 
 
 2 Bloxham r. Williams, 3 B. & C. 233. 
 
 3 Bell's Principles, § 44. Oliphant, Feb. 3, 1662. M'Pkerson, &c. 1824. 
 
 4 Stair's Institute, b. ih. tit. 1, § xxxvii. 
 
 5 Masse, Droit Commercial, vol. ii. p. 479.
 
 OF REGULATIONS AND PRIVILEGES. 51 
 
 to the other religions, suggests the consideration of how far the 
 Church of a section of the community has a right to compel 
 general conformity to its rites and ceremonies. A law enjoin- 
 ing the observance of certain ferial days, established by one 
 religion, always presupposes the superior authority of such a 
 religion over the others, and the right also to subject them 
 to its own regulations : a principle which operates unjustly 
 towards the minority. With respect to the observance of the 
 Sabbath, the universal benefit arising from such an institution 
 outweighs any just ground of dissent on the part of the 
 minority. Such consideration, however, can scarcely be ad- 
 vanced for any other fast or feast days. In England and 
 Ireland, Good Friday and Christinas day are commonly ob- 
 served as close holidays in the same manner as Sundays, 
 though contracts made on those days are not void. But with 
 regard to bills of exchange or promissory notes becoming- 
 due on Good Friday and Christinas day, they are by statute 1 
 made payable on the day before. The same is the case for 
 any day appointed by her Majesty's proclamation, for a day 
 of solemn fast or a day of thanksgiving. These provisions 
 do not apply to Scotland, where Good Friday and Christmas 
 day are not observed as holidays. 
 
 1 7 and 8 Geo. IV. c. 15 for England, and 9 Geo. IV. c. 24 for Ireland. 
 
 E 2
 
 52 THE LAW OF PATENT. 
 
 CHAPTER III. 
 
 THE LAW OF PATENT. 
 
 Section I.— NATURE AND POLICY OF PATENT LAW. 
 
 63. It is foreign to the object of this work to enter into an 
 elaborate discussion on the principles and policy of Patent 
 Laws. Man's ideas and thoughts are inherent with his being ; 
 he has therefore a natural right to the results of his intellec- 
 tual labours, whether in literature, designs, or inventions, and 
 to preserve a sole and exclusive power and possession over 
 them. But it is a peculiarity of intellectual property, that it 
 is non-existent until it be embodied in some material form, 
 and being so embodied, it becomes communicated by publi- 
 cation or otherwise, so that no exclusive title to it by pre- 
 occupation and possession can exist. It has, therefore, been 
 deemed necessary, for the encouragement of learning and 
 the promotion of the arts, to establish Patent Laws whereby 
 authors and inventors may, for limited times, enjoy the exclu- 
 sive right to their respective writings and discoveries. Such 
 privileges are conceded on the ground that but for such se- 
 curity afforded against piracy, inventions would not be made 
 known ; that it is the expectation of deriving remuneration 
 which acts as the main incentive to the exercise of ingenuity; 
 and, above all, that it is just to secure a reward to ingenious 
 men, in consideration of the great benefit they confer upon 
 mankind. It may, however, be observed, that inventions are 
 in some cases the result of prolonged researches and many 
 fruitless experiments ; in others, of pure accident, and even of
 
 NATURE OF PATENT LAW. 
 
 a mistake ; they also proceed from attempts to cheapen 
 or to improve a manufacture. Patent Laws are scarcely 
 requisite in order to secure the publication of inventions, 
 inasmuch as, in the nature of things, few inventions would 
 be of any use to the inventors unless made known ; whilst 
 such laws often act injuriously in interfering with the rights of 
 bond fide inventors, who cither simultaneously, or even after- 
 wards, but independently, may have arrived at the same 
 result, thereby obstructing, instead of assisting, the progress 
 of science. 1 Conceding the justness of the claims of inventors 
 to participate in the profits derived from their inventions, the 
 object is wholly defeated by the enormous cost of obtaining 
 a patent in the United Kingdom, amounting to about 1701., 
 whereby inventors are often under the necessity either of 
 keeping the secret, or of assigning the right to the patent for 
 a trifling consideration. 
 
 64. That the Patent Laws may afford reward and encou- 
 ragement to those for whose benefit they are enacted, the cost 
 should be nominal, except what may be required for the 
 purpose of registration and for the maintenance of a Patent 
 Office ; moreover, if the grant of a patent be to encourage 
 inventions, it should be exclusively limited to such. Where 
 an invention has already been used and published in other 
 countries, it is no more an invention. Yet a patent may be 
 obtained in the United Kingdom, for an invention already 
 used and published in other countries, till after the expiration 
 of the term granted by the foreign patent ; 2 which is a granting 
 
 1 The Report of the Prizes of the Exhibition of 1851, on Philosophical 
 Instruments, and Processes depending upon their use, refers to the effects of 
 the Patent Law in the following terms : — " We cannot help recording how 
 clearly the injurious effects of patent enrolments on science were shown in 
 the course of our labours. Many of the ingenious contrivances exhibited 
 proved to be merely variations for the avoidance of infringements of patents. 
 In many cases the subjects patented were of a very trifling nature ; but still 
 their effect was to shut up the path in that direction from further improve- 
 ments. The great advance of photography, and the perfection of the micro- 
 scope, are chiefly due to the avoidance of patents in connexion with their 
 improvements." 
 
 2 15 and 16 Vict. c. 83, § 25.
 
 54 THE DAW OF PATENT. 
 
 of monopolies to mere introducers. In America, patents 
 are awarded to original inventors only. In the Patent Office 
 of America, there are indices of all the patents granted in 
 every country ; and before any patent is granted, it is care- 
 fully examined whether any invention on the subject, in 
 Germany, France, England, or elsewhere, has been recorded. 1 
 In France, no one can obtain a patent for an invention pre- 
 viously patented in another country, except the original 
 patentee or his assigns. 2 In Prussia it is the same : use and 
 publication abroad would have the same effect as use and 
 publication in Prussia. 3 
 
 Section II.— SUBJECT-MATTER OF A PATENT. 
 65. A patent is a grant by the Crown of the exclusive privi- 
 lege of making, using, or disposing of new inventions, for a 
 limited time. The prerogative of the Crown to grant monopolies 
 having been exercised without discretion, a statute was passed 
 in the reign of James, whereby all monopolies were declared to 
 be null and void, 4 " except as to letters patent and grants of 
 privilege, for the term of fourteen years or under, for the sole 
 working or making of any manner of new manufactures within 
 the realm, to the true and first inventor or inventors of such 
 manufactures, which others, at the time of making such letters 
 patent and inventions, shall not use." 5 A patent is granted 
 for fourteen years, but subject to the condition of payment of 
 certain fees and stamps, 6 at the expiration of three years and 
 seven years respectively. The patent may be further pro- 
 
 1 Evidence before the House of Lords on Patent Bills, 1S51. (580.) 
 
 2 Ibid. (2499, 2502.) 
 
 3 Ibid. (2183, 21S4.) It has been suggested that Patent Laws should be 
 abolished ; and it may be worthy of consideration whether it would not be 
 advantageous to the public and to inventors, and tend to the better ad- 
 vancement of science and art, to establish an International Order of Merit, 
 to be granted to inventors by a Council of Merit appointed by the respective 
 sovereigns, and to diminish considerably the time for which letters patent 
 are granted. 
 
 4 21 Jas. I. c. 3, § 6. 5 Ibid., and Boulton v. Bull, 2 H. Bl. 486. 
 6 See Schedule of Stamp Duties, pp. 62, 63.
 
 SUBJECT-MATTEB OF A PATENT. 00 
 
 longed for seven years after the expiration of the first term ; J 
 and if such further seven years are found not to be suffi- 
 cient, the Crown may grant an extension for fourteen years 
 longer. 2 
 
 66. The patent must be for a manufacture. The word 
 manufacture is of extensive signification : it applies not only 
 to things made, but to the practice of making — to principles 
 carried into practice in a new manner — to new results of 
 principles carried into practice. Under tilings made, may be 
 classed new compositions of things, such as manufactures in 
 the most ordinary sense of the word ; secondly, all mechanical 
 inventions, whether made to produce old or new effects. 
 Under the practice of making, may be classed all new 
 artificial manners of operating with the hand, or with instru- 
 ments in common use — new processes in any art, producing 
 effects useful to the public. 3 A new application cannot be 
 made the subject of a patent when the machinery is already 
 known ; 4 unless a very useful application and adaptation of a 
 substance had been found, the properties and qualities of 
 which for that particular purpose had never been known 
 before ; 5 or a new mode of arranging old materials, provided 
 they are accessory to a new invention of a new article. 6 In 
 improvements in machinery, if the invention consisted in a 
 perfectly new combination of parts from the beginning, though 
 all the parts separately might have been used before, the patent 
 would be good. 7 No merely philosophical or abstract prin- 
 ciple can answer to the word " manufacture ;" something of a 
 corporeal and substantial nature — something that can be made 
 by man from the matters subject to his art and skill — or, at the 
 least, some new mode of employing practically his art and skill, 
 is requisite to fulfil the conditions required by this word. 
 
 i 15 and 16 Vic. c. 83, § 17. 2 7 and 8 Vic. c. 09, §§ 2, 4. 
 
 3 Per Heath, J. Boulton v. Bull, 2 H. Bl. 486. 
 
 4 Reg. v. Cutler, 3 Car. and Kir. 234. 
 
 5 Per Colman, J. Walton v. Potter, 3 M. and G. 438. 
 
 6 Allen v. Eawson, 1 C. B. 576. Templeton r. Macfarlane, 1 C. and Fin. N.S. 604 . 
 
 7 Bovill r. Moore, 2 Marshall, 212. 
 
 s Res r. Wheeler, 2 B. and Aid. 350.
 
 56 THE LAW OF PATENT. 
 
 67. One of the requisites of an invention is its utility : it 
 must be useful for the purpose. An invention may fail in 
 two ways. A man may describe a machine, and say it does 
 so much; if, when it comes into actual practice, it fails to 
 produce that result, there is an end of the patent. It may 
 fail in another way. It may produce a movement; but 
 a movement, like gold, may be bought too dear : it may be 
 of no advantage whatever when it comes to be used. It may 
 be such, that though possibly the effect may be produced 
 which the inventor pretends to produce by it, yet it may 
 be produced at such cost, that it is not sufficiently counter- 
 balanced by the actual good resulting from it : and if it be 
 found that the old way is better with all its disadvantages, 
 then the patent fails because the invention is not useful. 1 
 
 Section III.— PRIORITY OF INVENTION. 
 
 68. To give a right of a patent, there must be priority in 
 the use and publication of the invention. 2 The patentee must 
 be the true and first inventor, and a person cannot obtain a 
 patent for an invention which has been communicated to him 
 by another within the realm. 3 The question of priority is often 
 of considerable difficulty. Scientific men have frequently at 
 the same time, independently of each other, arrived at the same 
 stage of progress, which has arisen from previous stages which 
 have been published ; but if a man arrives at one of those stages, 
 and does not think that that stage is of any value, and there- 
 fore does not claim the idea to himself, and if another man 
 afterwards has arrived at the same idea, and makes use of that 
 idea for the benefit of the public, the right of the first man is 
 extinguished, and he is not entitled, under these circumstances, 
 to come forward and oppose the claim of another. There are 
 many instances of things being kept secret and not published. 
 In the case of the achromatic telescope, it was invented by 
 
 1 Per Lord Brougham, arg. Crossley v. Beverley, Nisi Prius, Webst. Pat. 
 Cases, 109. Norman on Patent, p. 25. 
 
 2 Mullins V. Hart, 3 Car. and Kir. 297. 3 Beard v. Egerton, 3 C. B. 97.
 
 PROCEEDING TO OBTAIN A PATENT. 57 
 
 a country gentleman of the name of Hall, who did not choose 
 to take out a patent, but put the instrument into his drawer. 
 Mr. Dollond obtained a patent for it afterwards. This in- 
 strument, after the death of Mr. Hall, was found to be the real 
 achromatic telescope. It was decided that Mr. Dollond's 
 patent was not vitiated by the previous discovery of Mr. Hall, 
 who had not made it public. 1 The party who is entitled 
 to a patent is the inventor himself, and the person who 
 suggests the principle is the true inventor. 
 
 Section IV.— PROCEEDING TO OBTAIN A PATENT. 
 
 69. The mode of proceeding to obtain a patent is now 
 defined by the new act, by which a Commission of Patents for 
 invention was constituted, consisting of the Lord Chancellor, 
 and the law officers for England, Ireland, and Scotland. An 
 inventor must apply to the Crown by a petition, leaving with 
 it the provisional specification describing the whole nature of 
 the invention. The petition must bear a stamp of 51. The day 
 of delivery of such petition and declaration is to be recorded 
 at the office, and endorsed on the petition. 2 The provisional 
 specification is referred to the law officer, who, if satisfied, 
 may give a certificate of his allowance ; and then the in- 
 vention may be used and published, being protected for 
 six months from the date of the application, which is called 
 provisional protection. 3 An inventor may also deposit a 
 complete specification, which would have the same effect as 
 a provisional specification. The invention so protected is 
 forthwith advertised in the London Gazette; and any per- 
 sons opposing the grant of letters patent are at liberty to 
 make their objections, which are referred to the law officer. 1 
 The letters patent issued under the Great Seal extend to 
 the whole of the United Kingdom of Great Britain, the 
 Channel Islands, and the Isle of Man, but not to any of the 
 
 1 Evidence of Sir D. Brewster before the House of Lords. (2445, 2446.) 
 
 2 15 and 16 Vict. c. 83, § 6. s Ibid. § 9. * Ibid. §§ 12, 13.
 
 58 THE LAW OF PATENT. 
 
 Colonies, 1 unless specifically included in the letters patent; 
 and it is always understood that no letters patent so granted 
 shall have any effect in any Colony in which such patent 
 would be invalid by the law there in force at the time. 2 
 
 70. No letters patent, except where the patents are destroyed 
 or lost, ever issue on any warrant, unless application be made 
 to seal such patents within three months from the date of war- 
 rant, or unless the same be granted before the expiration of 
 the provisional protection. 3 When the applicant dies during 
 the continuance of the provisional protection, or of the deposit 
 of a complete specification, letters patent may be granted to 
 the personal representatives during the continuance of the 
 protection, or within three months after the death of such 
 applicant, notwithstanding the expiration of the term of the 
 provisional protection. If letters patent be destroyed or lost, 
 others may be issued. The letters patent may bear the date 
 of the day of the application for the same, or of the day of 
 provisional registration ; and where antedated, they are of the 
 same validity as if they had been sealed on the day therein 
 expressed; and until letters patent are actually granted, for 
 which a complete registration has been deposited, no pro- 
 ceedings may be had for any infringement committed. 4 A 
 
 1 The state of the patent law in the Colonies varies considerably. From an 
 inquiry transmitted through the medium of the Colonial Office by Mr. Curtis, 
 with a view to apply an invention to the Colonies, it appeared that in Canada, 
 letters patent for invention are granted only to subjects resident in the pro- 
 vince. In Nova Scotia, one year's residence is necessary, and the deposit of the 
 model of the invention. In New Brunswick and Prince Edward's Island, there 
 are local patent laws. In Newfoundland, an oath or affirmation must be made, 
 proving the petitioner to be the inventor. In Jamaica, Antigua, and Barba- 
 does, an agent should be appointed to introduce a Bill into the legislature. In 
 Victoria, Van Diemen's Land, the Bahamas, Grenada, St. Lucia, Nevis, and 
 British Guiana, there are no patent laws. In St. Christopher and Trinidad, a 
 patent may be obtained. In New South Wales, a deposit of 201. is required to 
 be made with the Colonial Treasurer, and petition then made to the Governor 
 in Council, with full specification of the particulars of the invention. For 
 Madras, Bombay, and Bengal, Mr. Curtis was refen-ed to the East India 
 House. (See Journal of the Society of Arts, vol. ii. p. 213.) 
 
 2 Minterv. Wells, Webst. Pat. Cases, 132. 
 
 3 15 and 16 Vict, c. 83, §§ 19, 20. 4 Ibid. §§ 21—29.
 
 TITLE AND SPECIFICATION OF A PATENT. "j9 
 
 letter patent may also be obtained for patented foreign inven- 
 tions, but all rights and privileges will eease and be void 
 immediately upon the expiration of the foreign patent ; and no 
 patent in the United Kingdom would be valid if granted after 
 the foreign patent for the same invention has expired. 1 An 
 importer of a foreign invention, by which the public is bene- 
 fited, is entitled to be put on the same footing as an original 
 inventor, when applying for a prolongation for such foreign 
 importation. 2 
 
 Section V.— TITLE AND SPECIFICATION OF A PATENT. 
 
 71. The title of the patent must be clear and specific. It 
 must not claim more than the invention, as explained by the 
 specification. The mere vagueness of the title may be an 
 objection that may well be taken on the part of the Crown 
 before it grants the patent, but it is not sufficient ground to 
 avoid the patent after it has been granted. The patent is 
 generally granted under condition that the patentee shall 
 describe and ascertain the nature of his invention, and in 
 what manner the same is to be performed within a certain 
 time: this is called the specification. This specification is 
 the very foundation of the patent. In preparing a specification, 
 it is necessary to examine thoroughly the existing state of the 
 art in which the invention is made, in this and other countries, 
 and to ascertain exactly in what the improvement consists. If 
 the invention is an old principle carried out by a new 
 machinery, the claim must be restricted to that which is really 
 new in the mode of working. Nothing is to be claimed 
 which is not new and useful. Vague generalities must be 
 avoided, lest something not new and useful should be em- 
 braced. The patentees must also describe freely and full}'- in 
 plain language, the mode in which the invention is to be 
 carried out, the processes, and the proportions of ingredients of 
 any composition, and also the uses of all and any part of the 
 
 1 15 and 10 Vict. c. S3, § 25. 
 
 2 In re Berry's Patent, 7 Moore's Rep. P. C. 187.
 
 60 THE LAW OF PATENT. 
 
 machinery. 1 The specifications are to be filed in the Court of 
 Chancery, instead of being enrolled as formerly. 2 Certified 
 printed copies of specifications, disclaimers, and memoranda of 
 alterations, are transmitted to the Director of Chancery in 
 Scotland, and to the Court of Chancery in Ireland, which 
 shall be evidence without production of originals. 3 
 
 Section VI.— NOTICE OF ALTERATION IN A PATENT. 
 
 72. When the patentee sees fit to withdraw some of the 
 points which might afford ground of objection to the whole 
 patent, he may enter a memorandum of any alteration either 
 in the title or in the specification. This is called a disclaimer, 
 the application for which is to be made at the office of the 
 Commissioners. 4 The intention of the legislature is to allow 
 a specification to be amended at any time by a disclaimer 
 subsequently enrolled, and to provide that such disclaimer, 
 having been perfected after proper precautions taken by the 
 law officers of the Crown, and after such terms have been 
 imposed as they in their discretion shall have thought fit, is 
 to be deemed and taken to be a part of the original specifica- 
 tion, except in actions pending at the time of its enrolment. 5 
 A memorandum of alteration is, therefore, part of the specifi- 
 cation, and must be dealt with in the same manner as the 
 specification. 6 
 
 73. The filing of a disclaimer, except in case of fraud, is 
 deemed conclusive as to the right of the parties to enter such 
 disclaimer. No action can be brought upon any letters patent 
 or specification on which any disclaimer or memorandum of 
 alteration shall have been filed, in respect of any infringement 
 prior to the filing of such disclaimer, unless allowed by the 
 law officer. 7 Any person, however, may enter a caveat, or his 
 
 1 Norman on Patent, p. 75. 2 15 and 16 Vict. c. 83, § 27. 
 
 3 16 and 17 Vict. c. 115, § 5. 4 5 and 6 Will. IV. c. 83, § 1. 
 
 s Rex v. Mill, 20 L. J. C. P. 16. 
 
 6 Perry v. Skinner, 2 M. and W. 471. Stead v. Carey, 1 C. B. 520. 
 ' 15 and 16 Vict. c. 83, § 39.
 
 PROPERTY AND ASSIGNMENT PATENT. 61 
 
 objection, against such disclaimer or alteration, by which he 
 will have a right to have notice of the application being heard 
 by the law officer. 1 In case the patentee has assigned a part or 
 the whole of his interest in the patent, a disclaimer and memo- 
 randum of alteration may be made notwithstanding, by him- 
 self alone, or by himself and the assigns. 2 
 
 Section VII.— PROPERTY IN PATENTS AND ASSIGNMENT. 
 
 74. It is lawful for a larger number than twelve persons to 
 have a legal and beneficial interest in a patent. 3 The patentee- 
 may assign the patent for England, Scotland, or Ireland 
 respectively, as effectually as if the patent extended to 
 England, Scotland, or Ireland only. A register of proprietors 
 is now kept, wherein is entered the assignment of any patent, 
 and the district to which such licence relates, with the name 
 of any person having any share or interest in such letters 
 patent, the date thereof, and any other matter affecting the 
 proprietorship in such patent or licence ; and a certified copy 
 of the entry may be given to any person on payment of cer- 
 tain fees, which certified copy is proof of the assignment, or 
 of the licence or proprietorship. Until such entry has been 
 made, the grantee of the letters patent is deemed the sole 
 proprietor. Certified duplicates of all entries are also trans- 
 mitted to Edinburgh and Dublin. Any falsification or forgery 
 of entries is deemed a misdemeanour; and if any person deems 
 himself aggrieved by any entry, he may apply to the Master 
 of the Rolls, or other courts of law, for an order that such 
 entry may be expunged ; and upon such application, the 
 Master of the Rolls or such court may make such order for 
 expunging, vacating, or varying such entry. 4 An assignment 
 of a patent, as of any incorporeal personal property, may be 
 made without deed. 5 
 
 1 5 and 6 Will. IV. c. 83, § 1. 12 and 13 Vict. c. 109, § 15. 
 
 2 7 and 8 Vict. c. 69, § 5. 3 15 and 16 Vict. c. 83, § 36. 
 
 4 15 and 16 Vict. c. 83, §§ 35, 37, 38. 
 
 5 Williams' Personal Property, p. 188.
 
 62 THE LAW OF PATENT. 
 
 Section VIII.— REMEDIES AGAINST INFRINGEMENT. 
 
 75, Remedies against the infringement of the patent may 
 be obtained in the superior Courts of Common Law, 1 or 
 Chancery, either of which Avill grant injunctions to restrain 
 persons from using the invention without licence, and for an 
 account of the profits made by the wrongful use of the patent, 2 
 and also for fraudulently using the name or mark of the 
 patentee. 3 If a manufacturer uses a certain mark or sign to 
 distinguish his articles from those belonging to others, the law 
 will throw a protection over such mark, and he may obtain an 
 injunction to restrain a fraudulent invasion of his right, 4 pro- 
 vided the mark denotes the origin or ownership of his articles, 
 and not simply their name or quality. Even a colourable 
 imitation will be restrained, and it would be no excuse that 
 dealers were informed of the imitation. By a statute of New 
 York passed in 1850, the forging of trade marks, with intent 
 to deceive or defraud the purchaser or manufacturer, is made 
 a misdemeanour, and the vending of goods with forged stamps, 
 scienter, without disclosing the fact to the purchaser, is like- 
 wise made penal. 5 
 
 SCHEDULE OF STAMP DUTIES TO BE PAID UNDER THE 15 AND 
 16 VICT. C. 83, AND 16 VICT. C. 5. 
 
 £ s. d. 
 
 On Petition for Grant of Letters Patent 500 
 
 On Certificate of Record of Notice to proceed 5 
 
 On Warrant of Law Officer for Letters Patent 5 
 
 On the Sealing of Letters Patent 500 
 
 On Specification 500 
 
 On the Letters Patent, or a Duplicate thereof, before the expira- 
 tion of the third year 50 
 
 1 14 and 15 Vict. c. 99. 2 6 Vict. 706. 3 5 and 6 Will. IV. c. 83, § 7. 
 
 4 Blofeld v. Payne, 4 B. and Ad. 410. Sykes v. Sykes, 3 B. and C. 541. 
 Edelsten v. Vick, 1 Eq. Dig. 413. 
 
 5 See Kent's Commentary, vol. ii. p. 446 n., seventh Ed.
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 5 
 
 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 COST OF LETTEES PATENT. 63 
 
 e ». d. 
 
 On the Letter.? Patent, or a Duplicate thereof, before the expi ration 
 
 of the seventh year 100 
 
 On Certificate of Record of Notes of Objections 2 
 
 On Certificate of every Search and Inspection 
 
 On Certificate of Entry of Assignment or Licence 
 
 On Certificate of Assignment or Licence 
 
 On Application for Disclaimer 5 
 
 On Caveat against Disclaimer 2 
 
 On Office Copies of Documents, for every ninety words .... 
 
 The cost of a patent in foreign countries is as follows : — 
 
 In the United States of America, for a citizen of the United States, 
 30 dollars, or about 61. 5s. ; for foreigners generally, 300 dollars, or 631. ; and 
 for a subject of Great Britain, 500 dollars, or 101. 6s. 
 
 In France, 500 francs, or 20?. for five years; 1000 francs, or 401. for ten 
 years; and 1,500 francs, or 601. for fifteen years. The tax is payable at 
 100 francs, or 41. per annum. 
 
 In Spain, 1,000 reals, or 11Z. for five years; 3,000 reals, or 331. for ten 
 years; 6,000 reals, or 661. for fifteen years. 
 
 In Austria, 101. for the first five years ; 20Z. for the first ten years; 4.01. for 
 the last five years ; and 701. for fifteen years. 
 
 In Belgium, 61. for five years; 121. to 161. for ten years; and 241. for fifteen 
 years. 
 
 In Russia, 151. for three years ; 251. for five years ; 75L for 15 years. 
 
 In Netherlands, 121. 10s. for five years; 251. for ten years; 551. for fifteen 
 years.
 
 (U THE LAW OF COPYRK.IIT. 
 
 CHAPTER IV. 
 
 THE LAW OF COPYRIGHT. 
 
 Section I.— NATURE AND HISTORY OF COPYRIGHT. 
 
 76. Copyright is the exclusive right of the authors of 
 books, maps, charts, and musical compositions, and of the 
 designers of prints and engravings, to multiply copies of 
 their own works. Based on the same principle as the Law 
 of Patent, it is a limited monopoly, granted for the purpose 
 of encouraging and rewarding intellectual labour ; and, as in 
 the case of patents, legislative interference was required in 
 order to afford protection to authors against piratical pub- 
 lication of their works. The decrees of the Star-Chamber 
 show that that court admitted and protected the rights of 
 authors as early as 1556. Then the Stationers' Company was 
 incorporated; and from that time to 1640, the Crown exercised 
 an unlimited authority over the press. Ordinances of Parlia- 
 ment, as far back as 1641, recognised the exclusive rights 
 of authors to their own productions; and, in 1662 and 
 1679, Acts of Parliament were passed prohibiting any person 
 from printing, without the consent of the owner of the 
 copy. 1 In the reign of Charles II. copyright was acknow- 
 ledged by Chief Justice Hale, and treated by him as the 
 ancient Common Law. Still the question remained in an 
 unsatisfactory state until the first statute on copyright 2 was 
 passed in 1710, whereby authors were secured of a copyright 
 for fourteen years. The constant recurrence of piracy con- 
 tinued, however, to create serious disputes, and the whole 
 
 1 Maugham, 15, 16. Wheaton v. Peter, 8 Peters, 597. 2 8 Anne, c. 19.
 
 NATURE AND HISTOET OF COPYRIGHT. 65 
 
 question respecting the literary property of authors was 
 made a subject of judicial investigation in 1769, when the 
 case of Miller v. Thomson, 1 decided, by a majority of three 
 Judges, including Lord Mansfield, that copyright belonged to 
 the author by common law. The question yet remained to 
 be solved, whether, on the expiration of the fourteen years 
 granted by the statute of Anne, authors could resort to their 
 natural right against piracy ; this the House of Lords 
 solemnly decided in the negative, so that the common law 
 right of action, if any existed, could not be exercised beyond 
 the time limited by the statute. The privilege of copyright 
 being thus under the exclusive protection of statute law, it 
 was deemed expedient to extend the period of protection from 
 fourteen years to twenty-eight years, 2 and subsequently to 
 forty-two years, by the statute now in force. 3 
 
 77. The protection of copyright was first granted by the 
 Senate of Venice, in 1469. 4 In Spain, copyright was intro- 
 duced in the reign of Isabella. Tiie French law of copyright 
 is founded on the republican decree of 1793; it granted 
 copyright for the author's life, and to his wife, if she sur- 
 vives, for her life, and to their children for twenty years, and 
 if they leave no children, to their heirs or assigns for ten 
 years. In the United States of America, by the act of Con- 
 gress of 1831, copyright was granted for twenty-eight years, 
 with a right of renewal for the widow or children for the 
 further term of fourteen years. In Prussia, by the ordinance 
 of 1837, copyright continues for the author's life, and to his 
 heir for thirty years after his death. In Denmark, Norway, 
 Sweden, and Spain, copyright is perpetual. By the law of 
 Russia of 1828, copyright is for the author's life, and to his 
 heir after his death for twenty-five years. In Austria, copy- 
 right is for the author's life. In Holland and Belgium, the 
 duration of copyright is to the author's life, and to his heirs 
 and assigns for twenty years after his death. 
 
 78. A book, for the purpose of copyright, is construed to 
 
 1 3 Burr. * 54 Geo. III. c. 156. 3 5 & 6 Vict. c. 4 5, § 3. 
 
 4 Hallam's Literature of Europe, vol. i. p. 344—348. 
 
 F
 
 6G THE LAW OF COPYRIGHT. 
 
 include every volume, part or division of a volume, pamphlet, 
 sheet of letter-press, sheet of music, map, chart, or plan, 
 separately published. Copyright in books published during 
 the lifetime of the author endures for the natural life of the 
 author, and for the farther term of seven years, commencing 
 at the time of his death, during which time the book remains 
 the property of such author and his assigns. If the seven 
 years expire before the end of forty-two years from the first 
 publication of such book, the copyright in that case endures 
 for such period of forty-two years ; and the copyright in every 
 book published after the death of its author endures for the 
 term of forty-two years from the first publication thereof; 
 during which time it is the property of the proprietor of the 
 author's manuscript from which such book is first published, 
 and his assigns. 1 
 
 79. In cases of subsisting copyright, at the time of passing 
 the Copyright Act in 1842, the term was also extended, 
 except when it belonged to a publisher, or other person who 
 had acquired it for other consideration than that of natural 
 love and arTection, in which case it endured only for the term 
 which then subsisted ; unless, before the expiration of such 
 term, the author, or his personal representative, agreed to 
 accept the benefit of the act in respect of such book. 2 In 
 order to provide against the suppression of books of import- 
 ance, the Judicial Committee of the Privy Council was 
 authorized to license the republication of books which the 
 proprietors refuse to republish after the death of the author. 3 
 The copyright of any encyclopaedia, review, magazine, and 
 other periodical works, belongs to the proprietors of the work, 
 whenever they have been composed for the proprietor, who 
 shall enjoy the same rights as if he were the actual author 
 thereof. 4 But that the copyright may vest in the proprietors, 
 payment must be actually made to the author. In the case 
 of essays, articles, or portions forming part of and first pub- 
 lished in reviews, magazines, or other periodical works, after 
 
 1 5 & 6 Vict. c. 45, § 3. 2 Ibid. § 4. 3 Ibid. § 5. 4 Ibid. § 18. 
 
 5 Richardson v. Gilbert, 1 Sim. N. S. 336.
 
 DELIVERY OF COPIES TO PUBLIC LIBEAEIES. 67 
 
 the term of twenty-eight years from the first publication 
 thereof respectively, the right of publishing the same in a 
 separate form reverts to the author for the remainder of the 
 term of forty-two years. During these twenty-eight years 
 the proprietors cannot publish any such essay separately, 
 without the consent of the author or his assigns; but any 
 author may, by contract, reserve to himself a right to the 
 copyright in such composition when published in a separate 
 form, without prejudice to the right of the proprietor of the 
 publication where such composition has first appeared. 1 No 
 person, except the proprietor of the copyright, can import 
 into the United Kingdom, or into any part of the British 
 dominions, for sale or hire, any book first composed or 
 written, or printed and published, in any part of the United 
 Kingdom, and reprinted elsewhere, under penalty of forfei- 
 ture thereof, and also of 10/. and double the value of every 
 copy of such book so imported. Such books are to be seized 
 by the officers of customs or excise. 2 
 
 Section II.— DELIVERY OF COPIES TO PUBLIC LIBRARIES. 
 
 80. A printed copy of the whole of every book published, 
 together with all maps, prints, or other engravings belonging 
 thereto, and also of any second or subsequent edition with 
 any addition or alteration, must be delivered for the use of 
 the British Museum, within one calendar mouth after the day 
 of publication, (that is, after the day on which such book is 
 first sold, published, or offered for sale,) if within the bills of 
 mortality ; or within three months, if published in any other 
 part of the United Kingdom ; or within twelve months, when 
 published in any other part of the British dominions. Such 
 copies, bound, sewed, or stitched together, and upon the best 
 paper, must be delivered at the British Museum, between the 
 hours of ten and four, on any day except Sunday and holy- 
 days, to some person authorized by the trustees, in the 
 Museum, who will give a receipt in writing for the same. 
 
 1 5 & 6 Viet. c. 45, § 18. 2 ibid. § 17. 
 
 F 2
 
 68 THE LAW OF COPYRIGHT. 
 
 Another copy of such "books must also, on demand in writing, 
 be delivered, within twelve months after the publication 
 thereof, to the officer of the Stationers' Company, for the 
 following libraries: the Bodleian Library, at Oxford; the 
 Public Library, at Cambridge ; the Library of the Faculty of 
 Advocates, at Edinburgh ; the Library of Trinity College, at 
 Dublin. Publishers may deliver the copies to the libraries, 
 free of expense, instead of at the Stationers' Company. If 
 any publisher neglect to deliver such copies, he forfeits, 
 besides the value of such copies of such book, a sum not ex- 
 ceeding 5?., to be recovered by the librarian or other officer 
 of the library in a summary way, on conviction before two 
 justices of the peace for the county or place where such pub- 
 lisher resides, or by action for debt, or other proceeding of 
 the like nature, at the suit of such librarian or officer, in any 
 court of record in the United Kingdom ; in which action, if 
 the librarian shall obtain a verdict, he shall recover his costs 
 reasonably incurred, to be taxed as between attorney and 
 client. The difference between the British Museum and other 
 libraries is, that to the former the copy must be on the best 
 paper, and be delivered without demand ; to the latter, a copy 
 of any of the common editions is sufficient, and must be 
 delivered only on demand. 1 
 
 Section III.— REGISTRY OF STATIONERS' HALL, AND 
 ASSIGNMENT. 
 
 81. A book of registry for the proprietorship in the copy- 
 right of books, and assignment thereof, and in dramatic and 
 musical pieces, whether in manuscript or otherwise, and 
 licences affecting such copyright, is kept at the Stationers' 
 Hall, open to the inspection of any person, on payment of one 
 shilling for every entry which is searched for or inspected in 
 the book ; and a certified copy may be given of any entry in 
 
 1 5&6 Vict. c. 45, §§6—10.
 
 REGISTRY OF STATIONERS' HALL AND ASSIGNMENT. 69 
 
 such book by the officer to any person requiring the same, on 
 payment of five shillings; such copies to be primd fade proof 
 of the proprietorship, or licence of copyright or licence, but 
 subject to be rebutted by other evidence. 1 Any person 
 making a false entry in such book is deemed guilty of mis- 
 demeanour. The proprietor of copyright of any book may 
 make entries in the registry at the Stationers' Hall of the title 
 of the book, the time of the first publication, the name and 
 place of abode of the publishers, and of the proprietor of the 
 copyright of the book, or of any portion of such copyright, 
 upon payment of five shillings to the officer of the company ; 
 and every such registered proprietor may assign his interest, 
 or any portion of it, by making entry in the book of registry 
 of such assignment, and of the name and place of abode of 
 the assignee, on payment of a like sum ; such assignment so 
 entered to be effectual at law, without being subject to any 
 stamp or other duty, and to have the same force as if such 
 assignment had been made by deed. 2 
 
 82. If any person thinks himself aggrieved by any entry 
 made in the book of registry, he may apply to a court of law 
 in term, or judge in vacation, who may order such entry to 
 be varied or expunged. 3 jSTo assignment of the copyright of 
 any book, or dramatic piece, or musical composition, is held 
 to convey the right of representing or performing such dra- 
 matic piece or musical composition, unless an entry in the 
 registry book is made of such assignment. And no pro- 
 prietor of copyright in any book can maintain any action for 
 the infringement of such copyright, unless, before commencing 
 such action, he has made an entry in the registry book ; in 
 default of which, though his right to copyright is not thereby 
 affected, he has no right to sue for the infringement thereof. 
 This, however, does not affect the remedies of the proprietors 
 of dramatic pieces or musical compositions. 4 All copyright 
 is deemed personal property, and is transmissible by bequest, 
 
 i 5 & G Vict. c. 45, § 11. 2 Ibid. § 13. :i Ibid. ? 13. 
 
 4 Ibid. § 24. Russell v. Smith, 12 Q. B. 217.
 
 70 THE LAW OF COPYRIGHT. 
 
 or, in case of intestasy, is subject to the same law of distri- 
 bution as other personal property, and in Scotland is deemed 
 to be personal and moveable estate. 1 
 
 Section IV.— FOREIGN COPYRIGHT. 
 
 83. Copyright in the United Kingdom is a right regulated 
 by statute law, which applies to aliens as well as natural-born 
 subjects, within the British territory. Therefore, a foreigner 
 domiciled in England, although neither naturalized nor made a 
 denizen, if he composes a literary work here, may acquire a 
 copyright in it. A question, however, of importance has been 
 raised, whether the protection of the British copyright would be 
 granted to foreign authors, for works written abroad, but first 
 published in this country. Bellini, a foreigner, residing at 
 Milan, composed the work of " Sonnambula," in 1831, and in 
 the same year he transferred the copyright to Bicordi. The 
 latter came to this country, and assigned the copyright of the 
 opera to Boosey & Co., for publication in the United Kingdom 
 only. Having made due entry at the Stationers' Hall, ten airs 
 of the opera were exposed for sale on the same day, at London, 
 by Boosey & Co., and at Milan, by Ricordi. At a later 
 period these airs were publicly sold at Purday's shop, with- 
 out the permission of Boosey, and the latter entered an action 
 for infringement of copyright. Purday maintained that there 
 could be no copyright in the " Sonnambula," the work having 
 been written abroad. The case was decided by Chief-Baron 
 Pollock, that Bellini, a foreigner, by sending to and first pub- 
 lishing his work in Great Britain, could acquire no copy- 
 right in this country. 2 After this decision, in 1849, Boosey 
 & Co. brought an action against Jefferys, for another breach 
 of copyright in the same musical composition ; and it was 
 again decided by Baron Rolfe (now Lord Chancellor Cran- 
 worth), that Boosey & Co. had no copyright in the " Son- 
 nambula." To this a bill of exception was tendered, and 
 the case was brought before the Exchequer Chamber. 
 
 1 5 & 6 Vict. c. 45, § 25. 2 Boosey v. Purday, 4 Exch. 145.
 
 COPYRIGHT IN WORKS OF ART AND MANUFACTUBE. 71 
 
 84. Judgment was then given by Lord Campbell, to the 
 effect that if an alien residing in his own country were to 
 compose a literary work there, and, continuing to reside there 
 without having before published his work anywhere, sin mid 
 cause it to be first published in England, in his own name 
 and on his own account, he would be an author within the 
 meaning of the statute for the encouragement of learning, 
 and might maintain an action against any one who, in this 
 country, should pirate his work ; provided, however, the work 
 was first published in England. 1 An appeal or a writ of error 
 was thereupon brought to the House of Lords ; and there 
 the judgment of the Exchequer Chamber was reversed, it 
 having been finally decided that the statute of Anne could 
 only affect British subjects properly so called, or such per- 
 sons who might obtain that character for a time, by being 
 resident in this country, and therefore under allegiance to the 
 crown, and under the protection of the laws of England ; 
 that it referred to books printed and first published in this 
 country, and not to books printed abroad, and then imported 
 into the United Kingdom ; that Bellini must have resided in 
 England, in order to possess the copyright, and that, there- 
 fore, he had no legal power to assign that copyright, as re- 
 garded this country ; and the assignment not being valid, 
 the right of action of Boosey against Jefferys could not be 
 maintained. 2 It may be difficult to ascertain what is a suffi- 
 cient residence in this country to entitle a foreigner to the 
 benefit of its law, but this is to be determined by the cpiestion 
 of national character. 3 
 
 Section V.-COPYRIGHT IN WORKS OF ART AND 
 MANUFACTURE. 
 
 85. Copyright in Engravings and Prints, including Histo- 
 rical or other prints, is secured for twenty-eight years from 
 the publication thereof; 4 in Busts and Sculptures, for fourteen 
 
 1 Boosey v. Jefferys, 6 Exch. 580, 597. 
 
 2 Jefferys (iu error) v. Boosey (in error). 23 L. T. 3 See p. 37. 
 
 4 8 Geo. II. c. 13 ; 7 Geo. III. c. 38; 17 Geo. III. e. 57 ; 6 & 7 Will. IV. c. 59.
 
 72 THE LAW OF COPYRIGHT. 
 
 years from the time of first publication, and for the further 
 term of fourteen years, in case the maker of such sculpture 
 shall be still living-; 1 in Drama, the same as in Books, for the 
 author's natural life, and seven years after his death, or forty- 
 two years from the time of first representation or performance. 2 
 In Lectures, the sole right of publishing them rests with the 
 authors ; and if any person, by taking down in short-hand or 
 otherwise in writing, cause the same to be printed and pub- 
 lished without leave of the author thereof, he is subject to 
 the penalty of the forfeit of the copies, and one penny for 
 every sheet thereof which shall be found in his custody ; the 
 publishers of the same being liable to the same forfeitures 
 and penalties in respect of such printing and publishing. No 
 persons, having leave to attend any lecture for certain fee and 
 reward, are thereby allowed to print and publish such lec- 
 tures, only because of having attended them. This does not 
 prohibit the publishing of lectures after the expiration of the 
 copyright ; but this exclusive right does not extend to Lec- 
 tures delivered in unlicensed places, or to Lectures delivered 
 in any University, or public school or college, or on any 
 public foundation, or by any individual, in virtue of, or ac- 
 cording to any gift, endowment, or foundation. 3 Copyright 
 in designs varies according to the nature of the article. First, 
 for Ornamenting articles in metal, in wood, in glass, and in 
 earthenware, for three years from the time of registration ; so 
 for Paper-hangings, Carpets, floor and oil Cloths, for three 
 years ; Shawls, patterns printed, for nine months ; ditto, not 
 printed, three years ; Woven fabrics, not furnitures, patterns 
 printed, nine months ; Woven fabrics, furnitures, patterns 
 printed, three years ; Woven fabrics, patterns not printed, 
 twelve months ; Woven damasks, three years ; Lace, and all 
 other articles, twelve months. 4 
 
 1 38 Geo. III. c. 71. 54 Geo. III. c. 56. 
 
 2 3 & 4 Will. IV. c. 15. 5 & 6 Vict. c. 45, §§ 20—22. 6 & 7 Vict. c. 68. 
 
 3 5 & 6 Will. IV. c. 65. 
 
 * 5 & 6 Vict. c. 100. 6 & 7 Vict. c. 65. 13 & 14 Vict. c. 104. Burke's 
 Supplement to Godson, p. 60,
 
 INFRINGEMENT OF COPYRIGHT. 73 
 
 Section VI.— INFRINGEMENT OF COPYRIGHT. 
 
 86. Any person printing, either for sale or for exportation, 
 any "book in which there is a subsisting copyright, without the 
 consent in writing of the proprietor thereof, or who imports 
 for sale or hire any such book so unlawfully printed beyond 
 the seas ; or knowing such book to have been so unlawfully 
 printed or imported, should sell, publish, or expose for sale, 
 or should have in his possession for sale or hire, any such 
 book, would be liable to a special action before any court of 
 record in that part of the British dominions in which the 
 offence is committed. In actions for piracy, the person sued 
 must give notice of the objections on which he means to 
 rely. If the nature of his defence be, that the person suing 
 was not the author or first publisher of the book in which 
 copyright is claimed, or is not the proprietor of the copy- 
 right therein, or that some other person was the author or 
 first publisher of such book, or is the proprietor of the copy- 
 right therein, then, to render the defence valid, the person 
 sued must specify in the notice of his objections to the 
 action, the name of the person whom he alleges to have been 
 the author or first publisher of such book, or the proprietor of 
 the copyright therein, together with the title of such book, 
 and the time when and the place where such book was first 
 published, otherwise no evidence against the action for piracy 
 would be allowed. 1 All copies of any pirated book become the 
 property of the proprietor of the copyright, and such registered 
 proprietor may be entitled to recover the same by action. 2 
 
 87. The question, what is an infringement of the author's 
 copyright? is one of considerable nicety. The learned Ameri- 
 can judge, Mr. Justice Story, gave the following luminous, 
 full, and philosophical judgment on an infringement of the 
 copyright, in a book called " Emerson's North American 
 Arithmetic:" — 
 
 " The differences between different works are often of such 
 
 1 5 & 6 Vict. c. 95, §§ 15, 16. 2 Ibid. § 23.
 
 74 THE LAW OF COPYRIGHT. 
 
 a nature that one is somewhat at a loss to say whether the 
 differences are formal or substantial. In many cases, the mere 
 inspection of a work may at once betray the fact that it is 
 borrowed from another author, with merely formal or colour- 
 able omissions or alterations. In other cases, we cannot affirm 
 that identity in the appearance or use of the materials is 
 a sufficient and conclusive test of piracy, or that the one has 
 been fraudulently or designedly borrowed from the other. In 
 truth, in literature, in science, and in art, there are and can 
 be few if any things which, in an abstract sense, are strictly 
 new and original throughout. Every book in literature, 
 science, and art, borrows, and must necessarily borrow and 
 use, much which was well known and used before. No man 
 creates a new language for himself, at least if he be a wise 
 man, in writing a book ; he contents himself with the use of 
 language already known, and used, and understood by others. 
 No man writes exclusively from his thoughts, unaided and 
 uninstructed by the thoughts of others. The thoughts of 
 every man are, more or less, a combination of what other men 
 have thought and expressed, although they may be modified, 
 excelled, or improved by his own genius or reflection. If no 
 book could be the subject of copyright which was not new and 
 original in the elements of which it is composed, there could 
 be no ground for any copyright in modern times, and we 
 should be obliged to ascend very high even in antiquity to 
 find a book entitled to such eminence. Virgil borrowed 
 from Homer ; Bacon drew from earlier as well as contem- 
 porary minds ; Coke exhausted all the known learning of his 
 profession ; and even Shakspeare and Milton, so justly and 
 proudly our boast as the brightest originals, would be found 
 to have gathered much from the abundant stores of current 
 knowledge and classical studies in their days. What is La 
 Place's great work but the combination of the processes and 
 discoveries of the great mathematicians before his day, with 
 his own extraordinary genius"? What are all modern law 
 books, but new combinations and arrangements of old materials, 
 in which the skill and judgment of the author, in the selection,
 
 INFRINGEMENT OF COPYRIGHT. 75 
 
 and exposition, and accurate use of those materials, constitute 
 the "basis of his reputation as well as of his copyright. Black- 
 stone's Commentaries and Kent's Commentaries are but 
 splendid examples of the merit and value of such achieve- 
 ments. 
 
 88. " In truth, every author of a book has a copyright in 
 the plan, arrangement, and combination of his materials, and in 
 his mode of illustrating the subject, if it be new and original 
 in its substance. Nay, the right to a copyright goes much 
 further. A man has a right to a copyright in a translation 
 upon which he has bestowed his time and labour. To be sure, 
 another man has an equal right to translate the original work, 
 and to publish its translation ; but then it must be his own 
 translation, by his own skill and labour, and not the mere use 
 and publication of the translation made by another. A man 
 has a right of a copyright of a map of a state or country, 
 which he has surveyed or caused to be compiled from existing 
 materials, at his own expense, or skill, or labour, or money. 
 Another man may publish another map of the same state or 
 country by using the like means or material, and the like 
 skill and labour, at his own expense ; but then he has no right 
 to publish a map taken substantially and designedly from the 
 map of the other person, without any such exercise of skill, or 
 labour, or expense. If he copies substantially from the map 
 of the other, it is downright piracy, although it is plain 
 that both maps must be the more accurate, the more they 
 approach nearer in design and execution to each other. He, 
 in short, who by his own skill, judgment, and labour, writes 
 a new work, and does not merely copy that of another, is 
 entitled to a copyright therein, if the variations are not 
 merely formal and shadowy from existing works. He win) 
 constructs, by a new plan, and arrangement, and combination 
 of old materials, a book designed for instruction either of 
 the young or of the old, has a title to copyright which cannot 
 be displaced by showing that some part of the plan, or arrange- 
 ment, or combination, has been used before." 
 
 1 Emerson v. Davie?., o Story, 7'
 
 76 THE LAW OF COPYRIGHT. 
 
 89. The true test of what is or is not piracy is to ascertain 
 whether the plan, arrangement, and illustrations of the ori- 
 ginal work have been used as the model of the new book, 
 with colourable alterations and variations only to disguise the 
 use thereof; or whether the new work is the result of the 
 writer's own labour, skill, and use of common materials and 
 common sources of knowledge, open to all men, the resem- 
 blances being either accidental, or arising from the nature of 
 the subject. It is a nice question, what shall be deemed such 
 a modification of an original work as shall not infringe the 
 copyright of the original in the new composition ? No doubt 
 such a modification may be allowed in some cases, as in 
 that of an abridgement or a digest ; such publications are 
 in their nature original : their compiler intends to make of 
 them a new use, not that which the author professed to 
 make. Digests are of great use to practical men, though not 
 so comparatively to students. The same may be said of an 
 abridgement of any study ; but it must be a hond-fide abridge- 
 ment, because, if it contains many chapters of the original 
 work, or such as made that work most saleable, the maker of 
 the abridgement commits a piracy. 1 
 
 Section VII.— INTERNATIONAL COPYRIGHT. 
 
 90. The expediency of putting an end to piracy of intel- 
 lectual labours between the subjects of friendly States, as it is 
 provided by law between the subjects of the same country, 
 has been universally acknowledged, and was made the subject 
 of formal conventions between her Majesty's Government and 
 that of several European States. In 1844 an act 2 was 
 passed, whereby her Majesty was empowered, by an Order 
 in Council, (which Orders in Council were issued by her 
 Majesty with respect to such States as are hereafter described,) 
 to direct that the authors, designers, engravers, &c, and 
 their respective executors and assigns, might have the privi- 
 lege of copyright in the United Kingdom in any book, 
 prints, articles of sculpture, and other works of art first 
 
 1 D'Almaine v. Boosey, 1 Y. & C. 301. 2 7 & 8 Vict, c. 12.
 
 INTERNATIONAL COPYRIGHT. 77 
 
 published in any foreign country ; the same to be protected 
 and governed by the copyright law of this country, except 
 in so far as it relates to the delivery of copies of books 
 at the British Museum and other libraries. Her Majesty 
 was also empowered, by Order in Council, to direct that 
 authors and composers of dramatic pieces and musical com- 
 positions, first publicly represented and performed in foreign 
 countries, might have similar rights to the sole liberty of 
 representing or performing in any part of such, in the British 
 dominions. In order that the author of any book, dramatic 
 piece, or musical composition, or the inventors, designers, or 
 engravers of any print, or maker of any article of sculpture, 
 or other works of art, or their assigns, &c, be entitled to the 
 benefit of this act, they must observe the following particulars 
 as to registry and delivery of copies, within the time pre- 
 scribed in the order in council : — 
 
 91. As regards any book and dramatic pieces or musical 
 composition, the title of such copy, the name and place of 
 abode of the author or composer, and of the proprietor of the 
 copyright thereof, the time and place of the first publication 
 and performance in the foreign country named in the order 
 in council, should be entered in the registry-book of the 
 Stationers' Company in London ; and one printed copy of the 
 whole of such book, and of such dramatic pieces or musical 
 composition, and of every volume thereof, upon the best paper, 
 together with all maps and prints relating thereto, should be 
 delivered to the same company ; the same particulars to be 
 observed as regards dramatic pieces and musical compositions, 
 in manuscript, and prints and sculpture, except that no article 
 of sculpture need be delivered, but a descriptive title thereof; ' 
 second or subsequent editions not necessary to be delivered 
 to the Stationers' Company, unless the same contains additions 
 or alterations. 2 
 
 92. In case of books published anonymously, it is sufficient 
 that the name of the publisher thereof be entered in the 
 register, together with a declaration that such entry is 
 
 1 1 & 8 Vict. c. 12, §§ 4—6. 2 i bid . § 12 .
 
 78 THE LAW OF COPYRIGHT. 
 
 made either on behalf of the author, or on behalf of the first 
 publisher. 1 The provisions of the Law of Copyright, 2 as 
 regards entries in the register of the Stationers' Company, 
 apply also to entries under this act. Every entry of a first 
 publication is prima facie proof of first publication; and if 
 there be a wrongful first publication, and any party has 
 availed himself thereof to obtain an entry of a spurious work, 
 no order for expunging or varying such entry shall be made, 
 unless it be proved, first, with respect to a wrongful publication 
 in a country to which the author or first publisher does not 
 belong, and in regard to which there does not subsist with this 
 country any treaty of international copyright, that the party 
 making the application was the author or first publisher, as 
 the case may require ; second, with respect to a wrongful first 
 publication, either in the country where a rightful first publi- 
 cation has taken place, or in regard to which there subsists 
 with this country a treaty of international copyright, that 
 a Court of competent jurisdiction in such country has given 
 judgment in favour of the right of the party claiming to be the 
 author or first publisher. 3 
 
 93. The Orders in Council may specify different periods 
 for different countries, and for different classes of works ; 
 but it must be conditional that reciprocal protection is secured. 
 This, however, would not have prevented the publication of 
 translations, which was met by a subsequent act, 4 to enable 
 Her Majesty to carry into effect a convention with France on 
 the subject of copyright. By this act Her Majesty was 
 empowered, by Order in Council, to direct that the authors 
 of books published in foreign countries might prevent the 
 publication in the British dominions of any translations of 
 such books not authorized by them for a limited time, not 
 extending beyond the expiration of five years from the time 
 at which the authorized translations of such books are first 
 published ; and, in the case of books published in parts, not 
 extending as to each part beyond the expiration of five years 
 
 1 7 & 8 Vict. c. 12, § 7. 2 5 & 6 Vict. c. 45. 
 
 3 7 & 8 Vict. c. 12, §§ 8, 9. 4 15 & 16 Vict. c. 12.
 
 INTERNATIONAL COPYRIGHT. 7!) 
 
 from the time at which the authorized translation of such part 
 is first published. Thereupon the law of copyright shall be 
 
 applied for the purpose of preventing the publication of such 
 translations. 1 The same powers are also given against unau- 
 thorized translations of dramatic pieces, for a time not exceeding 
 five years from the first publication of the author's translations. 
 94. No author is entitled to the benefit of this act without 
 complying with the following requisitions : — 
 
 (1.) The original work from which the translation is to be 
 made must be registered, and a copy thereof deposited in the 
 United Kingdom, in the manner required for original works by 
 the International Copyright Act, within three months of its 
 first publication in the foreign country. 
 
 (2.) The author must notify on the title-page of the 
 original work, or if it is published in parts, on the title-page 
 of the first part, or if there is no title-page, on some con- 
 spicuous part of the work, that it is his intention to reserve 
 the right of translating it. 
 
 (3.) The translation sanctioned by the author, or a part 
 thereof, must be published either in the country mentioned in 
 the Order in Council by virtue of which it is to be protected, 
 or in the British dominions, not later than one year after the 
 registration, and deposit in the United Kingdom of the 
 original work, and the whole of such translation must be pub- 
 lished within three years of such registration and deposit. 
 
 (4.) Such translation must be registered, and a copy 
 thereof deposited in the United Kingdom, within a time to be 
 mentioned in that behalf in the order by which it is protected, 
 and in the manner provided by the said International Copy- 
 right Act for the registration and deposit of original works. 
 
 (5.) In the case of books published in parts, each part of 
 the original work must be registered and deposited in this 
 country in the manner required by the International Copy- 
 right Act, within three months after the first publication 
 thereof in the foreign country. 
 
 1 15&1G Vict, c. 12, §§2,3.
 
 80 THE LAW OF COPYEIGHT. 
 
 (6.) In the case of dramatic pieces, the translation sanc- 
 tioned by the author must he published within three calendar 
 months of the registration of the original work. 
 
 (7.) The above requisitions apply to articles originally 
 published in newspapers or periodicals, if the same be after- 
 wards published in a separate form, but do not apply to such 
 articles as originally published. 1 
 
 95. All pirated copies of any works of literature or art 
 wherein there is any subsisting copyright by virtue of the 
 International Copyright Act, or of any Order in Council, and 
 all unauthorized translations of any book or dramatic piece, 
 are prohibited to be imported, except with a written authori- 
 zation of the registered proprietor or his agent. 
 
 96. In virtue of the powers granted to Her Majesty by the 
 International Copyright Act, Her Majesty's Government have 
 concluded treaties of International Copyright with the following 
 countries, and Orders in Council to that effect were accordingly 
 issued on the following dates : — As to Prussia, on the 13th 
 May, 1846 ; Saxony, 26th September, 1847 ; Brunswick, 24th 
 April, 1847 ; Thuringian Union — including Saxe Weimar 
 Eisenach, Saxe Altenburg, Saxe Coburg Gotha, Schwarzburg 
 Rudolstadt, Schwarzburg Sondershausen, Reuss Greiz, Reuss 
 Cobenstein, Reuss Ebersdorf, and Reuss Schleiz, 10th August, 
 1 847 ; Hanover, 30th October, 1849 ; Oldenburg, 11th February, 
 1848; Anhalt Bernburg and Anhalt Coe'then, February, 1853; 
 and France, 10th January, 1852. The convention between the 
 United Kingdom and France was signed at Paris on No- 
 vember 3, 1851, and thereby the same benefit of copyright, 
 now secured to works first published in the United Kingdom, 
 applies within this country to works first published in France. 
 A translator is also protected in respect of his own transla- 
 tion ; but the first translator of any work does not acquire 
 the exclusive right of translating that work, except in such 
 cases and to the extent provided in conformity with the act 
 already described, to enable her Majesty to carry into effect 
 a convention with France on the subject of copyright. 
 
 1 15 & 16 Vict, c.12, § 8.
 
 RESTRAINTS OF TRADE IN TIME OF WAR. 81 
 
 CHAPTER V. 
 
 RESTRAINTS OF TRADE IN TIME OF WAR. 
 
 Section I.— NATURE OF INTERNATIONAL LAW. 
 
 97. After a period of forty years of peace, Europe wit- 
 nesses once more those calamitous scenes of war, which 
 turn the fields of industry and social advancement into an 
 arena of mutual contention and devastation. Notwithstanding 
 the lessons of experience, the immense sacrifices which war 
 imposes, and the sudden check thereby given to all measures 
 of progress, the ambition of princes, or political intrigues, 
 periodically plunge nations into a state of war with each 
 other. Nor are they arrested from the appeal to what Lord 
 Bacon defined to be the highest trial of right, 1 by an 
 impoverished exchequer, the exhaustion of the vitals of a 
 nation, and the devotion of the flower of its people to de- 
 structive, instead of productive, pursuits. Owing to the exten- 
 sive ignorance which prevails among the masses, to political 
 disorganizations and social wrongs, and above all, to human 
 passions, it will be a long time before war will be universally 
 extinguished ; yet much may be done to prevent its recurrence. 
 "Let one," said one of the most illustrious moralists of the pre- 
 sent century, " take up the question of war in its principles, and 
 make the full weight of his moral severity rest upon it and all 
 its abominations. Let another take up the question of war in 
 its consequences, and bring his every power of graphical 
 
 1 Bacon's Observations on a Libel, vol. iv. p. 345, ed. 1730. 
 G
 
 82 INTERNATIONAL LAW. 
 
 description to the task of presenting an awakened public with 
 an impressive detail of its cruelties and its horrors. Let 
 another neutralize the poetry of war, and dismantle it of all 
 those bewitching splendours which the hand of misguided 
 genius has thrown over it. Let another teach the world a 
 truer and more magnanimous path to national glory, than any 
 country of the world has yet walked in. Let another tell, 
 with irresistible argument, how the Christian ethics of a 
 nation is at one with the Christian ethics of its humblest indi- 
 vidual. Let another pour the light of modern speculation 
 into the mysteries of trade, and prove that not a single war 
 has been undertaken for any of its objects, where the millions, 
 and the millions more, which were lavished on the cause 
 have not all been cheated from us by the phantom of an 
 imaginary interest." 1 It is thus that, slowly but surely, step 
 by step, the prophetical future will be realized, when men 
 shall " beat their swords into ploughshares, and their spears 
 into pruning-hooks, and when nation shall not lift up sword 
 against nation, neither shall they learn war any more." 
 
 98. Time was when a state of war was followed by an 
 entire suppression of ail laws of humanity and justice, when 
 " victory made even the sacred things of the enemy profane, 
 confiscated all his property, doomed him and his posterity to 
 perpetual slavery, and dragged his kings and generals at the 
 chariot- wheels of the conqueror." The introduction of inter- 
 national jurisprudence greatly modified these barbarous prac- 
 tices, and it succeeded in establishing a code of moral duties 
 to govern the intercourse and contentions of independent 
 States, which, though the work not of legislators but of 
 scholars, has, within the last two centuries, received universal 
 sanction. Unknown to the Greeks, with whom the terms 
 
 1 From a Sermon on Peace, by the Rev. Thomas Chalmers, D.D. The 
 moral influence of ministers of religion, if exercised in the advocacy of peace, 
 would do much towards diminishing the causes of war, especially those under- 
 taken under the specious pretext of the defence of, or for the purpose of 
 advancing the interests of, Christianity. Unfortunately, religious controversy is 
 too often the source of disturbance in foreign politics, and in social relations 
 at home.
 
 NATURE OF INTERNATIONAL LAW. 83 
 
 of foreigners and barbarians were synonymous in language, 
 slightly shadowed by the institution of the Collegium and 
 Jus feciale of the Romans, the first glimpses of inter- 
 national law dawned during the middle ages, when the Pope 
 was acknowledged as the international judge and arbitrator in 
 the convention of Christendom. With the progress of time, 
 the combined influence of chivalry, commerce, learning, and 
 religion, brought nations into closer contact with each other ; 
 and in the sixteenth century, their intercourse was consolidated 
 by the system of maintaining reciprocally among the European 
 sovereigns ordinary and resident embassies. To trace the 
 history of international law, we should examine the modes of 
 warfare before the introduction of the science, and the altered 
 practice since the adoption of it by the respective States. But 
 such an inquiry would be foreign to the object of the present 
 work. The labours of Grotius and Puffendorf, of Yattel and 
 Martens, of Bentham and Sir James Mackintosh, have acquired 
 universal reputation ; and no nation could with impunity in- 
 fringe the precepts which these immortal writers have esta- 
 blished, precepts derived from the example of ancient practice, 
 the dictates of philosophy, the testimony of poets and orators, 
 and the light of Divine revelation. A most comprehensive 
 treatise on International Law has just appeared, by the 
 learned Dr. Robert Phillimore, a work which combines the 
 learning of the scholar, the enlarged views of the statesman, 
 and the discriminating acumen of the jurist. 1 
 
 Section II— RIGHTS OF BELLIGERENTS. 
 
 99. War is the mode of settling a difference by means 
 of arms between two nations, who recognise no common 
 superior to whom the pacific settlement of the dispute may 
 be submitted. 2 War is usually preceded by a declaration 
 or manifesto, setting forth the origin and progress of the 
 
 1 Commentaries on International Law, by Rob. Phillimore, M.P. 
 
 2 Alb. Gentilis De Jure Belli, Comment. 1 in pr. 
 
 g2
 
 84 INTERNATIONAL LAW. 
 
 dispute, the steps taken to avert the impending calamity, and 
 the motives for commencing hostilities. Such declaration is 
 necessary, in order to fix the date from which the relations of 
 the "belligerent countries assume the new character consequent 
 on a state of war. It was of ancient practice to notify such 
 declaration to the enemy, prior to the actual commencement of 
 hostilities ; but, with the increased facilities for communication, 
 it is now considered sufficient to give to such a document the 
 necessary publicity in one's own State. It is not requisite 
 that there be a declaration of war on both sides ; if it be 
 given on one side only it is sufficient to prove the existence 
 of actual hostilities, and that puts the other party also in a 
 state of war, though he may perhaps think proper to act on 
 the defensive only. 1 
 
 100. Sometimes, prior to declaration of war, an embargo is 
 laid on the ships and other property of the offending nation 
 found within the territory of the injured State. The seizure 
 of property under such circumstances, although hostile in the 
 mere execution, is but equivocal as to its effects, and liable to 
 be varied by subsequent events. If the relations of peace are 
 reestablished, then the seizure proves to be a mere embargo 
 or temporary sequestration, and the property is restored ; if a 
 declaration, followed by actual war, takes place, then it has 
 a retroactive effect, and the property is considered as having 
 belonged to the enemy. 2 
 
 101. The immediate effect of a declaration of war is to con- 
 stitute the belligerent nations and governments collectively, 
 and each individual respectively, as enemies to each other ; 
 for it is a rule of the law of nations, that when one sovereign 
 declares war against another sovereign, it is understood that 
 the entire nation declares war against the other nation. This 
 principle, hitherto maintained by the law of nations, is in fact 
 no more than a fiction of law ; inasmuch as relations of trade, 
 of families and of friendship, must still subsist, notwithstanding 
 
 1 The Eliza Ann, 1 Docl. 247, 4 Rob. 247. 
 
 2 The Bcecles Lust, 5 Rob. 245. The Jerbruida, 2 Rob. 211.
 
 RIGHTS OF BELLIGERENTS. 85 
 
 the governments of the respective countries arc at war against 
 each other. The subjects of the belligerent States residing in 
 each other's territory are considered as alien enemies, and 
 as such cease to be protected: this, however, is subject to 
 some modifications. By the ancient law of England it was 
 provided that merchant strangers, in case of war between 
 their prince and the king of England, shall have forty 
 days' warning, by proclamation, to avoid the realm ; and il 
 they cannot do it by that time, by reason of some accident, 
 they shall have forty days more, and in the mean time 
 liberty to sell their merchandise. During these eighty days 
 they have the king's protection. 1 The same rule prevails in 
 the United States of America ; 2 and Magna Charta 3 pre- 
 scribed that foreign merchants, if their country was hostile, 
 might be arrested till it was known how our merchants 
 were treated in the alien country. This principle of reci- 
 procity, in the treatment of foreigners in time of war, is still 
 adhered to in this country. 4 By the law of nations, both 
 persons and individual property are inviolable, both in time 
 of peace and in time of war. Some international writers '" 
 laid down that debts due to the enemy might be confiscated ; 
 but such a right cannot be maintained, and the books do not 
 furnish a single instance of the seizure of debts, or a decided 
 case in the support of the legality of such a measure. 6 More- 
 over, a sovereign may force a debtor to pay him the debts due 
 to the enemy, but that could never discharge the claim, against 
 the consent of the creditor. During the late wars, no action 
 could be maintained by an alien enemy, yet the right of the 
 original creditor was not extinguished, but was only suspended 
 during war, and was revived at the restoration of peace. 7 
 
 1 27 Edw. VI. c. 17. . 2 Act of Congress, July G, 1798, c. 73. 
 
 3 This great charter of the liberties of England, which has become sacred 
 in the memory of Englishmen, was extorted from King John, on the 15th 
 June, 1215, and confirmed under the reign of Henry III. in 1223. 
 
 4 The Santa Cruz, 1 Rob. 64. 5 Grotius, b. i. c. i. § 6 ; b. iii. c. viii. § 4. 
 " Wolff v. Oxhonlin, b. M. & S. 106. 
 
 7 Ex parte Boussmaker, 13 Ves. Jun. 71. The Ann Green, 1 Gallifi. 292
 
 86 INTERNATIONAL LAW. 
 
 According to a late decision, the plea of alien enemy was not 
 admitted in the courts of law. 1 Public funds held by the 
 enemy are also respected: it being a property entrusted to 
 public faith, the duties which it imposes are not altered by the 
 change of relations between the two States. 
 
 102. As soon as hostilities commence between two countries, 
 a complete interruption of commercial intercourse follows; 
 all trading with the public enemy being interdicted, and 
 the property engaged in such trading liable to confiscation. 
 Pending contracts, the performance of which is rendered un- 
 lawful by the government of the country, are dissolved on 
 both sides. 2 Where operations have been entered into before 
 the war commenced, and are in the act of being carried out, 
 and the goods or ships are in actual transference, such trading 
 would be an unintentional violation of the right of war, and 
 the property if captured would be restored. So a vessel char- 
 tered before the declaration of war, would not be affected by 
 subsequent hostilities ; but in the case of a vessel chartered for 
 an outward and homeward cargo before the commencement of 
 hostilities, although the outward cargo would be protected, the 
 homeward cargo would be liable to seizure. 3 The prohibition 
 to trade with the enemy extends also to the prohibition of 
 withdrawing goods purchased in the enemy's country after 
 the declaration of war, without the licence. 4 
 
 103. Notwithstanding all trade with the enemy has been 
 uniformly prohibited in former wars, the British Government, 
 during the present hostilities with Russia, by an order in 
 Council, 15th April, 1854, granted permission to all British 
 subjects, and the subjects or citizens of any neutral or friendly 
 States, freely to trade with all ports and places wheresoever 
 situated, which shall not be in a state of blockade ; except 
 
 1 Chapeler v. Durrant, 23 L.T. 79 C.B. 
 
 2 Barker v. Hudson, 3 M. & S. 273. Potts v. Bell, 8, T.R. 548. The Hoop, 
 1 Rob. 196. 
 
 a The Lady Jane, 1 Rob. 202. The Williams, ibid. 214. 
 4 The Rapid, 8 Cranch, 155.
 
 LICENCES. 87 
 
 however that no British vessel can, under any circumstances. 
 communicate with any port or places which belong to, or may 
 1)C in possession or occupation of, her Majesty's enemies. 1 
 
 Section III.— OF LICENCES. 
 
 104. The liberal principles sanctioned by the British Go- 
 vernment during the present war with Russia, and the virtual 
 abolition of the long-established doctrine of illegal trading 
 with the enemy, have materially simplified the rules which 
 will govern the relations of commerce in time of war. What 
 was, in effect, conceded as privileges to individuals, has now 
 been established as the general law of nations. Yet it may 
 be important to detail the leading features of the system of 
 carrying on trade in time of war by means of licences. It 
 has at all times been found expedient to relinquish partially 
 the prohibition to trade with the enemy, with a view to the 
 advantage of certain kinds of trade which were indispensable 
 to the wants of the country ; but, in all cases, it is the sove- 
 reign alone who can authorize this partial suspension of the 
 war; and, as licences are high acts of sovereignty, they must 
 not be carried further than the intention of the great authority 
 which grants them may be supposed to extend. 2 Still, licences 
 are interpreted liberally, and, provided no fraud had been 
 committed or meditated, as far as appeared, the parties would 
 be entitled to the benefit of the protection, although the 
 terms may not have been literally and strictly fulfilled. 3 In 
 the construction of licences certain rules are generally fol- 
 lowed ; for example, when the licence is for importation on 
 board a neutral vessel, it would make no difference if she be 
 of another country than that designated in the licence, pro- 
 vided the different countries have the same political bearing 
 to this kingdom. 4 But it would never be extended to the 
 ship of the enemy, or to a British ship. 5 A licence granted to 
 
 i See Orders in Council, p. 100. - The Cosmopolite, 4 Rob. 11. 
 
 a The Daukbarheit, 1 Dods. 187. 4 Ibid. 
 
 5 The Gute Hoffnung, 1 Dods. 251.
 
 88 INTERNATIONAL LAW. 
 
 a British merchant cannot be extended to another, because 
 it is a material object, in the discretion of government in 
 granting such exemptions, to judge of the particular persons 
 who are fit to be so entrusted. 1 Where a licence is obtained 
 for certain enumerated articles, other articles not inserted in 
 the licence, but sent at the same time, would not be protected ; 
 although, where there is a total absence of fraud, the licence 
 might be held to cover the other articles also. 2 
 
 105. If a licence be granted to go to an enemy's port in 
 ballast, for bringing a cargo from thence to this country, that 
 would not protect the vessel carrying a cargo to the port of 
 the enemy. 3 Nor could a licence to trade with the enemy be 
 used for another trade from one foreign port to another. No 
 voluntary deviation from the course pointed out is tole- 
 rated : when the party is not within terms of the licence, 
 the character of enemy revives, and the property would be 
 subjected to confiscation. 4 It is the duty of the merchant 
 resident in a hostile country, who wishes to trade with the 
 ports of the kingdom, to state to the government, in a most 
 full and explicit manner, the purposes of his voyage, and the 
 place to which he intends to go ; and it is then for her Ma- 
 jesty's Government, being put in possession of the plans and 
 designs of the party, to decide whether it will permit such a 
 course of proceedings. A licence never operates retrospectively ; 
 it looks to that which remains to be done, and extends its 
 influence to future operations. 5 If the date of the licence is 
 fraudulently altered, its validity is destroyed, even where the 
 person claiming protection under it is innocent of the fraud. 6 
 
 Section IV.— RIGHT OF SEARCH. 
 
 106. In order to prevent the enemy's ships escaping the 
 vigilant eye of the belligerent cruisers, — to watch that other 
 
 1 The Jonge Johannes, 4 Rob. 263. 
 
 2 The Vriendschap, 4 Rob. 99. The Henrietta, 1 Dods. 174. 
 
 3 The Catherine Maria, Edw. 337. 
 
 4 The Europa, Edward, 342. 
 
 s The Vrow, 1 Dods 167. 6 The Louisa Charlotte, 1 Dods. 308.
 
 RIGHT OF SEARCH. 89 
 
 nations do not afford any illegal assistance to the enemy by 
 carrying articles of war, — and with a view to exhaust their 
 resources from, and to intercept their communication with, 
 other States, the belligerents claim the right of searching and 
 visiting any ship, to whatever State it may belong, whatever 
 be its cargo, and whatever be its destination ; for it does not 
 appear what the ships, or the cargoes, or the destinations are, 
 till they are visited and searched. 1 And neutral vessels would 
 not be protected from the right of search by being under 
 convoy of a man-of-war, unless it were mutually agreed by the 
 respective governments that the presence of one of their 
 armed ships along with their merchant vessels is understood 
 to imply that nothing is to be found in that convoy of mer- 
 chant ships inconsistent with amity or neutrality. 
 
 107. The custom is, that when a cruising vessel meets 
 a neutral merchant vessel, she fires a gun, as a signal for 
 the merchant vessel to stop and submit to the search. If 
 the vessel summoned does not stop, the belligerent cruiser 
 has a right to pursue it, and force it to the search. The 
 belligerent cruiser then sends on board the ship for her 
 papers f and if he finds such vessel carrying a cargo com- 
 posed of contraband goods, wholly or in part, to any ports of 
 the enemy of the country, he has a right to detain it. The 
 belligerent cruisers may also bring in, for a more deliberate 
 inquiry than could be conducted at sea upon a number of 
 vessels, even those which professed to carry cargoes with a 
 neutral destination. If the merchant vessel offers no resistance 
 to the right of search, then, where the nature of the goods 
 and destination are not hostile, the vessel is restored. But if 
 there was intention to resist, the penalty for the violent con- 
 travention of the right of search is the confiscation of the 
 property. 3 In time of war, merchant vessels are supplied 
 
 1 The Maria, 1 Rob. 300. 
 
 2 The following are the papers and documents usually required : 1st. tin 
 passport ; 2d, the register, the sea-letter ; 3d, the muster-roll ; 4th, the charter- 
 party ; 5th, the bill of lading ; 6th, the invoices ; 7th, the log-book ; and 
 8th, the bill of health. 3 The Maria, 1 Rob. 360.
 
 90 INTERNATIONAL LAW. 
 
 with passports and certificates, describing the true names of 
 the master of the vessel, ship's goods, and the ownership of 
 them, and any other particulars ; praying the governors of 
 ports, commanders, generals, or whom the ship should chance 
 to meet, to suffer such vessel to proceed, without molestation, 
 detention, or impediment. 
 
 Section V.— RIGHT OF CAPTURE. 
 
 108. The capture of the merchant vessels and property of 
 the subjects of the belligerent states is a measure resorted to 
 with a view to destroying the national resources of the enemy, 
 and inducing him thereby to come to terms of peace. This, 
 however, is obtained at the expense of an infringement of the 
 natural rights of individuals ; the exercise of which not even 
 war can interrupt. In operations of war by land, private 
 property is respected : pillage has been entirely relinquished 
 by civilized nations ; but in maritime wars, the most flagrant 
 violations of individual rights are still sanctioned. The 
 inequality in the operation of the laws of war by land and by 
 sea, has been mainly justified by alleging that, in maritime 
 wars, the great object in view is the destruction of the 
 enemy's commerce and navigation ; whereas the objects of 
 war by land are conquest, or the acquisition of territory, in 
 which case the victor is naturally restrained from the exercise 
 of his extreme rights. It may, however, be questioned 
 whether, according to the dictates of international equity, the 
 belligerents may invade the right of individuals to their own 
 property during a time of war, on the plea that each indi- 
 vidual subject of the enemy forms an integral part of the 
 nation at war. 1 
 
 109. The right of capture attaches on. the ships of the 
 enemy and their cargoes, being enemy's property. This right 
 was formerly exercised even against the enemy's property 
 found on board neutral vessels; and was maintained with 
 
 1 Wheaton's International Law, p. 811.
 
 RIGHT OF CAPTURE. 91 
 
 considerable learning by British and foreign jurists. But 
 its interference with the acknowledged right of neutrals w;i- 
 strenuously resisted by the European powers, and proved 
 the fertile source of international disputes. " The vigilance of 
 our cruisers and the acuteness of our lawyers were incessantly 
 employed, in all former contests, in tracking out the faintest 
 scent of enemy's property on board every vessel met at sea. 
 The mercantile ingenuity of the country, pressed by the in- 
 creased demands and exorbitant prices of prohibited articles, 
 was strained to evade, by every species of fraud, these prohi- 
 bitions ; and a warfare was carried on within our courts of 
 justice between the pitiless exaction of the laws of war, and 
 the irresistible impulse of the laws of trade." * The principle 
 of " free ship, free goods," has now been recognised by her 
 Majesty's Government, and has been adopted by France and 
 Russia. 2 A lawful capture cannot be resisted. Upon the 
 
 1 "The Times," of 21st April, 1854. 
 
 2 The great maritime question as to the rights of a belligerent of seizing 
 the enemy's property in neutral vessels, and neutral property in the enemy's 
 vessels, may be considered as definitely settled by the recent measures 
 of the British and French governments; but as the principle possesses an 
 historical interest, we shall briefly trace its progress. Omitting the brief 
 allusions of the Roman law, De Publicanis et Vectig.* &c, which have no 
 direct reference to international rights, the oldest authority on the point 
 is the " Consolato del Mare," which said, " If the captured ship belongs to 
 a friend, and her cargo to an enemy, the cargo may be confiscated; but 
 if the ship belongs to an enemy, and the cargo to a friend, the owner of 
 the cargo may ransom the vessel." " Se la nave che pigliata sara fosse 
 di amici, e le mercanzie che lui portent saranno d'inimici, l'ammiraglio della 
 nave p\i5 forzare e costringere quel padrone di quella nave che lui pigliato 
 avera, che lui con quella sua nave gli debba portare quello cho de' suoi 
 inimici sara. Se la nave fosse d'inimici e il carico che nella detta nave 
 sara fosse di amici, i mercanti che nella detta nave saranno, e dei quali il 
 detto carico fosse, tutto o in parte, si debbano accordare per conto della detta 
 nave che di buona guerra e con il detto aimniraglio per alcun prezzo ragio- 
 nevole come che loro potranno, e il detto ammiraglio debba fare tutto 
 accordo e patto che ragionevole fosse e lui sopportare possa alia giusta 
 ragione." (Cap. 273.) The word " amico" being intended as the friend of 
 both parties, is equivalent to the modern word " neutral." These rules of the 
 Consolato were generally followed during the twelfth and thirteenth centuries. 
 
 Dig. lib. xxxix. tit. iv.
 
 <)2 INTERNATIONAL LAW. 
 
 capture of a ship, the master and crew are not bound to navi- 
 gate the vessel, and they owe no service whatever to the 
 
 The first two treaties on the subject are, one between Edward III. of England 
 and the maritime towns of Castile and Biscay, in 1351 ; and the other between 
 the same king and the maritime towns of Portugal, in 1353 ; both of which 
 declared neutral property in the enemy's vessels to be free. In 1406, Henry IV. 
 of England concluded a treaty with the Duke of Burgundy, which declared 
 enemy's goods under a neutral flag to be confiscable. Several other treaties 
 were entered into at this period between England and Genoa and Austria, 
 some declaring enemy's goods under a neutral flag, others neutral goods under 
 an enemy's flag, to be good prize. France had concluded as yet no treaties 
 ou the subject, but the edicts of 1543 and 1584 declared the same prin- 
 ciples. In 1604, Henry IV. of France concluded a treaty with the Sultan 
 Achmet, by which neutral goods under an enemy's flag were declared free, 
 and equally so enemy's goods under a neutral flag. Similar treaties were 
 entered into in 1612 between Holland and Turkey, and also between the 
 regencies of Algiers, Tunis, and Tripoli, with Holland, Sweden, and Den- 
 mark. In 1634, England and Portugal concluded a treaty, declaring enemy's 
 goods under a neutral flag to be free, but neutral goods under an enemy's 
 flag to be confiscable. France, in 1646, by a treaty with Holland, stipulated 
 the freedom of enemy's goods under a neutral flag; but the edict of 1650 
 confirmed the rigorous provisions of the ancient ordinances with respect to 
 enemy's goods in a neutral vessel, whilst it modified them as to the goods of 
 a friend in an enemy's vessel. The treaties entered into before and after 
 the Peace of Westphalia in 1659, adopted as a rule the freedom of enemy's 
 goods under a neutral flag, and the confiscation of neutral goods under an 
 enemy's flag. Of these treaties we may notice that of 1650, between Spain 
 and the United Provinces; of 1655, between France and the Hanseatic 
 Towns; of 1655, between Cromwell and Louis XIV., and another between 
 France and England in 1677; of 1656, between England and Sweden; the 
 treaty of Westphalia of 1659; and the treaty of 1661, between Portugal 
 and Holland. During this period, while so many treaties existed, adopting 
 the principle, " free ship, free goods," two treaties were concluded containing 
 provisions similar to those of the Consolato — one of 1661 between England and 
 Sweden, and the other of 1664 between Sweden and Denmark. In 1665, 
 England entered into a treaty with Spain which contained the principle, 
 " free ship, free goods," and in all subsequent treaties with that country till 
 1783, the same principle was maintained. In 1667, the same principle was 
 sanctioned in the treaty between Great Britain and the United Provinces, and 
 was confirmed in the subsequent treaties till 17S0. During the first half 
 of the seventeenth century, the principle, " free ship, free goods," was all 
 but universally adopted ; but in the latter part of the seventeenth, and 
 at the commencement of the eighteenth century, during the wars which 
 took place between England, France, and Holland, far different rules prevailed 
 regarding neutrals. The French ordinance of 1681 declared all ships loaded
 
 RIGHT OF CAPTURE. 93 
 
 captors. A ship cannot he captured in a neutral territory. A 
 neutral territory cannot be made use of for any pur]! 
 
 with enemy's goods, and the goods of friends found in an enemy's ship, to be 
 good prize. Such rigorous rules were confirmed in 1692, and renewed during 
 the wars of the Spanish succession. Spain also adopted the same rules in 1702 
 and 1718. In 1693, the first armed neutrality was concluded between Sweden 
 and Denmark, to resist the execution of the convention between Holland and 
 England to put a stop to all neutral trade with France. The commercial 
 treaties of Utrecht in 1713 between England, France, Spain, and Holland, 
 sanctioned the principle, " free ship, free goods ;" and the seventeenth article 
 of this treaty was repeated verbatim in the twenty-eighth article of the I 
 of commerce of Versailles in 1786. By a treaty between France and the Han 
 seatic Towns in 171 6, both enemy's goods in neutral vessels, and neutral goods 
 in the enemy's vessels, were declared confiscable. But in a treaty with 
 Holland in 1739, France restored the principle of tho treaty of Utrecht. In 
 1751, the famous dispute arose between Great Britain and Prussia in re 
 to the seizure of certain Prussian ships with the enemy's goods on board, 
 and it elicited the remarkable document transmitted by the Duke of Newcastle, 
 which bore the signature of Geo. Lee, G. Paul, D. Ryder, and W. Murray. 
 
 During the war which occurred after 1740, the most rigorous rules regard- 
 in 0, neutral navigation were reestablished by France; but, in 1756, that 
 country opened to neutral powers the trade between France and the French 
 Colonies, a right which Great Britain denied to neutrals. In 1776, the United 
 States of America declared their independence; and in 177S France entered 
 into a treaty with them on the principle, "free ship, free goods," even where 
 the whole or part of the cargo belonged to the enemy ; and in furtherance of 
 it, France passed regulations, modifying the previous rules of 1681, 1704, and 
 1744; but England did not follow her example, and continued to seize all 
 vessels, Dutch, Danish, Russian, or Hanseatic. The Northern Powers deter- 
 mined to resist such an encroachment of the rights of neutrality ; hence the 
 formation of a second armed neutrality of 1780, first declared by Catherine II. 
 of Russia, and soon responded to by Denmark, and a double treaty between 
 Denmark and Sweden, and between Russia and Denmark. 
 
 The principles which this confederacy maintained were the following : — 
 
 I. That neutral ships might freely trade from port to port, and upon the 
 coasts of nations at war. 
 
 II. That the property of the subjects of belligerent powers should be free 
 on board neutral snips, excepting goods that were contraband. 
 
 The armed neutrality was afterwards strengthened by the accession of 
 Holland, Prussia, France, Portugal, and the Two Sicilies. In 1783, the Peace 
 of Paris was concluded, which confirmed the principle on which the armed 
 neutrality was founded ; and in the same year the United States entered into 
 a treaty with Sweden, adopting " free ship, free goods." Other treaties were 
 also concluded to the same effect between Russia and the Porte, in 1784 ; 
 Prussia and the United States, in 1785; Russia and Austria, in 1785; France 
 and Russia, and Prussia and the Two Sicilies, in 1787. The French Revolu-
 
 94 INTERNATIONAL LAW. 
 
 which shall lead to immediate violence : no proximate acts of 
 war are in any manner allowed to originate on neutral ground. 
 
 tion of 1793 caused a complete change of policy on the part of the Northern 
 Powers. Russia broke her treaty with France, and formed one with Great 
 Britain, renewing the treaty of 1766 ; and by a decree of the French Con- 
 vention, enemy's goods on board neutral vessels were declared to be good 
 prizes. In 1795, the United States concluded a treaty with Great Britain, 
 by which it was agreed that the property of enemies found on board neutral 
 ships shall be taken from them. But again, in 1800, the United States and 
 France formed a treaty, establishing the principle that free ships make free 
 goods, but that neutral property in enemy's ships shall be good prize. 
 
 Another armed neutrality was made in 1800, for the recognition of the 
 principle that free ships make free goods, by treaties between Russia, Sweden, 
 Denmark, and Prussia ; but this was suddenly ended by the murder of the 
 Emperor of Russia. The death of Paul I. changed the policy of Russia ; and 
 a treaty was concluded between England and Russia in 1801, by which enemy's 
 goods under a neutral flag were declared good prize. To this Denmark and 
 Sweden acceded in 1801 and 1802. It would be in vain to follow the severe 
 measures of hostility resorted to by the French and British governments during 
 the French wars, brought to a close in 1815. Since the Peace, France and the 
 United States have concluded numerous treaties with other countries, esta- 
 blishing the principle, " free ship, free goods." The treaties of France are— 
 with Brazil, in 1826; with Bolivia, in 1837; with Ecuador and Venezuela, in 
 1843 ; with New Grenada, in 1846 ; with Guatemala, in 1848 ; with Costa Rica, 
 in the same year; and with Hayti, in 1852. The Ottoman Porte has also 
 engaged with France in 1604, with England in 1675, with Russia in 1783, 
 and with other countries indirectly, not to confiscate any goods, except con- 
 traband of war, on board the ships of friendly nations. In so far, therefore, 
 as treaties are authoritative in settling the principles of the law of nations, 
 they are conclusive in establishing the principle that the belligerents have no 
 right to seize the property of an enemy found in the ship of a neutral. It is 
 contended, however, that, notwithstanding the numerous treaties formed to 
 secure the recognition of this principle, the law of nations, as expounded by 
 Gentilis, Grotius, Zouch, Loccenius, and Bynkershoek, is not affected by the 
 exceptions introduced by treaties. But international writers themselves 
 founded their doctrines on the established laws and usages of the civilized 
 world at their respective periods, and these, expanded and liberalized with 
 the progress of civilization, form, in progress of time, the basis of the 
 treaties entered into between nations. Therefore, to produce the authority 
 of the eminent writers on the law of nations as opposed to the more 
 enlightened international relations of modern days, would be to stereotype 
 rules, the practice of which, in many cases, would now be condemned by the 
 civilized world. To render it incompetent for any nation to repeal any of the 
 principles sanctioned by the jurists and statesmen of former ages, would be to 
 arrest the law of progress in moral science. As to the authority of treaties, 
 Rayneval said, " Les trace's, n'importe leur contenu, ne constituent point le
 
 RIGHT OF CAPTURE. 95 
 
 But it belongs to the State to assert tlie right of its own 
 territory against its violation. 
 
 110. A seizure may, under certain circumstances, he justi- 
 fiable or unjustifiable. If it be justifiable, the captor is entitled 
 to recover costs and damages from the claimants. If the prize 
 be returned, but the capture was originally justifiable, the 
 restitution would not exonerate the claimants from paying the 
 costs. But if there were no sufficient ground of seizure, the 
 claimants would be entitled to costs and damages. The captor 
 is bound to use due diligence with regard to the property 
 captured. 1 So if a prize- ship were lost by the misconduct 
 of the prize-master, by his not taking a pilot on board or 
 otherwise, the owner would be entitled to restitution in value. 
 But captors are not responsible for losses occasioned by mere 
 misfortune. They are authorized to take the prize to a con- 
 venient port, a port where the vessel may lie in safety, and of 
 sufficient capacity to admit of her entering it without unload- 
 ing the cargo ; as bulk must not be broken. 2 If the property 
 captured be restored, the claimant is entitled to receive the 
 goods as per invoice, and if there be found any deficiency, he 
 is entitled to compensation. If the captor knew that the ship 
 was protected by a licence, either from its production, or from 
 
 droit des gens ; ils sont 1' expression de la volonte" particuliere des contract- 
 ants; et le droit de gens est independant de cette volonte" ; ils ont la meme 
 nature que les contrats entre particuliers ; mais a defaut de contrat, e'est la 
 loi commune qui decide ; et entre nations, la loi commune e'est le droit des 
 gens."* The principle, "free ship, free goods," rests, however, on a solid 
 foundation. The right of neutrals to trade in time of war with belligerents, 
 is an indefeasible right of the law of nations ; it rests on the inviolability 
 of the neutral territory, a ship being regarded as the floating colony of the 
 State to which she belongs. This was the position of Kubner, Huber, De 
 Martens, Galiani, Jorio, and Rayneval. We hail, therefore, the recognition 
 of the principle by the British and French governments. France renounced 
 her presumed right of confiscating neutral property on board Russian ships, 
 and England that of confiscating Russian property on board neutral ships. 
 Russia has imitated the example, and henceforth this more just and liberal 
 doctrine may be deemed as incorporated in the law of nations, and held as 
 the rule of belligerents in any future wars.t 
 * Vol. i. p. 2S& t See Speech of Sir W. Molesworth, " Times," July 5, 1854. 
 
 1 The Williams, G Rob. 31G. 2 The Wilhelmsberg, 5 Rob. 143.
 
 96 INTERNATIONAL LAW. 
 
 other circumstances which ought to have satisfied him of its 
 existence, he is liable to the whole extent of the mischief 
 done. But if the existence of the licence was not disclosed to 
 him by those whose duty it was to inform him, and he had no 
 sufficient means to inform himself, then the captor would not 
 be responsible. 1 
 
 Section VI.— RIGHT OF BLOCKADE. 
 111. A blockade is a sort of circumvallation round a place, 
 by which all foreign connexions and correspondence, as far as 
 human force can effect it, is to be entirely cut off. It is a high 
 act of sovereignty, and cannot be extended at will by the block- 
 ading force. 2 There are two sorts of blockade ; one by simple 
 fact only, the other by a notification accompanied with the 
 fact. 3 A blockade should be intimated to neutral merchants ; 
 it may be notified in a public and solemn manner by declara- 
 tion to foreign governments ; or, w T hen it commences de facto, 
 notice may be given on the spot to those who come from 
 a distance, and who may therefore be ignorant of the fact. 1 
 Much contention was created during the last wars by the 
 attempt to establish what is called a paper blockade; the belli- 
 gerent parties asserting the right to declare all shipping ports, 
 and even the whole coast of the enemy's country, in a state 
 of blockade. The armed neutrality of 1800 declared a block- 
 ade to exist only where, from the arrangements of the 
 power which is attacking, with vessels stationary and suffi- 
 ciently close, there is an evident danger in entering. An acci- 
 dental change would not suspend the blockade ; 5 it would be 
 considered as legally existing, although the winds did occa- 
 sionally blow off the blockading squadron. If, however, the 
 squadron be driven off by a superior force, a new r course of 
 events arises, which may introduce a presumption in favour of 
 the restoration of freedom of commerce. The breach of a 
 blockade subjects the property to confiscation. 7 
 
 1 The St. Antonius, 1 Acton, 113. The Felicity, 2 Docls. 381. 
 
 2 The Kenrick and Maria, 1 Rob. 152. 
 
 3 The Neptunus, 1 Rob. 171. 
 
 4 The Vrow Judith, 1 Rob. 153. 5 The Columbia, 1 Rob. 156. 
 « The Hofihunp;, 6 Rob. 118. 7 1 Rob. 156.
 
 BIGHT OF BLOCKADE. 97 
 
 112. On the question of blockade three things must be 
 proved : first, the existence of an actual blockade ; secondly, 
 the knowledge of the party ; and, thirdly, some act of viola- 
 tion, either by going in or coming out with a cargo laden 
 after the commencement of blockade. 1 The circumstances 
 which prove the existence of a blockade have already been 
 stated. The knowledge of the party is presumed when a noti- 
 fication has been made to the foreign government, the effect of 
 which is to include all the individuals of that nation ; it being 
 the duty of foreign governments to communicate the informa- 
 tion to their subjects, whose interests they are bound to pro- 
 tect. 2 A notification does not jproprid vigore bind any country 
 but that to which it is addressed, yet in a reasonable time it 
 must affect neighbouring States with knowledge. 3 When the 
 blockaded place is in the Continent of Europe, where the dif- 
 ferent States have constant intelligence, ships would not be 
 allowed to sail to it under pretence that they expected to 
 receive information on the spot. 4 Ships must call somewhere 
 to obtain information, and they cannot obtain it at the mouth 
 of the blockaded port. There may be ignorance as to the 
 continuation of the blockade. Where the blockade is one of 
 simple fact only, it ceases with the fact itself; but where it is 
 accompanied by public notification, the blockade is supposed 
 to exist till it has been publicly repealed. In the former case, 
 the ignorance of the party may be admitted as an excuse for 
 sailing on a doubtful and provisional destination. But when 
 it is by notification, till notice has been given, the port is to 
 be considered as closed up, and from the moment of quitting 
 port to sail on such a destination, the offence of violating the 
 blockade is complete. 
 
 113. The object of a blockade is not merely to prevent an 
 importation of supplies, but to cut off all communication of 
 commerce with the blockaded place ; and this blockade is just 
 as much violated by a vessel passing outwards as inwards. 
 
 1 The Betsey, 1 Rob. 92. 2 The Neptimus, 1 Rob. 171. 
 
 3 The Adelaide, 2 Rob. 111. l The Betsey, 1 Rob. 335 note.
 
 98 INTERNATIONAL LAW. 
 
 Nothing "but an absolute and unavoidable necessity will justify 
 the attempt to enter a blockaded port. 1 A neutral vessel 
 cannot enter a blockaded place; if she had already entered it 
 before the commencement of the blockade, and had laden 
 a cargo, she may retire with it ; but no more purchases are 
 allowed to be made in that port : the cargo must have been 
 purchased before the port was put in a state of blockade. If 
 the cargo be taken on board afterwards, it is a fraudulent act, 
 and a violation of the blockade. 2 
 
 Section VII.— EIGHTS AND DUTIES OF NEUTRALS. 
 
 114. Neutrals are those who take no part in the hostilities, 
 who are impartial with respect to both belligerents, and 
 continue their accustomed trade without affording any suc- 
 cours or privileges to either party. The right of neutrals 
 to trade with the enemy was often contested, but the 
 principle is universally admitted. A limitation was intro- 
 duced during the war in 1756, not to allow neutral vessels 
 to trade between the mother country and the colony of the 
 enemy, inasmuch as such a trade would be closed to a 
 neutral but for the war. The same restriction applies also to 
 the coasting trade. Such trading is so peculiarly national, 
 that a neutral would at once be invested with the national 
 character of the enemy if she were found engaged in it. But 
 our courts have never condemned the ships to confiscation 
 on that account, unless they carry on that trade with false 
 papers. 3 Neutrality and impartiality must also be manifested 
 by avoiding to become an auxiliary to any of the belligerents, 
 by carrying articles which are contraband of war. The articles 
 included under the denomination of contraband of war have 
 often been stipulated by treaties. Certain articles, beyond 
 the quantities necessary for the use of the ship, are of a 
 direct and immediate use in war, such as cannons, mortars, 
 
 1 The Neptunus, 2 Rob. 115. The Hurtige Hane, 2 Rob. 127. 
 
 2 The Betsey, 1 Rob. 04. 3 The Johanna Tholen, 6 Rob. 78.
 
 RIGHTS AND DUTIES OF NEUTRALS. 99 
 
 muskets, fire-arms, pistols, bombs, grenades, bullets, balls, 
 flints, matches, powder, saltpetre, sulphur, pikes, flints, swords, 
 belts, cartouche-boxes, also cuirasses, saddles and bridles. 
 Other articles are used both in time of peace and in time of 
 war. Horses have by many treaties been considered as liable 
 to confiscation. Naval stores are declared contraband. Pitch 
 and tax have been condemned as such, except where these 
 articles are the produce of the claimant's country and con- 
 stitute its ordinary commerce. Unmanufactured articles are 
 looked upon with more indulgence than manufactured ones; 
 so iron is more favourably considered than anchors ; hemp 
 than cordage ; and wheat is not considered as so obnoxious 
 a commodity as any of the final preparations of it for 
 human use. 
 
 115. Provisions generally are not contraband, but may 
 become so under circumstances arising out of the particular 
 situation of the war, or the condition of the parties engaged in 
 it. 1 With respect to provisions, a right of preemption may 
 be exercised ; that is, the belligerent may assume the right to 
 intercept the delivery of the cargo, and to purchase it at a 
 price calculated exactly in the same manner and at the same 
 value as it would have done if it had arrived at its port of 
 destination in the ordinary course of trade. No freight can be 
 claimed on contraband goods, 2 but the vessel is not thereby 
 subject to capture ; where, however, the ship belongs to the 
 owner of the contraband cargo, or where the simple miscon- 
 duct of carrying a contraband cargo has been connected with 
 other aggravating circumstances, the ship would be liable 
 to confiscation. If the owner of the cargo has any interest 
 in the ship, he is thereby concerned in the illegal transaction, 
 and the whole of his property will be involved in the same 
 sentence of condemnation. 3 This right of confiscation of 
 contraband goods and vessels is much modified by treaties. 
 
 1 The Jonge Margaretha, 1 Rob. 193. 
 
 The Mercurius, 1 Rob. 288. The Regende Jacob, 1 Rob. 92. 
 3 The Jonge Tobias, 1 Rob. 330. 
 H 2
 
 100 INTERNATIONAL LAW. 
 
 Order in Council in furtherance of Ilcr Majesty's Declaration of the 28^/t March, 
 1854, respecting the Trade of Neutrals and British Subjects, 15th April, 1854. 
 
 Whereas Her Majesty was graciously pleased, on the twenty-eighth day of 
 March last, to issue her royal declaration in the following terms : — 
 
 " Her Majesty the Queen of the United Kingdom of Great Britain and Ire- 
 land, having been compelled to take up arms in support of an ally, is desirous 
 of rendering the war as little onerous as possible to the powers with whom 
 she remains at peace. 
 
 " To preserve the commerce of neutrals from all unnecessary obstruction, 
 her Majesty is willing, for the present, to waive a part of the belligerent rights 
 appertaining to her by the law of nations. 
 
 "It is impossible for her Majesty to forego the exercise of her right of 
 seizing articles contraband of war, and of preventing neutrals from bearing the 
 enemy's despatches ; and she must maintain the right of a belligerent to pre- 
 vent neutrals from breaking any effective blockade which may be established 
 with an adequate force against the enemy's forts, harbours, or coasts. 
 
 "But her Majesty will waive the right of seizing enemy's property laden on 
 board a neutral vessel, unless it be contraband of war. 
 
 "It is not her Majesty's intention to claim the confiscation of neutral pro- 
 perty, not being contraband of war, found on board enemy's ships ; and her 
 Majesty further declares, that being anxious to lessen as much as possible the 
 evils of war, and to restrict its operations to the regularly organized forces of 
 the country, it is not her present intention to issue letters of marque for the 
 commissioning of privateers." 
 
 Now it is this day ordered, by and with the advice of her Privy Council, 
 that all vessels under a neutral or friendly flag, being neutral or friendly pro- 
 perty, shall be permitted to import into any port or place in her Majesty's 
 dominions all goods and merchandise whatsoever, to whomsoever the same 
 may belong ; and to export from any port or place in her Majesty's dominions 
 to any port not blockaded, any cargo of goods, not being contraband of war, 
 or not requiring a special permission, to whomsoever the same may belong. 
 
 And her Majesty is further pleased, by and with the advice of her Privy 
 Council, to order, and it is hereby further ordered, that, save and except only 
 as aforesaid, all the subjects of her Majesty, and the subjects or citizens of any 
 neutral or friendly State, shall and may, during and notwithstanding the pre- 
 sent hostilities with Russia, freely trade with all ports and places wheresoever 
 situate which shall not be in a state of blockade, save and except that no 
 British vessel shall under any circumstances whatsoever, either under or by 
 virtue of this order or otherwise, be permitted or empowered to enter or com- 
 municate with any port or place which shall belong to, or be in the possession 
 or occupation of, her Majesty's enemies. 
 
 And the Right Honourable the Lords Commissioners of her Majesty's 
 Treasury, the Lords Commissioners of the Admiralty, the Lord Warden of the 
 Cinque Ports, and her Majesty's Principal Secretary of State for War and the 
 Colonies, are to give the necessary directions herein as to them may respec- 
 tively appertain. 
 
 C. C. Greville.
 
 BOOK III. 
 
 MERCANTILE CONTRACTS. 
 
 CHAPTER I.— OF CONTRACTS. 
 
 Section I.— NATURE OF CONTRACT. 
 
 116. It is important, before entering into an exposition of 
 the distinctive branches of mercantile contracts, to ascertain the 
 leading principles of the law of contracts generally. A con- 
 tract is an agreement by which two parties reciprocally pro- 
 mise and engage, or one of them singly promises and engages, 
 upon certain considerations to the other, to give some par- 
 ticular things, or to do or abstain from doing some particular 
 act. 1 The essentials of a contract are, the consent, the capacity 
 of the parties, the subject matter, the lawfulness of the con- 
 tract itself, and the consideration. A contract is called synal- 
 lagmatic, when two persons reciprocally bind themselves one 
 towards another ; unilateral, when one only or more persons 
 bind themselves to another, without any corresponding obli- 
 gation on the part of the other. 
 
 Section II.— THE CONSENT. 
 
 117. The consent would not be valid if given under an 
 error, or if extorted by violence, surprise, or fraud. A con- 
 sent may be expressed, implied, or tacit ; it may be given by 
 word or by writing ; nor is it necessary to be drawn up in 
 any form. It may also result from a correspondence. The 
 consent, when proceeding from a correspondence, gives rise 
 to the question already propounded with respect to the place, 
 as to the time when the consent is deemed to perfect the con- 
 
 1 Pothier on Obligations, §3. Addison on Contracts, p. 1.
 
 102 OF CONTEACTS. 
 
 tract. Suppose an offer is made of goods at a certain price, and 
 the correspondent writes by return of post accepting the offer : 
 is the contract perfected as soon as the answer is written, or 
 not till the answer is received? It is a rule, that until the 
 terms of the contract are mutually and finally agreed upon, 
 either party may retract. The party making the offer could 
 not remain hound by it whilst the letter is forwarded, because 
 during that time there is no mutual agreement ; but when 
 the letter containing the acceptance reaches him, then, if he 
 have not retracted his offer, the acceptance becomes simul- 
 taneous with the offer, and the contract is perfected. If, 
 however, there be a custom of trade, or it was expressly 
 intimated in the letter conveying the offer, that the offer is 
 binding provided it be accepted by return of post, then the 
 party offering is considered as making, during every instant 
 of the time the letter is travelling, the same identical offer ; 
 and the moment the offer is accepted, it entitles the buyer 
 to recover in an action for not completing the contract. 1 
 
 118. Another difficulty in the consent is the following: 
 Suppose I offer to sell 100 bales of cotton ; an answer is sent 
 to me accepting 50 bales only : am I bound for the 50 ? 
 Clearly not. There may be many reasons why I would sell 
 100 bales, and not 50 only. The disagreement does not con- 
 sist in the quantity, but in the subject matter of the contract. 
 Again, suppose I write to A a letter, with an offer to sell 
 100 bales of cotton, at 5d. per lb., and a letter with an offer 
 to purchase the same at 5\d. per lb. is addressed by A to me: 
 in this case A's offer would be deemed a complete consent to 
 my terms, the less being included in the greater. A tacit 
 consent may sometimes be inferred by the acts of the party ; 
 for example, if, upon notice of abandonment, the insurer gave 
 no answer, but sent instructions to the spot with respect to 
 the property abandoned, there would be a tacit consent to 
 the abandonment. If a cheque be presented to a banker, and 
 he retains it beyond a certain time, it would be construed as 
 an acceptance ; generally, however, silence does not imply 
 1 Adainv. Lindsell, 1 B. & Aid. 681.
 
 THE CONSENT. 103 
 
 consent. There arc cases when, if a person should not 
 answer a letter of advice, it would be deemed an approval. 
 For instance, if I send goods to one with whom I am in 
 regular correspondence, and forward to him the bills of 
 lading for them ; some days after, I inform him I am about 
 to draw upon him for the price ; if he does not answer this 
 letter, it is tantamount to a consent to such draft. But it', 
 on the contrary, I were to write to one with whom I never 
 had business, announcing a draft made upon him, his silence 
 would not imply his consent. In mercantile intercourse, it 
 is the duty of a party who refuses the acceptance of an offer, 
 or to perform an act, or to give effect to any contract, to 
 express his dissent. This is especially required where there 
 is a regular commercial intercourse between the parties. 
 
 119. As already stated, the consent would not be valid if 
 given in error. There may be an error in the motives which 
 induce a person to the transaction, in the nature of the trans- 
 action, in the thing itself, or in the jyerson. An error in the 
 motives never avoids the contract, unless it rests on the con- 
 sideration for the contract; as, for example, a third person 
 need not inquire why a party puts his name on a bill of ex- 
 change, whatever may be the acceptor's rights towards the 
 other contracting party. If there be an error in the nature of 
 the transaction, the contract will be void ; but if the error 
 consist only in the accidental qualities of the thing, it would 
 not annul the contract ; the error must rest on the very iden- 
 tity of the thing : unless, indeed, the accidental qualities of the 
 article form the most essential conditions of the contract. In 
 the contract of insurance, the error in the nature of the risk, 
 or in the circumstances attending it, produced either by mis- 
 representation or concealment, would vitiate the contract. 
 The error in the person is often material ; cash transactions 
 would not be affected by such an error, but if, after a person 
 deals with one on credit, he finds that another was the 
 contracting party, the sale would be void. 
 
 120. In certain trades, where all contracts arc made through 
 brokers, although it is understood that brokers never pur-
 
 104 OF CONTRACTS. 
 
 chase on their own account, and that they generally deal on 
 account of numerous principals, yet they do not declare the 
 name of the principal in their purchases. We shall enter fully 
 into this subject when treating on the law of Principal and 
 Agent ; it is enough for the present to say, that when the name 
 of the person on whose account the broker contracted is not 
 mentioned, the broker dealing in his own name, unless pro- 
 tected by special customs, will be personally responsible. If 
 a consent were given under distress or restraint, it would be 
 void; and also when it has been given by fraud or deceit. 
 It must be observed, however, that in all these cases the 
 contract is not of itself void, but there is ground for an 
 action for damages, or for annulling the contract. 
 
 Section III.— THE CAPACITY OF THE PARTIES, SUBJECT 
 MATTER, AND CONSIDERATION. 
 
 121. We have already observed the natural and artificial 
 disabilities which affect minors, married females, ecclesiastics, 
 and aliens ; ' it is not requisite, therefore, to refer to the subject 
 under this head. The subject matter of the contract may be 
 any th ing. It may be corporeal or incorporeal ; it may be goods, 
 bills, good-will, share, stock, anything having a value ; a thing 
 future or a thing present ; even an expectation, provided it be 
 certain or ascertainable, and provided it be lawful. Whatever 
 is contrary to justice, morality, statute law or public policy, 
 is void, and cannot be supported in any court of law or 
 equity. But illegality is never presumed ; on the contrary, 
 everything is always presumed to be legal unless the contrary 
 be proved. 
 
 1 22. There must be a consideration for a promise : where- 
 ever the undertaking is gratuitous, it creates no legal respon- 
 sibility. A consideration must be of some value, however 
 slight. A difference is made between a good consideration 
 and a valuable consideration. To give a right of action as 
 
 1 See pp. 42—48.
 
 FORM OF THE CONTRACT. 105 
 
 between the parties, it is enough if there be a good consider- 
 ation; but to render it good, even against third parties, tin- 
 consideration must be valuable. A consideration will be 
 sufficient when the party promising obtained some benefit for 
 such a promise, or even when a third person was thereby 
 benefited ; and also when the party to whom the promise is 
 made subjects himself to any charge or obligation, or to some 
 inconvenience. 1 For example, if I have a clear claim upon 
 you, and I consent to forbear it, that would be a sufficient 
 consideration for a promise you may make. 2 Moreover, a 
 consideration, as the contract itself, must be lawful, and not 
 against law, sound policy, or good morals. 3 The consideration 
 required in bills of exchange, and other contracts, will be 
 separately considered in the proper place. 
 
 Section IV.— FORM OF THE CONTRACT. 
 
 123. No special form is needed for a mercantile contract, 
 except that, in England, by the statute of frauds, all 
 contracts for the sale and purchase of any goods above the 
 value of 101. must be in writing, the requisites of which 
 will be detailed under the head of Contract of Sale. 4 Few 
 contracts are drawn up by formal deed : a deed is a contract 
 in writing, signed, sealed, and delivered. The sealing of a 
 deed is a very ancient eastern custom. Scriptural records 
 afford repeated instances of its uses ; thus, in Nehemiah 5 it is 
 said, " And because of all this, we make a sure covenant, and 
 write it; and our princes, Levites, and priests, seal unto it." 
 So Jeremiah, 6 speaking of a contract of land, said, " And 
 I bought the field of Hanameel, my uncle's son, that was in 
 Anathoth, and weighed him the money, even seventeen shekels 
 of silver. And I subscribed the evidence, and sealed it, and 
 took witnesses, and weighed him the money in the balances. 
 
 1 Jones v. Ashburnham, 4 East. 455. 
 
 2 Morton v. Burn, 2 Nev. & Perry, 297. 
 
 3 Reg. v. Iub. of Northwingfiekl, 1 B. & Ad. 913. 
 
 4 29 Car. II. c. 3. § 17. 5 Nehein. ix. 38. 6 Jer. xxxii. 9—11.
 
 106 OF CONTRACTS. 
 
 So I took the evidence of the purchase, both that which was 
 sealed according to the law and custom, and that which was 
 open." Sealing is now one of the requisites of deeds, and 
 must be made after the deed has been written, and before it is 
 delivered ; it must also be attested by witnesses, to establish 
 the fact of the sealing, and to acknowledge the performance 
 of all that is requisite for the validity of the instrument. 
 Any material alteration in a deed, whether made by the party 
 holding it, or by a stranger, renders the instrument altogether 
 void from the time when such alteration is made. In order 
 that a contract may have a legal validity, it must be duly 
 stamped. The stamp duties vary according to the nature of 
 the instrument, and to the length of the same. Stamps are 
 required for deeds, sales of land, charter-parties, bills of 
 exchange, policies of insurance, specific agreements, written 
 contracts, and other mercantile instruments. 
 
 124. All written instruments are construed according to 
 their natural sense and meaning, as collected, in the first 
 place, from the terms used in them ; which terms are them- 
 selves to be understood in their plain, ordinary, and popular 
 sense, unless they have generally, in respect to the subject 
 matter, as by the known usage of the trade or the like, 
 acquired a peculiar sense distinct from the popular sense of 
 the same words ; or, unless the context evidently points out 
 that they must, in the particular instance, and in order to 
 effectuate the immediate intention of the parties to that con- 
 tract, be understood in the same other special and peculiar 
 sense. 1 As to the admissibility of parole evidence, in the 
 first instance, where a written contract has been entered into, 
 no parole evidence can be introduced to show that the agree- 
 ment was in reality different from that which it purports to 
 be ; 2 or to add to, or alter, or contradict what is written. 
 Evidence is admissible where words have an ambiguous 
 meaning : where they may apply to two different things, then 
 
 1 Per Lord Ellenborough, Robertson r. French, 4 East. 137. Mallan v. May, 
 13 M. & W. 511. Lee v. Stone, 1 Exck. GS7. 
 
 2 Williams v. Jones, 5 B & C. 109.
 
 LIMITATION OF ACTION. l'<< 
 
 it may be shown which of them was the thing intended. 1 So 
 where terms are used which are known and understood by a 
 particular class of persons, in a certain special and peculiar 
 sense, evidence to that effect is admissible, for the purpose of 
 applying the instrument to its proper subject matter. And 
 conformably with these principles, the courts have allowed 
 mercantile instruments to be expounded according to the cus- 
 tom of merchants, who have a style and language peculiar to 
 themselves, of which usage and custom are the legitimate 
 interpreters. 2 
 
 Section V.— LIMITATION OF ACTION. 
 
 125. The exercise of the right of action for the fulfilment 
 of a contract, or for the payment of a debt, is limited by 
 statute within certain specific periods, according to the nature 
 of the claim and the document on which it is founded. One 
 of the principal reasons for admitting such limitations is the 
 difficulty of ascertaining the facts necessary to make it safe to 
 exercise the judicial power. 3 If the claim rests on a document 
 under seal, or on a judgment, unless there be an acknowledg- 
 ment or part-payment, the remedy would be extinguished at 
 the end of twenty years ; if it rests on a document not und< r 
 seal, or on a verbal contract, the claim may be enforced till 
 the end of six years only, 4 except in cases of disability. Yet, 
 by the English law, this limitation does not extinguish the 
 debt ; it only gives right to the debtor to produce this limita- 
 tion in bar of the claim ; therefore, if the creditor has in his 
 hands any property of the debtor, he has still a right of lien 
 on such property. By the law of Scotland, however, while 
 all legal remedy to enforce payment of a debt does not cease 
 until the end of forty years from the time at which the right 
 to sue first accrues, at the end of that period the debt is 
 altogether extinguished. In the case of book-debts and mer- 
 chants' accounts, there is prescription after three years; in 
 
 1 Smith v. Jeffreys, 15 M. k W. 562. 
 
 2 Starkie on Evidence, p. 1033. Smith v. Wilson, 3 B. & Ad. 733. 
 
 3 Wedderburn v. Weddcrburn, 4 My. & C. 41. 
 
 4 21 Jas. I. c. 16, § 3, for England; 10 Car. I. sess. 2, c. 6, for Inland.
 
 108 OF CONTRACTS. 
 
 the case of bargains as to moveables not running into account, 
 after five years ; and in bills of exchange, after six years. In 
 these cases the debt is not extinguished, but the parole proof, 
 bills of exchange, and writings not attested, although not 
 holograph, cease to be available at the end of the respective 
 periods. 
 
 126. In order to put a claim out of the statute of limitation, 
 the acknowledgment of the debt must be in writing, and must 
 contain a promise, express or implied, to pay the debt. 1 In Scot- 
 land it is not requisite that the acknowledgment should contain 
 a promise to pay, but it must be made after the period of short 
 prescription is completed ; if it be' made within the time, it 
 would not elude prescription. In England, such acknowledg- 
 ment must be signed by the party to be charged thereby, and 
 the signature of his agent would be insufficient ; but in Scot- 
 land the acknowledgment would be valid, even where clearly 
 made by the agent of the debtor. Moreover, in England the 
 acknowledgment must be made to the creditor or his agent; 2 
 while in Scotland it is not indispensable that the acknow- 
 ledgment should be so made. Certain disabilities, arising 
 from the absence of the creditor or debtor, may prevent 
 the commencement of the period of limitation ; although in 
 Scotland such absence, if voluntary, would not be a valid 
 answer to a plea of prescription. A minor has six years after 
 attaining majority in which to enforce his claims. 3 
 
 1 9 Geo. IV. c. 14, § 1. Hart v. Prendergast, 14 M. & W. 741. 
 
 2 Holland v. Clark, 1 Y. & C. C. 151. 
 
 3 See the queries issued by the Mercantile Law Commission, on the 
 differences between the mercantile law of England and Scotland (1854).
 
 CONSTITUTION OF PARTNERSHIP. 109 
 
 CHAPTER II. 
 
 OF PARTNERSHIP. 
 
 Section I.— CONSTITUTION OF PARTNERSHIP. 
 
 127. Vast mercantile transactions, the field of which 
 is so enlarged by increased facilities for communication 
 and the expanded wants of the civilized world, require an 
 amount of capital, a variety of talents and industry, and an 
 extent of credit, seldom at the command of any single indi- 
 vidual. Therefore contracts of partnership are formed with 
 a view to associate capital and labour, consisting of two or 
 more persons having a joint capital, and each being interested 
 in the profit and losses. The contract is of ancient origin : it 
 was known to the Romans, and in the middle ages it formed 
 the basis of those great associations or leagues, which for a 
 considerable period monopolized the commerce of Europe. 
 In the consideration of this contract, we shall first examine 
 the constitution of common or private partnerships, and the 
 rights and duties of partners among themselves, and towards 
 third persons. We shall afterwards enter into that more 
 enlarged form of associations for commercial purposes, viz. 
 joint-stock companies, including those for banking ; and define 
 the legal position of open or regulated companies, as well as 
 of the civic companies or corporations. The doctrines of the 
 English law respecting partnership will, in their most im- 
 portant bearings, be compared with the provisions of foreign 
 law. 
 
 128. Partnership is created by an agreement, whereby two 
 or more competent persons place, or bind themselves to place, 
 something in common for the purpose of a common lawful
 
 110 OF PARTNERSHIP. 
 
 undertaking, and the acquisition of common lawful profits, of 
 which they hind themselves mutually to account. The essen- 
 tial ingredients of this definition are, — 
 
 (1.) It is an agreement formed by the consent of the parties, 
 and not a community of interests created by the operation of 
 law. A community of interests may exist in cases of joint- 
 tenancy in lands or goods, as in the case of joint-heirs and 
 joint-legatees, or in the case of part-owners of a ship : these 
 have all a joint-interest in the land or ship, but they are not 
 partners on that account. So where a broker purchases a 
 cargo of goods for several persons, they would all alike be 
 interested in the purchase, but each would have a distinct 
 interest for his own share. A community of interests does not 
 necessarily constitute partnership. 1 
 
 (2.) Each party must bring something. It may be in 
 different proportions and in different kinds, but each must 
 bring something valuable. It may be stock or effects, or 
 labour or skill, or any other thing. 2 And what is brought by 
 all the partners respectively, becomes the joint and undivided 
 property of them all : it becomes a common stock, in which 
 all of them have an equal interest. 
 
 (3.) The partnership must be formed for a lawful under- 
 taking. 3 The contract must be legal in itself. A partnership 
 formed for stealing, or smuggling, or any other immoral 
 object, would not be valid. The trade must also be consistent 
 with the law of the land. 
 
 (4.) The profits must be in common, although they may be 
 distributed in unequal proportions. 
 
 (5.) The partnership must be constituted bond fide, and the 
 concurrence of each partner must proceed from a full knowledge 
 of all the circumstances and conditions of the partnership. 4 
 
 (6.) It may be formed by express or implied consent, by 
 
 1 Hoare v. Dawes, Doug. 371. Coope v. Eyre, 1 H. Bl. 37. Gibson v. Lup- 
 ton, 9 Bing, 297. 
 
 2 Dale v. Hamilton, 5 Hare, 393. 
 
 3 Bensley v. Bignold, 5 B. & Aid. 335. 
 Nye v. Beale, 18 L. T., 270 Q. B.
 
 CONSTITUTION OF PAKTNEKSHIP. Ill 
 
 written articles, by parole contract, or by the acts of tlie 
 parties. 
 
 (7.) Each partner must have free access to all the books 
 and accounts. 
 
 129. A contract of partnership is founded on and perfected 
 by the consent of the parties ; therefore a third person could 
 not be introduced into it after it has been formed, without the 
 express concurrence of all the partners. The dissent of a 
 single partner would be sufficient to exclude him. Hence it 
 occurs that when a partner dies, the partnership is ipso facto 
 dissolved, and, unless by specific provisions in the deed, the 
 heir or assignee of the deceased partner would have no right 
 to succeed him in the partnership. 1 As to what constitutes 
 partnership, when two parties have a joint and mutual interest 
 in a thing and in the profits thereof, they are deemed partners 
 towards each other. The great indicia as to the existence of 
 partnership being a community of profit and loss, no part- 
 nership can exist without a joint and mutual interest in the 
 profits. Where there is only a community of interests, there 
 would be no partnership. For example, two persons may agree 
 to purchase goods on their joint account, without intention to 
 sell them for common profit ; and whether they purchase 
 them in their joint names, or in the name of one of them, or 
 through a broker, this will not make them partners. 2 
 
 130. The numerous decisions relating to the question as to 
 what constitutes partnership between the parties and towards 
 third persons, have considerably complicated a principle other- 
 wise clear. Between the parties themselves a partnership exists 
 only when such is their actual intention: a mere participation 
 of profits will not make the parties partners, as between them- 
 selves. Where a person receives out of the profits of a 
 business the wages of labour, or a commission as hired ser- 
 vant or agent, such as a factor, foreman, clerk, or manager, 
 having no interest or property in the capital stock of the 
 
 Crawshay v. Maule, 1 Swanst. 508. Downs v. Collins, 6 Hare, 418. 
 2 Coope r. Eyre, 1 H. Bl. 48. Hoare v. Dawes, Do\ig.371. Barry v. Nesham, 
 16 L. I. C. P. 41.
 
 112 OF PAETNERSHIP. 
 
 business, the contract will be one of hiring and service ; and 
 he will not be a partner, although his wages may be calcu- 
 lated according to a fluctuating standard, and may rise and 
 fall with the accruing profits. 1 
 
 131. But although an agreement to participate in the profit 
 and loss may be one of agency as between the parties, it may 
 under certain circumstances be held to be one of partnership 
 with respect to third persons, and the agent would acquire the 
 responsibility of a partner. For instance : A, the sole owner 
 of a lighter, entered into an agreement with B, a lighterman, 
 that B should work the lighter, and that the net profit made 
 should be equally divided between them, j In this case A and 
 B are held to be partners in the concern, and B as well as A 
 would be liable for the repairs done to the lighter. Although 
 there is no community of interest in the lighter, yet there 
 is a community of interest in the profit and loss, which are 
 to be divided as between principals ; and that is sufficient to 
 constitute a partnership. 2 So where a merchant employed 
 a broker to purchase goods on speculation, and agreed to 
 allow him a proportion of the profits arising from the sale, 
 as a remuneration for his trouble and by way of brokerage, 
 and that he should also bear a proportion of the losses ; though 
 the broker stood in relation of agent towards the merchant, 
 yet as to third persons he was liable as a partner. 3 Again, an 
 agreement by which a clerk is allowed a fixed annual salary 
 in consideration of his general services in the business, and in 
 addition to this a certain share of the net profit, that would 
 constitute a partnership : 4 if a man, as a reward for his labour, 
 chooses to stipulate for an interest in the profits of a business, 
 instead of a certain sum proportionate to those profits, he is as 
 to third persons a partner, and no arrangement between the 
 parties themselves can prevent it. 5 It has been held that 
 
 1 Stocker v. Brocklebank, 3 M. & G. 250. Meyer v. Sharpe, 5 Taunt. 74. 
 Mair v. Glennie, 4 M. & S. 240. Rawlinson v. Clarke, 15 M. & W. 292. 
 
 2 Dry v. Boswell, 1 Camp. 329. Bond v. Pittard, 3 M. W. 357. 
 
 3 Smith v. Watson, 2 B. & C. 403. Muirhead v. Salter, 4 B. & A. GG7. 
 * Katch v. Sckenck, 18 L. T. Chancery, 386. 
 
 s Ex parte Rowlandson, 1 Rose, 91 .
 
 CONSTITUTION OF PAETNEESHIP. 113 
 
 a partnership would not exist as "between themselves and 
 toward third persons, where the agent is to receive, not a 
 specified proportion of the profits in specie, but a sum of money 
 calculated in proportion to a given quantum of the profits, and 
 fluctuating with them ; nor would there be a partnership 
 among themselves even if a trader agreed to pay another 
 person for his labour in the concern, a sum of money in 
 proportion to the profits equal to a certain share. 1 But such 
 subtlety of distinctions are calculated to introduce confu- 
 sion in the contracts between principals and agents, without 
 in many cases preventing the latter from incurring that 
 responsibility which the law imposes on those who participate 
 in the net profit of the business. 
 
 132. In the instances already alluded to, a partnership 
 would be held to have existed between the parties and toward 
 third persons, where there was a participation in the net profits 
 of the concern. If however JB, the lighterman, as in the case 
 already referred to, in consideration of working the lighter, 
 should receive half the gross earnings, that would not consti- 
 tute a partnership ; 2 so if a captain of a ship employed in the 
 whale fishery agrees with the sailors, that in lieu of wages they 
 shall have a share of the produce of the cargo, that would not 
 make them partners. 3 The meaning of the shipping contract 
 is, that the men shall be paid out of the proceeds in a stipu- 
 lated proportion : it is an agreement as to the mode of com- 
 pensation, and gives them no property in the oil. In the 
 case of Cornish miners, it is usual for gangs of miners to 
 contract with the agent who represents the owner of the 
 mine, to work a certain portion of a vein and fit the ore for 
 market, at the price of so much in the pound of the sum for 
 which the ore is sold. 
 
 133. The state of the law on this subject is productive of 
 injurious results, it being a not uncommon practice to grant to 
 
 1 Ex parte Hamper, 17 Ves. 404. Ex parte Eowlanclson, 19 Yes. 461. Ex 
 parte Langdale, 18 Ves. 300. 
 
 2 Dry v. Boswell, 1 Camp. 329. Pott v. Eyton, 3 Com. B. 32. 
 
 3 Wilkinson v. Frazier, 4 Esp. 441. Evans v. Bennett, 1 Camp. 300. 
 
 I
 
 114 OF PARTNERSHIP. 
 
 clerks an interest in the profits, in addition to a fixed salary. 
 The principle of associating the employed in the interest of the 
 concern would be extensively adopted, were it not for the 
 obstructions put to it by the present state of the law ; whilst the 
 increase of intelligence and resources of the working classes 
 demand that every facility should be afforded for the carrying 
 out of such arrangements. The more direct is the interest 
 of the parties who labour in the prosecution of an adven- 
 ture, the more successful it is likely to prove, from the 
 greater energy which it will call forth; while, by affording 
 them a personal responsibility in the concern, it will have the 
 effect, also, of fostering a character of independence and moral 
 elevation amongst those who, by their talents, application, and 
 frugality, are enabled to occupy positions of importance. 
 
 134. An agreement to participate in profit and loss may 
 either render the property of the concern the joint stock of the 
 firm, or it may be so framed as to allow it to remain the separate 
 property of either party : in other words, there may be a com- 
 munity of interest in the profits, and not in the property. 1 
 Where, however, the transaction is a joint one, and is treated 
 by the parties as a joint account and joint speculation, there 
 would be a community of interest in the property itself, 
 and each partner would have the disposal of it ; even if one of 
 the parties contributed all the capital, and the other his time 
 and labour only. If, for example, a broker were to purchase 
 1,000 bales of cotton, being interested therein and acting in 
 the business free of commission, and treating it as a joint 
 transaction, although the whole amount was disbursed by the 
 principal, the broker would acquire a complete right of dis- 
 posal over the cotton as a partner. 2 
 
 135. A community of profit and loss is sufficient to bind 
 the parties as partners towards third persons. By a stern 
 principle of the English law, the responsibility of partners is 
 charged upon all who participate in the profit and loss, not- 
 withstanding their names never appeared, and the parties 
 
 1 Wish v. Small, 1 Camp. 331. Mair r. Glennie, 4 M. & S. 240. 
 
 2 Reid v. Holliushead, 4 B. & C. 878. Meyer v. Sharpe, 5 Taunt. 74.
 
 CONSTITUTION OF PARTNERSHIP. 115 
 
 who trusted the concern never knew that there were others 
 who had an interest in the business. Nay more, however 
 small the proportion in which any of the partners participate 
 in the profits — however far it he from the intention of the 
 parties to constitute a partnership among themselves — a com- 
 munity of interest in the profits renders each party liable for 
 the debts of the other. A and B, ship agents, one residing 
 at Cowes, and the other at Gosport, agreed to assist each 
 other in procuring agencies, with a view to divide among 
 themselves the profits of their respective commissions. They 
 also engaged that each party shall respectively run the risk 
 and sustain any loss in respect of any ship under his own 
 immediate care, and that neither of them shall in any degree 
 be answerable for the acts of the other. The Cowes house 
 failed, and the creditor of that house sued the Gosport house 
 for the debt: was the Gosport house responsible for the 
 other ? It was quite clear that A and B never meant to be 
 partners, that they had no idea that either was to be involved 
 in the consequences of the failure of the other, and that they 
 did not understand themselves to be mutually responsible for 
 any losses that might happen to either : yet it was decided 
 that such an agreement would only be valid as between 
 themselves; but with respect to third persons, they constituted 
 themselves partners. The law on this subject is founded on 
 the principle that he who takes a portion of all profits inde- 
 pendently, takes from the creditors a part of that fund which 
 is the proper security to them for the payment of their debt, 
 and therefore he becomes liable to third persons to losses, if 
 losses arise. 1 Another class of cases, resulting from the same 
 
 i Waugh v. Carver, 2 H. BL 235. Grace v. Smith, 2 H. Bl. 299. Barry v. 
 Nesham, 3 C. B. 641. Cheap v. Cramond, 4 B. & Aid. 663. See the evidence 
 of Mr. Commissioner Fane, before the Committee of the House of Commons, 
 on the Law of Partnership, 1851, p. 73. It has been questioned whether the 
 participation of profits in a mercantile concern, without interfering in the 
 management of it, is sufficient of itself to constitute a partnership. Allowing 
 that the portion of the funds thus subtracted from the partnership may so 
 far reduce the assets of the house, would it not have the same effect should 
 an equal amount be paid by the partnership in the shape of interest for loans, 
 
 i2
 
 116 OF PARTNERSHIP. 
 
 principle of the English law, is, where a person leaves a 
 certain sum in the concern of a partnership, with a view to 
 receive an annuity out of the profits. Retiring partners would 
 often prefer not to withdraw the whole of their capital from 
 the concern, with a view to obtain a rate of interest varying 
 with the profits ; but such would be accounted a participa- 
 tion in the profits, and would charge them with the liabilities 
 of partners. In such cases, the criterion to determine whether 
 the relation be one of partnership or not, is, whether the 
 annuity was of a certain or of an uncertain amount ; whether 
 the profit or premium was certain and defined, or casual, in- 
 definite, and depending on the accidents of trade. If the 
 annuity is fixed, the retiring partner will be considered a 
 lender of money; if contingent on the profits, he will be 
 a partner. 1 
 
 Section II— WHO MAY BE A PARTNER. 
 
 136. Every person of age, of sound mind, and under no 
 legal disability, may enter into a contract of partnership. 
 A minor may be a partner, and be entitled to all the benefits 
 resulting from the partnership ; though he will not be liable 
 
 which might at any time be withdrawn ? Or again, if it be the participation 
 of profits which constitutes a person a partner, any party realizing profits from 
 business transactions with such house may be said to have participated in the 
 profits. If it be not the participation in the profits, but the right which such 
 participation might give to the examination of the accotints as principal, that 
 may affect the parties among themselves, and not third persons. With respect 
 to third persons, the principle upon which credit is granted is not the know- 
 ledge that any person, beyond those whom they trust, have any interest in 
 the business, and against whom, under any circumstances, they may proceed, 
 but it is the character, known conduct, and honesty of the parties themselves, 
 the mode of management of the concern, the capital which is known to have 
 been embarked in it, and the success of the business which the house has 
 undertaken. Such is the true foundation of credit, which seems to subvert 
 the whole liability of dormant partners. The recognition of this principle 
 would remove the principal hindrances to the carrying out of satisfactory 
 arrangements for the association of capital and labour. 
 
 1 Grace v. Smith, 2 W.B1. 998. Ex parte Wilson, Buck, 48. Ex parte Chuck, 
 8 Bing, 469. Gilpin v. Enderby, 5 B. & Aid. 963. Elgie v. Webster, 5 M. & 
 W. 518.
 
 WHO MAY BE A PARTNER. 117 
 
 for the losses, nor be responsible for the debts contracted 
 during his infancy while he is a partner, if he choose to take 
 advantage of it. As it has already been observed, the acts of 
 the minor are not absolutely void, but voidable. A minor 
 being a partner may, when he comes of age, elect if he will 
 continue that partnership or not. If he continues the part- 
 nership, he will then be liable as a partner ; but if when of 
 age he intends to dissolve the partnership, and takes proper 
 means to let the world know that the partnership is dissolved, 
 then he will cease to be a partner. If, on the contrary, he 
 allows the time to elapse when he could disaffirm acts done 
 under infancy, and no notice be given by him to dissolve the 
 partnership, then the contract, which was voidable only in the 
 first instance, becomes absolute, and he becomes responsible 
 for all the debts contracted by the firm before and after he 
 became of age. 1 
 
 137. Married women are incapable of forming a partnership, 
 and they are disabled generally to contract. If, by consent of 
 their husbands, they possess shares in a banking company or 
 other commercial establishments, their husbands are entitled 
 to their shares, and become partners in their stead. 2 By 
 the custom of London, a feme covert may be a partner ; 
 married women may contract partnership when they are 
 deserted by their husbands, or when their husbands have 
 been transported, or are exiles. 3 In France, a married woman 
 may contract partnership even with her husband, and she 
 may be held liable with her husband for partnership debts. 
 Though, by marriage, all her property vests in her husband, 
 and therefore she has no separate property to put in common 
 for the purposes of partnership, still, as by such a contract she 
 acquires a right of control over the business, that advantage is 
 enough to enable her to stand in the new character towards 
 her husband. 4 
 
 1 Goode v. Harrison, 5 B. & Aid. 147. Holmes v. Blogg, 8 Taunt. 35. 
 
 2 Cosio v. De Bernales, 1 C. & P. 266. 
 
 a Beard v. Webb, 2 B. & P. 93. Lean v. Schultz, 2 W. Bl. 1195. 
 4 Dalloz Jurisprudence, 1S51. Le Sieur Gavelle.
 
 118 OF PARTNERSHIP. 
 
 138. Idiots cannot be partners, and when a partner becomes 
 subsequently a lunatic, the Court of Chancery grants a decree 
 for the dissolution of partnership. If a case arose in which 
 it was clearly established that the party is what is called an 
 incurable lunatic, by which he is rendered incapable to contri- 
 bute the necessary skill and industry, that would be a good 
 ground to put an end to the partnership. 1 Clergymen cannot 
 engage in partnership. No spiritual person can engage in 
 any trade, or enter in ordinary partnership, though they 
 may form part of associations consisting of more than six 
 persons. 2 
 
 139. Alien friends may lawfully contract a partnership, 
 but alien enemies are prohibited from trading. In America, it 
 has been held that the breaking out of a war between two 
 countries has the retroactive effect of dissolving a partnership 
 existing between persons domiciled in the two belligerent 
 countries. 3 But although for a time all intercourse between 
 the partners would be at an end, the ground for dissolution, 
 being of a temporary character, ought not to justify a sudden 
 severance of the relations of partnership. By the civil law, 
 civil death has the same effect with regard to partnership as 
 natural death. 4 
 
 Section III.— KINDS OF PARTNERSHIP. 
 
 140. The most practical classification of partnerships is the 
 common law division of two kinds, — private partnerships, 
 which are composed of two or more persons ; and public com- 
 panies composed of a large number of persons, the stock 
 being divided in a number of shares. The latter are sub- 
 
 1 Waters v. Taylor, 2 Ves. & Beam. 292, 302. Sayer v. Bennett, 1 Cox, 107. 
 Jones v. Noy, 2 My. & K. 125. 
 
 2 37 Geo. III. c. 99, § 3. 1 & 2 Vict. c. 10. Van Espen, Jus Ecclesia, III. 
 548. 
 
 3 Story on Partnership, 189. Griswold v. Waddington, 15 Johns, 438. 
 
 4 1 Domat. B. 1, de Tit. 8, § 5, arts. 11, 12, 15.
 
 KINDS OF PARTNERSHIP. 119 
 
 divided into companies by charter from the Crown, or incor- 
 porated by special Act of Parliament — companies constituted 
 under the Joint Stock Companies Acts, or Mining Companies. 
 Partnerships are also divided into universal and limited. 
 Universal partnership, that is, where everything that is done, 
 bought, or sold, is to be deemed on partnership account, is 
 seldom entered into, as most men own some real or personal 
 estate, which they manage exclusively for themselves. 1 
 
 141. In the United States of America, there are ordinary 
 and limited partnerships, and chartered corporations for bank- 
 ing, railways, &c. Limited partnerships arc distinguished 
 from ordinary, in the limitation of liabilities contracted by 
 some of the partners. In France there are three kinds of 
 partnerships, viz. partnerships in collective name, partner- 
 ships en commandite, and anonymous partnerships. Partner- 
 ship in collective name is that contracted by two or more 
 persons for carrying on some business under a social name 
 or firm, containing the names of some or all of the partners. 
 Partnership en commandite, or limited partnership, is that 
 where the contract is between one or more persons responsible 
 to the full extent of their property, and one or more persons 
 who merely furnish a certain sum as temporary shareholders, 
 called commanditaires, the business being carried on under the 
 social name, including the names of the general partners onh/, 
 the liability of the commandite partners being limited to the 
 amount they have invested, or have engaged to invest, in the 
 partnership. 2 Anonymous partnerships are those whose affairs 
 are carried on, not by the name of the partners, but by that 
 of the undertaking itself. In Holland and Belgium, the same 
 kinds of partnership are recognised by law ; so in Spain and 
 Portugal, and in other countries in Europe. 
 
 142. Ostensible partners are those who are known to 
 the world as partners, and who, in fact, are such. Nominal 
 'partners are those whose names are inserted in the firm as 
 
 1 United States Bank v. Binney, 5 Mason, 176. 
 
 2 Code of Commerce, 20—26.
 
 120 OF PARTNERSHIP. 
 
 ostensible partners, although they have no real interest in the 
 concern. In that case it matters not what agreement there 
 may be between him and those who share the profits and loss ; 
 they are all equally responsible, and the contract of one is the 
 contract of all. 1 A contract of partnership may therefore not 
 exist, and yet by lending his name and credit to a concern as 
 a partner, or suffering his name to continue in the firm after 
 he has ceased to be an actual partner, an individual becomes 
 liable for its engagements as a nominal partner. Afcase may 
 be stated in which it is the clear sense of the parties to the 
 contract that they shall not be partners — that A is to contri- 
 bute neither labour nor money, and, to go further, not to 
 receive any profits. But if he will lend his name as a partner, 
 he becomes as against all the rest of the world a partner ; not 
 upon the ground of real transactions between them, but upon 
 principles of general policy, to prevent the frauds to which 
 creditors would be liable if they were to suppose that they 
 lent their money upon the apparent credit of three or four 
 persons, where they lent it only to two of them, to whom 
 without the others they would have given nothing. 2 
 
 143. Voluntary partners are those who, though not actual 
 partners, do any act of a nature to induce others to believe 
 they are partners. If it can be proved that A held himself 
 out to be a partner to a person, or under such circumstances of 
 publicity as to make B believe that he was a partner, he 
 would be liable to B in all transactions in which he engaged 
 and gave credit to A upon the faith of his being such partner. 
 A would be bound by an indirect representation to B arising 
 from his conduct as much as if he had stated to him directly 
 and in express terms that he was a partner, and acted upon 
 that statement. The holding oneself out to the world as a 
 partner is a voluntary act of the party. Thus when a person 
 allows his name to remain in a firm, either exposed to the 
 
 1 Guidon v. Robson, 2 Camp. 304. Baker v. Charlton, Peake, 80. Hesketh 
 v. Blanchard, 4 East, 144. Ex parte Hamper, 17 Vesey, 404. Ex parte Langdale, 
 18 Ves. 300. 
 
 2 Per Lord Chief Justice Eyre, Waugh v. Carver, 2 H. Bl. 235.
 
 KINDS OF PARTNERSHIP. 121 
 
 public over a shop door, or to be used in printed invoices, or 
 to be published in advertisements, the knowledge of the party 
 that his name is used, and his assent thereto, are the very 
 ground upon which he is stopped from disputing his liability 
 as a partner. 1 When, however, a person, though appearing to 
 the world as partner, does not participate in the profits, he may, 
 by giving notice of the stipulation, exonerate himself of his 
 liability towards such a person as received the notice. In a case 
 against the acceptor of a bill of exchange, it appeared that the 
 bill was drawn by the firm Guidon and Hughes. Guidon traded 
 under such firm, but he had no partner who participated in the 
 profits of his business : he had, however, a clerk of the name 
 of Hughes, at a fixed salary, who was held out to the world as 
 his partner, and was generally considered as such. On an 
 action against the acceptor of the bill by Gttidon in his own 
 name only, it was objected that Hughes ought to have been 
 joined in the suit. Park arguendo insisted, that the case stood 
 exactly the same as if there had been no such person as Hughes 
 in rerum natura. The names in a firm are quite immaterial. 
 Firms sometimes continue unchanged for generations, and 
 when the names of the real partners no longer correspond with 
 any of those ostensibly used : persons who deal with the firm, 
 therefore, contract with those really comprising the partner- 
 ship. It is very common for men trading by themselves to 
 add and Co. to their names, and if, instead, they add the name 
 of another person who had no share in the business, the legal 
 effect must be the same. Lord Ellenborough did not sanction 
 such a practice. He said, " There being such a person as 
 Hughes, I am clearly of opinion that he ought to have been 
 joined as a partner. Persons in trade had better be very 
 cautious how they add a fictitious name to their firm for the 
 purpose of gaining credit." 2 It is to be regretted that such 
 practice is resorted to extensively in the commercial towns of 
 the United Kingdom, where a number of firms, though styled 
 
 1 Guidon v. Robson, 2 Camp. 302. Gerish v. Lockhead, 20 L. T. 296. 
 3 Guidon v. Robson, 2 Camp. 304.
 
 122 OF PARTNERSHIP. 
 
 with the words " and Co." arc, in fact, carried on by single 
 individuals ; moreover, many firms continue under the names 
 of those who have been long dead, or of those who have 
 retired from the business. 1 In the United States of America, 
 the abuse of the words " and Co." and the use of fictitious 
 firms, have been suppressed by statute, by declaring that 
 no person shall transact business in the name of a partner 
 not interested in his firm, and that where the designation 
 "and Company," or "and Co.," is used, it shall represent 
 an actual partner or partners; and the violation of the pro- 
 vision is made a penal offence. 2 
 
 144. Dormant partners are those whose names do not appear 
 in the firm, but who share in the profits ; and they are respon- 
 sible for all the debts of the firm as the ostensible partners. 
 Thus if A and B should agree to carry on their trade or 
 business for their joint account, dividing profits and losses 
 between them, A alone being known in the trade, and being 
 solely responsible for the debts and contracts, and B merely 
 a secret, dormant partner ; B would nevertheless be deemed 
 a partner as to third persons, and responsible to them for all 
 the debts and contracts growing out of such a trade. 3 So 
 in all cases of simple contracts, a dormant partner would 
 be liable, when discovered, for the engagement of the partner- 
 ship, although the party who sues him was, at the time he 
 contracted, ignorant of his having any interest in the partner- 
 ship. 4 
 
 Section IV.— FORMATION OF THE CONTRACT. 
 
 145. The contract of partnership need not be drawn out in 
 writing ; it may be established by verbal agreement, or in- 
 ferred from the acts of the parties. But if it is for a period 
 longer than one year, it must be in writing. It is of the last 
 
 1 Young v. Axtell, cited 2 H. Bl. 242. Story on Partnership, §§ 64, 65. 
 
 2 3 Kent Comment. 7th ed. p. 30 n. Statute of New York, 1833. 
 
 3 Robinson v. Wilkinson, 3 Price, 538. Newmarsh v. Clay, 14 East, 239. 
 * Gellar v. Hutchinson, 1 Rose, 297. Wintle v. Crowther, 1 C. & I. 316.
 
 FORMATION OF THE CONTRACT. 123 
 
 importance that all partnerships should subsist upon written 
 articles, and that these written articles should provide for all 
 the emergencies which may befal to the partnership during 
 the course of its existence. The deed usually specifies the 
 nature of the business, the date and commencement of partner- 
 ship, the term and duration of it, the style of the firm, the 
 place of business, the capital of the firm, the capital which 
 each partner is to bring, the proportion of the profits and 
 losses to be taken and borne by each partner, the reservation 
 of the rights of any partner in any specific property, the 
 allowance to partners to draw certain sums at stated intervals, 
 the general duties of partners, the mode of keeping accounts, 
 the parties authorized to sign drafts, acceptances, and other 
 securities in the name of the firm, the power to dissolve on 
 notice, mode of valuation, and general winding up of the 
 accounts, the optional clauses to continue the affairs, and the 
 arbitration clauses. 
 
 146. The duties and obligations of partners are regulated, 
 as far as they are touched, by the express contract ; if it does 
 not reach all their duties and obligations, they are implied 
 and enforced by law. All the parties to the contract ought to 
 intervene in it, and when complete, the articles cannot be 
 altered ; nor can another person be introduced into the part- 
 nership without the consent of all the partners. A partner 
 may give to a third person an interest in his share, but cannot 
 make him a partner. It is the duty of every partner to carry 
 out the provisions of the partnership deed, and the intentional 
 non-performance of any of the duties therein prescribed may 
 give ground for a dissolution. But although partners enter 
 into written agreements, stating the terms upon which the 
 joint concern is to be carried on, it is always to be understood 
 that a partnership agreement is open to variation from day to 
 day. Partners, if they please, may, in the course of their 
 partnership, daily come to a new arrangement for the purpose 
 of having some addition or alteration in the terms on which 
 they carry on business, provided those additions or altera- 
 tions be made with the unanimous concurrence of all the
 
 124 OF PARTNERSHIP 
 
 partners. And such variations may not only be evidenced by 
 writing, but also by the conduct of the parties in relation to 
 the agreement and to their mode of conducting the business. 1 
 So if there be a long course of dealing, or long enough to 
 demonstrate that they have all agreed to change the terms 
 of the original written agreement, they may be held to have 
 changed the terms by their conduct; in which cases, such 
 clauses on which the parties have not acted, are read in a court 
 of equity as if they were expunged. 2 Bonds executed by 
 partners relating to their rights as partners, bearing the same 
 date as the partnership deed, are read in court as part of the 
 partnership contract. 8 The courts of law and equity will 
 cause all the provisions of the partnership deed to be scrupu- 
 lously carried out, except that by which the partners agree to 
 refer to arbitration any dispute which may occur amongst 
 themselves during the course of the partnership. The court 
 of equity will not be precluded by such an agreement from 
 granting its ordinary remedy, 4 and no action at law is main- 
 tainable for a breach of such stipulations. 5 
 
 147. This anomalous state of the law is tantamount to 
 affording a premium to the non-observance of a voluntary 
 contract. Partnership disputes are often most intricate, but 
 depending on matters of fact easily investigated by arbitrators. 
 The agreement to refer is a valuable consideration to the con- 
 tract, especially owing to the difficulty experienced in bringing 
 partnership disputes before the ordinary tribunals. Lord Eldon, 
 in his judgment in Street v. Rugby, discussed the subject at 
 large. He said, " The plea means this, that the parties will 
 not harass themselves by going to courts of justice, but will 
 state to each other what is in dispute, and refer to arbitration ; 
 and, entering into such a covenant, they must be taken to 
 
 1 England v. Curling, 8 Beav. 133. [Geddes v. Wallace, 2 Bligh. (0. S.) 270. 
 Jackson v. Sedgwick, 1 Swan, 46. 
 
 2 Ex parte Harris, 1 Rose, 437. 
 
 3 Morrison v. Moat, 9 Hare, 260 ; 15 Jur. 7S7. 
 
 * Street v. Rugby, 6 Ves. 815. Tatersall v. Groote, 2 B. & P. 131. 
 5 Kell v. Hollister, 1 Wills, 129.
 
 FORMATION OF THE CONTRACT. 125 
 
 mean that they will be content with a decision upon such 
 discovery as arbitrators can compel. They chose, therefore, 
 that forum, exclusive of the jurisdiction of the country, to all 
 intents and purposes. I doubt whether it is a very wise 
 exercise of the jurisdiction of this court, recollecting that it is 
 to give a relief beyond the law, not to order the parties to go 
 to law to take the effect of the stipulated remedy, but, under 
 a positive covenant that they will not sue, to send them by 
 way of experiment to that jurisdiction ; and whether the court 
 would not act more directly by saying, They are in a court 
 where justice can certainly be done, and, as they have not 
 stipulated to the contrary, their fate shall be decided here, 
 instead of sending them to so improvident a tribunal. I recol- 
 lect passages in which courts of justice, however full of eulogia 
 upon these domestic forums, have recollected their own dignity 
 sufficiently to say that they would not be auxiliary to these 
 forums, — that the parties should not be permitted to take their 
 relief from them coming here (Chancery courts) for discovery." 
 He then suggested a prudential way of drawing these articles, 
 by an agreement for liquidated damages ; that is to say, to sti- 
 pulate that a certain sum shall be the penalty for breach of any 
 of the articles. But it would be impossible to fix the measure of 
 compensation for the non-performance of any of the articles of 
 partnership, as they differ so much in their respective impor- 
 tance, and, moreover, in the circumstances under which the 
 breach might take place. Hence such an expedient is not resorted 
 to, and the agreement invariably inserted in all partnership 
 deeds becomes nudum 'pactum} In France, all disputes between 
 
 1 To remedy the defect of the law on this subject, a Bill was introduced by- 
 Lord Brougham in the House of Lords in 1854, by which every agreement to 
 refer may be produced as a barrier to any action at law, or suit in equity, 
 brought by any party to such an agreement. But if a reference has been 
 attempted, and has entirely failed, without fault of the party suing, such 
 failure is a sufficient ground to justify him to proceed with the suit. That 
 agreements to refer shall not be revocable without the written consent of all 
 parties, or by leave of court ; and that it shall be lawful for the arbitrator to 
 examine on oath, unless the submission expresses an intention that the exami- 
 nation shall not be on oath or affirmation. If, in any case of arbitration, 
 reference be made to more than one arbitrator, and any party fail to make
 
 126 OF PARTNERSHIP 
 
 partners, and for causes connected with the partnership, must 
 go before arbitrators ; an appeal "being granted from their 
 awards to the superior courts. In case of refusal by one or 
 several of the partners to nominate arbitrators, they are nomi- 
 nated by the tribunals of commerce. 
 
 148. A partnership takes effect from the date of the con- 
 tract. From the moment the agreement is actually formed, 
 each partner becomes responsible for the performance of every 
 duty and obligation consequent therefrom, and becomes indi- 
 vidually and collectively bound for all the liabilities of the 
 partnership ; and, with regard to the actual commencement of 
 partnership transactions, those are not excluded which are 
 necessary by way of introduction or preparation for a partner- 
 ship dealing. 1 There may be an agreement for a present as 
 well as for a future partnership. 2 When the terms of a con- 
 tract to carry on any business between a certain definite 
 number of persons are unconditional or complete, then the 
 partnership is actually formed ; but if a person agree to be- 
 come a partner at a future time, provided other persons agree 
 to do the same, or provided any other previous conditions are 
 performed, then no partnership is contracted. When, how- 
 ever, the agreement is complete and unconditional, a delay in 
 executing the deed would not render it less valid from the 
 day originally fixed, and the liability of the members of the 
 firm will commence from the time originally agreed on. 3 
 
 149. In all cases of disagreement, each partner has an 
 
 such appointment, the remaining arbitrator is authorized to act alone, and 
 make an award which shall be binding on all parties ; and if, where the refer- 
 ence be to a single arbitrator, the parties do not, after differences have arisen, 
 concur in the appointment of one arbitrator, the County Court Judge may 
 appoint such single arbitrator. Any party who, having agreed to submit any 
 matter of difference to arbitration, or to concur in the appointment of any 
 arbitrator, refuses to make such appointment, or wilfully delays or prevents 
 an award being made, shall be deemed guilty of contempt of court. 
 
 1 Cruikshank v. M ; Vicar, 8 Beav. 116. 
 
 2 Dickinson v. Valpy, 10 B. & C. 140. Bourne v. Frith, 9 B. & C. 640. 
 Meigh v. Clinton, 11 A. & E. 418. 
 
 3 Battley v. Bailey, 1 M. & G. 155. Gabriell v. Evill, 9 M. & W. 297. 
 William v. Jones, 5 B. & C. 108.
 
 FORMATION OF THE CONTRACT. 127 
 
 equal voice, and the majority rule the minority, unless specific 
 regulation is made to the contrary. 1 Lord Eldon said, " In 
 all partnership, whether it is expressed in the deed or not, 
 the partners are bound to be true and faithful to each other. 
 They are to act upon the joint opinion of all, and the direc- 
 tion and judgment of any one cannot be excluded. What 
 weight is to be given to it is another question ; the act of the 
 majority will be deemed the act of all, provided all are con- 
 sulted, and the majority act bond fide." 2 Moreover, once the 
 objects of the partnership are specifically described in the 
 partnership deed, neither of the partners can set up a totally 
 distinct branch of business, except with the concurrence of all. 
 If there be a departure from the line of business for which 
 the partnership is formed, any of the partners may obtain 
 from the Court of Chancery an injunction to arrest the prose- 
 cution of such business. It is not competent for any number 
 of persons, in a partnership formed for specific purposes, to 
 enter upon any different purposes, and to meet any opposition 
 from the dissentient partners, by calling upon them to receive 
 their subscribed capital and interest, and quit the concern. 3 
 
 150. It is usual to provide for annual accounts to be made 
 out, of balance of monies on hand, the valuations of stock-in- 
 trade, credits of the partnership, and debts due by it ; and 
 also that such accounts should not afterwards be called in 
 question, except for errors discovered in the life-time of all 
 the partners. If, however, by reason of the fraud of any of 
 the partners, just and true accounts have not been made out, 
 there would be reason for the court causing account to be 
 taken of the dealings and transactions of the partnership from 
 the date of the articles. 4 The partnership articles, also, sti- 
 pulate for the mode of winding up the concern, upon disso- 
 lution or expiration of the partnership. It is often agreed 
 that a value should be set on the partnership stock, and that 
 
 1 Const, v. Harris, Turn. & Russ, 496. 
 
 2 Oldakerv. Lavender, 6 Simons, 239. 
 
 3 Nasusch v. Irving, 2 Cooper, J. R. 358. 
 
 4 Oldaker v. Lavender, 6 SimonSj 239.
 
 128 OF PARTNERSHIP. 
 
 one or more of the partners shall be allowed to purchase the 
 share of the others at that valuation. In the absence, how- 
 ever, of specific agreement, a court of equity will order the 
 whole concern to be wound up by a sale, and the proceeds to 
 be divided among the partners. 1 A sale of the partnership 
 effects will also be ordered by the court, where the mode pre- 
 scribed by the partnership articles is either impracticable or 
 cannot be fairly obtained. 2 
 
 151. Provision is also made in the articles for the expul- 
 sion of a partner for gross misconduct, or in certain specified 
 cases. Such power can only be exercised bond fide, and for 
 the benefit of the whole body, and not for the benefit of indi- 
 vidual partners. Moreover, the construction of the deed, in 
 reference to the mode in which a partner is to be expelled, 
 and his interest acquired by the remaining partners, must be 
 a construction of the strictest character, the power being 
 extremely stringent. The time, also, when the notice may be 
 given is of importance. It would be pretty certain not to be 
 given at any time when the trade is depressed; it may be 
 given at a period of the greatest prosperity ; it may be given 
 in the very last year of the partnership, when the whole 
 assets are about to be realized. The expelling partners put 
 themselves in the position of purchasers of the expelled 
 partner's share ; there must, therefore, be some mode of 
 valuation of that share, consistent with the stipulations which 
 the parties have come to. Where it appears that there was 
 want of good faith on the part of the expelling partners, a 
 court of equity will consider such expulsion void. 3 
 
 Section V.— COMMON FIRM AND STATUS OF THE 
 PARTNERSHIP. 
 
 152. A partnership is held as a moral person: it buys and 
 sells, it deals and exchanges, and is accountable to the partners 
 for their respective interest. The accounts are also kept in the 
 
 i Featherstonhaugh v. Fenwick, 17 Ves. 311. 
 2 Cook v. Collingridge, Jacob, 607. 
 3 Blissett v. Daniel, 1 Eq. Rep. 484, 8 Jar. 122.
 
 FIRM AND STATUS OF THE PARTNEBSHIP. !_'!» 
 
 name of the firm, and the property brought by each partner 
 becomes the common property of the firm, and is placed under 
 its control. Yet the separate existence of the partnership 
 firm is not recognised by law ; the property brought by the 
 partners, though in common understanding it ceases to be the 
 property of the respective partners, at law or equity it remains 
 as such ; and though the accounts are kept in the name of 
 the firm, they are not so considered when they come to be 
 examined in a Court of Chancery. One important conse- 
 quence of the non-recognition of the partnership as a moral 
 person is, that the partners individually are held to be the 
 parties liable in the first instance for partnership debts, and 
 it is in the power of the creditors to choose any party against 
 whom to proceed ; whereas, in accordance with the constitu- 
 tion of a partnership, the joint stock of the firm ought to be 
 first liable for partnership debts, and each partner be held as 
 a guarantee for the partnership, and not as the proper or 
 principal debtor. In Scotland, a company forms a separate 
 person, competent to maintain its relations with third persons 
 by its separate name or firm, independently of its partners. 
 In this respect the law of Scotland, which agrees with that of 
 the Continent of Europe, is superior to that of England. In 
 foreign countries, every partnership is held to be a separate 
 person, but they are all subject to registration. By the French 
 code, extracts of all deeds of partnership must be forwarded, 
 within a fortnight of their date, to the office of the tribunals 
 of commerce ; the extracts to contain the names, surnames, 
 and residences of all the partners, the style of the firm, 
 the duration of the partnership, the amount of capital, and 
 all other particulars. The system of registration has been 
 introduced in England, in respect to joint-stock companies, 
 to enable them to act in their corporate capacity. The 
 right to sue in the name of their officers is also a sequel 
 of the registration of partnerships ; as in the case of a 
 common partnership, however large the number of its part- 
 ners, it must sue or be sued in the name of each separate 
 partner. 
 
 K
 
 130 OP PARTNERS III]'. 
 
 Section VI —PARTNERSHIP PROPERTY. 
 
 153. Partnership property consists of all property put into 
 the partnership, and all property subsequently acquired by the 
 firm by means of any transactions, and also of real estates pur- 
 chased with partnership funds, in whosesoever name it stands, 
 leases of premises, ships purchased or freighted. It may 
 consist also of a patent or a copyright, or of the goodwill of a 
 mercantile establishment, and also of the skill, and industry, 
 and time, of each of the partners. Over such property all the 
 partners have undivided interest, per my and per tous, and also 
 a joint tenancy, which continues throughout all the changes 
 that might be made in the course of trade. In consequence 
 thereof, each partner has a specific lien on the partnership 
 stock for everything he has advanced or brought in as his 
 contribution ; and also for the payment of the debts of the 
 firm ; and to charge the other, in the account, with what the 
 other has not brought in, or has taken out more than he 
 ought. But, although partnership property may be used and 
 risked for common profits of the partners, it may still remain 
 the private property of one of them. The profits accruing 
 from it may be divided, and yet not the ownership of 
 the property. It rests on the terms of the transaction, 
 and on the intention of the parties, to discover whether 
 there existed between the partners a joint interest in the 
 stock. 
 
 154. We have already observed that a considerable differ- 
 ence exists between partnership and joint-tenancy, as to the 
 mode in which property is held, and as to the rights therein 
 acquired by the parties. In tenancy in common, as in a ship, 
 each party has a separate, although an undivided, interest of 
 his own share ; but in a partnership, the partners are joint 
 owners of the whole property. A ship-owner, for instance, 
 can dispose only of his own share in the ship ; but a partner 
 lias the control and disposal of the whole of the partnership 
 funds. The same principles are applicable to real and personal
 
 PARTNERSHIP PROPERTY. 131 
 
 estate, the latter "being considered in equity as personalties. 1 
 
 In the consideration of the rules relating to the disposal of 
 the partnership property, in case of death of one of the part- 
 ners, we shall examine the doctrines of survivorship, by which 
 the property and the disposal of it are held, in equity, as 
 vesting in the survivor ; in so far only as relates to the 
 management of it, the title to it vesting in the representatives 
 of the deceased partner. 2 This departure from the establish'- 1 
 law regarding joint-tenancies, granted for the encouragement 
 of trade, has not been followed by the courts of law. Some- 
 times the goodwill of the trade, that is, that advantage which 
 arises from a long-established custom, often on account of the 
 situation of a shop, and often on account of the sole ownership 
 of a trade, is treated as part of the partnership property. But 
 the goodwill of a trade is not, properly speaking, actual pro- 
 perty which can be divided among the partners, unless by the 
 sale of the whole establishment, with a view to a division of 
 its proceeds. 3 
 
 Section VII.— INTEREST OF THE PARTNERS IN THE PROPERTY 
 AND THE PROFITS. 
 
 155. The interest of a partner in the partnership property 
 is his share in the surplus, after the partnership accounts are 
 settled, and all just claims satisfied. It is the same for real 
 as for personal property. Xo partner has an exclusive right 
 to any part of the joint stock, until a balance of accounts be 
 struck between him and his copartners, and the amount of his 
 interest accurately ascertained. 
 
 156. The interests of partners in the profits is a matter of 
 agreement, and, when so defined, the evidence is conclusive ; 
 but in the absence of any contract between partners, or any 
 
 1 1 Story, Eq. Jurisp. 674. Morris v. Barrett, 1 Young & Jer. 1S4. 
 
 2 Jackson v. Jackson, 7 Yes. 535. Buckley v. Barber, 15 Jur. 13 Exch. 
 Anderson v. Tomkins, 1 Brock, 556. Blake v. Nutter, 1 Appleton, 16. 
 
 3 Shackle v. Baker, 14 Ves. 468. Crawshay v. Collins, 16 Yes. 218. Crutt- 
 nell v. Lye, 1 Rose, 123. Featherstonbaugk v. Fen-wick, 17 Ves. 298. 
 
 K 2
 
 132 OF PARTNERSHIP. 
 
 dealing from which a contract may be inferred, it will be 
 assumed that the partners have carried on business on terms 
 of equal partnership, which implies that each partner has a 
 right to participate in equal proportion in profit and loss. 1 
 This will apply, also, where one partner contributes all the 
 capital, and the other his labour only. The Spanish code 
 prescribes that, when a deed of partnership does not deter- 
 mine the proportion of the profits in which each partner is 
 interested, the profits are divided in proportion to the capital 
 invested by each partner ; but that the industrial partner shall 
 participate in the profits, in the same proportion as the partner 
 who contributed the least share in the capital, at the same 
 time allowing the industrial partner not to participate in any 
 loss. 2 The same provisions are found in the French code, 3 
 not, however, with respect to discharging the industrial part- 
 ner from the responsibility of loss. The Portuguese code has 
 the same regulation, but it confers no authority to such partner 
 to contract in the name of the firm. 4 The Austrian code leaves 
 it to the tribunal to fix the rate of profits which the industrial 
 partner should participate in, in proportion to the importance 
 of the business, the nature of the work, and the utility of his 
 cooperation. 5 By the law of Scotland, where there is no 
 express contract between partners, it is not a necessary pre- 
 sumption that the profits are to be divided in equal shares, 
 but it depends on the evidence of all the circumstances, on 
 goodwill, skill, capital, and labour, to ascertain what the pro- 
 portion of interest in the profit and loss shall be. Although 
 partners may have shared equally in profit and loss, the pre- 
 sumption of an equal partnership will be rebutted, if, from 
 the entries in the books, it should appear that the shares in 
 which the parties were entitled in the business materially 
 
 1 Stewart v. Forbes, 1 H. & T. 461. Peacock v. Peacock, 2 Camp. 45. 
 Walstab v. Spottiswoode, 15 M. &W. 502. Farrar v. Beswick, 1 M.&Rob. 527. 
 
 2 Spanish Code, 318. See Levi's Commercial Law of the World, vol. i. p. 104. 
 
 3 French Code, 1853. See ditto, p. 92. 
 
 4 Portuguese Code, 559 and 560. See ditto, p. 92. 
 
 5 Austrian Code, 1193. See ditto, p. 141.
 
 DUTIES OF PARTNEES. 133 
 
 differed in amount and value ; the entries in the books of a 
 partnership being as conclusive evidence as if the conditions 
 were prescribed in a regular contract. 1 
 
 Section VIII.— DUTIES OF PARTNERS. 
 
 157. Partners join their capital, labour, and industry, to the 
 attainment of the common good ; they choose each other on 
 account of the peculiar advantages possessed by each ; and 
 form among themselves a tie which cannot be broken before 
 the prescribed time, except under extraordinary emergencies. 
 They bind themselves to act, the one for the other, as every 
 one would do for himself; they owe reciprocity to one another, 
 upright fidelity and integrity ; and each engages to share with 
 the other whatever they have belonging to the community, 
 with all the profits and other revenues which they may reap 
 from it, and not to keep anything to themselves but what they 
 may lawfully do by their contract. 
 
 158. They are likewise to bestow their utmost care to the 
 affairs and effects of the partnership, and to use the same 
 application and vigilance in the business of the firm as they 
 would use in their own. Partners are not responsible for any 
 accidents, nor for slight faults, but are accountable for all 
 deceits, and for gross negligence, unskilfulness, or wanton 
 misconduct, in the course of the partnership. 2 
 
 159. If one of the partners appropriate to himself or 
 conceal anything belonging to the partnership, or if he put 
 it to his own use contrary to the intention of the copartners, he 
 commits a theft, and will be liable to make good all damages. 
 And if, having in his hand some of the money belonging to 
 the joint stock, he lay it out to his own particular affairs, he 
 will be obliged to pay interest for it, as a reparation of 
 damages to his copartners, and as punishment for his own 
 infidelity. The whole of the partnership property must be 
 
 1 Stewart v. Forbes, 1 H. & T. 461. 
 
 2 Domat. Civil Law, L. 52, No. 1 & 3, D. pro-soc.
 
 134 OF PARTNERSHIP. 
 
 used for the exclusive "benefit of the partnership. So if a part- 
 ner stipulate clandestinely for some private advantage, or if 
 he obtain some private allowances in purchases, or any secret 
 per centage of commission, he would be compelled to share 
 the same with his partners. 1 So if he were to purchase goods, 
 and make the bargain by a barter with his own private 
 goods, charging the partnership with the full cost value, this 
 would be a constructive fraud upon the partnership. 2 
 
 160. The partners cannot take out of the common stock 
 the capital they have brought in, because the whole stock 
 belongs to the partnership, and cannot be diverted or dimi- 
 nished without the consent of all the partners, while the 
 partnership lasts. And it is no more lawful for a partner 
 to diminish the common stock, than it is to break off from the 
 partnership unfairly, and with a sinister view. Neither of the 
 partners can engage in any other concern which may necessa- 
 rily give them a direct interest adverse to the undertaking. 3 
 And as each partner stands trustee to the partnership concern, 
 he should not, in pursuit of his private advantage, place him- 
 self in a situation which gives him a bias against the due 
 discharge of that trust or confidence. In general, each part- 
 ner must act with scrupulous good faith, afford a zealous 
 cooperation in the objects of the partnership, be exact in 
 keeping accounts, and have them ready at any time for 
 inspection and explanation, and carry out the interest of the 
 partnership with due care and skilfulness, each partner having 
 equal rights and equal duties to perform in the management 
 of the concern. 
 
 Section IX.— EXTENT OF LIABILITY OF PARTNERS. 
 
 161. Each partner in a commercial partnership is, at law, 
 answerable for the amount of the whole of the debts of the 
 
 1 Featlierstonhaugh v. Fenwick, 17 Ves. 298. 
 
 2 Crawshay v. Collins, 15 Ves. 218. Burton v. Wookey, 6 Madd. 367. 
 
 3 Glassington v. Thwaites, 1 Sim & Stw. 133.
 
 EXTENT OF LIABILITY OF PAETNEBS. 135 
 
 concern. 1 No restriction of liability, except by charter or by 
 statute, is permitted to any of the partners ; all are liable, not 
 only to the extent of their interest in the partnership fund, but 
 also to the whole extent of their separate property, and, as 
 Lord Eldon said, " to the last acre and the last shilling." No 
 person can advance any capital to any undertaking, public or 
 private, in the profits of which he is to participate, nor become 
 partner or shareholder in any enterprise or profit, without 
 becoming liable to the whole amount of his fortune. Partners 
 may limit their individual responsibility towards each other, 
 and will be bound among themselves by such stipulation, but 
 it will not affect third persons. So they may agree among 
 themselves that each shall subscribe and be responsible for a 
 certain sum only ; and when one has paid up the whole 
 amount subscribed for by him, he is no longer responsible for 
 any further amount to his copartners. But with respect to 
 third parties, who have no notice of the terms of the partner- 
 ship, all partners have an unlimited responsibility. 2 When, 
 however, such restrictions can be clearly notified, as in 
 a policy of insurance, where a clause is commonly inserted 
 declaring the limitation of the responsibility of the partners 
 to the amount of the shares, then such an express notice will 
 be sufficient, there being both a notice and a direct concur- 
 rence in the limitation of liability on the part of all who take 
 such policy, and third parties, possessing such policy, would 
 have to look to the funds of the company alone for the re- 
 covery of any claim upon them. 3 
 
 162. A company, styled the " General Maritime Insurance 
 Company," was formed for the purpose of effecting insurances 
 on vessels; and it was agreed that there should be a capital 
 of 1,000,000?. in 100 shares; that the direction of affairs 
 should be vested in directors, who had power to make calls, 
 and that every policy should be signed by three directors, and 
 that they should be indemnified for all liabilities out of the 
 
 1 Carlen v. Drury, 1 V. & B. 157. 
 
 2 Rex v. Dodd, 9 East, 527. 
 
 3 Hallett v. Dowdale, 21 L. J. 98. Q. B. Vice v. Fleury, 1 Y. & Jer. 227.
 
 136 OF PARTNERSHIP. 
 
 fund of tlic company ; that the directors should cause it to 
 "be stated in every policy, "by which an assurance should be 
 effected with the company, that the subscribed capital of 
 1,000,000?., and the stock and property belonging to the 
 company, should alone be liable to make good all claims and 
 demands upon the company in respect of such policy ; that 
 the directors issuing the policy should not be responsible to 
 any greater extent than the fluids or property in their hands ; 
 and that no proprietor should in any event whatever be liable, 
 beyond the amount of the unpaid part of his share, in the 
 subscribed capital of 1,000,000Z. A total loss on a policy 
 of insurance of 11,000?. having become due, the insured 
 sued some of the shareholders, who pleaded that the capital 
 of the company was not sufficient to pay the claim. The 
 questions at issue were, first, Whether the policy of insurance 
 contained a joint promise whereby all the shareholders became 
 insurers. Secondly, What was the amount of liability of each 
 shareholder, and to whom were they liable for the amount 
 of their shares ; to the company, or to each individual 
 claimant ? 
 
 163. In a case of a similar character previously decided by 
 Lord Denman, that eminent judge held that the clause re- 
 stricting the liability of the company to the amount of the 
 capital subscribed, could only mean that the assured should 
 look to the funds of the company alone so far as any remedy 
 at law extended, and that the individual subscribers should be 
 liable only to contribute to the funds of the company to the 
 amount of their respective shares, which liability must be 
 enforced by the company against the subscribers, either at law 
 or in equity as the case may be. But the enforcement of such 
 liability might possibly be compelled by the assured by some 
 proceeding against the company, therefore, by the contract 
 itself (the policy), the assured was precluded from any legal 
 proceedings against the individual subscribers. In the case 
 of the Maritime Insurance Company, Baron Parke construed 
 the term " company" to denote " the funds of the company," 
 which alone were to pay; or that it meant, not the whole body
 
 EXTENT OF LIABILITY OF PARTNERS. 137 
 
 collectively, so as to make tlie whole body joint-contractors, 
 but each individual of the company, so as to make each of 
 them contract to bear the loss, in the same proportion as his 
 share bore to the total capital in the nature of a separate 
 under-writer. There may be difficulties in ascertaining how 
 much each was to pay, in a case where the assured has 
 already been obliged to contribute to other losses ; but 
 similar difficulties would exist if all jointly undertook to pay 
 out of the capital stock. If the capital stock had already 
 been reduced by the payment of prior claims, the residue 
 only would be the capital liable to pay. But whatever dif- 
 ficulty might arise on this ground, the assured must suffer, 
 for the individual proprietors were never meant to be respon- 
 sible for any other than themselves. 
 
 164. With respect to the right of parties to limit their 
 liability by special contract, the following pointed observa- 
 tions were made by Baron Piatt: — "It was contended in the 
 course of the argument that this was in fact an attempt, on the 
 part of partners, to do that which the law would not permit. 
 If partners jointly contract, without in any manner restricting 
 or qualifying their responsibility, there is no doubt they are 
 jointly, personally, and generally responsible. So an agree- 
 ment among themselves, unknown to the party with whom 
 they contract, will not alter that general liability ; but if the 
 party with whom they contract shall, by the terms of the 
 bargain, agree that this responsibility shall van- from the 
 ordinary responsibility, he will be bound by that agreement. 
 What objections could be raised to a contract by which four 
 parties agreed to buy of a merchant merchandise, upon the 
 terms of one of them paying half the price, and the three 
 others paying each a third of the remainder; and by which it 
 was distinctly stipulated between the buyers and the seller, that 
 the seller should not be entitled to demand payment, except 
 in the several proportions, and severally from the different 
 partners? Is that an illegal contract? Is the law to make 
 a contract which the parties never contemplated? It is no 
 answer to say that they contracted as partners, and that by
 
 138 OP PARTNERSHIP, 
 
 the general law partners are jointly liable; for in the case 
 supposed, they would not have contracted on that footing. 
 The terms of the contract would regulate the application of 
 the law, provided it did not infringe it by illegality. By 
 these terms the partners assumed, and the seller was content 
 to accept, a qualified and definite responsibility — and what 
 could the seller exact more? " l 
 
 165. Here, however, a mutual agreement is presumed to 
 exist between the parties as to the limitation of liability. 
 Where no such consent has been proved, no contract of the 
 partners among themselves would discharge them of an un- 
 limited liability towards third persons. The Lord Chan- 
 cellor, in the recent case of the Sea and Fire Insurance 
 Company, 2 laid down the following rules on the subject: 
 " Every person engaged in a partnership is liable for every 
 thing. If three persons agree to carry on a business together, 
 notwithstanding they stipulate among themselves that no 
 one should be liable beyond 1,000?. ; if a debt were con- 
 tracted in the conduct of the business to the extent of 
 10,000/. every one of them would be liable to the 10,0007., 
 and the stipulations so made would be inoperative. That 
 doctrine does not depend upon the persons dealing with 
 them having or not having notice of such stipulation, for the 
 creditors would only know what engagements the partners 
 had made among themselves, and their rights are rights 
 extrinsic of any such contract, and therefore the notice would 
 be wholly immaterial. If the decree of partnership were hung 
 up in a shop, and it contained a provision, ' Notice is hereby 
 given, that it is agreed that none shall be liable for more than 
 1007.,' that would make no difference." Such is the law in 
 common partnerships. The liability of partners may also be 
 limited by charter, or by act of Parliament ; but hitherto the 
 legislature lias shown much disinclination in granting charters, 
 
 1 Hallett v. Dowdale, 21 L. J., Q. B. 115. See Halket v. Merchant Traders' 
 Ins. Comp. 13 Q. B. 960. Eeid r. Allan, 4 Exch. 326. Hassell v. Merchant 
 Traders' Ship, Loan, & Ins. Assoc. 4, Exch. 525. 
 
 2 2 Eq. Rep. 260.
 
 RIGHTS AND AUTHORITIES OF PARTNERS. 139 
 
 because, in the first instance, limited liability is a deviation 
 from the general law, which can only be justified by special 
 circumstances; and, secondly, on account of the presumed 
 unfair competition between such privileged companies and the 
 general traders. The subject of partnership en commandite, 
 or with limited liability, will be treated on separately. 
 
 Section X.— RIGHTS AND AUTHORITIES OF PARTNERS. 
 
 166. Each partner is the accredited agent of the rest, 
 whether they be active, nominal, or dormant, and has commu- 
 nicated to him all authorities necessary for carrying on the 
 partnership, and all such as are usually exercised by partners 
 in the business in which they arc engaged. 1 He is by law 
 held to be propositus negotiis societatis, or to possess a general 
 mandate to act for all the others. He has authority, on behalf 
 of the firm, to transfer, pledge, exchange, or dispose of the 
 partnership property and effects, for any purposes within the 
 scope of the partnership, and in the course of its business. 2 
 
 167. A partner has authority to buy and to sell on behalf 
 of the partnership. A sale to one partner is a sale to the 
 partnership, with whatever view the goods may have been 
 bought, and to whatever purposes they may be applied ; and 
 all the partners are liable to the seller for the price of the 
 goods. 3 A partner has also power to pledge the goods be- 
 longing to the partnership in which he is interested as a part- 
 ner. 4 He may effect contracts of insurance 5 or charter-parties, 
 borrow or lend money, act for bankruptcy, and, in general, do 
 any other acts which are incident or appropriate to the 
 business of the firm. 
 
 168. The like powers may be exercised by each partner, 
 
 1 Hawken v. Bourne, 8 M. & W. 710. Vere v. Askby, 10 B. & C. 288. 
 
 2 Fox v. Hanbury, Cowp. 445. Barton v. Williams, 5 B. & Aid. 395, Bond 
 v. Gibson, 1 Camp. 185. Rapp v. Latham, 2 B. & Aid. 395. 
 
 3 Raba v. Ryland, 1 Gow. N. P. 132. Reid v. Hollinshead, 4 B. & C. S67. 
 
 4 Thickness v. Bromilow, 2 Cr. & Jer. 431. Un. St. Bank v. Mason, 5 Mason, 
 17C. ° Hooper v. Lusby, 4 Camp 66.
 
 140 OF PARTNERSHIP. 
 
 by drawing, negotiating, or accepting, bills of exchange or 
 promissory notes, or drawing checks ; but this authority is 
 confined to partnerships for purposes of trade, because it is 
 usual and expedient so to do in mercantile transactions. There 
 is no custom or usage that attorneys, 1 or members of farming 
 or mining companies, should be parties to negotiable instru- 
 ments, nor is it necessary for the purpose of their business. 2 
 When, however, from the very nature of the company, it 
 becomes necessary, or from the practice in other similar com- 
 panies, it is usual, then the authority would be implied to exist. 3 
 Moreover, this authority can only be exercised by accepting 
 or endorsing, in the true style of the partnership. 4 A partner 
 cannot bind the partnership by bills signed in his own private 
 name, or in any other name than that held out to the world as 
 the name of the firm, unless it appears on the face of the 
 paper to be on partnership account, and to be intended to have 
 a joint operation. 5 If a partner draw or indorse a bill in the 
 name of the firm, it will prima facie bind the firm, although 
 passed in discharge of his own debts. 6 
 
 169. But if the nature of the transaction clearly shows it 
 to be separate, and if the party, at whose request a bill is 
 signed in the name of the firm, knew at the time that it 
 was not on the partnership account, nor for their benefit, 
 but that it was the act of the partner, then, unless previous 
 authority or subsequent approbation be proved, the party 
 could not sue upon it. 7 Yet if it be taken bond fide, with- 
 out such knowledge at the time, no subsequently acquired 
 knowledge of the misconduct of the partner in giving security 
 
 i Harman v. Johnson, 20 L. T. 314. 
 
 a Hedley v. Bainbridge, 3 Q. B. 316. Dickinson v. Valpy, 10 B. & C. 128. 
 Thickness v. Bromilow, 2 C. & J. 431. 
 
 3 Ibid. Mullett v. Hucbison, 7 B. & C. 639. 
 
 * Newton v. Boodle, 3 M. G. & Scott, 792. Ex parte Peele, 6 Ves. 202. 
 
 5 Smith v. Craven, 1 C. & J. 500. Faith v. Richmond, 11 A. & E. 339. Kirk 
 v. Blurton, 9 M. & W. 284. 
 
 « Swan v. Steele, 7 East, 210. Sandiland v. Marsh, 2 B. & Aid. 673. Maclae 
 v. Sutherland, 3 E. & B. 1. 
 
 7 Arden v. Sharpe, 2 Esp. 524. Shireff v. Wilks, 1 East, 48.
 
 EIGHTS AND AUTHOIUTIES OF PARTNERS. 141 
 
 can disaffirm the act. A partner may render the firm liable 
 for a loan for his expenses, while engaged in the partnership 
 business, or for a purchase of goods such as the firm trades in, 
 but which he uses in his own benefit ; but when a man takes a 
 security from one partner in the name of the partnership, in 
 a transaction not in the usual course of dealing, he takes such 
 a security at his peril. 
 
 170. A partner has power to bind the firm by a guarantee 
 in a matter relating to the partnership, but not in one in which 
 the partnership had no concern: 1 yet, if the firm adopt such a 
 guarantee, they will be bound, although the guarantee may 
 have been given out of the regular line of their business. It 
 is not incidental to the general powers of a partner to bind 
 his copartners by a guarantee ; and, therefore, in commercial 
 partnerships, where it is not usual for merchants in the 
 common course of business to give collateral engagements of 
 this sort, it would be necessary to prove that such partner had 
 authority from the others to sign the partnership firm to the 
 guarantee in question. 2 A partner would not bind the partner- 
 ship for an acceptance in the name of the firm, for the purpose 
 of raising a capital for the foundation of the partnership. 3 
 
 171. The extent to which partners may render each other 
 liable, as agents, goes beyond that which is strictly their 
 ordinary and usual course of business ; it goes to that which 
 is so nearly akin to their ordinary course of business, that 
 persons dealing with a partner may fairly and reasonably con- 
 clude that it is in their usual course of business, provided, 
 however, the business be conducted through the instrumen- 
 tality of the firm. 4 The acts and assurance of one partner, 
 made with reference to business transacted by the firm, will 
 bind all the partners. Hence the acknowledgment, promise, or 
 undertaking of one partner, with reference to the business of 
 
 1 Sandilands v. Marsh, 2 B. & Aid. 679. 
 
 2 Duncan v. Lowndes, 3 Camp. 478. Story on Partnership, § 127. Hope v. 
 Cust, 1 East, 48. 
 
 3 Saville v. Robertson, 4 T. R. 720. Wilson v. Whitehead, 10 M. & W. 503. 
 
 4 Bishop v. the Countess of Jersey, 2 Drewry, 143.
 
 142 OF PARTNERSHIP. 
 
 the partnership, is the acknowledgment, promise, and under- 
 taking of all. 1 A partner has no implied power to hind the 
 others by a submission to arbitration, made without their 
 knowledge, assent, or authority : 2 he cannot bind his copart- 
 ners by deed or instrument under seal, either for a debt or any 
 other obligation, even when contracted in the course of their 
 commercial dealings, unless a special power under seal be 
 given for the purpose. 3 In Scotland a partner may bind his 
 copartners in any form in which he can bind himself. There 
 is no implied authority between partners in England to bind 
 each other by an equitable mortgage, unless it can be inferred 
 from accessory circumstances. 4 A partner may render his co- 
 partners liable even for his fraud and misconduct, provided it 
 have a sufficient relation to the business of the firm, and is 
 committed in his capacity of partner. So if a partner fraudu- 
 lently negotiate securities belonging to the partnership, it 
 would bind the firm ; 5 and if a partner make any fraudulent 
 representation of certain facts which did not exist, the firm 
 will be bound as if they were true, and existed. 6 
 
 172. All representations, notices, declarations, admissions, 
 and acknowledgments, made by or to a partner, will bind the 
 firm. 7 A release of one partner, and a compromise of a 
 partnership debt, would bind all, as it has been said ; if a 
 person owe money to five several partners, he is not bound to 
 pay them altogether, but may pay the debt to any of them, 
 whose receipt or discharge operates as a receipt or discharge 
 of the whole firm. 8 
 
 173. Partners may restrict, by agreement, the authority of 
 
 i Sandilands v. Marsh, 2 B. & Aid. 679. "Wood v. Braddick, 1 Taunt. 679. 
 Cheap v. Cramond, 4 B. & Aid. 663. 
 
 2 Stead v. Salt, 3 Bing, 101. Hainbridge v. Be la Crouee, 3 M. G. & Sc. 742. 
 Cleworth v. Pickford, 7 M. & W. 314. 
 
 3 Harrison v. Jackson, 7 T. R. 207. Horsley v. Rush, 7 T. R. 148. Appleton 
 v. Binks, 5 East, 148. 
 
 4 Ex parte Lloyd, 1 Mont. & Ayrt. 494. 
 
 5 Sanderson v. Brooksbank, 4 Car. & P. 286. Stone v. Marsh, Ry. & 
 Moo. 364. e H a pp v , Latham, 2 B. & Aid. 795. 
 
 i Bignold v. Waterhouse, 1 M. & S. 249. 8 Stead v. Salt, 13 Moore, 395.
 
 EIGHTS AND AUTHORITIES OF PAETNEES. 143 
 
 any partner; but, in order to render such restriction valid 
 towards third persons, direct notice must be given, and then 
 it will be operative only towards those who "were made ac- 
 quainted with it. The general authority of partners to bind 
 each other, by their acts or negotiable instruments, is only 
 implied ; it may be rebutted by express notice to the con- 
 trary. Lord Ellenborough said, " It is not essential to a 
 partnership that one partner should have power to draw bills 
 and notes in the partnership firm, to charge the others: they 
 may stipulate between themselves that it shall not be done ; 
 and if a third person, having notice of this, will take such a 
 security from one of the partners, he shall not sue the others 
 upon it, in breach of such stipulation, nor in defiance of a 
 notice previously given to him, by one of them, that he will 
 not be liable for any bill or note signed by the others." l So, 
 where a person, having sold his share in a mining company, 
 gives notice of it to the persons who usually contracted with 
 the company, the notice would be conclusive, and he would 
 be no longer responsible. The firm would not be bound 
 when money was lent, or goods sold, or any other contract 
 made, upon the separate security of one partner only, although 
 the money or property was put to the use and benefit of the 
 partnership. 2 Where the transaction is wholly unconnected 
 with, and beyond the scope of, the partnership business, the 
 firm would not be bound by any contract entered into by a 
 single partner, although the party implicitly trusted on the 
 credit of the firm. 3 
 
 174. The authority of partners to bind each other by con- 
 tract commences with the commencement of the partnership. 
 W here goods are sold to parties who are not partners, the 
 seller will have his rights against the parties individually, 
 although they afterwards were to become partners, because no 
 act which passed subsequently to the delivery of the goods 
 
 1 Gal way v. Mathew, 10 East, 264. 
 
 2 Bonfield v. Smith, 12 M. & W. 405. Lloyd v. Freshfield, 2 C. & T. 325. 
 Faith v. Richmond, 11 A. & E. 339. Emily v. Lye, 15 East, 7. 
 
 3 Bolton v. Pullou, 1 B. & P. 539.
 
 144 OF PARTNERSHIP. 
 
 can have any retrospect, so as to change the nature of the 
 contract. But if the goods are bought by previous agreement 
 on joint account, and the interest of the partners attached in 
 them at the same instant, mutual liability would immediately 
 commence. In order to bind the firm, the intended partner 
 must cither have purchased the goods by joint authority, or the 
 transaction must have been subsequently ratified by the firm, 
 and for which they afterwards agree to be jointly liable. 1 
 
 175. An incoming partner would not be bound for the 
 debts contracted by the firm previous to his joining it. 2 And 
 even where the account was transferred from the old to the 
 new firm, and interest was paid upon the loan, it cannot bind 
 the new partner without his assent. Slight evidences, however, 
 may be sufficient to show that the partner assumed all the 
 outstanding debts of the firm. So, where, in the original 
 transaction, the party to be bound was not a partner, but at 
 a subsequent time he acquired all the benefit as if he had 
 been a partner in the original transaction, slight circumstances 
 might be sufficient to render him bound as a partner. In fact, 
 if one man, having debts, take another into partnership with 
 him, a very little matter respecting these debts will make 
 them both liable. Where a new firm accepts a bill in respect 
 to a contract made by the old firm, that would imply a 
 ratification of the old firm, and every member would become 
 liable. 3 
 
 Section XL— REMEDIES BETWEEN PARTNERS. 
 
 176. The ancient distinction of the equity from the common 
 law courts, and the peculiar jurisdiction which the Court of 
 Chancery possesses in questions of partnership, renders it essen- 
 tial to offer a brief outline of the nature and origin of equity 
 jurisprudence, so as to draw a line of demarcation between the 
 
 1 Saville v. Robertson, 4 T. R. 720. Gouthwaite v. Dickworth, 12 East, 421. 
 
 2 Shirreff v. Wilks, 1 East, 48. Kirwan v. Kirwan, 2 C. & M. G17- 
 Lloyd v. Ashby, 2 C. & P. 138. Williams v. Jones, 5 B. & C. 108. 
 
 3 Lloyd v. Ashby, 2 C. & P. 138.
 
 REMEDIES BETWEEN PARTNERS. 145 
 
 questions which are in the province of the respective courts 
 of equity and common law. As early as the Anglo-Saxon 
 times, the King exercised a kind of equitable jurisdiction, in 
 order to mitigate the rigour of the positive laws, to modify 
 their hardness, and to supplement their deficiencies. This pre- 
 rogative of grace, this exercise of privilege, the germ of the 
 jurisdiction of the Courts of Chancery, was delegated to the 
 Lord Chancellor in the time of Edward the Elder, owing to 
 the pressure of business which thereby fell on the King. The 
 Chancellor was then the chief of the King's chapel, and. even 
 down to William II., he signed amongst the chaplains only ; 
 but for a considerable time afterwards he exercised important 
 functions, as a high dignitary in the Church possessing 
 independent legal j urisdiction. It was during the reign of 
 Edward III. that the Court of Chancery was formed into 
 a distinct court, for giving relief in cases which required 
 extraordinary remedy; but in effect the court consisted of 
 one man, who, in most cases, was an ecclesiastic. This 
 court at first possessed an ordinary jurisdiction, and was 
 governed by the rules of common law ; it commenced to ac- 
 quire the character of a Court of Equity during the reign 
 of Richard II. ; and afterwards, in the time of Henry VIII., 
 under the fostering care of Cardinal Wolsey, its jurisdiction 
 was considerably expanded. Such is the origin of this 
 important branch of English jurisprudence. The principles 
 on which the Court was founded were, the exercise of the 
 prerogative of grace, according to conscience, good faith, 
 honesty, and equity, not to supersede the law, but to follow 
 it. St. Germain said, "Conscience never resisteth the law, 
 nor addeth to it, but only when the law is directly in itseli 
 against the law of God or law of reason." Notwithstand- 
 ing this, however, the Court of Chancery, in some cases, 
 administered its own remedy, even where that provided by 
 the law was sufficient, and its interference was resented in 
 vain by the Common Law Courts. The court of equity is not 
 always strictly governed by precedents, though their influence 
 is fully recognized. "There are," said Lord Redesdale, " 
 
 L
 
 140 OF PARTNERSHIP. 
 
 tain principles on which courts of equity act, which are very 
 well settled. The cases which occur are various, but they 
 are decided on fixed principles. Courts of equity have, in this 
 respect, no more discretionary power than courts of law." ' 
 
 177. When we speak of equity as contrasted with law, it 
 would appear as if law were devoid of equity, whereas equity 
 is the soul and the spirit of all law. For example, in the 
 interpretation of contracts, it is not the strictness of the 
 letter, but the spirit of the agreement and the intention of 
 the parties, which are looked to both by the courts of law and 
 equity. Like a court of law, the courts of equity are founded 
 on the principles of justice and positive law. In questions 
 of International jurisprudence, they follow the Law of Nations ; 
 and in mercantile disputes, they follow the Maritime Law, 
 and argue from the usages of authorities received in all mari- 
 time countries. The essential difference between Courts of 
 law and equity consists in the different modes of administering 
 justice in each — viz. the mode of proof, the mode of trial, 
 and the mode of relief. Thus, where the existence of a 
 contract of partnership is controverted, and the written articles 
 are either suppressed or concealed, until the late improve- 
 ments in the law of Evidence, there was no evidence to go 
 before a court of law ; but a court of equity alone had an 
 immediate remedy by a bill of discovery, appealing to the 
 consciences of the individuals to produce what passed between 
 the parties. Now, however, it is competent for the parties 
 themselves to give evidence ; and moreover, the common 
 law courts are authorized, on application made for such 
 purpose by either of the litigants, to compel the opposite 
 party to allow inspection of all documents in the custody of 
 such opposite party relating to such action, in all cases in 
 which, previous to the passing of this act, the court of 
 equity would have granted a bill of discovery. 2 The same 
 mode by a bill of discovery, or, where practicable, by action 
 at common law, would be applied to discover the number 
 
 1 See Spence's Equitable Jurisdiction, and Story's Equity Jurisprudence. 
 - 14 & 15 Vict. c. 99, g§ 2 & 6.
 
 REMEDIES BETWEEN PARTNERS. 147 
 
 of dormant partners in a firm; which, owing to the want 
 of any system of registration in common partnerships, there 
 is no legal means of ascertaining. 
 
 178. In order to exhibit perspicuously the concurrent juris- 
 dictions of the Courts of law and ecpiity in partnership dis- 
 putes, we shall first see under what circumstances a partner 
 may sue his copartners by an action at common law. The 
 first general principle is, that no action at law can be main- 
 tained between partners on transactions founded on the part- 
 nership accounts. Yet a partner may maintain an action at 
 law against his copartner for money lent to him for his separate 
 use, upon a bill of exchange, because by such an acceptance 
 a distinct and separate right is acknowledged to exist. 1 For 
 the same reason, when a note is granted or a promise 
 given, after a balance of account has been struck between 
 the partners, an action could be maintained upon it: pro- 
 vided, however, such accounts were agreed to by ail the 
 partners. 2 In all cases where a particular transaction is sepa- 
 rate by special bargain, constituting a separate and inde- 
 pendent debt between the partners, a partner might sue upon 
 that transaction. 3 An action may also be maintained for the 
 breach of an agreement to pay a certain capital into the part- 
 nership funds; 4 or for the nonpayment of instalments when 
 due, or upon agreed damages for the breach of articles, or 
 even for breach of agreement to become a partner. In all 
 such cases an action at law will stand, because the ground of 
 action is clear; but an action could not be brought by one 
 partner against his copartner for work and labour performed, 
 or money expended on account of the partnership, 5 or on any 
 ground of general disputes arising between partners: for, until 
 
 1 Coffey v. Ryan, 10 Moore, 341. Wilson v. Cutting, 10 Bing. 436. Nockels 
 v. Crosby, 3 B. & C, 814. Smith V. Barrow, 2 T. R. 476. 
 
 2 Moravia v. Levi, 8 T.R. 483. Wray v. Milestone, 5 M. & W. 21. 
 
 3 Jackson v. Stopherd, 2 C. & M. 361. 
 
 4 Venning v. Leckie, 13 East, 7. Gale v. Leckie, 2 Stark, 107. Fromont v. 
 Coupland, 2 Bing, 170. Carr v. Smith, 5 Q B. 138. 
 
 6 Holmes v. Higfrins, 1 B. & C. 74. Brown r. Tapscott, 6 M. & W. 1 1 9. Teaguo 
 v. Hubbard, 8 B. & C. 348. 
 
 L 2
 
 148 OF PARTNERSHIP. 
 
 all partnership accounts are settled, it is impossible to ascer- 
 tain what are the respective claims of the partners — whether 
 a particular partner is, in fact, a debtor or a creditor of 
 the firm, even in the simplest case with reference to partner- 
 ship affairs. 1 
 
 179. The court of equity possesses a much more complete 
 jurisdiction than the courts of common law, in matters of part- 
 nership, concerning any dispute arising out of the formation 
 of the original deed, of the management of the partnership 
 effects, of the bankruptcy or dissolution of the partnership, 
 and on account of the death of the partners. A wilful 
 and continued breach of partnership articles would afford a 
 reasonable ground for the interference of the court, although 
 such a breach must be so important in its consequences as to 
 authorize the party complaining to call for a dissolution of 
 partnership. Again, a court of equity would interfere where a 
 partner raises money for his private use, on the credit of the 
 partnership firm ; but here, also, the danger must be such, 
 there must be that abuse of good faith between the members of 
 the partnership, that the court will try the question whether the 
 partnership should not be dissolved in consequence. 2 Where 
 a partner asks the interference of the court of equity in 
 settling the accounts, whilst the partnership is still subsisting, 
 he must have in view the dissolution of the partnership, be- 
 cause the court would not grant such an account simply for 
 the purpose of his obtaining the share of the profits due to 
 him. Yet it would not withhold its assistance, in directing 
 accounts to be taken of the dealings of a partnership, with 
 a view of having the common assets realized, and applied to 
 the legitimate purposes. 3 We have seen that it is the duty 
 of partners not to put themselves in situations likely to give 
 them a bias against the interest of the partnership ; so where 
 there is an agreement between the partners that neither of 
 them shall engage in any other business on his separate 
 
 1 Bovill v. Hammond, 6 B. & C. 149; Cruikshank v. M'Vicar, 8 Beav. 112. 
 
 2 Marshall v. Coleman, 2 Jacob & Walk. 269. 
 
 a Wallworth v. Holt, 4 M. & Craig, 619. Loscombe v. Russel, 4 Sim, 8.
 
 REMEDIES BETWEEN PARTNERS. 14 ( J 
 
 account, an injunction might be obtained to restrain such 
 partner from that trading. 1 If any partner is obstructed or 
 interfered with in the enjoyment of his rights under the part- 
 nership articles, as, for example, if he was prevented from 
 having full access to the partnership books, a remedy would 
 be administered by injunction; 2 so if, notwithstanding an 
 agreement to the effect of inserting the name of a partner in 
 the name of the firm, his name were intentionally and con- 
 tinually omitted. 3 Numerous other instances of the same 
 character might be given, where courts of ecpiity will inter- 
 fere by way of injunction ; as, for example, they would re- 
 strain a partner from wasting the partnership property, from 
 misusing the partnership name, or from committing such like 
 grievous and fraudulent practices, which it is expedient at any 
 cost to arrest. Let it, however, be understood, that, in cases 
 of frivolous vexations, or mere differences of temper, or minor 
 differences, the court would not interfere, as it is a matter of 
 course that, when two parties enter into partnership, they 
 entered into it with the fair understanding that such infir- 
 mities are to be borne with, and that they virtually, as in 
 another relation of life, unite for the better or for the worse. 
 
 180. Another remedy, granted in some instances by the 
 court of equity, is, the appointment of a receiver. This is 
 even done during the continuance of a partnership ; but it 
 must be shown to be a case of the grossest abuse, and of the 
 strongest misconduct on the part of the managing partners, 
 and, except under such circumstances, the court would nut 
 interfere. 1 Exclusion from the management of a partnership 
 would be a sufficient ground for appointing a receiver, unless 
 the articles provided for such an emergency on the happening 
 of certain events. 5 It must never be forgotten that, where the 
 Court of Chancery interferes between partners by appointing a 
 receiver, it is merely with a view to grant relief by winding up 
 
 1 Soraerville v. Mackay, 16 Ves. 3S2. 
 
 2 Cbarltonv.Poulter,19Ves.l48. Goodman v. Whitcomb, 1 Jac. & Walk. 5S9. 
 " Marshall v. Coleman, 2 Jac. & Walk. 266. 
 
 4 Oliver v. Hamilton, 2 Anstr. 453. Millbank v. Revett, 2 Mer. 405. 
 
 5 Blackncy v. Dufaur, 15 Bcav. 40. Wilsons v. Greenwood, 1 Swanst. 1181.
 
 150 OF PARTNERSHIP. 
 
 and disposing of the concern, and dividing the product, but 
 not for the purpose of cany in g on the partnership ; a receiver 
 being only granted where it is auxiliary to the object of dis- 
 solution. 1 As to the time allowed for the enforcement of legal 
 or equitable remedies between partners, the statute of limita- 
 tion bars only the legal remedies ; yet even the court of equity 
 has adopted analogous rules, making six years the limit or 
 convenient measure for an equitable bar. 2 
 
 Section XII.— REMEDIES AGAINST THIRD PERSONS. 
 
 181. Partners in their collective capacity have, as a general 
 rule, the same right to bring any suit at law or equity which 
 it would be competent for any individual to bring. There 
 are, however, some important exceptions. Owing to the want 
 of distinction between the capacity of the firm and of its 
 individual partners, it follows that where two private partner- 
 ships have one or more members in common, they cannot sue 
 each other, because, as all partners must at law be included in 
 every suit, the partner who is member of both partnerships 
 would stand at the same time in the character of plaintiff 
 and defendant in the suit. This is not the case in Scotland, 
 where debts between companies, in which the same indivi- 
 
 1 Story on Partnership, No. 231. Waters v. Taylor, 15 Ves. 10. 
 
 2 Beckford v. Wade, 17 Yes. 96. 
 
 When we consider the tardy and expensive procedure of the Court of 
 Chancery, and the anomaly of preserving the distinct jurisdictions of law 
 and equity in the settlement of mercantile disputes, it would seem most 
 important to the interests of commerce that one tribunal should be formed, 
 having complete jurisdictiou in all questions connected with trade, shipping, 
 and bankruptcy. The constitution of new courts is necessarily attended with 
 much difficulty and expeu.se ; but the principal elements of a Commercial 
 Tribunal might be engrafted upon one of the existing courts. It has been 
 suggested that the Courts of Bankruptcy might easily embrace the whole 
 commercial jurisdiction. They are already to a certain extent courts of law 
 and equity, and of all others seem most competent, by their acquired expe- 
 rience, and by their constitution, to sift commercial questions and accounts. 
 The establishment of improved tribunals, to decide claims by and against 
 partners in all partnership disputes, was recommended by the Committee of 
 the House of Commons of 1851 on the law of partnership.
 
 REMEDIES AGAINST THIRD PERSONS. 151 
 
 dual is a partner, are every day sustained as quite unex- 
 ceptionable. 1 Another exception is, where one of the partners 
 has given a discharge for a partnership debt, the partnership 
 cannot sue upon it, not even where the partner has acted 
 fraudulently ; and a defence valid as against one of the co- 
 partners, is available as against all of them, in an action by 
 the copartners. No person is allowed to rescind his own act, 
 on the ground that such act was a fraud on some other 
 person, whether the party seeking to do this has sued in his 
 own name only, or jointly with sucli other person. 2 In Scot- 
 land, a partner has no right to release a debtor pending a suit 
 by the company; and a defence, although it wordd be valid 
 against one of the partners, would not be available against 
 the company. 
 
 182. In all suits against third persons, all the partners must 
 join, 3 except the dormant or nominal partner. With respect 
 to a dormant partner, it is quite optional to join him or not in 
 the suit; 4 and, as regards a nominal partner, as he has no 
 interest, there is no necessity for his joining. 5 In cases of 
 written instruments made payable to certain persons by name, 
 it may be questioned whether all must join in the action, 
 notwithstanding all have not an interest in the contract, and 
 there seems to be an apparent conflict in the authorities. 
 The most cautious mode is to join them all. 6 In Scotland, a 
 private partnership may sue and be sued by any of its members. 
 It is not necessary to make an infant partner a party to the 
 suit, except where he confirmed or rati tied the contract after he 
 attained his majority. If one of two partners be an infant, the 
 holder of a bill accepted by both partners may sue the adult 
 
 1 2 Bell's Coniui. 620, 5th edit. 
 
 2 Jones v. Yates, 9 B & C. 532. Jacaud v. French, 12 East, 317. 
 
 3 Story on Partnership, § 241. 
 
 4 Skinner v. Stocks, 4 B & Aid. 437. Cothay v. Fennell, 10 B. & C. 671 
 Lloyd v Archbowle, 2 Taunt. 324. 
 
 5 Guidon v. Robson, 2 Camp. 302. Parsons v. Crosby, 5 Esp. 109. Daven- 
 port v. Rackstraw, 1 Carr. & P. 89. 
 
 6 Grove v. Dubois, 1 T. R. 112. Alexander v. Barker, 2 C. & J. 133. dim- 
 ming v. Forrester, 1 M. & S. 197.
 
 152 OF PARTNERSHIP. 
 
 only, ill the name of both ; ' and where one of the partners be- 
 comes bankrupt, and has obtained his certificate, it would 
 not be necessary to make him a party to the suit. 2 If one of 
 several partners die, the action must be brought against the 
 survivors. The partnership is generally bound for all contracts 
 made in the name of the firm, and also for those which, 
 although made in the name of one of the partners, are proved 
 to be on behalf of the partnership, or for the benefit thereof. 
 So in the converse case, where loans or other contracts are 
 made by one partner, an action might be maintained by all 
 the partners on account of the partnership firm. 3 Where, on 
 a change in the firm, the existing contracts and effects become 
 a part of the funds of the new firm, any action on such effects 
 must be maintained in the name of the old firm, except in case 
 of negotiable instruments regularly transferred to the new firm. 4 
 183. A question of considerable importance arises where an 
 execution is levied upon the partnership property by a creditor 
 of a partner on his separate account. In such cases, the great 
 principle to be observed is, that each individual partner has an 
 interest in a residue only, after adjusting equities, 5 and that 
 all the partners have a lien upon the whole of the partnership 
 property for the payment of partnership debts, and for their 
 separate rights to the property. Therefore, a separate creditor 
 can only take and sell the interest of the partner in the part- 
 nership property: that is, his share upon a division of the 
 surplus after discharging all demands upon the copartner- 
 ship ; 6 and in case of seizure of the property by the sheriff, 
 for the purpose of sale, the Court of Chancery would inter- 
 fere by restraining the sale. 7 
 
 1 Thornton v. Illingworth, 2 B. k C. 824. 
 
 2 3 & 4 Wm. IV. c. 42, § 29. 
 
 a Robson v. Drummond, 2 B. & Ad. 303. Garrett v. Handley, 4 B. & C. 664. 
 Walton r. Dodson, 3 C. & P. 162. 
 
 4 Pease v. Hirst, 10 B. & C. 122. Osborne v. Harper, 5 East, 225. Wilsford 
 r. Wood, 1 Esp. 182. 
 
 5 Bennett v. Goude, 21 L. T. 231. 
 8 Fox r. Hanbury, Cowp. 445. 
 
 1 Taylor v. Field, 4 Ves. 396. Franklin r. Thomas, 3 Meriv. 234.
 
 LIABILITY OF RETIRING PARTNERS. 1 V> 
 
 Section XIII.— LIABILITY OF RETIRING PARTNERS. 
 
 184. A partnership may be partially dissolved at any time, 
 by the retirement of any partner; but, in order to cause a 
 cessation of liability to the future engagements of the firm, 
 the retiring partner must give express notice to all who had 
 dealings with the partnership, and also insert the notice in 
 the "Gazette." 1 The rule of law is, that where there is ;i 
 partnership of any number of persons, if any change be made 
 in the partnership, and no notice is given, any person dealing 
 with the partnership, either before or after such change, has 
 a right to call upon all the parties who at first composed the 
 firm. 2 The general usage of inserting the notice in the 
 " Gazette," and sending it round to the correspondents of 
 the house, has always been considered ample notice. 3 This 
 notice, however, does not affect past transactions, with re- 
 spect to which the retiring partner still remains liable for all 
 the debts and contracts of the firm, but produces a discharge 
 of liability to future debts. 4 If credit be given subsequently 
 to the notice, or new securities be taken, or a fresh account 
 be opened with the remaining partners, it is understood that a 
 new and separate contract has been entered into. Care, also, 
 must be taken by the retiring partner that his name be 
 removed from the firm, or from the shop door; because, no 
 matter what notice is given, so long as his name is permitted 
 to remain he would continue liable. 5 A dormant or secret 
 partner, or a person whose name does not appear in the firm, 
 may retire without giving notice to the world, but still he 
 would remain liable for contracts made or goods furnished 
 during the time he participated in the profits of the concern. 6 
 
 1 Parker v. Carruthers-, 3 Esp. 248. Godfrey v. Turnbull, 1 Esp. 371. Ex 
 parte Burlton, 1 G. & J. 207. Ex parte Leaf, 1 Deac. 176. 
 
 2 Parker v. Carruthers, 3 Esp. 248. 
 
 3 Newsoine v. Coles, 2 Camp. 290. 
 
 « Wood v. Braddick, 1 Taunt. 104. Ault v. Goodrich, 4 Russ. 430. 
 
 5 Williams v. Keats, 2 Stark, 290. Newsome v. Coles, 2 Camp. CI 7. Dolman 
 v. Orchard, 2 C. & P. 100. 
 
 6 Brooke v. Enderby, 2 B. & B. 71. Heath r. San om, 4 B. & Ad. 171.
 
 154 OF PARTNERSHIP. 
 
 If he has been known by any person to be a partner, he must 
 give notice to such of his retiring from the business, otherwise 
 he would remain liable even after he actually ceased to be a 
 partner. 1 In Scotland, a dormant partner, on retiring from 
 the partnership, must give notice of his retirement to all 
 persons then having relations with the partnership, whether 
 they were or were not aware of his connexion with it, and 
 also public notice by advertisement. 2 Generally, the respon- 
 sibility of retiring partners ceases immediately that a bond 
 fide dissolution takes place and notice is given ; and an ac- 
 ceptance given by the continuing partner, in the name of 
 the firm, after dissolution, would not bind the retiring partner, 
 even if the bill were dated before dissolution. 3 But if the 
 retiring partner had himself accepted the bill before dis- 
 solution, he could not then question his liability .* 
 
 185. The liability of the retiring partners with respect to 
 past transactions is not diminished by his retirement, yet the 
 creditor may, by new arrangements with the continuing part- 
 ners, waive his right against the retiring partner; and this 
 may be proved, either by an express agreement, or by facts 
 and conduct from which the discharge of the retiring partner 
 may be fairly inferred. 5 If the creditor consent to take a 
 separate note of the continuing partner, strictly reserving his 
 rights against all the members of the former partnership, he 
 would still have his remedy against all. Taking a new 
 security is not of itself sufficient to discharge the retiring- 
 partner, even if such security were renewed several times. If, 
 however, at the maturity of a joint bill of exchange given 
 for a partnership demand, the holder take the separate bill 
 of the continuing partner, the other would be discharged. 6 
 
 1 Evans v Drumuioud, 4 E^p. 89. 
 
 2 Hay v. Mair, 27 Jan. 1809, Fac. Coll. 
 
 3 Ex parte Liddiard, 2 M. & A. 87. Paterson v. Zechariah, 1 Stark, 71. 
 * Abel v. Sutton, 3 Esp. 110 ; Adams v. Biugley, 1 M. & W. 192. 
 
 6 Hart v. Alexander, 2 M. & W. 484. 
 
 6 Bedford v. Deakin, 2 B. & Aid. 210. Featherston v. Hunt, 1 B. & C. 113. 
 Harris v. Farwell, 15 Beav. 31. Kirvvau v. Kirwan, 2 C. & M. 617. Winter v. 
 Innes, 4 My. & C. 108.
 
 DISSOLUTION OF PARTNERSHIP. 155 
 
 186. The retiring partner will, also, remain responsible for 
 the balance of accounts due by the firm at the time of his 
 retirement. Where the account is continued by the new firm, 
 the balance for which the retiring partner is liable will be 
 diminished by every payment which is made by the new firm, 
 supposing such payment not to be appropriated to the dis- 
 charge of any specific item. The first item on the debit side 
 of the account will be discharged or reduced by the first item 
 on the credit side : this is the method adopted with respect to 
 cash or banking accounts. Where, however, goods are pur- 
 chased upon bills or general accounts, bills drawn or payments 
 made after his retirement, without any express appropriation 
 at the time, do not go to the discharge of old liabilities. 1 We 
 have already observed that if a retiring partner leaves a sum 
 in the partnership at interest, or for an annuity fixed or certain, 
 his liability to partnership debts will cease at his retirement ; 
 but if the annuity were uncertain, and fluctuating according to 
 the profits of the partnership, his liability will still continue. 2 
 
 Section XIV.— DISSOLUTION OF PARTNERSHIP. 
 
 187. A general dissolution of partnership is materially 
 governed by the partnership articles ; and it is all-important 
 that commercial men, when entering into partnership, should 
 advert to the necessity of providing, by express covenant, in 
 what manner the affairs of the partnership are to be wound 
 up, with reference to their respective interest, whenever there 
 shall be what may be called, but what is not in effect, an end 
 of the partnership. A partnership may expire by death, by 
 effluxion of time, by notice, or by bankruptcy of a part- 
 ner ; but in all these cases — though, in a certain sense of the 
 word expiration, a partnership does so expire in each and 
 all of them — yet, in most instances, a partnership does not 
 and cannot then expire to all purposes. In some it may not 
 
 1 ( layton's Case, 1 Meriv. 572. Brook v. Euderby, 4 Moore, 501. 
 s Grace a Smith, 2 W. Bl. 99. Young v. Austell, 2 11. Bl 242. Bloxam v. 
 Bell, 2 W. Bl.
 
 156 OF PARTNERSHIP. 
 
 expire for years after the period in which, in one sense of the 
 word, we say it does expire ; and it must depend upon the 
 nature of the partnership in what way it is to be carried on 
 during the period in which it is to be wound up. If it 
 expires by bankruptcy, there are introduced into it, as persons 
 interested in the manner of winding up, the assignees of the 
 bankrupt. If it expires by death, there are introduced, in 
 like manner, the executors of the deceased partner ; who may 
 be stated, though certainly not in a very correct use of the 
 term, to be a kind of assignees of the deceased partners. "When 
 it expires by notice, it may happen that, in many cases, the 
 party who gave the notice may die long before the time arrives 
 when it may be said to be quite dissolved, and his executors 
 may become partners in the concern. In short, in every 
 species of dissolution which may take place in different events, 
 persons, in the course of time, may be introduced into the part- 
 nership, with reference to whom accounts must be settled, 
 much in the same manner as it would have been necessary to 
 have settled them with the original partners. 1 
 
 188. A partnership may be dissolved — 1st. By the act or 
 will of the partners. 2d. By efflux of time. 3d. By the ex- 
 tinction of the concern itself, or on account of the impractica- 
 bility of the object, or on account of the incapacity or insanity 
 of a partner. 4th. By decree of a court of equity. 5th. By 
 operation of law. 6th. By insolvency or bankruptcy of any 
 of the partners. 7th. By outlawry, exile, transportation, or 
 civil death of any of the partners. 8th. By death of one or 
 more partners. 
 
 189. The first mode of dissolution is by the spontaneous 
 will of the parties themselves. Whether the partnership be 
 for a limited or unlimited period, it may be at any time dis- 
 solved by the mutual agreement of the parties. 3 Wherever 
 there is no good agreement between the parties, or where any 
 of the partners, owing to necessary absence or other reasonable 
 ground, deem it expedient to withdraw from the partnership, 
 
 1 Crawshay v. Collins, 15 Ves. 218; Crawshay v. Maule, 1 Swanst. 493. 
 
 2 Nerot v. Buriianil, 4 Russ. 260. Peacock v. Peacock, 16 Ves. 50.
 
 DISSOLUTION OF PARTNERSHIP. 157 
 
 it is quite competent to them to dissolve it ; provided there be 
 no sinister motives, or the dissolution does not take place at 
 an unreasonable time, so as to cause loss and inconvenience to 
 the partnership. Thus, if a partner were to quit whilst on a 
 journey, or engaged in any other business of the partnership, 
 he would be bound to make good the losses which he occa- 
 sioned. 1 Where a time has been agreed on for the duration of 
 the partnership, it is reasonable that due notice be given with 
 a view to obtain a premature dissolution ; but there is no rule 
 as to the time to be allowed by such notice, provided it be 
 given bond fide. A partnership at will is presumed to endure 
 so long as the parties are in life, and have a capacity to carry 
 on the business. 2 
 
 190. Whenever the period for which the partnership was 
 created has elapsed, it may be deemed as dissolved by the terms 
 of the original contract; the articles are in force no longer, unless 
 the parties like to continue the partnership on the same terms, 
 or from the act of the parties a continuation or renewal of the 
 contract may be inferred : but in such a case, the continuation 
 of the partnership would be founded on a presumed new agree- 
 ment, and not under the old one. When the partnership 
 continues without fixing any term, the natural presumption is 
 that it was continued upon the same terms as before, unless 
 that presumption is rebutted by the other circumstances of the 
 case. 3 Yet, without an express agreement, it will not be 
 inferred that the partnership has been renewed for a like 
 period, but only during the joint will and pleasure of all the 
 parties. The circumstances which may concur, and such as 
 may be urged in opposition to the sudden dissolution of part- 
 nership, were fully commented on by Sir William Grant 
 Master of the Rolls, in a case of partnership which had 
 existed upon articles by which twelve months' notice was 
 necessary to enable a partner to withdraw, but which con- 
 tinued after a lapse of that period without articles. The 
 
 1 Domat. Civil Law, B. 1, Tit. 8, No. 5, Art. 128. 
 
 2 Story on Partnership, No. 271. 
 
 3 United States Bank v. Binuey, 5 Mason, 170.
 
 1.38 OF PARTNERSHIP. 
 
 first question was, whether the partnership, having originally 
 been formed on articles by which a notice was to be given 
 prior to dissolution, and having been renewed without articles, 
 any partner had a right to put an end to the partnership 
 without giving the same notice. On this point Sir William 
 Grant held that the latter partnership was for an indefinite 
 period, and therefore might be dissolved at the will of the 
 parties. It was, moreover, objected that the lease of the 
 premises used in carrying on the concern was then unexpired. 
 But that did not oppose any obstacle to the dissolution, as it 
 is not a necessary consequence that partners taking premises 
 for the use of their trade for a definite period, contracted a 
 partnership for the same period. Again, it was contended 
 that there were several contracts subsisting which had a con- 
 siderable period of time to run. But, according to this argu- 
 ment, a partnership could not be dissolved until all their 
 contracts were completely ended and wound up. It would 
 on that ground be hardly possible to dissolve any partner- 
 ship, as there must always be contracts depending. The 
 existence of engagements with third persons cannot form an 
 objection to a dissolution. Notwithstanding any similar ob- 
 jections, the rule in the case of a partnership subsisting 
 without articles, and for an indefinite period, is that any 
 partner may say, " It is my pleasure on this day to dissolve 
 partnership." A guarantee that such sudden dissolution may 
 not take place by the caprice of any of the partners, is obtained 
 by the fact that injury must necessarily arise from such a 
 step to all the partners ; because the immediate consequences 
 of dissolution are, that the whole of the joint property must be 
 sold oif, and the entire concern wound up. No partner, there- 
 fore, can derive a particular advantage by choosing an unrea- 
 sonable moment for dissolution, as every one must suffer in 
 proportion to the extent of his interest in the trade.' 
 
 191. A partnership may be dissolved by tacit renunciation, 
 and dissolution may be presumed by natural inference from 
 
 1 Featherstoiihangli v. Fenwick, 17 Ves. 299. Heath v. Sansom, 4 B. & Ad. 
 172. Crawskay v. >!anle, 1 Swanston, 495.
 
 DISSOLUTION UF PARTNERSHIP. ] 59 
 
 circumstances. If a partner withdraw from the business, 
 or engage in other concerns, or assign his interest in the 
 partnership to the other partners, or do any act which is 
 either injurious to the partnership or inconsistent with his 
 duties as partner, there will be a dissolution. The circum- 
 stances which will render it lawful for a partner to dissolve 
 by tacit renunciation will depend on the terms of the con- 
 tract, if it be a partnership at will or for a limited time, 
 and these have already been detailed. A voluntary assign- 
 ment of all the rights, titles, and interest in the property 
 of the partnership, would necessarily cause a dissolution, 
 inasmuch as it gives rise to a state of things altogether 
 incompatible with the prosecution of a partnership concern. 1 
 A dissolution of partnership would also accrue from an in- 
 voluntary assignment, or an assignment under a judicial 
 process. "When a creditor takes out an execution against the 
 separate share of a partner, there would be a dissolution, 
 because the purchaser is not bound to become a partner, nor 
 are the other partners bound to admit him into the partner- 
 ship. In case of gross misconduct, or want of good faith and 
 due diligence, or where the authority of a partner is exercised 
 in such way as may cause serious and permanent injury to 
 the success of the partnership — as where there is habitual 
 intoxication or reckless speculation — the court would decree a 
 dissolution. 2 
 
 192. The loss or extinction of the business which formed 
 the object of the partnership would have the same effect of dis- 
 solution. This, however, may occur only where the partnership 
 was formed for one single object, or where there was a joint 
 transaction only. Again, where it is utterly impracticable to 
 carry out the undertaking, 3 or where one of the partners 
 becomes unable to act either from sudden illness or other 
 physical causes, although the partnership was agreed for a 
 
 1 Heath v. Sansom, 4 B. & Ad. 175. Fox v. Hanbury, Cowp. 445. Mar- 
 quand v. N. York Manuf. Co., 17 John, 525. 
 
 2 Loscoinbe v. Russell, 4 Sim. 8. Goodman v. Whitcombe, 1 Jack & Walk. 5G9. 
 
 3 Waters v. Taylor, 2 Yes. & Beavan, 299.
 
 160 OF PARTNERSHIP* 
 
 fixed period, the law as well as common reason adjudgeth the 
 partnership to be dissolved. 1 
 
 193. Insanity is a good ground to put an end to the partner- 
 ship, because it not only disables the partner from giving any 
 assistance to the partnership, but prevents him from watching 
 over the affairs for his own safety. 2 But, in order to justify 
 dissolution on account of insanity or other disease, such 
 disease must be habitual or permanent, and not of a tem- 
 porary character. A broken leg, or an accidental blow, may 
 incapacitate the partner for a time as much as insanity, and 
 the one may be as temporary as the other. Moreover, in- 
 sanity does not, per se, amount to a dissolution; it only gives 
 a good cause to a court of equity to decree dissolution ; and 
 one partner cannot, on account of the lunacy of another, put 
 an end to the partnership. 
 
 194. Partnership would be dissolved when a single woman 
 marries, because she ceases thereby to have control over her own 
 property. 3 The insolvency or bankruptcy of any of the partners 
 would also cause a dissolution, inasmuch as all the acts of a 
 bankrupt are void from the day of his bankruptcy, and his pro- 
 perty vests at once in his assignees, who cannot carry on any 
 trade. The dissolution of the partnership by the bankruptcy 
 of one partner, takes effect from the declaration of bankruptcy 
 by commission, and from the time when the act of bank- 
 ruptcy was committed. 4 Bankruptcy of one of the partners 
 will not only dissolve the partnership with regard to himself, 
 but even with regard to the solvent partners. The insolvent 
 partner ceases to exercise any control or disposition over the 
 joint property, and the assignee becomes a tenant in common 
 with the other partners. But the control or disposition over 
 the joint property continues to be exercised by the solvent 
 partners, 5 and they must apply it in liquidation of the part- 
 
 1 Baring v. Dix, 1 Cox, 213. Pearce v. Pearce, 17 Ves. 1. 
 
 2 Sander v. Sander, 2 Coll. C. & C. 276. Sayer v. Bennet, 1 Cox, 107. 
 Wrexham v. Huddleston, 1 Swanst. 514. Jones v. Noy, 2 M & K. 125. 
 
 3 Nerot v. Burnand, 4 Russ. 247. Griswold v. Waddington, 15 John, 57. 
 
 4 Dutton v. Morrison, 17 Ves. 193. 
 
 5 Morgan v. Marquis, 2 Com. L. Rep. 277. 9 Exch. 145.
 
 DISSOLUTION OF PARTNERSHIP. 1G1 
 
 nership debts. Tlic insolvent partner is, moreover. div< 
 of all right of action. All actions are henceforth brought 
 in the joint name of the solvent partner and the assignee of 
 the bankrupt ; but in all actions against the partners, the 
 name of the bankrupt partner must be included. When an 
 execution issues against one of the partners, an account is made 
 out of the whole estate, and the joint creditors are paid, pari 
 passu, out of the joint estate, and the residue is distributed 
 according to the interest of the partners. The interest of each 
 partner is his share of the surplus, subject to all the partner- 
 ship accounts ; and that interest only is liable to the execution 
 of the creditors. 1 
 
 195. A partnership is dissolved, ipso facto, by death. 2 Even 
 where the partnership is composed of more than two partners, 
 the death of one is sufficient to effect a dissolution among the 
 survivors ; and the reason is, the uncertainty as to the person 
 whom death might introduce into the partnership, as such might 
 be the next of kin, or the executor or administrator of the 
 deceased partner, or a creditor taking administration, or any 
 one claiming by representation or assignment from their repre- 
 sentatives. Provision may be made in the contract of part- 
 nership, by which, in case of the death of either of the 
 partners during the continuance of the partnership, the 
 executor or administrator of the deceased partner may have 
 the option of succeeding to the share of such deceased partner 
 in the business, if he or she think proper. But the option on 
 the part of the representatives of the deceased partner must be 
 accompanied by a corresponding obligation, on the part of 
 the surviving partners, to admit them. 3 
 
 196. In case of death of one of the partners, the property 
 and the disposal of it go to the executors or representatives 
 of the deceased partner, and not to the surviving partner, 
 which is the case in all joint-tenancies, under the rule, Jus 
 accrescendi inter mercatores locum non habet j and there is ii" 
 difference whether the property consists of personal or real 
 
 i Aspinall v. L. & N. W. Kailw. Co. 22 L. T. 75. 
 
 2 Wulliamy v. Noble, 3 Mer. 610. 3 Holland r. King, 6 C. B. 727. 
 
 M
 
 162 OF PARTNERSHIP. 
 
 estate, or of both. The surviving partner holds the partner- 
 ship funds for the partnership debts, and a right to wind up the 
 partnership concern is by law vested in him. 1 The balance, 
 if any, is distributed equally between the representatives of 
 the deceased partners and the survivors. If is only the share 
 of such balance belonging to the deceased partner which goes 
 to the representative ; but he has a right to insist that the part- 
 nership effects shall be applied to the payment of the debts 
 of the firm, because the share of the deceased partner may 
 eventually be made liable for any deficiency. He has, how- 
 ever, no interest in the question as to what debts shall be 
 paid first, in case the partnership effects are insufficient to pay 
 the whole. Again, the surviving partners have no power to 
 dispose of the share belonging to the executors of the deceased 
 partner, in order to pay the debts which are due principally 
 from themselves, or in order to enable them to continue their 
 trade. The power intrusted to the surviving partner to deal 
 with the property is only to pay partnership debts, and to wind 
 up the partnership concern. From the moment one of the 
 partners dies, his estate ceases to be liable to the debts sub- 
 sequently contracted by the surviving partners, even where 
 no notice has been given. The surviving partner must im- 
 mediately put an end to all transactions, and cease altogether 
 from carrying on any business on the partnership account; 
 and from that moment the surviving partner and the repre- 
 sentatives of the deceased partner become tenants in common 
 of all the partnership property and effects in possession. 
 
 197. A partnership has been held, by the courts of the 
 United States of America, to be dissolved by public war between 
 the countries in which the partners respectively reside, inasmuch 
 as all commercial relations with the enemy being thereby at 
 an end, partners thus situated are, by operation of law, pre- 
 vented from carrying out the object of the partnership, and 
 the trade itself in which they were engaged ceased to exist. 2 
 
 1 Collins v. Young, 21 L. T. 25. 
 
 2 Griswold v. Waddington, 15 John, 57 ; 16 John, 438 Story on Partner- 
 ship, § 316. The Vigilantia, 1 Rob. 1. The Franklin, 6 Rob. 127.
 
 EFFECTS OF DISSOLUTION AMONG PABTNEE3. 163 
 
 Section XV.— EFFECTS OF DISSOLUTION AS AMONG THE 
 PARTNERS. 
 
 198. The dissolution of a partnership, whether it be by- 
 effect of time, the death or bankruptcy of one partner, or the 
 mere will of the partners, has the immediate effect of revoking 
 the mutual power of partners to bind each other by their 
 contracts, to buy or to sell, to dispose of the partnership pro- 
 perty, to sign bills of exchange in the name of the firm, or 
 to do any act which they were authorized to do in virtue of 
 the partnership connexion, and in furtherance of partnership 
 affairs. Yet there are certain powers and duties still existing 
 after dissolution ; there are engagements which cannot be 
 fulfilled during the existence of the partnership. Time is, 
 under any circumstances, requisite for the purpose of winding 
 up the affairs, of taking and settling all its accounts, and 
 converting all the property, means, and assets of the part- 
 nership, existing at the time of the dissolution, as beneficially 
 as may be, for the benefit of all who were partners, according 
 to their respective shares and interests. 1 
 
 199. Each partner has a right to demand that the partner- 
 ship funds and effects shall be employed to the discharge ot 
 partnership debts. The liabilities of the partnership must 
 first be discharged, 2 and then, if there be a surplus of capital 
 and profit, it will be divided among the partners according 
 to their proportion of interest. If, on the contrary, there be 
 a deficiency, a call will be made upon all the partners to 
 make up that deficiency according to their proportions. A 
 partner has no right to trade on his own exclusive account 
 with the partnership property ; and should he so trade, in case 
 of profits, he would be accountable for them to the other 
 
 1 Harvey v. Crickett, 5 M. & S. 336. 2 Bell's Comm. b. 7. c. 2. p. 643, 5th 
 ed. Story, 328. 
 
 » Kilgour v. Finlayson, 1 H. Bl. 155. Abel r. Sutton, 3 Esp. 108. Bell's 
 Principles, 387. 
 
 M 2
 
 164 OF PAKTNEKSHIP. 
 
 partners, whilst in case of loss, it would fall on himself alone. 
 If, in the management of the partnership funds for the purpose 
 of winding up the concern, a partner should exceed his autho- 
 rity, or waste or misapply the funds, then the Court of Equity 
 will appoint a manager to wind up the concern. Each 
 partner may insist on a sale, as the best criterion of the value 
 of the property. 1 The common property thus converted, and 
 the proceeds of the partnership effects when collected, form a 
 fund over which the creditors of the concern have a primary 
 and preferable claim, and it must be so applied before any 
 partner, or the assignees of deceased partners, can claim any 
 share. A partner cannot set a value on the partnership 
 stock, and force the others to take their proportion of it at 
 that valuation, or to take it out of the premises. Then- 
 rights are precisely equal, to have the whole concern wound 
 up by a sale, and division of the produce. 
 
 200. In taking an account between the partners themselves, 
 the state of the stock is to be taken as it was worth at the 
 time of the dissolution, and the proceeds thereof until it is 
 got in. Each partner is to be allowed whatever he had ad- 
 vanced to the partnership, and to be charged with what he 
 has failed to bring in, or has drawn out, more than his just 
 proportion, and also with all the debts and claims which 
 he owes or is accountable for to the partnership, with all 
 interest accruing on the same debts and claims. If a partner 
 has made advances to the partnership, the sum only con- 
 stitutes an item in the account. 2 Where the partnership ad- 
 vances a sum to an individual partner, his profits are first 
 answerable for that sum ; and if his profits are not sufficient 
 to answer it, the deficiency is made good out of his capital ; 
 and if both his profits and his capital are not sufficient to 
 make it good, he is considered a debtor for the excess. The 
 partners are to be allowed equal shares of the profits and 
 stock, if there, be no other engagement settled. When the 
 
 1 Story on Partnership, 350. Crawshay v. Maule, 1 Swanst. 495. Collyer 
 on Partnership, pp. 204 — 214. Regden v. Pierce, 6 Madd. 353. 
 3 Richardson v. Bank of England, 4 Mylne & Craig, 165.
 
 DISSOLUTION WITH EESrECT TO CREDITORS. 1C5 
 
 partnership is dissolved by the death of both or all the 
 partners, the court of equity may appoint'a receiver. 
 
 Section XVI.— EFFECTS OF DISSOLUTION WITH RESPECT TO 
 CREDITORS. 
 
 201. The creditors have a right to sue at any time, and by 
 judgment and execution they may obtain possession of the 
 property ; but till then they cannot prevent the partners from 
 effectually transferring bondjide, for a valuable consideration, 
 the property of the partnership. So long as the partnership 
 is solvent, a partner may convey all his property to his copart- 
 ners previous to a dissolution, and his creditors could not arrest 
 the property in their hands. But, in all such cases, an assign- 
 ment of the whole estate would only be valid where there has 
 been an absolute bond fide sale, or a present advance has 
 been given to the full amount of the property, and provided 
 also the transfer or assignment is complete. 1 The creditors 
 have no right of lien upon the partnership effects, but they 
 have power only to sue, and by process create a demand that 
 would directly attach upon the property. As we have already 
 seen, however, each partner has an especial lien on the part- 
 nership effects for the payment of the partnership debts, and 
 this lien may be made available for the benefit of creditors. 
 In case of death of a partner, creditors may, without being 
 compelled to pursue the surviving partners in equity, resort to 
 the assets of the deceased partner, because then a partnership 
 debt is several and joint, leaving it to the personal representa- 
 tives of the deceased partner to take proper measures for re- 
 covering what, if anything, shall appear upon the partnership 
 accounts to be due from the surviving partners to the estate 
 of the deceased partner. 2 If the estate of the deceasi <1 
 partner is not sufficient to pay all his separate debts and all 
 the joint debts, joint creditors will have a right of priority 
 
 1 Sea and Life Assurance Society, ex parte Harvey in re Collins, 2 E^. 
 Rep. 27*. - Heward v. Wheatiey, 19 L. T. p. 293.
 
 166 OF PARTNERSHIP. 
 
 over the joint estate, and separate creditors a right of priority 
 over the separate estate. 1 
 
 202. The consequences of bankruptcy of a partnership to 
 the right of the creditors are similar to those arising from 
 death. If the partnership becomes bankrupt, all the joint 
 and all the separate property will vest in the assignees, 
 whether the commissions are joint or several. If a separate 
 commission issue against one partner, his assignees will take 
 all his separate property, and all his interest in the joint pro- 
 perty. If a joint commission issue against all, the assignees 
 will take all the joint property, and all the separate property 
 of each individual partner. In the distribution to creditors, 
 it is necessary to see the nature of the rights of creditors, 
 as to the execution of their debts before bankruptcy. The 
 separate creditor, that is, the creditor of one of the partners 
 on his individual account, will be restrained from resorting in 
 the first instance to his debtor's share of the joint property, 
 and the joint creditor, or the creditor of the partnership, will 
 also be restrained from resorting in the first instance to the 
 separate property of his debtors. But, although the joint 
 creditors and separate creditors are not allowed to come in, 
 pari passu, upon the joint and separate estate of a bankrupt, 
 joint creditors will be admitted to prove under a separate 
 commission of bankruptcy, for the purpose of assenting to or 
 dissenting from the certificate. In Scotland, upon the bank- 
 ruptcy of a partnership, the separate estates of the co-partners 
 are applicable to the payment, pari passu, of the respective 
 separate debts, and of the partnership debts. As the partnership 
 fund is altogether distinct from the separate property of the 
 co-partners, where a partner becomes bankrupt, the creditor of 
 the partnership, in claiming upon the sequestrated estate of a 
 bankrupt partner, must deduct from the amount of his claim 
 the value of his right to draw payment from the company's 
 funds, and he is ranked as a creditor only for the balance. 
 Thus, in a case where the estates of a party carrying on 
 
 1 Gray v. Chiswell, 9 Ves. 118. 3 Kent's Comm. Lect. 43, p. 65. Murray v. 
 Murray, 5 John, 60.
 
 DISSOLUTION WITH HESPECT TO CREDITORS. 167 
 
 business in Scotland, but who was also a partner of an English 
 company, were sequestrated, it was held that a creditor of the 
 company was entitled to be ranked upon his sequestrated 
 estate pari passu with his personal creditors, according to the 
 Scotch law of ranking, though by the law of England com- 
 pany-creditors are not entitled to rank upon the estate of an 
 individual partner, till his personal creditors have been fully 
 paid.' 
 
 Lurik v. Elder, 5 D. 1279, Shaw's Digest, vol. iii.
 
 168 ON CHARTERED AND TRADING COMPANIES. 
 
 CHAPTER III. 
 
 ON CHARTERED AND TRADING COMPANIES. 
 
 Section I.— NATURE AND ORIGIN OF JOINT-STOCK COMPANIES. 
 
 203. A Joint-stock Company is a partnership, and differs 
 from common partnerships only in the large number of 
 partners of whom it is composed, which rendered it essential 
 that the authority of shareholders be somewhat restricted, and 
 special powers be granted to the directors. Joint-stock com- 
 panies are of modern origin ; the ancient companies, such as 
 the East India Company, or the Russia Company, having 
 no joint-stock, each member trading on his own account and 
 risk. Joint-stock companies are formed for the accomplish- 
 ment of undertakings for which individual capital and enterprise 
 are inadequate, and where the risk is beyond that usually 
 incurred in private trading. And, inasmuch as such under- 
 takings are generally of a permanent character, requiring a 
 permanent supply of funds, it became expedient to allow 
 persons to invest and to withdraw their capital in them : 
 hence the transfer of shares. A fatal abuse, however, was 
 soon introduced : the transfer of shares became itself a trade, 
 and Companies were formed for the single object of creating 
 shares, upon which speculative transactions were largely 
 carried on, regardless of the possible results of the undertaking 
 itself; until, after having reached an exorbitant price, the 
 shares were thrown into the market, and the whole loss fell on 
 the unfortunate last purchaser. Of such companies, the South 
 Sea Company was the most conspicuous representative, its
 
 COMPANIES BY LETTERS PATENT. 169 
 
 origin and management being alike founded on deception 
 and fraud, the extent of which all but endangered a national 
 bankruptcy. To administer a sufficient remedy to practices 
 so dangerous to the public good, the Bubble Act was 
 passed, 1 which rendered illegal and void the acting or pre- 
 suming to act as a corporate body, the raising or pretending 
 to raise transferable stock, and the transferring, or pretending 
 to transfer or assign, any share in such stock, without legal 
 authority. But the statute remained a dead letter, and was 
 at last altogether repealed. With the growing extension of 
 commerce, joint-stock companies increased in number and 
 importance ; the powers of the Crown to confer the privileges 
 of incorporation by charter were enlarged ; and the legal 
 position of joint-stock companies was settled by an act of 
 the legislature, establishing a system of registration, together 
 with regulations as to the rights and liabilities of directors 
 and members, and the mode of suing and being sued in 
 the name of the officers of the company. 
 
 Section II.— COMPANIES BY LETTERS PATENT OR CHARTER. 
 
 204. Upon the repeal of the Bubble Act, 2 and with a view 
 to grant certain corporate privileges to trading associations, 
 without limiting in all cases the liability of their members, 
 it was provided that, in any charter of incorporation here- 
 after to be granted, it might be lawful for the Crown to 
 declare that the members of such corporation should be 
 individually liable, in their person and property, for the 
 debts, contracts, and engagements of the corporation, to 
 such extent and subject to such regulations and restric- 
 tions as might be deemed fit and proper. These provisions 
 were afterwards embodied in a special statute, 3 by which her 
 Majesty was authorized to grant the privileges of corporation 
 to any company, by letters patent, although not incorporated. 
 It was thereby provided that all suits and proceedings at law 
 
 1 6 Geo. I. c. IS. § 19. - 6 Geo. IV. c. 91. s 1 Vic. c. 73, § 2.
 
 170 ON CHARTERED AND TRADING COMPANIES. 
 
 or equity, by or against such company, may be commenced 
 and prosecuted in the name of one of two officers appointed to 
 sue and be sued on behalf of such company, and duly regis- 
 tered ; l and that the members of such company shall be indi- 
 vidually liable for the debts, contracts, and engagements of 
 the company, to such extent only per share as shall be declared 
 in the letters patent. 2 
 
 205. In order that the company may be entitled to such 
 privileges, it must be formed by a deed of partnership, which 
 should set forth the name or style of the company, the names 
 of the members thereof, the date of the commencement of 
 the partnership, the business for which the company is formed, 
 and the principal or only place for carrying on such business. 
 The deed must also contain the appointment of two or more 
 officers to sue and be sued on behalf of the company ; and the 
 capital must be divided into a certain number of shares. 3 The 
 company is required, within three months after the date of the 
 letters patent, to make a return to the Enrolment Office of all 
 the particulars set forth in the deed, the number of shares, and 
 the amount for which each shareholder is liable f and no change 
 can be made in the name or style of the partnership during the 
 time it shall be so registered. 6 A return must also be made in 
 case any person should cease to be a member of the company, 
 or in case of the addition of any person thereto, or of the change 
 of any member by marriage or otherwise. 6 On the transfer 
 of any share in the company, a notice in writing must be 
 sent to the company. 7 The returns, as required by the act, 
 are to be made in the Enrolment Offices of the Court of 
 Chancery of England and Ireland, and in the General Re- 
 gister Office in Edinburgh, for Scotland, where such returns 
 are enrolled in alphabetical order ; and any person is at liberty 
 to inspect such books and index, and, on payment of certain 
 fees, to require certified copies of the returns, which certified 
 copies are received as evidence in all the courts. 6 
 
 1 1 Vic. c. 73, § 3. 2 Ibid. § 4. a Ibid. § 5. 
 
 * Ibid. § 6. 5 Ibid. § 7. • Ibid. § 8. 
 
 7 Ibid. §§ 9, 10. s Ibid. §§ 13 to 18.
 
 COMPANIES BY LETTERS PATENT. 171 
 
 206. No person becoming a member of such companies, by 
 the transferring of any shares, can be entitled to any propor- 
 tion of the profits, until he is able to prove the transfer by the 
 registered return; 1 and no person ceasing to be a member, 
 by the transferring of any share, or by death or otherwise, 
 ceases to be liable, until a return of the transfer or other fact 
 be duly registered. 2 Any suit or proceedings commenced in the 
 name of the officers, or of some member of the company, are 
 not abated or prejudiced by the death, or removal, or resig- 
 nation of such officer, or by any change in the members of 
 such company. 3 All judgments obtained against such officers 
 or members have the same force against the property and 
 effects of the company, and also against the person, property, 
 and effects of the individual members, as if all such had been 
 parties to the suit ; but where the liability has been limited 
 by charter, no execution can be issued against any individual 
 member for a greater sum than the residue, if any, of the 
 amounts for which such individual is liable in respect to the 
 shares he held in the company, after deducting the amount 
 which he shall have advanced or paid. 4 
 
 207. The bankruptcy or insolvency of any officer or mem- 
 ber of such company is not construed to be the bankruptcy 
 of the company ; and the property and effects of the company, 
 as well as of the individual members, as the case may be, 
 remain liable to execution or diligence in the same manner 
 as if such bankruptcy had not taken place. 6 In all cases of 
 summons or notice to be served upon the company, it is 
 sufficient to serve it on the clerk of the company, or at the 
 head office for the time being, or to any agent of such com- 
 pany ; and any summons by the company may be given in 
 writing by the clerk, secretary, or attorney for the time being, 
 without being required to be under the common seal of the 
 company. In case of dissolution of such company, it 
 is nevertheless considered as subsisting, so long as any 
 matter relating to the company remains unsettled, and for the 
 purpose of winding up the concern ; and it may sue and be 
 
 09 
 
 ' 1 Vic. c. 73, § 20. * Ibid. § 21. 3 Ibid. § 
 
 4 Ibid. § 24. * Ibid. § 25. 6 Ibid. §§ 26, 27.
 
 271 ON CHARTERED AND TRADING COMPANIES. 
 
 sued till such winding up is completed. 1 The duration of 
 charters of incorporation may be limited for any term or 
 number of years, or for any other period whatsoever ; and in 
 any charter of incorporation, the corporation thereby formed, 
 and the officers and members thereof, may be made subject to 
 the liabilities imposed on or required from any unincorporated 
 company, or its officers or members ; and such charter may 
 also confer on such corporation, or its members and officers, 
 all the powers or privileges which may be conferred on any 
 unincorporated company, or its officers or members. 2 
 
 Section III.— PROGRESS OF JOINT-STOCK COMPANIES. 
 
 208. The development of commercial enterprise, which 
 received of late an unprecedented stimulus by the progress 
 of discoveries, the useful application of inventions, and the 
 manifold adaptations of scientific processes, and also by the 
 extension of intercourse with regions hitherto separated from 
 the European family, cannot be better illustrated than by a 
 description of the numerous joint-stock companies which were 
 formed in the United Kingdom during the last ten years. 
 During this period, we have experienced a succession of 
 years of much commercial excitement ; differing materially 
 from any antecedent ones, in its being directed to the promo- 
 tion of numerous undertakings, which have exercised a powerful 
 influence in promoting the progress of civilization, the improve- 
 ment of morals, and additions to individual comfort. When 
 we consider the extension of life and fire insurance, and their 
 wonderful influence in eliciting habits of providence and fore- 
 sight ; and of railways, which have effected so material an 
 alteration in the habits of the people, and have rendered the 
 metropolis of almost every country easily accessible to all 
 nations ; the introduction of gas-lighting, one of the greatest 
 economical improvements of the present century; and the 
 recent important gold discoveries, which are likely to produce 
 a great alteration in the value of the precious metals ; together 
 
 1 1 Vic. c. 73, § 28. 2 Ibid. § 29. .
 
 PROGRESS OF JOINT-STOCK COMPANIES. 17 
 
 with the unprecedented amount of capital embarked in all 
 kinds of public undertakings, it will readily be acknowledged 
 that the decennium which has just elapsed forms one of the 
 most momentous epochs in the annals of commercial history. 
 The annexed tables show, first, the number of joint-stock com- 
 panies registered according to the statute of 1844 ; the number 
 of those provisionally registered — that is, of those projected, 
 and for which the promoters have gone through the pre- 
 liminaries required by the statute ; and the number of those 
 companies completely registered, in each year, from 1844 to 
 1853, both inclusive ; and secondly, the amount of capital of 
 each kind of companies. 
 
 209. The tables indicate also a large disproportion between 
 the number of railway companies provisionally registered and 
 those completely registered, viz. 1,534 to 26 : this is, however, 
 partly owing to the circumstance that railway companies, by 
 obtaining a special act of parliament, do not require to be 
 completely registered ; and therefore it does not appear, from 
 the register of joint-stock companies, how many projected 
 railway companies were carried through, and obtained an act 
 of parliament. In the other cases, the difference between the 
 number of companies completely registered and those provi- 
 sionally registered, indicates generally the number of com- 
 panies which proved abortive, or were not proceeded with 
 after provisional registration ; from which it is evident, that 
 a good proportion of the schemes which are constantly being 
 projected die still-born. As to capital, taking the companies 
 collectively, it seems that one-third of them were formed with 
 a capital not exceeding 5,000/. ; one-ninth, from 5,000?. to 
 10,000/. ; one-fourth, with a capital from 10,000/. to 50,000/.; 
 one-ninth, from 50,000/. to 100,000/. ; and one-ninth, from 
 100,000/. to 500,000/. ; and only a small proportion 500,000/. 
 and upwards. The table of the provisionally and completely 
 registered companies, and that compared to the capital of 
 such companies, agree in their totals; but there is some 
 difference in the number of each kind, owing to the difficulty 
 of classification.
 
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 176 ON CHARTERED AND TRADING COMPANIES. 
 
 Section IV.— JOINT-STOCK COMPANIES ACT. 
 A. — Registration of Joint-Stock Companies. 
 
 210. The Joint-Stock Companies Act has for its object 
 the registration, incorporation, and regulation of joint-stock 
 companies ; it applies to all joint-stock companies for any- 
 commercial purpose, or for the purpose of assurance, and to 
 every partnership, established in England and Ireland, which 
 at its formation, or by subsequent admission, consists of 
 more than twenty-five members, the capital of which is divided 
 into shares, transferable without the express consent of all the 
 co-partners. 1 The act, however, does not apply to banking 
 companies, schools, literary institutions, and friendly societies, 
 except such as make assurances for lives to an amount 
 exceeding 2007. upon one life, loan societies, and benefit 
 building societies, which are regulated by special statutes : 2 
 nor does it extend to mining companies on the cost book 
 principle, 3 nor to Irish anonymous partnerships, 4 nor to any 
 companies for executing bridges, roads, railways, canals, &c. 
 «fec, nor to any companies incorporated by statute or charter, 
 or any companies authorized by statute or letters patent to sue 
 and be sued in the name of some officer or person. 5 
 
 B. — Provisional Registration. 
 
 211. Before any prospectus, handbill, or advertisement can 
 be issued for the purpose of forming an association coming 
 within the definition of a joint-stock company, the promoters 
 must make a provisional registration of, at least, the proposed 
 name and business of the intended company, and the names 
 and addresses of the promoters of it. 6 Such duty devolves on 
 the promoters themselves ; except, however, where they have 
 appointed an attorney or solicitor for the company, in which 
 case it is his duty to effect such a registration, and he becomes 
 
 1 7 & 8 Vict. c. 110, § 2. 2 Ibid. § 2. * ibid. § 63. 
 
 " Ibid. § 64. 5 Ibid. § 2. 6 Ibid. § 2.
 
 LIABILITY OF PROMOTERS OF COMPANIES. 177 
 
 liable for the neglect of it. 1 It is also prescribed thai no 
 money shall he taken or deposited on the allotment of shun-, 
 or on scrip, and that no contract shall he made in the name of 
 the company, before a certificate of complete registration has 
 been obtained. 2 A company provisionally registered is entitled 
 to act provisionally for twelve months, but not for any longer 
 period, unless the certificate is renewed. During the time of 
 provisional registration, the promoters of a company are 
 entitled to assume the name of the intended company, but 
 coupled with the words "registered provisionally;" to open 
 subscription lists ; to allot shares, and receive deposits at a 
 rate not exceeding 10s. per cent, on the amount of every 
 share ; and, in the case of companies for public works, to 
 receive such further sums per cent, on the amount of the 
 shares as may be required by the standing orders of the 
 houses of parliament ; and to perform any other acts that are 
 necessary for constituting the company, or for obtaining a 
 charter or act of parliament ; but not to make calls, nor to 
 purchase, contract, or hold lands, nor to contract for any ser- 
 vice, nor for the supply of any stores, except such as are 
 necessary for the establishing of the company. 3 Provisionally 
 registered companies are also required to make periodical 
 returns of the place of business or of meeting, the names of the 
 committee or directors, of the officers and subscribers, the pro- 
 posed capital, the number of shares into which it is divided, 
 and the amount of each share, and every change in any of the 
 above particulars as it takes place : 4 such returns to be made 
 by the promoters of the company, or by their attorney or 
 solicitor. 
 
 C— Liability of Promoters of Companies Provisionally Registered. 
 
 212. The liability of promoters of companies extends, first, 
 to all the penalties imposed by the act for failure of making 
 the requisite returns. The promoters of a company are all 
 
 1 7 & 8 Vict. c. 110, § 6. » i bidi § 24, 8 Ibid< g 03 
 
 4 10 & 11 Vict. c. 78, §§5, 6. 
 
 N
 
 178 ON CHARTERED AND TRADING COMPANIES. 
 
 those who act in the formation of it as provisional committee- 
 men ; but it is not sufficient that the name be allowed to be 
 placed on the provisional committee, and that it be inserted 
 and published in a prospectus, to charge a person with liability 
 for contracts entered into by the other members of it : if, how- 
 ever, he attends a meeting of the committee, or does any act in 
 relation to the proposed company, he then becomes liable for 
 goods supplied after the date of such consent. The principles 
 which govern the liability of provisional committee-men are as 
 follow: — First, whoever acts as promoter or member of the 
 provisional committee of any company, is liable on all con- 
 tracts entered into by himself, or by any third party, under an 
 authority, special or general, from him ; Secondly, such autho- 
 rity will not be presumed from the mere fact of his having 
 consented to act as a promoter or member of the provisional 
 committee, but must be established by evidence of such act on 
 his part as will be held to constitute an authority, special or 
 general ; and, Thirdly, that if he has, by words or conduct, 
 represented himself as having given such authority, and if the 
 contract has been truly entered into on the faith of his repre- 
 sentation, he will be stopped from disputing the truth of it, 
 and will be liable as if the authority had been directly 
 established. 1 
 
 213. The subscribers to a joint-stock company are under- 
 stood to consent to take shares in the concern, provided the 
 terms of the prospectus shall be fulfilled : therefore, if the pro- 
 jected operation should prove abortive, the subscribers would 
 be entitled to have back the whole of the money advanced, 
 and the expenses incurred must be supported by the promoters 
 of the company, unless what was promised in the prospectus 
 was actually carried out. A railway company was pro- 
 visionally registered, and the prospectus was issued, which 
 stated the proposed capital to be 2,000,000/. in 80,000 shares 
 of 25/. each. Mrs. Walstab applied to the provisional com- 
 mittee for seventy shares, or any less number they might 
 
 1 Taylor on Joint-Stock Companies.
 
 LIABILITY OF PBOMOTERS OF COMPANIES. 179 
 
 allot to her, agreeing to pay the deposit of 21. 12s. Qd. pel 
 share, and to sign the parliamentary contract and subscriber's 
 agreement when required. To this letter she received an 
 answer, signed by the secretary, stating that the committee of 
 management had allotted to her thirty shares, and requesting 
 her to pay the deposit of 27. 12s. Qd. per share, amounting to 
 787. 15s., into a bank, on or before a day mentioned. Mrs. 
 Walstab paid the deposit of 787. 15s. and received the 
 banker's receipt for the same. She afterwards presented the 
 receipt to the company, and made several fruitless applications 
 to the committee for scrip ; and at length was informed thai 
 the directors had come to the resolution not to issue any scrip, 
 and that a greater part of the deposit had been expended, and 
 the balance would be rateably divided. It appeared that the 
 directors, finding it impossible to go to parliament in the 
 ensuing session, had determined not to issue any scrip, and 
 that of the entire number of 80,000 shares, 70,000 were 
 allotted, but deposits were paid on 4,0007. only, producing 
 altogether the sum of 10,5007. Mrs. Walstab, failing to get 
 scrip or her money again, brought an action against the 
 directors ; and it was decided that, the concern having been 
 abandoned, the directors could not claim to retain that which 
 was paid for a specific purpose, and that she was entitled to 
 recover back the whole sum so paid by her. 1 If, however, it 
 be shown that, although the original project proved abortive, 
 or the managers carry on the undertaking on a different 
 footing, or with a less capital, the subscriber has acquiesced 
 in their so doing, or authorized the directors to proceed in 
 the management of the concern, then he would become 
 answerable for their future contract. 2 As regards the liability 
 of provisional committee-men, inter se, for any work or service 
 done by any one member of the provisional committee, no 
 liability would be incurred by the other members, as they all 
 stand in the capacity of joint adventurers, and all are pre- 
 
 1 Walstab v. Spottiswoode, 15 M. & W. 501. 
 
 2 Per Lord Abinger, C. B. Pitchford v. Davis, 5 M. & V. 2. 
 
 N 2
 
 180 ON CHARTERED AND TRADING COMPANIES. 
 
 sumcd to act, or to contribute their labour, for the advance- 
 ment of the concern in which they are jointly interested. So 
 in the case of a railway company, a surveyor, who became 
 subsequently a shareholder in the company, could not main- 
 tain an action against the co-projectors for work done in 
 furtherance of the undertaking. 1 
 
 214. The managers of a projected company are bound to 
 render to the subscribers an account of the monies received, 
 and the expenses incurred, 2 and to apply the funds in their 
 hands to the liquidation of the liabilities of the company; the 
 managers being liable for any work done or money given by 
 any subscribers on behalf of the company. 3 But while the 
 promoters are bound to do all that on their part was to be done, 
 they have also a right to sue the subscribers for the sum they 
 have agreed to subscribe, or for the deposits which they were 
 to make on the allotment of the shares, 4 provided, however, 
 the directors acted bona fide, and the contract for the allotment 
 of shares was complete. In order to prevent the fraudulent 
 system of companies pretending to be patronised, or directed, 
 or managed, by eminent or opulent persons, any person 
 making such false pretences, knowing the same to be false, 
 in any advertisement or other paper, whether printed or 
 written, and whether published in any newspaper or hand- 
 bill, or placard or circular, a forfeit of a sum not exceeding 
 10/. is incurred for every such offence. 5 And wherever 
 the directors sanction the publication of false statements, 
 either concerning the amount of the capital subscribed, or the 
 number of shares allotted, or as to the actual condition of the 
 company, they could not support an action for the payment of 
 deposits, against those who were induced to become share- 
 holders under such false impression. Until the company has 
 been completely registered, no shares can be sold or mort- 
 gaged. 
 
 1 Parkyn v. Fry, 2 C. & P. 311. Holmes v. Higgins, 1 B. & C. 74. 
 
 2 Cooper v. Webb, 15 Sim. 454. 3 Colley v. Smith, 2 M. & Rob. 9(5. 
 
 4 Duke v. Dive, 1 Exeh. 36. Duke v. Forbes, 1 Exch 35G. 
 
 5 7 & 8 Vict. c. 110, § 65.
 
 COMPLETE REGISTRATION. 181 
 
 jy.— Complete Registration. 
 
 215. A provisionally registered company, to obtain a certi- 
 ficate of complete registration and its attendant privileges, 
 must be formed by deed of settlement, signed by at least one- 
 fourth in number of the subscribers, and who hold one- 
 fourth of the maximum number of shares in the capital, and 
 certified by two directors. The deed must contain the name 
 and business of the company, the principal or only place of 
 business, and every branch office ; the amount of the proposed 
 capital, and the means by which it is to be raised ; the amount 
 of money to be raised by loan ; the total amount of capital 
 subscribed, or proposed to be subscribed, at the date of such 
 deed; the division of the capital, if any, into equal shares, and 
 the total number of such shares, distinguished by a separate 
 number in a regular series; the name, occupation, and residence 
 of the subscribers ; the number of shares which each subscriber 
 holds, and the distinctive number thereof; the names of 
 directors or trustees, and auditors ; the duration of the com- 
 pany, and the mode, or condition, of its dissolution : the deed 
 must also contain an agreement, on the part of every share- 
 holder, with a trustee on the part of the company, to pay up 
 the instalments on the shares taken by such shareholder, and 
 to perform the several engagements contained in the deed. 1 
 
 216. The effect of complete registration is to constitute the 
 company incorporated from the date of the certificate, for the 
 purpose of carrying on the business, and of suing and being 
 sued, and taking and holding the property of the company, 
 but not to restrict in any wise the liability of the company. 
 By such complete registration the company is empowered to 
 use the registered name of the company, to have a common 
 seal, on which must be inscribed the name of the company, 
 adding thereto "registered;" to sue and be sued by their 
 registered name upon or by any person, whether a member of 
 the company or not; to enter into any contracts for the execu- 
 
 1 7 & 8 Vict, c 110, § 7.
 
 182 ON CHARTERED AND TRADING COMPANIES. 
 
 tion of the works, and lor the supply of stores ; to purchase and 
 to hold land in the name of the company or of the trustees ; to 
 issue certificates of shares ; to receive instalments from sub- 
 scribers for any shares not paid up; to borrow or to raise 
 money within the prescribed limitations ; to declare dividends 
 out of profits of the concern ; to hold general meetings ; to make 
 bye-laws, and to perform all other acts necessary for carrying 
 into effect the purposes of the company. All bye-laws must 
 be printed and circulated with the seal of the company, and 
 a copy thereof must be given to every officer of the company, 
 and to every shareholder who may require the same : the bye- 
 laws, having the seal of the registrar of the joint-stock com- 
 panies, are received as evidence in court. 1 The company is 
 also empowered to appoint a number of directors, not less than 
 three, for a period not greater than five years; and also to 
 appoint or remove one or more of the auditors, or any other 
 officer, subject, however, to the provisions of the Joint-Stock 
 Companies Act, or the deed of settlement. 2 No shareholder is 
 entitled to receive any dividends or profits, until he has 
 executed the deed of settlement, and paid all instalments or 
 calls due from him, and the same shall have been duly regis- 
 tered. 3 
 
 E. — A ccounts. 
 
 217. The books of the company are to be kept at the prin- 
 cipal or only place of business, and at all reasonable times they 
 are to be open to the inspection of any shareholder; subject to 
 the provisions of the deed of settlement, or of any bye-law. 4 
 Fourteen days before the period at which the accounts are to 
 be delivered to the auditors, the directors must cause the 
 books to be balanced, and a full and fair balance-sheet to be 
 made up; the same to be examined and signed by at least 
 three directors and the chairman, and entered in the books of 
 the company. 5 The balance-sheet must be produced at the 
 
 1 7 & 8 Vict. c. 110, §§ -17, 48. a Ibid. § 25. :i Ibid. § 26. 
 
 i Ibid. § 33. 5 Ibid. § 35.
 
 BIGHTS OF SHAEEHOLDEES. 183 
 
 ordinary meetings of the shareholders, and during fourteen 
 days before and one month after; and at any other time, by the 
 authority of three directors, every shareholder may inspect the 
 books and balance-sheet of the company, and take copies and 
 extracts therefrom. 1 Every joint-stock company completely 
 registered must annually appoint one or more auditors, and 
 return the names of such to the registrar of joint-stock compa- 
 nies ; and if such appointment be not made, then, on the appli- 
 cation of any shareholder, the Board of Trade may proceed to 
 appoint such auditor. 2 Twenty-eight days before the ensuing 
 ordinary meetings, the accounts must be delivered for ex- 
 amination to the auditors, who have power at all reasonable 
 times throughout the year to inspect the books of the company." 
 Within fourteen days after the receipt of such balance-sheet and 
 accounts, the auditors must either confirm the accounts, and 
 report generally thereon, or, if they do not see proper to confirm 
 such accounts, report specially, and deliver the accounts and 
 balance-sheet to the directors. 4 Ten days before the ordinary 
 meetings of the company, a printed copy of the balance-sheet 
 and auditors' report must be sent to every shareholder, and 
 fourteen days after such meeting, the directors must return a 
 copy of the same to the registrar of joint-stock companies, 
 where it is to be registered and filed. 
 
 F. — Rights of Shareholders. 
 
 218. The directors of every joint-stock company registered, 
 must cause a book to be kept called the register of share- 
 holders, wherein there shall be entered from time to time the 
 names and addresses of all the shareholders, and also the 
 number of shares to which such shall be respectively entitled ; 6 
 such register being left open to the inspection of any share- 
 holder. Under demand of the holder of any shares, the com- 
 pany may cause a certificate of proprietorship of such shares to 
 be delivered to such shareholder, which certificate shall bear 
 
 1 7 & S Vict. c. 110, §§ 36, 37. s Ibid. § 38. 3 Ibid. §§ 39, 40. 
 
 4 Ibid. § 41. 5 Ibid. §§ 42, 43. " Ibid. § 4P.
 
 184 ON CHARTERED AND TRADING COMPANIES. 
 
 the common seal of the company; and the same is admitted in 
 all courts as prima facie* evidence of the title of the shareholder 
 to the share. Where the certificate is worn out, or damaged, 
 or lost, or destroyed, upon proof thereof, a new certificate may 
 be obtained. 2 Every shareholder may sell or transfer his 
 share, by deed duly stamped ; such deed to be entered in a 
 book called the register of transfer, and the entry is to be 
 endorsed on the instrument of transfer : the purchaser not 
 being entitled to the profits of the company, or to vote in respect 
 of the shares, until such instrument shall have been produced 
 at the office of the company ; but no transfer can be made, 
 except by provisions to the contrary in the deed of settlement, 
 where the shareholder has not paid up the full amount due to 
 the company. 8 The company may sue any shareholder for 
 the payment of any instalment of capital due upon any share ; 
 and the same, together with interest at the rate of five per 
 cent, per annum, may be recovered, in an action of debt, in 
 any court. 4 
 
 G. — Contracts. 
 
 219. The officers of the company may be authorized by 
 general bye-laws to enter into any contract for any articles 
 worth less than 50?., or for any service, the period of which 
 does not exceed six months, and a consideration for which 
 does not exceed 501. ; but all other contracts must be in 
 writing, and signed by two at least of the directors of the 
 company, and sealed with the common seal thereof, or signed 
 by one officer of the company expressly authorized by some 
 minute or resolution of the board of directors applying to the 
 particular case ; and in the absence of such requisites the con- 
 tract would be void, except as against the company in whose 
 behalf it shall be made. 5 With regard to bills of exchange 
 and promissory notes, if the directors of the company, by 
 deed of settlement, or by bye-laws, be authorized to issue or 
 
 1 7 & S Vict. c. 110, §§ 50—52. 2 Ibid. § 53. 3 Ibid. § 54. 
 
 4 Ibid. § 55. b Ibid. § U.
 
 LIABILITY OF SHAREHOLDERS. 1 5 
 
 accept bills or notes, then such bills or notes shall be signed, 
 ami also endorsed, by two of the directors in behalf of the 
 company, and countersigned by the secretary or other ap- 
 pointed officer ; but no personal liability will devolve thereby 
 on such secretary or directors, except as shareholders of the 
 company ; and the company on whose account bills or notes 
 are accepted or endorsed may sue and be sued thereon, in the 
 same manner as in the case of any contract entered under 
 their common seal. 1 All deeds and instruments bearing the 
 seal of the company, must be signed by at least two of the 
 directors. 2 
 
 H. — Liability of Shareholders. 
 
 220. Every judgment against any company completely 
 registered — except such as are incorporated by act of parlia- 
 ment or charter — or companies, the liability of the members of 
 which is restricted, may be enforced, not only against the 
 property of the company, but against the personal property 
 and effects of any shareholder for the time being, or any 
 former shareholder of the company, in his individual capacity, 
 until such judgment shall be fully satisfied ; provided such 
 former shareholder was a shareholder of the company at the 
 time when the contract or engagement was entered into, or 
 became a shareholder during the time such contract was 
 unexecuted, or was a shareholder at the time of the judg- 
 ment being obtained. In no case, however, can execution 
 be issued on such judgment, against the person, property, 
 or effects of any former shareholder, after the expiration of 
 three years next after the person sought to be charged shall 
 have ceased to be a shareholder of the company. 3 In Scot- 
 land, persons who were members of a joint-stock company 
 with transferable shares, at the time when a particular debt or 
 engagement was contracted by the company, and were person- 
 ally liable for such debt or engagement, continue liable to 
 execution in respect of that debt or engagement indefinitely, 
 
 1 7 & 8 Vict. c. 110, § 45. a Ibid. § 16. 3 Ibid. § 66.
 
 186 ON CHARTERED AND TRADING COMPANIES. 
 
 though they cease to be members by transfer of their shares. 1 
 Every person against whom or against whose property execu- 
 tion shall have been issued, is entitled to recover against the 
 company all loss and damages ; and, after due diligence used 
 against the property of the company, he will be entitled to 
 contribution for so much of such loss as shall remain unsatis- 
 fied, from the other shareholders ; and such contribution may 
 be recovered from such persons, in like manner as contribu- 
 tions in ordinary cases of partnerships. 2 
 
 Section V.— COMPANIES FOR PUBLIC WORKS. 
 
 221. The provisions usually inserted in the special statutes 
 which govern the formation of companies incorporated for 
 carrying on undertakings of a public nature, are now embo- 
 died into a comprehensive statute, under the title of " Com- 
 panies Clauses Consolidation Act." 3 We shall briefly notice 
 the principal features of this act, omitting those provisions 
 which are found also in the Joint-Stock Companies Act. 
 All shares in public undertakings, such as for the purchase 
 of land to make a canal, though the profits arise out of 
 land, the shares are held to be personal estate, and trans- 
 missible as such. 4 The capital is to be divided into shares, 
 and the transfer of shares must be by deed, duly stamped 
 and registered. When the interest on any shares is trans- 
 mitted by other means than by a transfer, the transmission 
 must be authenticated, as will be more fully described in the 
 case of shares in banking companies. 5 With respect to the 
 remedies of creditors of the company against the share- 
 holders, where, on any execution at law or equity, the 
 property or effects of the company are not found sufficient, 
 the creditors may obtain execution against any of the share- 
 
 1 See Queries of the Mercantile Law Commission, p. 33. 
 
 2 7 & 8 Vict. c. 110, § 67. 
 
 3 8 Vict. c. 16. 
 
 4 Ibid. § 5. Ex parte Lancaster Canal Con^any, 1 D. & C. 411. 
 i See 7 & 8 Vict. c. 113, § 26, p. 205.
 
 COMPANIES FOB PUBLIC WOBKS. l s 7 
 
 holders, only to the extent of their shares respectively, in 
 the capital of the company not then paid up. 1 
 
 222. If the company be authorized by special act to borrow 
 money on mortgage or bond, they may do so ; and if the 
 money be paid off, the company may borrow again the 
 amount, and so from time to time, under the authority of 
 a general meeting ; unless the money be reborrowed in order 
 to pay off any existing mortgage or bond. Every mortgage 
 or bond for securing money borrowed by the company must 
 be by deed, under the common seal of the company, duly 
 stamped, and setting forth the consideration. The mortgagees 
 or obligees will be entitled, one with another, to their respec- 
 tive proportions of the tolls, sums, and premises, comprised in 
 such mortgage, and of the future calls payable by the share- 
 holders, if comprised therein, according to their respective 
 sums in such mortgages, without any preference one above 
 another by reason of the priority of the date of such mortgage, 
 or of the meeting at which the same was authorized. The 
 company will not be precluded by such mortgage from 
 receiving, and applying to the purposes of the company, any 
 calls to be made by them. 2 A register of mortgages and 
 bonds must be kept by the secretary, to be open for the 
 perusal of any shareholder, or of any mortgagee or bond 
 creditor of the company, or of any person interested in such 
 mortgage or bond. 
 
 223. Mortgages and bonds may be transferred, but the 
 transfer must be by deed, duly stamped and registered. The 
 interest upon the money borrowed upon such mortgage or 
 bond shall be paid at the periods appointed, or otherwise 
 half-yearly, to the parties entitled thereto, and in preference 
 to any dividend payable to the shareholders of the company. 
 The company may fix a period for the repayment of the 
 money so borrowed ; but where no time is fixed, the party 
 entitled to the mortgage or bond may, at the expiration of 
 twelvemonths, demand payment of the principal and interest; 
 
 1 8 Vict. c. 16, § 36, : [bid. §§ J2, 43.
 
 188 ON CHARTERED AND TRADING COMPANIES. 
 
 tind the company may at any time pay off the money bor- 
 rowed, on giving the like notice. 1 The company has also 
 power to convert loan into capital, by creating new shares of 
 the company, on the authority ot a general meeting ; the new 
 shares to be considered as part of the general capital, and 
 subject to the same provisions. If at the time of such aug- 
 mentation of capital taking place, by the creation of new 
 shares, the old shares be at a premium, then the new shares 
 shall be offered to the shareholders. After the lapse of one 
 month after the offer of such new shares, if the shareholders 
 do not accept them, they may be disposed of by the directors. 
 If the old shares are not at a premium, the new shares may 
 be issued as the company shall think fit. 2 The company 
 has also power to consolidate shares, with the consent of 
 three-fifths of the votes of the shareholders, into a general 
 capital stock, to be divided among the shareholders according 
 to their respective interest therein. The holders of such 
 stock may thenceforth transfer their respective interest in it, 
 causing the same to be regularly registered. They shall also be 
 entitled to participate in the dividends and profits of the com- 
 pany, and to all other privileges and advantages. It is also 
 provided that all the money raised by the company, whether 
 by subscriptions of the shareholders, by loan, or otherwise, shall 
 be applied, firstly, in paying the costs and expenses incurred 
 in obtaining the special act, and all expenses incident thereto, 
 and, secondly, in carrying the purposes of the company into 
 execution. 3 
 
 224. Previously to every ordinary meeting, at which a 
 dividend is intended to be declared, the directors must cause 
 a scheme to be prepared and submitted to the ordinary 
 meeting, showing the profits, if any, of the company for the 
 current period since the preceding ordinary meeting at which 
 a dividend was declared, and apportioning the same among 
 the shareholders ; and at such meeting a dividend may be 
 declared, according to such scheme. The company cannot 
 
 1 8 Vict, c 16, §§ 50, 51. 2 Ibid. §s 56—59. 3 Ibid. § 65.
 
 .MIXING COMPANIES UPON THE COST-BOOK SYSTEM. 189 
 
 make any dividend whereby the capital stock will he in any 
 degree reduced. Before apportioning the profits to be divided 
 among the shareholders, the directors may set aside such 
 sum as they may think proper to meet contingencies, or for 
 enlarging, repairing, or improving the works connected with 
 the undertaking, or any part thereof, and may divide the 
 balance among the shareholders. No dividend shall be paid 
 in respect of any share, until all calls then due in respect of 
 that and every other share held by the person to whom such 
 dividend may be payable, shall have been paid. 1 
 
 Section VI.— OF MINING COMPANIES, AND COMPANIES 
 UPON THE COST-BOOK SYSTEM. 
 
 225. Mining companies may be formed as ordinary joint- 
 stock companies, or on the cost-book principle. The former 
 are regulated by the Joint-Stock Companies Kegistration 
 Act ; the latter principally by a custom prevailing in Corn- 
 wall. The cost-book principle of mining has been defined to 
 be, " a mining partnership according to the custom of the 
 stannaries, under which each shareholder is at liberty to 
 transfer his shares to any purchaser without the consent of 
 his co-partners, and to determine his liability at any time 
 by relinquishing his share and interest in the concern, upon 
 giving in either case notice to the purser of the transfer or 
 relinquishment, and requiring him to enter it in the cost- 
 book ; under which, also, each shareholder has complete access 
 to all the documents and proceedings of the adventure, the 
 right of controlling the outlay by his vote at the mine meet- 
 ings in proportion to his shares ; and is protected against 
 any risk from involuntary expenditure, by the rule that these 
 undertakings cannot be carried on upon any general credit, 
 but that all accounts must be made up and all expenditure 
 passed at the two-monthly meetings of the partnership, and 
 
 * 8 Vict. c. 16, §§ 120—123.
 
 190 <)N CHARTERED AND TRADING COMPANIES. 
 
 calls then made upon the shareholders to defray their propor- 
 tionate share of such expenditure." 1 
 
 226. Although this mode of forming companies for the 
 purpose of exploring mines, is entirely founded on a local 
 custom prevailing in Cornwall, certain rules or regulations 
 have been generally adhered to for the convenience of such 
 adventurers who may not be familiar with it. The cost-book 
 contains the names of all the shareholders, and the number of 
 shares held by each, and is signed either by all the share- 
 holders, or by the purser as their agent. The purser keeps 
 an account with the adventurers of the disbursements and 
 receipts of the mines, and a monthly balance of account is 
 struck. The shareholders in a mining company, under the 
 cost-book system, are liable for all the debts incurred ; and it 
 differs in this respect from common partnerships only in the 
 power of the partner to withdraw at his pleasure, at any of 
 the bi-monthly meetings. Again, the shareholders may, like 
 part-owners in ships, transfer their shares without the con- 
 sent of the co-partners, it being sufficient to effect such 
 transfer, by entering in the cost-book a simple statement 
 that A. B. transferred his share to C. I), for a valuable con- 
 sideration. Such partnerships are, doubtless, formed ex- 
 clusively by the custom of Cornwall ; yet there does not 
 appear any legal hindrance to their being established else- 
 where than in Cornwall. In consequence of the power of 
 every shareholder to relinquish his share whenever he thinks 
 proper, upon giving notice to the purser at the two-monthly 
 meetings, he ceases then to have any further responsibility for 
 the debts of the concern, and those who supply goods or 
 materials must look to those who are shareholders at that 
 time. 
 
 227. The following cases illustrate how the right of share- 
 holders to withdraw their interest from such companies at any 
 time, by giving notice to the purser, affects the liability of share- 
 holders as among themselves, and with respect to creditors. 
 
 1 Child's Letter to R. B. Crowder, Esq. M.P. p. 1.
 
 MINING COMPANIES UPON THE COST-BOOK SYSTEM. li»l 
 
 A company was formed in Wales, for working a lead mine on 
 the cost-book principle, called " The Pennant and Craigweii 
 Consolidated Lead Mining Company." The cost-Look con- 
 tained the rules of the association, and the 24th was as 
 follows : — " That any shareholder may determine his or her 
 responsibility or liability, with respect to the affairs of these 
 mines, upon his or her giving notice in writing to the purser of 
 the company for the time being, of his or her desire of retiring 
 from the company, and also upon depositing with the said 
 purser the transfer of the shares, or those held by him or her, 
 and signing a relinquishment of all claims or demands on the 
 company in respect of such share or shares." The Rev. Joseph 
 Fenn became a holder of ninety-eight shares in the company, 
 on the 17th April, 1848, and so continued down to the 4th 
 September, 1851, but he did not sign the cost-book. The 
 first call upon the shares of the company was made on the 
 3d April, 1848, of 8s. per share, authorized by a meeting of 
 shareholders held on that day. By an account laid before a 
 quarterly meeting of the shareholders, held on the 5th June, 
 
 1850, it appeared that the assets were 950?. 13s. Id., and the 
 liabilities 2,101Z. 3s. Hid. ; at the same meeting a call of 
 10s. per share was made ; and on the 8th January, 1851, 
 a further call of 5s. per share was made. Mr. Fenn received 
 the report of the meeting of the 5th June, 1850, with the 
 account, and the report of the meeting of the 8th January, 
 
 1851, and paid both calls. A special general meeting of the 
 shareholders was appointed to be held on the 2Gth August, 
 1851, and a circular was addressed to Mr. Fenn. showing the 
 financial state of the company. The meeting was held on the 
 26th August, and was then adjourned to the 5th September, 
 and notice of the adjournment given to Mr. Fenn. On the 
 4th September, 1851, the day before the adjourned meeting, 
 Mr. Fenn wrote to the purser of the company a letter of that 
 date, saying, " I beg to inform you, it is my desire to retire 
 from the Pennant and Craigweir Consolidated Lead Mining 
 Company, and thereby relinquish all right and title to the 
 parts or shares standing in my name on the cost-book of the
 
 192 ON CHARTERED AND TRADING COMPANIES. 
 
 company." The purser objected to the form of relinquish- 
 ment, and wanted him to sign a new form, whereby lie 
 should consent to bear his share of the liabilities incurred to 
 the end of the present month ; but Mr. Fenn refused to sign 
 the new form. The company was ordered to be wound up on 
 the 4th September, 1851, when the debts amounted to 1,730/., 
 for rent, money due to miners, &c. The name of Mr. Fenn 
 having been placed on the list of contributories, the question 
 turned as to the liability of Mr. Fenn. The Master held that 
 Mr. Fenn was still liable as a contributory, in respect of the 
 debts and liabilities of the company existing at the date of 
 his letter of relinquishment ; but, on appeal to the Lords 
 Justices, Mr. Fenn's name was removed from the contri- 
 butories. This judgment seems opposed to the received 
 principle, that the utmost that such relinquishment as Mr. 
 Fenn had sent can effect would be a release of all future debts, 
 while he must remain liable for all those subsisting at the 
 time of the relinquishment, or on the next monthly day for 
 making up the affairs of the mine, when he could and was 
 bound to settle his account with the mine. This is a late 
 case, of considerable importance in regard to the cost-book 
 principle. 1 
 
 228. The next case shows how the interest of creditors 
 may be affected by the transfer of shares by any shareholder. 
 J. Johnson had, by verbal contract, agreed to take shares in 
 a mine conducted upon the cost-book principle, in the county 
 of Cornwall. A little time after, Johnson verbally agreed to 
 transfer his shares to Demont, another partner, or to re- 
 linquish them to the rest of the company ; and subsequently 
 to this transfer, the superintendent ordered certain goods. 
 The creditor sued Johnson for the debt of the company, 
 objecting against Johnson, that the mere verbal agreement 
 amongst the partners themselves would not affect the rights 
 of third parties, creditors to the mine ; and, at least, that 
 
 1 Ex 'parte Fenn, in re Pennant and Craigweir Consolidated Lead Mining 
 Company, 22 L. J. C. C. C92.
 
 INSURANCE COMPANIES. 193 
 
 some written notification to the purser or other officer, of a 
 change in the adventurers, would be necessary in order to put 
 an end to the liability of a shareholder to such third parties. 
 It was, however, decided that no such formal act was necessary 
 to get rid of Johnson's liability, and that enough had been 
 done to that effect ; for he neither held himself out as a share- 
 holder, nor did he authorize any one to pledge his credit. 1 
 
 229. The purser is the agent of the adventurers, and re- 
 ceives a salary at so much per month, and the books are always 
 open to each shareholder. The co-adventurers have not, as 
 in a partnership, an implied authority to bind each other by 
 bills of exchange, or by borrowing money from bankers, nor 
 do they assume an equal degree of authority, but the manage- 
 ment is entrusted to certain from among them. 2 Such are the 
 principal features of the cost-book principle. 
 
 Any disputes among the co-adventurers are brought before 
 the stannaries court, a local tribunal administered by a judge, 
 and by officers having an equitable and legal jurisdiction. 
 
 Section VII.— INSURANCE COMPANIES. 
 
 230. We have seen that the Joint-Stock Companies Act 
 includes insurance companies. But these also may be formed 
 by charter of incorporation — by letters patent from the crown, 
 without being incorporated— and by deed of settlement. Incor- 
 porated companies are created by royal charter, or by an act 
 of parliament ; and their peculiar characteristics, as distinct 
 from unincorporated companies, is the limitation of liability 
 of their members ; as it has been said, the law T sees only the 
 creature of the charter — the body corporate — and knows not 
 the individuals. The Royal Exchange Assurance, and London 
 Assurance Corporations were the first insurance companies 
 incorporated by royal charter, granted in pursuance of an act. 
 of parliament. 3 Insurance offices or companies are constituted 
 
 1 Northey v. Johnson, 19 L. T. 104, Q. B. 
 
 2 Ricketts v Bennett, 4 Com. B. Rep. 686. 
 
 3 6 Geo. I. c. 18. 
 

 
 194 ON CHARTERED AND TRADING COMPANIES. 
 
 under three different forms. The first is that of a joint- 
 stock company, with a subscribed capital, trading in life 
 assurance contracts, and dividing the profits among the share- 
 holders ; the second form is also that of a joint-stock com- 
 pany, with a proprietary capital, but, in addition to the 
 specific sums payable upon the death of the insured, they are 
 allowed to participate to a certain extent in the profits of 
 the concern ; the third is that of a mutual insurance office, 
 the members sharing among themselves the entire profits, 
 after deducting the expenses of management. These are 
 called proprietary, mixed, and mutual insurance offices. 1 
 
 231. Unless by charter of incorporation, the liability of the 
 shareholders is unlimited. The fund primarily liable is the ac- 
 cumulated fund derived by the premiums ; and, in the case 
 of proprietary offices, the subscribed capital is a guarantee 
 fund, in addition to the personal liability of the shareholders. 
 This liability is generally limited by specific clauses in the 
 deed of settlement and in the policies, the effect of which has 
 been already considered. 2 Insurance companies, formed by 
 private acts of parliament, are not by implication to be held 
 as corporations, and do not thereby obtain the privileges of 
 limitation of liability; in order to prevent the act having 
 such an effect, an express declaration is generally inserted 
 to that effect. 3 All claims against insurance companies 
 incorporated by royal charter, must be enforced against the 
 corporation as such; when formed under the Joint-Stock 
 Companies Act, against the directors signing the policy. 
 In all cases where the policy of insurance is not under 
 seal, claims against the company may be enforced against 
 any of the shareholders, and either of them may be sued 
 separately. 4 
 
 1 Bunyon on Life Insurance, p. 114. 
 
 2 See p. 135—137. 
 
 3 Ex parte The Newport Marsh Trustees, 16 Sim. 346. 
 
 4 Reid v. Allan. See Bunyon, p. 336.
 
 WINDING UP OF JOINT-STOCK COMPANIES. 195 
 
 Section VIII.— WINDING UP OF JOINT-STOCK COMPANIES. 
 
 232. Several important measures have been found necessary 
 for facilitating the winding up of joint-stock companies, when 
 they are unable to meet their pecuniary engagements, or when 
 they fail to answer the purpose for which they were created ; 
 to that effect recourse may be had either to the Court of 
 Bankruptcy, or to the Court of Chancery. 1 Any person 
 claiming to be a contributory in a company, may present a 
 petition for the dissolution of such company in any of the 
 following cases : where there is a declaration of insolvency, in 
 pursuance of a resolution of the board of directors ; where 
 the company does not pay, secure, or compound for a judgment 
 debt ; where the company disobeys any order or decree for 
 payment of money; where the company shall have been 
 dissolved, or shall have ceased to carry on business, or shall 
 be carrying on business only for the purpose of winding up 
 its affairs, and the same shall not be completely wound up ; 
 or if any other matter or thing shall be shown which, in 
 the opinion of the court, shall be a sufficient ground for 
 dissolution. 
 
 233. The provisions of the winding up acts regard princi- 
 pally the mode of procedure, which need not be minutely stated. 
 It seems that on an application for the dissolution and winding 
 up of the affairs of a company, the court will take into con- 
 sideration the particular circumstances of each case ; and if, 
 from the materials before the court, it does not appear expe- 
 dient that the company should be wound up, it will act upon 
 that impression. 2 For example, where a joint-stock company, 
 formed for the insurance of cattle, had sustained heavy losses, 
 and was under liabilities to their insured to a great amount, 
 and many of the shareholders had been allowed to retire from 
 the company, so as to avoid any future liabilities, it was 
 
 1 7 & 8 Vict. c. 111. 11 & 12 Vict. c. 45. 12 & 13 Vict. c. 108. 
 
 2 Ex parte Pocock, re direct Lond. & Manchester B. Co., 5 Railw. Cases, 607. 
 Chitty's Practical Statutes, vol. i. p. 684. 
 
 o 2
 
 196 ON CHARTERED AND TRADING COMPANIES. 
 
 held that the court was not entitled, under this act, to look 
 into the accounts of the company ; and there being none of the 
 tests of insolvency provided by the act, nor any act done which 
 amounted to a dissolution of the company, the court refused 
 to make any order for winding up its affairs. 1 In another 
 case, a company was provisionally registered for making a 
 railway of 170 miles, to complete the communication from 
 London to the western coast of Ireland, and a subscription 
 contract was executed, authorizing the directors, among other 
 things, to apply for an act to construct only a portion of the 
 line, if they thought fit. Afterwards a portion of the scheme 
 was abandoned by the directors, and the deposits applied to 
 procure an act, which was obtained for making a portion of 
 the line, forty miles only. This again was held not a proper 
 case for an order upon the petition of a scripholder under the 
 original agreement. 2 On the contrary, an order for winding up 
 the afTairs may be obtained, notwithstanding there are trans- 
 actions of the company still pending. So the circumstance 
 that policies of a life insurance company are still in force, 
 and that the liabilities of the company upon them cannot be 
 settled for many years, is not sufficient to render it inex- 
 pedient to make an order for winding up. 3 
 
 234. The winding up acts apply to all partnerships, asso- 
 ciations, and companies, consisting of not less than seven 
 in number, whether incorporated or unincorporated, except 
 railway companies incorporated by act of parliament, or 
 companies formed on the cost-book principle ; unless the 
 owner or owners, of one-tenth in value of the shares in such 
 mine, shall present a petition for the dissolution and winding- 
 up of the company. 4 After providing for the general course of 
 proceeding upon winding up, and the mode of ascertaining and 
 getting in the estate, and also for making out a list of all debts 
 and demands due, or which may be claimed from the company, 
 
 1 Ex parte Spackrnan, in re Agi-icultural Cattle Insur. Conip. 1 H. & T. 229. 
 
 2 Ex parte Fisher, De Gex & S. 116. 3 Ex parte Dee, ditto, 112. 
 4 12 & 13 Vic. c. 108, § 1.
 
 WINDING UP OF JOINT-STOCK COMPANIES. 197 
 
 the acts establish rules for the formation of a list of the mem- 
 bers and the contributorics of such companies. Every person, 
 who in any event may become liable, is included in the list ; 
 and although a party may not actually have had his name 
 inserted in the register of the company as a shareholder, yet if 
 he has so acted, and his acts have been so far adopted, that it may 
 be inferred that both parties have wavered in the observance 
 of the unnecessary form, he will be held to be a contributory, 
 but his liability will be limited to the time when his legal 
 right to be registered accrued. 1 A holder of scrip-certificates, 2 
 and the provisional committee-man, are both held- contribu- 
 torics ; 3 and also the assignees of a bankrupt are con- 
 tributories in their character of assignees. 4 The contributories 
 are liable for expenses properly incurred by the directors, but 
 not for such losses or expenses improperly incurred by them. 5 
 The list of contributories made out by the official manager, 
 and settled by the master, is to be entered by the official 
 manager in a book, which shall be from time to time inspected 
 by the master, and certified by him in writing. A notice is 
 given to every person in or excluded from the list, and, when 
 such list of contributories is settled, it is held as conclusive, 
 unless cause is shown to the contrary ; and no person is en- 
 titled to appear as contributory, unless his name is on the list. 
 
 235. The money and assets of the company are, with all 
 convenient speed, to be paid and applied by the official 
 manager, under the direction of the master, towards the 
 satisfaction of the debts of the company. The master has 
 also power to make calls, and to apportion the same among 
 the several contributories of the company as they appear 
 
 1 Ex parte Hall, re the North of England Joint-Stock Banking Conip. 5 
 Railw. Cases, 624. 
 
 2 Re Rugby Warwick and Worcester Railw. Comp. 5 ditto, 611. 
 
 3 In re Chester and Birkenhead Railw. Comp. Railway Cases, 26 April, 
 1850, V. C. 
 
 4 Kuper's Case, De Gex & S. 113. 
 
 5 In re Universal Salvage Comp. ex parte the Earl of Mansfield, 1 H. & T. 
 593.
 
 198 ON CHARTERED AND TRADING COMPANIES. 
 
 from time to time on the list, giving notice of his intention to 
 make calls by advertisement, in two successive numbers, in 
 the London Gazette, 1 The winding up acts are extended to 
 Ireland, 2 but they do not apply to Scotland. All companies 
 are there liable to sequestration, and on the application of all 
 or any of the partners, the Court of Session will appoint a 
 judicial factor, with power to wind up the affairs of the 
 company, and to sue in the name of the company. 
 
 1 12 & 13 Vic. c. 45, §§ 82—85. 2 8 & 9 Vic. c. 98.
 
 HISTORY OF BANKING. 199 
 
 CHAPTER IV 
 
 OF BANKS AND BANKING COMPANIES. 
 
 Section L-HISTORY OF BANKING. 
 
 236. Banking is of ancient origin. The number and 
 variety of coins introduced into different countries, and 
 the difficulty of using other than the current coins for the 
 purchase of commodities, suggested the traffic of money- 
 changing. Reference to Scripture indicates that money- 
 changers frequented the Temple of Jerusalem ; the great 
 festivals held by the Jews attracted many strangers, and 
 money-changers occupied the outer courts of the Temple, 
 to exchange the coins in possession of such strangers for the 
 money current in Jerusalem. In Greece, money-changers 
 acquired at an early period the character of bankers ; and in 
 the general insecurity of property, the priesthood allowed 
 Delphi, their temple, to be a place of deposit for gold, 
 which, by degrees, became a bank. At Rome, the revenues of 
 the state and of private individuals were deposited with 
 bankers (argentarii) ; but such business, like all kinds of 
 trading, was held in general disrepute. Banks were first 
 established in Italy as early as A.D. 808. The word bank 
 is derived from the Italian Banco ; a bench being erected in 
 the market-place for the exchange of money. In the middle 
 ages, the first public bank was erected in Venice, in 1153. 
 With the progress of commerce in the twelfth century* 
 Florence became the centre of the monetary transactions 
 of all countries, and the business of banking considerably
 
 200 OF BANKS AND BANKING COMPANIES. 
 
 enlarged. Public banks were afterwards formed in Barcelona, 
 and established by the wealthy cloth-merchants, in 1401 ; in 
 Genoa, in 1407; in Amsterdam, in 1607; in Hamburg, in 
 1619; in Rotterdam, in 1635; in Stockholm, in 1688; in 
 England, in 1694; in Scotland, in 1695; in Copenhagen, in 
 1736; in Berlin, in 1765; the Casse d'Escompte in France, 
 1776; the Bank of Ireland, in 1783; of St. Petersburg, in 
 1786; in the East Indies, in 1787; in the United States 
 of America, in 1791 ; and the Bank of France, established 
 in 1803. 
 
 Section II.— THE BANK OF ENGLAND. 
 
 237. In England, the traffic in money was, as early as 
 the thirteenth century, carried on by the Jews and by the 
 Italian merchants, under the name of Lombards. Gold 
 was, for a considerable time, deposited at the public Mint, 
 in the Tower of London ; until, in 1640, owing to the 
 interference of the crown, in appropriating the money thus 
 lodged, public confidence began to cease in the existing 
 system. Upon the Civil War and the death of Charles I., 
 the business of banking fell into the hands of the goldsmiths, 
 who continued to deal as the acknowledged bankers of the 
 country till 1694, when the Bank of England was esta- 
 blished. This institution, which owes its origin to the need 
 felt by Government of obtaining funds to carry on a foreign 
 war, was projected by a Scotch merchant, Mr. Patterson. 
 The capital to be advanced for the public service con- 
 sisted of 1,200,000?.; and the subscribers were incorporated, 
 by charter of William III., dated 27th July, 1694, into a 
 society styled the Governor and Company of the Bank of 
 England, who were to receive eight per cent, interest per 
 annum, and 4,000?. for the expenses of management. This 
 charter provided " that the management and government 
 of the corporation be committed to a Governor, Deputy- 
 governors, and twenty-four Directors, who shall be elected, 
 between the 25th of March and the 25th April every year,
 
 THE RANK OF ENGLAND. 201 
 
 from among the members of the company ; that those 
 officers must be natural-born subjects of England, or have 
 been naturalized; that they shall possess in their own 
 names, and for their own use severally, the governor (at 
 least) 4,000?., the deputy-governor 3,000?., and each director 
 2,000?. of the capital stock of the said corporation; that 
 thirteen or more of the said- governors and directors (of whom 
 the governor or deputy-governor shall be always one) shall 
 constitute a court of directors for the management of the 
 affairs of the company; that no dividend shall at any 
 time be made by the said governor and company, save only 
 out of the interest, profit, or produce arising out of the said 
 capital stock or fund, or by such dealing allowed by act of 
 parliament." 
 
 238. Every elector must have, in his own name and for his 
 own use, 500?. or more capital stock, and can only give one 
 vote. He must, if required by any member present, take the 
 oath of stock ; or the declaration of stock in case he be a member 
 of the Society of Friends. Four general courts are to be held in 
 every year, in the months of September, December, April and 
 July. A general court may be summoned at any time, upon 
 the requisition of nine proprietors duly qualified as electors. 
 The majority of electors in general courts to have the power 
 to make and constitute bye-law r s and ordinances for the 
 government of the corporation ; provided that such bye-laws 
 and ordinances be not repugnant to the laws of the kingdom, 
 and be confirmed and approved according to the statutes in 
 such case made and provided. The bank was prohibited from 
 dealing in any goods, wares, or merchandise, except bullion, 
 and from purchasing any lands or revenues belonging to the 
 crown, or advancing on the lands of the crown any sum of 
 money by w T ay of loan or anticipation. 1 
 
 239. In the year 1708 an act was passed, declaring that 
 during the continuance of that corporation it should not be 
 lawful for any body politic other than the Governor and 
 
 1 W. & M. c. 20.
 
 202 OF BANKS AND BANKING COMPANIES. 
 
 Company of the Bank of England, or for any other company 
 whatever in partnership, exceeding the number of six persons 
 in England, to borrow or take up any sums of money on 
 their bills or notes payable on demand, or in any less time 
 than six months from the borrowing thereof. This restriction 
 was confined to the forbidding only of banks of issue ; but it 
 having been construed to prohibit the formation of banks of 
 all descriptions, the act was partially repealed in 1826, and, on 
 the renewal of the charter in 1833, a clause was introduced ex- 
 pressly authorizing the establishment of banks which did not 
 issue notes, with any number of partners, in any place within 
 or without the limits to which the exclusive privilege of the 
 Bank of England, in regard to issuing notes, now applied. 
 
 240. The charter of the Bank was renewed successively in 
 1707, 1708, 1713, 1742, 1764, 1781, 1800, 1833, and 1844. 
 The original capital of the bank, which amounted to 1,200,000?. 
 was enlarged in 1708, by new subscriptions, to 5,559,995/. 
 and, in 1764, to 9,800,000/. In 1816, 25 per cent, of the 
 profits were added to the amount of the stock, raising it to 
 14,553,000/., the present prospectus capital. The Bank 
 Charter Act of 1844 effected considerable alterations in the 
 Bank, by dividing into separate establishments the banking 
 and issue departments, limiting the amount of securities upon 
 which the Bank may issue notes, and providing that a weekly 
 publication should be made by the Bank of England of the 
 state both of the circulation and of the banking department. 
 Securities to the amount of 14,000,000/. were to be appro- 
 priated to the issue department: of this the debt due by 
 Government, 11,105,000/. formed a part. And, in addition to 
 the securities, any amount of gold and silver coin in the 
 possession of the Bank, and not required in the banking 
 department, was also to be placed in the issue department : 
 and thereupon an equal amount in notes, including those in 
 circulation, might be issued into the banking department. 1 
 
 ] The principle of this act, introduced by Sir R. Peel, was at the time of its 
 introduction, and has ever since been, the subject of anxious discussion, whilst
 
 THE BANK OF ENGLAND. 203 
 
 241. The act also provided for arrangements which may be 
 made by the Bank of England with any bankers who may dis- 
 
 its expediency has been strongly controverted. As the time approaches for 
 the expiration of the Bank Charter, when the whole question will be reopened, 
 in 1855, it may be desirable to set forth perspicuously the leading features of 
 the views held by the supporters and opponents of the measure. An able 
 paper was delivered on the subject before the Statistical Society * of London 
 by Mr. Danson, wherein these views were stated in the form of propositions, 
 gathered, on the one hand, from the evidence of Mr. Jones Lloyd, now Lord 
 Overstone, and Colonel Torrens, and the speeches of Sir E. Peel, in favour of the 
 measure ; and, on the other, from the writings of Mr. Tooke and Mr. Fullarton 
 against it. It was held by the supporters of the Bank Act : — 
 
 1. That the amount of the circulating medium in the hands of the public 
 may be greater or less than is properly required for the transaction of the 
 current business of the community ; and that, when greater, it tends, by the 
 excess, to make the use of the circulating medium too cheap. 
 
 2. That as the value of all other commodities is measured by that of the 
 circulating medium, prices, or the nominal expressions of their value, are at 
 such periods enhanced. 
 
 3. That such enhancements, by reducing exports and stimulating imports, 
 turn the foreign exchanges against us, and lead to a drain of bullion. 
 
 4. That if, on the other hand, the amount of the circulating medium be 
 reduced below that properly required for the time, a contrary effect will ensue, 
 producing favourable exchanges and an influx of bullion. 
 
 5. That one principal cause, and that which has heretofore been the most 
 common in this country, of an undue expansion of the circulating medium, is 
 the putting or keeping in circulation, by their issuers, of too large an amount 
 of bank-notes payable on demand. 
 
 6. That the issuers of such notes can regulate at will the amount of them 
 in circulation; and, 
 
 7. That if the bank-notes in circulation be kept in strict proportion to the 
 bullion in the hands of their issuers, the amount of the circulating medium 
 will be prevented from becoming greater than it should be, and the mischief 
 held to arise from its becoming so will be averted. 
 
 The counter propositions of those who hold that the act of 1844 is not 
 founded upon correct views of the currency may be stated as follows : — 
 
 1. That no greater amount of the circulating medium, whether in coin or 
 notes, is ever in actual use, or therefore in circulation, than is required by the 
 current transactions of the community ; for that so much of it as there is no 
 present use for, goes either into hoards or into bankers' deposits. That if 
 hoarded, it ceases to have any effect as circulating medium ; and that if depo- 
 sited with bankers, it can only pass again into use at interest, which interest 
 will only be paid by those who have a profitable use for it. 
 
 * Journal of the Statistical Society, vol. x. p. 132.
 
 204 OF BANKS AND BANKING COMPANIES. 
 
 continue to issue their own notes, and for increasing the amount 
 of securities to the extent of two-thirds of the issue thus with- 
 drawn. The Bank has the exclusive privilege in the city of 
 London, or within three miles thereof, to issue, on unstamped 
 paper, promissory notes for any sum of money amounting to 
 51. or upwards, payable to the bearer on demand. 1 And 
 during the continuance of the corporation, no company, exceed- 
 ing six persons, can issue in London, or within sixty-five 
 miles thereof, any bills of exchange or promissory notes 
 payable on demand. 2 
 
 242. The Bank may reissue any of their notes, after pay- 
 
 2. That while a large portion of the circulating medium is dependent solely 
 upon the credit of its issuers, its extension can, in fact, only be limited by the 
 state of that credit on the one hand, and by the aggregate demand of those 
 who are willing to pay for its use, on the other. 
 
 3. That while there is a large fund of deposits in every part of the country 
 payable on demand, an issuing banker cannot affect the aggregate amount of 
 the circulating medium, by issuing or withdrawing his notes. 
 
 4. That the amount of bank-notes in circulation, representing only one 
 portion of the addition made by the operations of bankers to the amount of 
 the circulating medium, through the agency of their credit with the public ; 
 a restriction upon the amount of the addition so made must be ineffectual, 
 unless it be accompanied by a like restriction on such of their other operations 
 as have the same, or a similar effect ; and that, therefore, the omission of any 
 regard to deposits, and their effect in supplying, readily and extensively, the 
 place of a portion of the circulating medium of this country, must render the 
 restriction now placed upon the bank-notes in circulation ineffectual to limit 
 the amount of the circulating medium, whenever it shall become practically 
 inconvenient either to bankers or to the public. 
 
 5. That the true measure of the voluntary addition made by a banker to 
 the amount of the circulating medium is found, not in the amount of his 
 notes in circulation, but in the terms upon which he makes advances; or, in 
 other words, upon the price he charges for the use of so much of the circu- 
 lating medium as he happens to command, either by the actual possession of 
 money, or by his credit ; and, 
 
 6. That any attempt to control the issuing banker by law, in the manage- 
 ment of this branch of his business, would be, in fact, an attempt to fix the 
 price of the use of money, or of credit held sufficient to represent money ; 
 which, like all other prices, is, and must continue to be, governed by influences 
 wholly beyond the control of the legislature. 
 
 1 9 Geo. IV. c. 23, § 1. 
 
 2 3 & 4 Will. IV. c. 98, § 6.
 
 THE BANKS OF SCOTLAND, IRELAND, AND FBANCE. 205 
 
 merit thereof, as often as they think fit. 1 Bank of England 
 notes, payable to bearer on demand, are a legal tender, except 
 at the Bank or any of the branch banks of the company, 
 where they are payable in gold on demand. 2 All notes of the 
 Bank of England payable on demand, issued out of London, 
 are payable at the place where they are issued. 3 At first the 
 Bank issued no notes below 20?. In 1759 it began to issue 
 notes for 10/. ; in 1793, notes of 5/. were first issued; and in 
 March, 1797, 1?. and 2?. were also sent in circulation. The 
 issue of the latter ceased, generally, in 1821, though again 
 put into circulation in 1825, for a short period during the 
 commercial crisis. In 1829, however, it was enacted that 
 no notes were to be issued below 51. The Bank of England 
 is the banker of Government, and has the management of 
 the National Debt ; it receives and registers transfer of 
 stock from one public creditor to another ; makes the quar- 
 terly payment of the dividends ; circulates exchequer bills ; 
 and makes advances to Government, on the produce of 
 the taxes not yet received, and on the security of exchequer 
 bills. The Bank receives an allowance for the management 
 of the public debt, of 340?. per million on 600,000,000?. of 
 the public debt, and 300?. per million on all that it exceeds 
 that sum. In consideration, however, of the exclusive ex- 
 emption from the payment of stamp duties upon their notes, 
 and of the privilege of exclusive banking, the Bank allows 
 the annual sum of 180,000?. The balances of money belong- 
 ing to the State are kept in the Bank. The Bank of England 
 has branches at Birmingham, Bristol, Gloucester, Hull, Leeds, 
 Leicester, Manchester, Newcastle, Norwich, Plymouth, Ports- 
 mouth, and Swansea. 
 
 Section III.— THE BANKS OF SCOTLAND, IRELAND, 
 AND FRANCE. 
 
 243. The Bank of Scotland was established by act of par- 
 liament in 1695, by the name of " The Governor and Com- 
 
 1 55 Geo. III. c. 134, § 20. - 3 & 4 Wm. IV. c. 98, § G. 3 Ibid, § 4.
 
 206 OF BANKS AND BANKING COMPANIES. 
 
 pany of the Bank of Scotland," with a capital of 100,000/. 
 The company had the exclusive privilege of banking in 
 Scotland for twenty-one years ; were exempted from public 
 burdens ; and the liability of the shareholders was limited to 
 the amount of their shares. The capital was subsequently 
 increased to 1 ,500,000*., of which 1,000,000?. has been paid 
 in. The Bank was forbidden to undertake any other business 
 besides banking. The management rests in a governor, 
 deputy-governor, twelve ordinary and twelve extraordinary 
 directors, chosen every year by the stockholders possessing 
 2501. stock or upwards. Bank-notes of 11. are in common 
 use in Scotland, and Bank of England notes are not legal 
 tender in Scotland ; l as Bank of Scotland or Bank of Ireland 
 notes would not be legal tender in England. 
 
 244. The Bank of Ireland was established in 1782, and 
 obtained a charter in 1783. The original capital was 600,000?., 
 but was augmented, in 1821, to 3,000,000?. The Bank pos- 
 sesses the same privileges, and is governed by the same prin- 
 ciples, as the Bank of England. In Ireland, 1?. notes are 
 issued, but all notes for a fractional part of 11. are prohibited. 
 
 245. The Bank of France has the exclusive privilege of 
 issuing notes. The Bank has, at present, a capital of 
 91,250,000 francs, or 3,650,000?. The maximum circulation 
 of the Bank is 452,000,000 francs, or 18,000,000?. The 
 Bank of France can issue no notes below 100 francs. (4?.) 
 
 Section IV.— BANKING COMPANIES. 
 
 246. Banks in England, of six or less than six persons, 
 established prior to the 6th May, 1844, having duly obtained 
 a licence, may issue, on unstamped paper, promissory notes 
 for five pounds or upwards, payable to bearer on demand, or 
 to order, at any period not exceeding seven days after sight ; 
 and also draw and issue on unstamped paper bills of exchange, 
 payable to order on demand, or any period not exceeding 
 
 1 21 & 22 Geo. III. c. 16.
 
 BANKING COMPANIES. 207 
 
 seven days after sight, or twenty-one days after date ; provided 
 such bills be drawn on a bank in London, Westminster, or 
 South wark, or be drawn by a banker or bankers at a town 
 where he or they shall be duly licensed to issue unstamped 
 notes and bills upon himself or themselves, or his or their 
 co-partners, payable at any other town where such banker or 
 bankers shall be duly licensed to issue notes and bills. 1 
 
 247. Partnerships of more than six persons, formed prior to 
 the 6th May, 1844, may cany on business as bankers in 
 England, sixty-five miles from London ; and, subject to the 
 regulation of the Bankers' Act, may issue their bills or notes 
 at any place in England, exceeding such a distance from Lon- 
 don, payable on demand or otherwise, and borrow money on 
 their bills so made; but such partnerships must not have a 
 house in London, or at any place not exceeding the distance 
 of sixty-five miles from London. - 
 
 248. The power of banking companies to issue promissory 
 notes payable on demand was restricted by the Banking Act, 
 in 1844. 3 From the 6th May, 1844, no new bank could be 
 formed in any part of the United Kingdom, as a bank of 
 issue; and no company consisting of only six or less than 
 six persons, was allowed to issue bank-notes, at any time 
 whenever the number of partners therein should exceed six 
 in the whole. If any banker, enabled to issue notes, become 
 bankrupt, or cease to carry on the business of banking, or 
 discontinue his issue of notes, he cannot resume it at any time 
 thereafter. The existing banks of issue which claimed, after 
 the act came in force, to continue to issue their own notes, 
 were to declare the average amount of the notes which they 
 had put in circulation during the twelve weeks preceding. 
 The maximum of the notes in circulation of each bank of 
 issue in England, is the average of the notes issued during the 
 four weeks ending the 27th April, 1844. When two or more 
 banks become united, the commissioners may ascertain the 
 
 1 9 Geo. IV. c. 23. 2 3 & 4 Win. IV. c. 93. Ibid. c. S3, § 2. 
 
 3 7 & 8 Vict. c. 32.
 
 208 OF BANKS AND BANKING COMPANIES. 
 
 average amount of the notes of each bank ; and the amount 
 of the two so united may be issued by the united bank, pro- 
 vided, however, the number of partners continue six, or less 
 than six. Every banker must take out a separate and distinct 
 licence for every town or place at which he intends to issue 
 any notes (a duty first enjoined upon bankers in 1809) ; but 
 those bankers who had four licences, in force on the 6th May, 
 1844, were not required to take out more than that number 
 of licences. 
 
 249. In Scotland, the issue of bank-notes is regulated by 
 a statute passed in 1845. 1 The power of issuing notes is, by 
 that act, confined to those banks which issued notes in the 
 year preceding the 1st May, 1845 ; and the amount of issue 
 is the average amount of notes which each bank had in cir- 
 culation during that vear, and the amount of gold and silver 
 which might be in the hands of the banker — the silver, how- 
 ever, not exceeding one-fourth the amount of gold. In Ireland, 
 the issue of notes is based on the same system as in England. 2 
 The amount of issue is the average amount of the year 
 ending 1st May, 1845. 
 
 250. The following points of difference exist in the banking 
 systems of England, Ireland, and Scotland : — 3 
 
 (1.) The maximum of the circulation in England is the 
 average of the twelve weeks ending the 27th April, 1844. 
 The maximum in Scotland and Ireland is the average of the 
 year ending the 1st May, 1845. 
 
 (2.) The English banks are not, under any circumstances, 
 allowed to exceed their fixed limit. The Scotch and Irish 
 banks are allowed to exceed their limit, provided they hold 
 in their coffers, at the head office, an amount of gold and 
 silver equal to such excess. 
 
 (3.) In England, should two joint-stock banks of issue 
 effect a junction, the circulation of one of them would be for- 
 
 1 8 & 9 Vict. c. 38. 2 Ibid. c. 37. 
 
 3 These differences are detailed in Gilbart's Practical Treatise on Banking 
 vol. ii. p. 60S.
 
 JOINT-STOCK BANKING COMPANIES. 209 
 
 feited, and the united bank could issue only to the amount of 
 the two circulations added together. 
 
 (4.) In Scotland and Ireland, notes under 51. are still per- 
 mitted. In England, notes under 51. are prohibited. 
 
 (5.) If any bank give up its issue, and agree to issue 
 Bank of England notes, the Bank of Ireland may increase 
 her authorized issue to the full amount of the issue of the 
 bank whose notes are withdrawn. In England, the Bank of 
 England can, in a similar case, issue only to the extent of 
 two-thirds of the issue of the bank whose notes are withdrawn. 
 
 (6.) In England and Ireland, all the notes are legally de- 
 mandable in gold at the branches where they have been 
 issued. In Scotland, they are payable only at the head office 
 of the bank that issues them. 
 
 (7.) The Scotch banks are all joint-stock banks. In 
 England and Ireland, there is a mixture of joint-stock and 
 private banks. 
 
 (8.) The Scotch banks are all banks of issue. In England 
 there are many, both private and joint-stock banks, that are 
 not banks of issue. 
 
 (9.) The Scotch banks generally have branches. In Eng- 
 land and Ireland most of the private banks, and some of the 
 joint-stock banks, have no branches. 
 
 (10.) The Scotch banks universally grant interest on the 
 balance of current accounts; a practice not universally adopted 
 in England, especially in London. 
 
 (11.) The mode of making advances, by way of cash credit, 
 is general in Scotland, lml very rare in England. 
 
 Section V.— JOINT-STOCK BANKING COMPANIES. 
 
 251. Joint-stock companies for the purpose of banking 
 are now regulated by special statute, which rendered it un- 
 lawful, after the 6th May, 1844, for any new company to be 
 formed of more than six persons to carry on the business of 
 banking in England, under any agreement, unless by virtue 
 
 p
 
 210 OF BANKS AND BANKING COMPANIES. 
 
 of letters patent ; ' not, however, restraining companies esta- 
 blished before such date from carrying on business without 
 such letters patent. Before beginning to enter into any busi- 
 ness, the company must obtain such patent, by petitioning her 
 Majesty in council, setting forth the names of all the partners 
 of the company, the proposed name of the bank, the name 
 of the place where the bank is to be carried on, the proposed 
 amount of the capital stock, which must not be in any case 
 less than 100,000/., and the means by which it is to be raised ; 
 the amount of the capital stock then paid up, and Avhere and 
 how invested ; and the proposed number of shares in the 
 business, each share being not less than 100/. 2 The company 
 cannot commence business till the deed of partnership shall 
 have been executed, all the shares subscribed for, and at least 
 half the amount of each share paid up. 3 
 
 252. Her Majesty is empowered to grant that the company 
 shall be incorporated, for the purpose of carrying on the 
 banking business, by such name as shall be given to them by 
 the letters patent, and shall have perpetual succession and 
 a common seal, and shall have power to purchase and hold 
 lands : the charter to be granted for a term not exceeding- 
 twenty years. 4 But, notwithstanding such incorporation, the 
 shareholders do not acquire any privilege of limitation of 
 liability for the contracts and undertakings of the company ; 
 and every judgment against the company may be executed 
 against the property and effects of the company, and upon the 
 person, property, and effects of every shareholder. 6 The regu- 
 lations respecting the execution against former shareholders, 
 their reimbursement, and the contribution to be recovered 
 from the other shareholders, are the same as already expounded 
 with respect to joint-stock companies in general. Within 
 three months after the grant of the patent, and before the com- 
 pany begin to carry on the business of bankers, they must 
 make a memorial, setting forth the title or firm of the company, 
 
 1 7& 8 Vic. c. 113, § 1. 2 Ibid. § 2. 3 Ibid. § 5. 
 
 4 Ibid. § 6. 5 Ibid. § 7. 6 Ibid. § 9.
 
 JOINT-STOCK BANKING COMPANIES. 211 
 
 and other particulars; the same memorial to be made by the 
 company in every year between the 20th February and 25th 
 March ; such memorial to be delivered at the stamp-office in 
 London, and to be there registered in a book kept for the pur- 
 pose, which shall be opened for inspection to any person upon 
 the payment of one shilling : the company causing, moreover, 
 to be printed, and kept in a conspicuous place in their office, 
 a list of the names and abodes of all the shareholders. 1 A 
 similar account must be made of all the changes that may 
 take place in the body of shareholders. 2 
 
 253. All bills of exchange are to be signed by one of the 
 managers or directors of the company, and by him expressly 
 to be so signed on behalf of the company. But the manager 
 or director shall not become liable on such bill to any greater 
 extent than upon any other contract signed by him on behalf 
 of the company. The transfer of shares is regulated by rules 
 similar to those established by the Joint-Stock Companies Act. 
 Where shares on banking companies are transmitted by other 
 means than by transfer: as, in consequence of the death, or 
 bankruptcy, or insolvency of any shareholder, or in conse- 
 quence of the marriage of a female shareholder, or any other 
 legal means; the transmission must be proved by declaration 
 in writing, duly authenticated. 3 Where any shareholder is 
 a minor, idiot, or lunatic, the receipt of the guardian for the 
 minor, or the receipt of the custodians of such idiot, for any 
 payment due to them, shall be a sufficient discharge. The 
 company is not bound to watch over the execution of any 
 trust to which any of the shares may be subject ; the receipt of 
 the party in whose name such shares shall stand in the books 
 of the company, shall from time to time be sufficient dis- 
 charge to the company for any dividend or other sum payable 
 in respect to such share. 
 
 254. The directors may make such calls of money upon the 
 respective shareholders, in respect of the amount of capital 
 stock subscribed by them, as they shall think fit ; and if any 
 
 1 7 & 8 Vict. c. 113, § 1G. 2 Ibid. § IT. s Ibid § 2G. 
 
 p 2
 
 212 OF BANKS AND BANKING COMPANIES. 
 
 shareholder do not pay the amount of any call, he shall be 
 liable to pay interest at the rate of five per cent. ; and if he failed 
 to pay the amount of such call, the company may sue such 
 shareholder in any court of law or equity. 1 If the holder of 
 any share fail to pay any call of money, the directors, at any 
 time after the expiration of six months, may declare such 
 share forfeited ; but the forfeiture of the share shall not relieve 
 the shareholder of his liability to pay the calls made before 
 such forfeiture. 2 The company cannot sell more of the shares 
 of such defaulter than will be sufficient to pay the arrears 
 then due from the defaulter, together with interest and ex- 
 penses attending the declaration of forfeiture and sale ; 3 and 
 if payment of such arrears of calls, interest, and expenses, be 
 made before any share so forfeited shall have been sold, such 
 share shall revert to the original holder. 4 The dissolution of 
 joint-stock banking companies is governed by the Winding- 
 up Act. 5 The Joint-Stock Bank Act was extended to Scot- 
 land and Ireland. 
 
 Section VI.— RELATIONS OF BANKERS AND THEIR CUSTOMERS. 
 
 255. A banker has been defined to be a person receiving- 
 money on deposit, and paying it out again to order, and 
 
 i 7 & 8 Vict. c. 113, §§ 31—33. 2 Ibid. § 37. 3 Ibid. § 41. 
 
 4 Ibid. §42. 5 9 & 10 Vict. c. 75. 
 
 6 An Act has just passed, 17 & 18 Vict. c. 73, for the purpose of amending the 
 Joint-Stock Bank Act, in so far as the same applies to Scotland. It was thereby 
 provided that the right of retention, or lien, which, in virtue of the common law 
 of Scotland, the company has over the shares of the partners, in respect of any 
 debt or liability incurred, or obligation undertaken by them to the company, 
 shall not be affected by any clause inserted in the deed of partnership ; that 
 as often as the company may, in virtue of their right of lien, acquire any 
 shares in the company's stock, they shall be bound to sell them within six 
 months, and account to the parties interested in such shares for the balance 
 of the price realized, after paying the debt due to the company, and the 
 expenses incurred by them in securing the debt and selling the shares : pro- 
 visions to be made in the deed of partnership, regulating the manner in which 
 bills of exchange of the company may be made, accepted, or endorsed, it being 
 not necessary that such bills or notes be signed in the manner represented 
 by the Joint-Stock Bank Act.
 
 RELATIONS OF BANKERS AND THEIR CUSTOMERS. 213 
 
 discounting bills. This, however, must be the substantial 
 
 part of his trade. It does not depend upon the fact whether 
 a person has or lias not occasionally done acts which a banker 
 regularly and openly would have clone ; nor upon what he 
 may have done upon one day, and what upon another day ; 
 but it must be his habitual business. 1 Therefore, unless he 
 held himself out to the public as a banker, and the public has 
 taken him to be one, he would not come within the scope 
 of the Bankers' Acts. 2 
 
 256. A banker does not stand in the character of agent or 
 trustee towards his customers. The relation between a banker 
 and a customer who pays money into the bank, is the ordinary 
 relation of debtor and creditor, with a superadded obligation 
 arising out of the custom of bankers to honour the customer's 
 drafts. Therefore, the money deposited by customers with 
 their bankers is intrusted, not as a deposit, but on pure 
 credit, as a loan ; it is money which the banker may deal 
 with as his own, notwithstanding lie is bound to return it on 
 demand. So a banker who receives endorsed bills 3 from his 
 customers, to be got in when due, and carried to his account, 
 may discount and sell them, and may also pledge them with 
 another ; in fact, he acquires a complete dispensing power over 
 the money and effects put in his hands. 4 Doubtless, this 
 absolute property may be qualified by circumstances, such as 
 where bills are remitted for a particular purpose, or to be 
 dealt with in a particular manner, and to be received and 
 entered as easli when due. In such case, the customer will 
 preserve a right over the bills, and the banker is then to be 
 considered as the factor of the customer; but generally, al- 
 though in common parlance a person says that he has so 
 much money in the hands of his bankers, the customer is. 
 in fact, no more than a mere creditor of the banker.'' 
 
 1 Stafford v. Henry, 12 Irish Eq. Rep. 400. 2 8 Geo. I. c. 14. 
 
 3 Laiug V. Smyth, 7 Bing. 284. 
 
 * Collins v. Martin, 1 B. & P. 648. Thompson v. Giles, 3 D. \ R. U5 
 5 Bosanquet v. Dudman, 1 Stark, 1. Watts v. Christie, 11 Beav. 552.
 
 214 OF BANKS AND BANKING COMPANIES. 
 
 257. A banker would have a right to negotiate bills depo- 
 sited by his customer, even without express authority, in 
 order to meet bills or cheques drawn by the latter on the 
 banker ; and where the banker has accepted bills to a much 
 larger amount than the cash balance in his hands, or has 
 discounted bills for his customer, he may hold any collateral 
 securities for value. Bankers have a general lien upon all 
 notes, bills, and other securities in their hands, for their 
 general balance, 1 unless it be proved that the securities were 
 handed under special circumstances or agreement. 2 
 
 258. An implied duty undertaken by the banker, in re- 
 ceiving sums of money belonging to his customer, is to pay 
 any cheque drawn by him, after the lapse of such reasonable 
 time as would afford an opportunity to the different persons 
 in the establishment of knowing the fact of the receipt of such 
 money; and a refusal to pay a cheque under such circum- 
 stances is a breach of duty, for which the customer would be 
 entitled to damages of an amount proportioned to the injury 
 he may have suffered thereby; 3 and even where no actual 
 damage was sustained, the customer may maintain an action 
 of tort against the banker for refusing payment of his cheque, 
 because it would be a tort on a banker to say falsely of his 
 customer that he has no assets, so that he drew cheques with- 
 out any assets, and the dishonour of his cheque amounts to 
 this/ In case of bankruptcy of a banker, the bills endorsed 
 to him become part of his assets, except such as were intrusted 
 to, or deposited with him, for a determined purpose. Having 
 become the property of the banker, the customer cannot follow 
 such bills in the assignee's hands. 5 
 
 1 Davis v. Bowsher, 5 T. R. 488. Giles v. Perkins, 9 East, 14. Branda v. 
 Barnett, 12 CI. & Fin. 808. 
 
 2 Jourdaine v. Lefevre, 1 Esp. 66. Scott v. Franklin, 15 East, 428 Ex parte 
 Waring, 2 G. & J. 403. 
 
 3 Marzettiv. Williams, 1 B. cV Ad. 419. Rollin v. Steward, 2 Com. Law 
 Rep. 959. 
 
 4 Rollin v. Steward, 2 Com. Law Rep. 959. 
 
 5 Rymer v. Laurie, 18 L. J. Q. B. 248.
 
 11EMAEKS 
 
 PARTNERSHIP EN COMMANDITE. 
 
 NATURE AND CONSTITUTION OF PARTNERSHIP WITH LIMITED 
 LIABILITY, OR EN COMMANDITE. 
 
 259. Partnership en commandite is a contract of capital 
 and labour. When, in the middle ages, Italian traders explored 
 the Eastern ports, commandite was the contract entered into 
 between the shipper and the person entrusted with the cargo. 
 The shipper was the Accomendante, the person entrusted the 
 Accomenda tario, and the contract one of Accomenda. By 
 this maritime contract, a quantity of goods was entrusted 
 by one person to another to carry them beyond sea, on 
 the shipper's account, upon condition of their participating 
 together in the profits. It was partly a contract of mandate, 
 partly one of partnership. The share of profit granted to the 
 Accomendatario was a kind of salary for his trouble ; yet 
 the uncertainty of such profit took it out of a contract of 
 agency. The Accomendante ventured the capital so ex- 
 posed ; the Accomendatario ran the risk of losing the reward 
 of his labour. Such was the contract of Accomenda mentioned 
 in the Consolato del Mare. A similar agreement was entered 
 into for carrying on inland trade, by means of persons going to 
 fairs ; and it was introduced into the laws of the Crusaders, the 
 laws of Montpellier, the statutes of Ancona, Marseilles, Genoa, 
 Barcelona, Pisa, and Florence. Yet the contract admitted of 
 further extension. Instead of trusting a capital in merchant
 
 216 PARTNERSHIP EN COMMANDITE. 
 
 dise, it was found more convenient to trust a sum of money. 
 At a time when ecclesiastical anathemas were pronounced 
 against usury, and when commerce itself was deemed a degrad- 
 ing vocation, a system which offered such favourable prospects 
 for the investment of money, with a risk not exceeding the sum 
 embarked in the operation, whilst it sheltered the speculator 
 from the danger and contumelies attached to the mercantile 
 profession, could not fail to become attractive, and it was thus 
 gradually incorporated into the system of trade. The ordinance 
 of Colbert, of 1673, found the custom and legalized it ; thence 
 it was introduced into the French code of commerce, and into 
 the codes of other Continental States ; and progressively into 
 the United States of America. 
 
 260. In order to form a correct idea of the nature of the 
 contract, we shall examine the provisions of the American 
 statutes, and notice the principal points of difference between 
 them and the laws of France and other countries on the subject. 
 A partnership en commandite consists of one or more persons, 
 called general partners, who are jointly and severally respon- 
 sible as general partners now are by law, and one or more 
 persons who contribute in actual cash payments a specific 
 sum as capital to the common stock, who are called special 
 partners or commanditaires, and who are not liable for the 
 debts of the partnership beyond the fund so contributed by 
 him or them to the capital. The general partners only are 
 authorized to transact business and sign for the partnership, 
 and to bind the same. The special partners cannot take any 
 part in the administration of the affairs of the partnership ; and 
 any interference on their part will render them liable to the 
 full extent of their property, toward the general partners and 
 third persons, for all the debts of the partnership. They may, 
 however, from time to time examine the state and progress 
 of the accounts, and may advise as to the management of the 
 concern ; but they cannot transact any business on account of 
 the partnership, nor be employed for that purpose even as 
 agent, attorney, or otherwise. A committee of inspection is 
 often formed in large partnerships en commandite, to watch
 
 PARTNERSHIP EN COMMANDITE. 217 
 
 over the affairs of the house on behalf of the body of com- 
 manditaires. 
 
 261. The contract of partnership must be formed by deed, 
 containing, 1st, the name or firm under which such partnership 
 is to be conducted. 2d. The general nature of the business in- 
 tended to be transacted. 3d. The names of all the general and 
 special partners interested therein, distinguishing those who are 
 general and those who are special partners, and their respec- 
 tive places of residence. 4th. The amount of capital which 
 each special partner is to contribute to the common stock ; 
 and 5th, the period at which the partnership is to termi- 
 nate. Such deed must be signed by the parties before the 
 judge, and is filed in the office of the clerk of the county in 
 which the principal place of business of the partnership is 
 situated, and is also recorded by him in a book kept for the 
 purpose, open to public inspection. In France, an extract 
 of such deed must be deposited at the registry of the Tribunals 
 of Commerce ; but it is not essential that it should contain the 
 names of the shareholders or commanditaires, and in practice 
 such names are scarcely ever published. If the partnership has 
 houses of business situated in different counties, a transcript 
 of the certificate, and of the acknowledgment thereof, is like- 
 wise recorded in the office of the clerk of every such county. 
 The same must be advertised in two newspapers for at least 
 six weeks immediately after such registry, and in such journal 
 as the court may prescribe. The American law renders it 
 imperative for special partners to bring their respective con- 
 tributions in actual cash payment as capital. The Irish 
 statute required each special partner to pay not less than one- 
 fourth of the sum subscribed at the time of executing the arti- 
 cles, and the remaining three-fourths within twelve months. 
 No such provisions exist in the French and Continental law 
 on the subject. 
 
 262. No part of the sum which any special partner has con- 
 tributed to the capital stock can be withdrawn, nor any division 
 of interest or profits be made, so as to reduce such capital stock 
 below the original sum. By the Irish law, each partner may
 
 218 PARTNERSHIP EN COMMANDITE. 
 
 only take out annually half of his share of the profits, the 
 other half to go towards the increase of the joint stock until 
 the expiration of the partnership. The French law is silent 
 as to the ultimate liability of the profits withdrawn for the 
 debts of the concern ; and the state of jurisprudence on this 
 point is extremely ambiguous and conflicting. The. statutes 
 of the several States of America differ also materially on 
 the subject. According to the statutes of Maine, Massachu- 
 setts, Vermont, Rhode Island, Michigan, and Indiana, if at 
 any time during the continuance, or at the termination of the 
 partnership, the property or the assets should not be sufficient to 
 pay the partnership debts, then the special partners would 
 severally be held responsible for all the sums by them in any 
 way received, withdrawn, or divided, with interest thereon 
 from the time when they were so withdrawn respectively. 
 By the statute of New York it is provided, that if it shall 
 appear that, by the payment of interest or profit to any 
 special partner, the original capital has been reduced, he shall 
 refund sufficient to make good his share. If, therefore, the 
 commandite partners have divided honestly and legitimately 
 a certain per centage of profits, say ten per cent, per annum, 
 for a series of years, leaving intact the whole capital ; should 
 the partnership at any future time suffer a complete reverse, 
 the special partners would not be bound to return the profits, 
 and they would only lose the original capital contributed. 
 Again, the statutes of Maryland and Connecticut prohibit any 
 payment or share of interest and profit during the continuance 
 of the partnership. 
 
 263. The affairs of the partnerships are carried on in the 
 name of a firm, in which the names of the general partners only 
 are inserted, without the addition of the word company, or any 
 other general term ; and if the name of any special partner is 
 used in such firm with his consent, he would be deemed as 
 a general partner. In France, two kinds of commandite 
 partnership prevail ; one of simple commandite, composed of 
 one or more general partners, and one or more commandi- 
 taires. The capital contributed is not divided by shares.
 
 PABTNBESHIP EN COMMANDITE. 21 ( J 
 
 The name of the firm must include that of the general 
 partner. Another is the general commandite by shares, 
 based on the same principle, the shares of which have, by the 
 French jurisprudence, been held to be transferable. The 
 property in such shares is established by the registers of the 
 partnership, signed by the endorser, or his attorney. 
 
 264. Every renewal or continuance of such partnership 
 beyond the time originally fixed for its duration, must be 
 certified, acknowledged, and recorded, and notice be given in 
 the same manner as is required for the original formation ; 
 and every such partnership, otherwise renewed or continued, 
 is deemed to become a general partnership. No general 
 assignment by such partnership, in case of insolvency, is valid, 
 unless it should provide for a distribution of the partnership 
 property among the creditors. In case of insolvency or bank- 
 ruptcy of the partnership, no special partner can be allowed 
 to claim as a creditor until the claims of all the other creditors 
 of the partnership are satisfied. No dissolution of such part- 
 nership by the acts of the parties can take place, previous to 
 the time specified in the certificate of its formation or of its 
 renewal, until a notice of such dissolution be filed and regis- 
 tered at the office of the tribunal where the original deed was 
 recorded, and published once in each week, for four weeks, 
 in a newspaper of the district, and in the Gazette. All suits 
 respecting the business of such partnership are prosecuted by 
 and against the general partners only, who alone are responsi- 
 ble towards third persons. 
 
 265. An examination of the law of partnership of the prin- 
 cipal commercial countries, is sufficient to show that partner- 
 ships with limited liability enter largely into their mercantile 
 system, and that they are sanctioned by the law and common 
 consent of all nations, whilst the testimony of observation and 
 of experience all but universally establish their beneficent ten- 
 dency. Yet in Great Britain, the most enterprising and the 
 most important commercial country in the world, the introduc- 
 tion of such partnerships has been resisted. Not, however, as a 
 general rule : on the contrary, all the vast undertakings which
 
 220 PARTNERSHIP EN COMMANDITE. 
 
 have contributed to her gig-antic growth, were carried out by 
 partnerships with limited liability. But, instead of acting on an 
 impartial and uniform system, limited liability is, on the one 
 hand, branded as a semi-fraudulent transaction, and on the other, 
 it is held as a privilege granted by government. Such, in fact, 
 is the arbitrary system adopted in fixing the extent of liability 
 of companies, that it has become difficult to know whether an 
 incorporated or chartered company is founded on limited or 
 unlimited liability. It has well been stated, that there are at 
 present the old chartered and parliamentary corporations, 
 with absolutely limited liability; the chartered colonial banks, 
 with liabilities to two or three times the amount of shares ; 
 completely registered companies, with unlimited liability; and 
 new joint-stock banks, expressly required to be chartered, and 
 expressly denied limited liability. 1 A system so anomalous 
 in itself, and so incongruous with the ordinary principles of 
 national legislation, could not fail to awaken public attention ; 
 and repeated inquiries were instituted by her Majesty's 
 Government into the foreign systems of partnership, and 
 especially into the nature and working of partnership en 
 commandite, with the view of establishing fixed rules in 
 the granting of powers to partners in public companies, to limit 
 their liability. 
 
 266. As early as in 1837, ia report on the subject was 
 presented to the Board of Trade ; but the authorities in favour 
 of and against partnerships with limited liability were nearly 
 balanced, and the introduction of the measure was not recom- 
 mended. In 1844, the Committee of the House of Commons 
 on Joint-stock companies received further evidence on the sub- 
 ject, although it was not within the scope of their inquiry. In 
 1850, a committee of the House of Commons was appointed to 
 consider and suggest means of removing obstacles, and giving 
 facilities to safe investments, for the savings of the middle and 
 working classes. That committee recommended that charters 
 
 1 See evidence of Mr. Ludlow, in the Report of the Royal Commissioners, 
 p. 144.
 
 PAETNEKSHIP EN COMMANDITE. 221 
 
 should be granted with the greatest caution, but at a far more 
 reasonable cost. In 1851 another committee was appointed by 
 the same House, to consider the law of partnership, and the 
 expediency of facilitating the limitation of liability, with a 
 view to encourage useful enterprise, and the additional employ- 
 ment of labour. The recommendations of the committee were 
 to the effect " that power be given to lend money for periods 
 not less than twelve months, at a rate of interest varying with 
 the rate of profits in the business in which such money may 
 be employed, the claim for repayment of such loans being 
 postponed to that of all other creditors ; that in such case 
 the lender should not be liable beyond the sum advanced ; and 
 that proper and adequate regulations be laid down to prevent 
 fraud, and also a greater facility in granting charters, under 
 rules published and enforced by the proper authorities." 
 That committee recommended the appointment of a Com- 
 mission to consider the whole Law of Partnership. 
 
 267. In 1852, a Royal Commission having been appointed 
 to inquire into the state of the mercantile law of Great Britain 
 and Ireland, the Commission reported as follows on the sub- 
 ject of Partnership : — 
 
 " In considering this subject, the question which appeared to Your Majesty's 
 Commissioners of paramount importance was, whether the proposed altera- 
 tion of the law would operate beneficially on the general trading interests of 
 the country, and they arrived at the conclusion that it would not. They have 
 not been able to discover any evidence of the want of a sufficient amount of 
 capital for the requirements of trade ; and the annually increasing wealth of 
 the country, and the difficulty of finding profitable investments for it, seem to 
 them sufficient guarantees that an adequate amount will always be devoted to 
 any mercantile enterprise that holds out a reasonable prospect of gain, without 
 any forced action upon capital to determine it in that direction ; while any 
 such forced action would have a great tendency to induce men to embark in 
 speculative adventures, to an extent that would be dangerous to the interests 
 of the general commerce of the country. Moreover, Your Majesty's Com- 
 missioners find no reason to suppose that the reputation of the British 
 merchants, either at home or abroad, would be raised by the establishment of 
 firms trading with limited liability, but the contrary ; for many of the opinions 
 in favour of such a system, are coupled with a recommendation of more 
 stringent regulations than those now existing for the prevention of fraud. 
 But if such partnerships would increase the danger of fraud, they can 
 hardly be otherwise than prejudicial to our mercantile reputation. Your
 
 222 PARTNERSHIP EN COMMANDITE. 
 
 Majesty's Commissioners have also considered the subject, with regard to the 
 benefit which it may be calculated to confer on individuals, by enabling 
 them to obtain capital, and establish themselves in business, by the aid of 
 partners incurring limited liability only. It cannot be doubted that instances 
 occur where men of probity and talent would derive benefit from such a 
 system, but Your Majesty's Commissioners are of opinion that such benefit 
 has been greatly overrated. 
 
 " Further, it appears to Your Majesty's Commissioners, that the benefit to be 
 acquired by the managing or limited partners, will be at the expense of a 
 more than countervailing amount of injury to traders bearing the burden of 
 unlimited liability, who will have to enter into competition with those who 
 enjoy the protection to be given by the proposed law. 
 
 "But while Your Majesty's Commissioners are of opinion that it is not expe- 
 dient to alter the law, and allow all persons at their own election to trade with 
 limited liability, they are aware that many useful enterprises calculated to 
 produce benefit to the public, and profit to those who engage in them, are of 
 such magnitude, that no private partnership can be expected to provide the 
 funds necessary to carry them into effect, or to have the means of superintending 
 and managing them, of which docks, railways, and extensive shipping compa- 
 nies may be taken as examples. And there are others of a more limited character 
 from which benefit to the humbler classes of society may be expected to 
 accrue, such as baths and washhouses, lodging-houses and reading-rooms, to 
 the establishment of which, by large capitalists, there is little inducement. 
 These two classes of undertakings it may therefore be desirable to encourage, 
 by limiting the liability of those who embark in them. But, with regard to 
 both, Your Majesty's Commissioners think they should be subjected to some 
 previous inquiry as to the means of carrying them into effect, and the prospect 
 of benefit to the promoters and the public. With regard to those undertakings, 
 the execution of which involves an interference with the rights of property, 
 the sanction of Parliament always has been, and still ought to be required. 
 With regard to others, the privilege of having a limited liability may be 
 granted by charter ; and, for the purpose of regulating the granting of charters, 
 Your Majesty's Commissioners recommend that a Board be established to 
 decide upon all applications for them ; and this Board should require, in all 
 cases, compliance with certain fixed regulations. 
 
 " Much observation has been made upon the expense of obtaining charters 
 or private Acts of Parliament. Where a charter is applied for, calculated to 
 affect injuriously the interests of others, it seems contrary to natural justice 
 to refuse them an opportunity of stating and proving the validity of their 
 objections, but regulations should be made to keep the expenses of such 
 inquiry as low as possible. Your Majesty's Commissioners feel that it is 
 beyond their province to offer any suggestions respecting the expenses of 
 obtaining private Acts of Parliament. If a charter is asked for the establish- 
 ment of baths and washhouses, or other things of that nature, opposition is 
 hardly to be anticipated, and the Board would have little to do, beyond seeing 
 that their fixed rules have been complied with, and the expense ought to be 
 very small.
 
 PARTNERSHIP EN COMMANDITE. 223 
 
 " The attention of Your Majesty's Commissioners has been directed to another 
 subject, which appears to them within the spirit, if not within the letter, of 
 their commission, viz. the expediency of a further relaxation of the I 
 Laws, and of enabling capitalists to lend money to traders at a rate of interest, 
 and agents and servants to receive remuneration for their services by money 
 payments, varying with the profits of the business, without being exposed to 
 the hazard of being rendered liable, as partners, to the creditors of the concern. 
 
 "In ex parte Hamper, 17 Ves. page 403 (a case relating to the remuneration 
 of an agent or servant), Lord Eldon appears to have considered that such 
 contracts might exist without constituting a partnership ; provided, of course, 
 that they are made in good faith, and are not partnerships in disguise ; and 
 in Pott v. Eyton, 3 Common Bench Reports, page 32, Lord-Chief-Justice 
 Tindal expressed an opinion, that it made no difference whether the money 
 was received by way of interest on money lent, or wages, or salary as agent, or 
 commission on sales. But it appears to Your Majesty's Commissioners, that 
 in practice they would be attended with so many difficulties, and with so 
 many results which the contracting parties would probably consider very 
 objectionable, that Your Majesty's Commissioners do not expect they will 
 ever be extensively made. 
 
 " In the report of the committee of the House of Commons on the Law 
 of Partnership, dated 8th July, 1851, it was recommended 'that power be 
 given to lend money for periods not less than twelve months, at a rate of 
 interest varying with the rate of profits in the business in which such money 
 may be employed, the claim for payment of such loans being postponed to 
 that of all other creditors ; that, in such case, the lender should not be liable 
 beyond the sum advanced ; and that proper and adequate regulations be laid 
 down to prevent fraud.' As to the expediency of adopting that suggestion, 
 Your Majesty's Commissioners, who concur in the residue of this Report, are 
 not agreed in opinion. 
 
 "With regard to the Usury Laws, Your Majesty's Commissioners are of 
 opinion that it would be expedient to repeal them altogether, as far as they 
 affect personal securities, but offer no opinion with reference to real securities. In 
 concluding their brief report, Your Majesty's Commissioners feel that although 
 the details of our mercantile laws may require correction, yet there is on every 
 side such abundance of satisfactory progress and national prosperity, that it 
 would be unwise to interfere with principles, which in their judgment have 
 proved beneficial to the general industry of the country." 
 
 268. When we speak of the law of partnership, it is not 
 meant that certain kinds of partnerships are formed according 
 to the requirements of the law, but that such agreements as 
 are entered into between individuals to combine their capital 
 or their industry, on conditions of fairness and good faith, 
 are entitled to the protection of the law ; or, in other words, 
 that the law will afford the means to secure the performance
 
 224 PARTNERSHIP EN COMMANDITE. 
 
 of the engagements accruing therefrom. It is erroneous to 
 suppose that the laAv can hinder the formation of any kind of 
 partnership, where it cannot be proved that it is founded on 
 fraud ; and in all cases, the burden lies on the part of the law 
 to justify the ground of its prohibitive interposition. The 
 distinct feature of partnership en commandite is the intro- 
 duction of capital by special partners in a mercantile concern, 
 on conditions differing from a pure loan mostly in the un- 
 certainty of the profits in which the partners are entitled to 
 participate. With respect to the managing partners, they 
 stand in the same capacity as general partners in common 
 partnerships; having an unlimited control, they have also 
 unlimited liability. The special partners, however, invest an 
 amount of capital in the business, to be responsible for the 
 debts of the house, on condition that they shall participate in 
 the profits and loss only in proportion to the capital contri- 
 buted. As the special partners abstain from any interference 
 in the general management of the concern, and are thereby 
 precluded from influencing or deceiving third persons with 
 regard to their interest in it, so they undertake no further 
 liability than the sum they have embarked in the business. 
 
 269. The managing partners make it known that they 
 assume the management of the business with the assistance 
 of the capital so obtained ; and third parties who grant them 
 credit, will look to the character and capacity of the general 
 partners, and to the capital they have at their disposal, as 
 the basis of their trust. No fraud is contemplated in such 
 a transaction. In so far as it regards the individuals among 
 themselves, there is a full concurrence in the conditions of 
 the partnership. With respect to creditors, it is always at 
 their option whether, under all circumstances, a mercantile 
 house so constituted is worthy of credit; and where they 
 concede such a credit, with full knowledge of the conditions 
 on which such partnership is formed, it is tantamount to 
 their agreeing to the immunity of the special partners. The 
 doctrine that credit is granted to the general partners only, 
 is questioned by the supposition that all partners become
 
 PARTNERSHIP EN COMMANDITE. 225 
 
 co-owners of the goods or funds so acquired on credit from 
 third parties, and that therefore special partners, as well as 
 the general partners, may be considered as co-purchasers of 
 the goods or co-borrowers of the money. It must be remem- 
 bered, however, that, although it is the firm which purchases 
 goods and borrows money, and not the gerants or comman- 
 ditaires, yet the firm of a partnership en commandite is held as 
 a separate person, altogether distinct in its interests from the 
 partners commanditaircs. Moreover, the whole property, and 
 the disposal of it, vest in the managing partners only, as the 
 only persons whose names appear as the contracting parties ; 
 and it is only a lien that each commanditaire has on the 
 original capital, and on the property acquired by the managing 
 partners in their common behalf, as a security for the debts of 
 the firm. It is objected that the participation and yearly 
 withdrawal of the profits allow special partners to remove 
 from the partnership fund that amount which constitutes the 
 main foundation for the security of creditors. But, in the 
 first place, even in common partnership, there may be a 
 periodical withdrawal of the profits to the private account of 
 each individual partner, which may be used for other pur- 
 poses than that of the partnership ; secondly, notwithstanding 
 the special partners withdraw their proportions of the profits, 
 the capital itself cannot be withdrawn or otherwise assigned 
 or reduced, and that remains responsible for the continuing 
 accounts. 
 
 270. The difference on this point will be, that whereas, in 
 common partnerships, the accumulation of profits will add 
 to the solvency of the firm, on the ground of the continued 
 addition to the capital invested, or for which, although with- 
 drawn from the business, the partners remain individually 
 liable; in the case of commandite partnership, the Bolvency 
 of the firm will increase in proportion only to the increased 
 capital of the managing partners, and with the provident and 
 skilful management of the concern, which will secure a corre- 
 sponding success, and thereby attract increased support and 
 confidence. The difference between a loan and a commandite
 
 226 PARTNERSHIP EN COMMANDITE. 
 
 investment consists in this : in the former case, a sum of 
 money may be intrusted to the partnership at an exorbitant 
 interest, and whether the affair proves successful or not, both 
 capital and interest may be withdrawn at any time ; and, in 
 the other, a special partner incurs the risk of receiving no 
 interest whatever for the money, and cannot withdraw the 
 capital invested until the whole of the partnership debts are 
 extinguished. Again, in the case of a loan, should bankruptcy 
 arise, the lender of money, after having regularly received his 
 interest, will be entitled to claim as a creditor for the amount; 
 whereas a special partner cannot claim in competition with 
 creditors. Such being the conditions of partnerships with 
 limited liability, it is difficult to conceive on what grounds 
 of natural justice special partners may be made liable, as 
 general partners, for partnership debts, notwithstanding their 
 public and private agreements to the contrary. Natural justice 
 demands that any person conducting or taking any part in 
 the conduct of a business of any kind, whether as the director 
 of a company, or managing partner, or borrower of money, 
 should be liable to the full extent of his property for the debts 
 which may be incurred in respect of such business ; but it does 
 not require that shareholders or lenders of money, on what- 
 ever terms, not taking part in such management, should be so 
 liable beyond the amount of any share or loan which he may 
 have contributed for the purpose of the business. 1 
 
 271. If, therefore, the constitution of partnership with 
 limited liability be not immoral in itself, and not opposed to 
 the principles of justice, it is foreign to the purpose to inquire 
 how far it is expedient to allow its introduction ; because 
 " there is no evidence of the want of a sufficient amount of 
 capital for the requirements of trade." 2 Where it is not in 
 
 1 See Lord Hobbard's Remarks on the Law of Partnership Liability. 
 
 2 See " First Report of the Commission appointed to inquire and ascertain 
 how far the Mercantile Laws, in the different portions of the United Kingdom 
 of Great Britain and Ireland, may be advantageously assimilated ; and, also, 
 whether and what Alterations and Amendments should be made in the case 
 of Partnership, as regards the question of limited or unlimited Responsibility 
 of Partners." 1S54.
 
 PARTNERSHIP EN COMMANDITE. 227 
 
 the province of the law to exercise a prohibitory interference, 
 such interference will act unjustly in all cases " where men 
 of probity and talent would derive benefit from such a sys- 
 tem;" and it is no reason why their just right should be 
 opposed, to assert that " injury would thereby accrue to traders 
 bearing the burden of unlimited liability." It is not those 
 seeking the formation of partnerships with limited liability 
 who require the protection of the law ; but those indulging 
 in illusory forebodings as to the possible effect of competition 
 with such partnerships who assert the right to such protection. 
 
 272. Where it is not asserted that partnerships with limited 
 liability are founded on fraud, apprehensions are suggested 
 that they are exposed to numerous frauds. Moreover, it is 
 feared lest third persons, ignorant of the terms of such part- 
 nerships, may be prompted to enter into transactions with 
 them by the fact that persons of capital are connected with 
 such houses. This system of granting credit is founded on 
 erroneous grounds of confidence ; and it is not in the province 
 of the legislature to protect creditors from an unguarded mode 
 of dealing. As all human affairs are subjected to abuses, it 
 would be needless to prohibit, on account of possible frauds 
 which may be practised, or of possible misunderstandings 
 which might arise, the carrying out of otherwise fair and 
 honest transactions. It is not in the thing, but in the per- 
 son, that we must search for the causes of the recurrence of 
 frauds ; and most of the numerous checks suggested to be 
 imposed, in the event of the introduction of partnerships 
 with limited liability, are dictated by erroneous conceptions 
 of the nature and operations of the law. 
 
 273. The question of limited liability in partnership should 
 be considered in its different and distinct bearings on numerous 
 relations, especially as these have hitherto been indiscriminately 
 suggested in the various reports and evidences. A common 
 application of the principle of commandite is that of retiring 
 merchants disposing of their business in favour of some of 
 their former clerks. The case is described by Mr. Horace Say, 
 in his answers to the queries of the Mercantile Law Commis- 
 
 Q 2
 
 228 PAETNERSHIP EN COMMANDITE. 
 
 sion, as follows : — Two partners have made their fortune in 
 business, and have a large stock ; they wish to retire, but 
 are willing still to participate, in some measure, in the profit 
 of the custom they have been able to obtain. They there- 
 fore choose, from among their employed, two young men, 
 whose capacity, honesty, and economic habits, they have 
 valued for years, and constitute them the managing partners 
 of the house which shall succeed them, whilst they themselves 
 take the position of commanditaires. Suppose the business 
 requires a million of capital ; they provide it accordingly. 
 Perhaps 100,000 francs are contributed by the managing 
 partners, and 900,000 francs by the commandite partners. Of 
 course, the share of profits participated in by the managing 
 partners would be larger than they would have been entitled 
 to in proportion to the capital they have contributed, but that 
 is conceded as a reward for their care and labour. The retiring 
 merchant is thus able to leave a certain sum in trade, for the 
 benefit of the most able and faithful amongst his employed, at 
 the same time that his continued inspection is a guarantee to 
 the success of the business. At present, in this country, if the 
 retiring partner leaves the smallest sum in the concern other- 
 wise than at interest, or at a fixed annuity, he continues respon- 
 sible for the debts of the firm on the whole of his property. 
 
 274. Another class of cases is that of a person possessing 
 a special capacity for some kind of industry, who is in want 
 of capital to develop it. He offers to put in partnership his 
 time, labour, and little savings ; some rich capitalists unite 
 together, and give him a sufficient commandite, and thus he is 
 enabled to pursue any great undertaking. In cases of this 
 description it would be very different were the individual to 
 obtain the money by loan. Let it be found, for instance, that 
 the business is not successful, and three-fourths of the capital 
 was lost, he would, in the character of commanditary, have 
 sacrificed two or three years of his time and three-fourths of 
 his savings ; but he would be free of the rest, whilst the 
 capital of the commandite partners would be sufficient to 
 meet the loss. On the contrary, were he a borrower of the
 
 PARTNERSHIP EN COMMANDITE. 229 
 
 money, lie would have lost the whole of his time and savings, 
 and besides remain indebted for the rest. Under this branch 
 may be classed the numerous cases of inventors, who find in 
 the system of unlimited liability considerable obstruction to 
 the development of their inventions. 
 
 275. The principle of limited liability obtains a wider 
 application in the case of public companies. In this country, 
 railways, canals, docks, and other public works, are now 
 exempt from unlimited liability, by charter or act of parlia- 
 ment. That the sanction of the State should be obtained 
 for undertakings the execution of which involves an inter- 
 ference with the rights of property, is just in itself; but 
 such sanction need not extend to the question of liability, 
 that being part of the private contract between the company 
 and the public or their creditors. In the case of joint-stock 
 companies with a large number of shareholders, where the con- 
 cern is under the exclusive management of a board of directors, 
 the unlimited liability of all the shareholders affords an undue 
 facility to the directors for the carrying on of hazardous and 
 losing operations, which may bring ruin on persons who, owing 
 to their living at a distance or other circumstances, may be 
 wholly ignorant of the progress of the concern. With respect 
 to banking companies, it is frequently found that wealthy men 
 abstain from becoming shareholders in joint- stock banks, in 
 consequence of the unlimited liability. To remedy this evil, 
 it has been suggested that a uniform rule for banking com- 
 panies should prevail, on the basis of the charters granted to 
 the Colonial banks : viz. a fixed amount of paid-up capital; an 
 extent of liability, on the part of the shareholders, to three or 
 four times the amount of the capital; a restriction on the bank 
 against incurring debts to the public, either by deposits, notes, 
 or any other means, beyond a certain multiple of the paid-up 
 capital ; and a prohibition against engaging in any other 
 branches of business, or making certain classes of investments. 1 
 
 276. As banking is, in effect, a modification of trading, there 
 
 1 See Evidence of J. W. Gilbart, Esq., to the Mercantile Law Commission, 
 p. 135.
 
 230 PARTNERSHIP EN COMMANDITE. 
 
 does not appear any reason why banking companies should 
 not be placed in the same category as joint-stock companies, 
 by allowing them to limit their liability to the amount sub- 
 scribed, upon complying with the prescribed regulations. An 
 exception should, however, be made with regard to those Banks 
 which have the power of issuing their own bank-notes ; these 
 generally passing as money into the hands of those who are not 
 in a position to appreciate the character and solidity of the bank. 
 A similar power to limit the liability of their members should 
 also be conceded to insurance companies, although the risk in- 
 curred by them differs from common companies, in the distant 
 data at which they are expected to refund the amount, and in the 
 sacred nature of the trust reposed in them generally in behalf 
 of widows and children. It must in this, as in all transactions, 
 be left to the care of the insured to select that company which, 
 whether by the inherent solvency of the concern, or by the 
 unlimited liability of the shareholders, or other circumstances, 
 offers the most reasonable prospect of undoubted security. 
 Much has been said as to the influence which the introduction 
 of partnerships with limited liability into the United King- 
 dom might have on the state of the working classes ; on the 
 one hand, by allowing them to take an interest in the factories 
 and mills, and on the other, by the facility which they would 
 acquire of forming co-operative societies. The discussion of 
 this branch of the subject, however, scarcely falls within the 
 province of this work. 
 
 277. The statistics of partnerships of foreign countries are 
 important to a question of so practical a character, as they 
 show the proportion which commandite bear to other kinds of 
 partnerships. In France, the number of partnerships of all 
 kinds registered in 1852 were 2,806: of these 2,154 were 
 partnerships in collective name or general partnership, 452 
 simple commandite, 70 commandite by shares to nominated 
 persons, and 130 shares to bearer. In Belgium, from 1845 to 
 1850, there were registered 511 partnerships in collective 
 name, and 110 in commandite. 1 
 
 1 Mr. William Hawse, in his valuable pamphlet on " Unlimited and Limited 
 Liability," states that, in Europe, partnerships en commandite are —
 
 PARTNERSHIP EN COMMANDITE. 231 
 
 278. One of the main reasons assigned against any limitation 
 of the liability of partners, is the encouragement which would 
 thereby be given to reckless trading; as if unlimited liability 
 had at anytime proved a preventive of the speculative mania 
 which almost periodically prevails in the mercantile world. 
 The records of 1824—1826, and 1835—1837, in this country, 
 where commandite partnerships are not allowed, and similar 
 accounts of commercial speculation in France under the com- 
 mandite system, are sufficient to show that the causes of such 
 commercial excitements must be sought for in other influences 
 than the state of commercial legislation. It has been asserted 
 that the commerce of Great Britain does not require any 
 additional stimulus, and that, perhaps, a larger amount of 
 capital is already embarked in trade than there are channels 
 of employment. This assertion may be met by the fact, that 
 owing to the extension of commerce to the most distant parts 
 of the world, much larger capital is needed to be embarked, 
 whilst longer time is required to obtain the returns. More- 
 over the possession of a large amount of capital by some is no 
 reason why obstructions should be placed in the way of those 
 less fortunate in obtaining the means by which alone their 
 skill and industry may be exercised with a prospect of success. 
 It has also been suggested that partnerships en commandite 
 may not prove so successful as partnerships with unlimited 
 liability ; and again, that it is not desirable to encourage 
 persons out of trade to employ their money in mercantile 
 operations over which they can have no control, and the 
 utility of which they cannot judge. These and similar argu- 
 ments may be urged against the expediency of undertaking 
 any specific business ; but it is altogether beyond the duties 
 and province of Government to act as paterfamilias over the 
 private interests of any class. 
 
 {France and Also common, though not ( Spain, 
 Holland. generally so successful as < Hamburg, 
 
 other partnerships, in ( Trieste. 
 
 / Belgium, 
 Allowed by law, but not com- I Prussia, 
 mon : nor, when established, I Saxony, . , , . f Sweden, 
 
 more successful than other \ Portugal, Aud ™*nown IU { Leipsic. 
 partnerships, in j Venice, 
 
 Naples. 
 
 Common and 
 approved in
 
 232 ON BILLS OF EXCHANGE. 
 
 CHAPTER V. 
 
 ON BILLS OF EXCHANGE. 
 
 Section I.— NATURE AND FORM OF BILLS AND NOTES. 
 
 279. In our brief dissertation on the progress of commerce, 
 we have already noticed the origin of hills of exchange. On 
 the utility of this mercantile instrument ; on the metamor- 
 phosis it has effected in the commercial intercourse between 
 countries ; on the immense importance it has acquired as the 
 representative of money, merchandise, and labour, and even 
 as an object of commerce in itself, we need not enlarge. An 
 attempt has been made to ascertain the magnitude and fluctu- 
 ations of the amount of bills of exchange, inland and foreign, 
 in circulation at one time in Great Britain, during the period 
 1828 — 1847 both inclusive, and it was shown that the total 
 amount of bills, inland and foreign, amounted to an average 
 sum of 110,018,000/. The enormous increase of commerce 
 since then must have proportionally increased the amount of 
 bills in circulation, and they may be assumed to reach at 
 present 150,000,000/. sterling. 1 
 
 280. A bill of exchange is an open letter of request, 
 addressed by one person to a second, desiring him to pay 
 a sum of money to a third, or to any other to whom that third 
 person shall order it to be paid; or it may be payable to 
 bearer. It presupposes that a certain sum of money is held 
 by the drawer in the drawee's hands, which sum, or a portion 
 of it, is assigned by the bill to another person ; and, by the 
 
 1 See a paper on the subject by William Newrnarch, Esq. in the Journal of 
 the Statistical Society, vol. xiv. p. 143.
 
 NATURE AND FORM OF BILLS OB NOTES. 233 
 
 acceptance of such bill, the drawee appropriates that sum to 
 the service of that person, or any other possessing the bill, 
 by his order. 1 The effect, however, that a bill may have 
 of charging specific funds of the draAver in the hands of the 
 drawee, so as to cause the proceeds of any specific property 
 deposited with the drawee to be set apart to the payment of 
 bills drawn upon it, has not been supported in England, 2 
 though it is so held in Scotland. The person who makes 
 the bill is called the drawer; he to whom it is addressed, 
 the drawee ; and when he accepts the bill, he becomes the 
 acceptor. The person to whom it is payable is the payee ; 
 and if he appoint another to receive the money, that other is 
 called the endorsee, and the payee becomes with respect to 
 him the endorser ; and any one who happens for the time to 
 be in possession of the bill, is called the holder of it. The 
 following is the form of an inland bill of exchange : — 
 
 "£100. "London, Nov. 1, 1854. 
 
 " At sight (or on demand, or at days after 
 
 sight, or at days after date), pay to Mr. , or order 
 
 (or bearer), one hundred pounds for value received. 
 
 " Thomas Brown." 
 
 281. A promissory note is a written agreement to pay 
 another person therein named, absolutely and unconditionally, 
 a certain sum of money, at a time specified therein. Promis- 
 sory notes were put on the same footing as bills of exchange 
 by the statute of Anne, in 1705. 3 This statute was intro- 
 duced into the United States of America ; but in a few States 
 there arc still some restrictions on the negotiability of notes. 
 The same is the case in the Cape of Good Hope, where the 
 statute of Anne does not appear to be in force. 4 A promissory 
 note differs from a bill of exchange, inasmuch as the former is 
 a promise to pay, — the latter is an order to pay; it is only 
 when the note is endorsed that the resemblance of the two 
 
 i Minet v. Gibson, 1 H. Bl. 569. 2 Laycock v. Johnson, 6 Hare, 199. 
 
 3 3 & 4 Anne, c. 9, § 1. 4 Russell v. Kitchen, 6 Ir. Iur. 218.
 
 234 ON BILLS OF EXCHANGE. 
 
 documents begins, for then a promissory note is an order by 
 the endorser upon the maker of the note, as debtor by the 
 note, to pay the endorsee. 1 The following is a form of a pro- 
 missory note : — 
 
 " £100. " Lon(ion > Nov - b 1854 - 
 
 " Three months after date, I promise to pay to Mr. , 
 
 or order, one hundred pounds for value received. 
 
 " Thomas Brown/' 
 
 282. No precise words are necessary to be used in a bill of 
 exchange or note, provided it be clearly shown that the par- 
 ties intended it to be a bill or note. 2 The principal requisites 
 of a note are, an express promise to pay — a specific sum — 
 payment of money — and payment absolute ; and those of a 
 bill of exchange are, an order to pay — a sum certain — the 
 name of the payee 3 — payment of money — and payment abso- 
 lute. 4 A bill or note, payable in cash or Bank of England 
 notes, or in East India Stock, would not be valid. 5 
 
 283. A bill or note may be drawn or endorsed with pencil, 6 
 or with any other specific material, provided it be in writing. 
 The sum is usually expressed in figures and in words, and, 
 where these are at variance, the sum in the body of the bill 
 prevails. 7 A bill or note, except cheques on bankers, cannot 
 be for a sum less than 20s. ; 8 and a bill or note for any sum 
 between 20s. and 5/., 9 to be valid, must contain the name and 
 abode of the person to whom it is made payable, and the 
 
 1 Heylin v. Adarason, 2 Burr. 676. Edie v. East India Company, Burr. 1224. 
 Chadwick v. Allen, Str. 706. 
 
 2 Shuttleworth v. Stevens, 1 Camp. 407. Green v. Davies, 4 B. & C. 235. 
 Block v. Bell, 1 M. & Rob. 149. 
 
 3 Peto v. Reynolds, 22 L. T. 246 Excb. 
 
 4 Roberts v. Peake, 1 Burr. 325. Carlos v. Fancourt, 5 T. R. 482. Viscount 
 Garnock v. Duke of Queensberry, M. 1401. 
 
 5 Bolton v. King, 4 B. & Ad. 619. 3 & 4 Will. IV. c. 98, § 6. 7 & 8 Vict. 
 c. 32, § 27. Martin v. Cbauntry, Str. 1271. 
 
 6 Geary v. Pbysic, 5 B. & C. 234. 
 
 7 Saunderson v. Piper, 5 Bing. N. C. 425. 
 
 8 48 Geo. III. c. 88, § 2. 9 7 Geo. IV. c. 6, & 17 Geo. III. c. 30.
 
 NATUEB AND FORM OF BILLS OR NOTES. 235 
 
 signature must be attested by witnesses. A person issuing a 
 note for less than 20s. is liable to a penalty not less than 5/. 
 and not exceeding 20/. ; and a person accepting a bill or 
 note without the above requisite is liable to a penalty of 20/. 
 Such bill must also bear date, and be made payable within 
 twenty-one days after date. Generally, in bills or notes for 
 any sum above 51., the date is not necessary; if the date be 
 omitted, the bill is considered as dated on the day of issue ; l 
 but in Scotland, if a bill be blank as to date, no summary 
 diligence or execution can be issued, and if the sum exceed 
 8/. 65. &d., the date, even in an ordinary action, can be sup- 
 plied only by written evidence. Although no contracts arc 
 valid if concluded on a Sunday, the simple drawing of a bill 
 of exchange on a Sunday is not sufficient to avoid it. Post- 
 dating of a bill, in order to evade the stamp law, is a criminal 
 offence. 2 
 
 284. An important requisite of a bill or note is, that it be 
 not payable on a contingency, but at all events, 3 although it 
 makes no difference when such an event may happen. 4 How- 
 ever distant the time, if it be a day that must come, it is suffi- 
 cient. A bill cannot be made payable out of a supposed 
 fund ; 5 it cannot refer to the realization of any sale of goods, 6 
 or to the happening of any particular event uncertain in 
 itself, but it must be payable absolutely. If the bill be in any 
 wise conditional, it loses at once its essential character, and 
 would not be negotiable. The place of payment is also speci- 
 fied. The bill may bear a general or a qualified acceptance, 
 which will have the effect of regulating the duty of the holder 
 in presenting the bill for payment. It is a general acceptance, 
 where the bill is made payable at a banker's or other places ; 
 
 1 Sinclair v. Baggaley, 4 M. & W. 212. Anderson v. Weston, 6 Bing. N. C. 
 296. De la Courtier v. Bellamy, 2 Shaw, 422. Giles v. Bourne, 6 M. & S. 73. 
 
 2 55 Geo. III. c. 184. Serle v. Norton, 9 M. & W. 309. 
 
 3 Drury v. Macaulay,16 M. & W. 147. Wheatley v. Williams, 1 M. & W. 
 533. Hartley v. Wilkinson, 4 Camp. 127. 
 
 4 Colehard v. Cooke, Willis, 398. 
 
 5 Dawkes v. Earl de Loraine, 3 Wils. 207. 
 
 6 Alexander v. Thomas, 16 L. T. 387, Q. B.
 
 236 ON BILLS OF EXCHANGE. 
 
 it is qualified, where it is payable at a banker's or other 
 place only. Notes payable to bearer on demand, for a sum 
 less than 20?. must be made payable at the bank or place 
 where they are issued. 
 
 285. It is also essential that the name of the payee be clear, 
 sufficiently designated, and certain. A note payable to A or 
 to B is not a valid promissory note. 1 The payee may be 
 described in his public capacity as the manager of a bank ; 
 but it was recently decided that a note, payable to the secre- 
 tary for the time being of a company, or to the individual 
 who at the time of the instrument falling due should be in 
 the situation of secretary to the company, is a note payable on 
 a contingency, and void. 2 A bill or note may be payable 
 to an individual, or to his order, or to the bearer; but in 
 order that a bill or note be made negotiable, it must contain 
 the words " to order," or " to bearer." In Scotland, a bill is 
 negotiable though not expressed to be made payable " to 
 order," or " to bearer." A mere acknowledgment of debt, 
 such as I O U, is not negotiable. 3 A bill or note, payable 
 to a fictitious payee, will, against the drawer or maker, be 
 considered as payable to bearer. 4 
 
 286. The name of the maker of a note, or the drawer of a 
 bill, must be subscribed at the bottom of every bill, either by 
 the maker himself, or by some one appointed for the purpose ; 
 and the name should be written in full. 5 It is not necessary 
 that the bill should contain the value received. Where such 
 words are omitted, the value is presumed to have been given 
 for the bill. A person signing his name on a blank paper, 
 bearing a bill of exchange stamp, either as drawer, acceptor, 
 or endorser, will render himself liable as such for any sum 
 afterwards filled in which is covered by the stamp, 6 only, how- 
 
 1 Blackenhagen v. Blundell, 2 B. & A. 417. 
 
 2 Rex v. Box, 6 Taunt. 325. Storm v. Sterling, 23 L. T. 187, Q. B. 
 
 3 Pirie v. Smith, 11, § 473. Israel v. Israel, 1 Camp. 499. Ellis v. Ellis, 
 Gow, 216. Fisher v. Leslie, 1 Esp. 426. 
 
 4 Tatlock v. Harris, 3 T. R. 174. Minet v. Gibson, Ibid. 481. 
 
 5 Taylor v. Dobbins, Str. 399. 
 
 Montague v. Perkin.s, 22 L. J. N. S. C. P. 180.
 
 NATURE AND FORM OF BILLS OR NOTES. 237 
 
 ever, to bond fide holders for valuable consideration, without 
 notice. 1 
 
 287. A bill of exchange is either inland or foreign. It is 
 an inland bill when made and accepted in England ; it is a 
 foreign bill when made or payable abroad. As yet, the dis- 
 tinction of nationalities between England, Ireland, and Scot- 
 land, has not been obliterated. A bill or note drawn in 
 England on a party in Scotland or Ireland, and vice versd, 
 is deemed as a foreign bill, except as regards the new stamp 
 duties. So it is in the United States of America : a bill of 
 exchange drawn in one of the States upon a person resident 
 in another State is a foreign bill, because each State has a 
 separate and distinct municipal jurisprudence, and is abso- 
 lutely sovereign in its political organization. Foreign bills, 
 properly so called, are drawn in several parts, called a set. 
 All the parts must be in all respects alike, and each ought 
 to contain a condition that it shall be payable only so long as 
 all the others remain unpaid, as well as mention every other 
 part of the set. All the several parts ought to be delivered to 
 the payee, except where one is forwarded to the drawee for 
 acceptance. The usual form of foreign bills is as follows : — 
 
 "Loudon, Nov. l, 1854. « Exchange for 1,000 francs. 
 
 " At two months after date (or at sight, or at one or 
 more usances), pay this my first bill of exchange (second and 
 
 third of the same tenor and date not paid) to Messrs. • or 
 
 order (or bearer), one thousand francs, value received, and 
 place them to account. « WlLLIAM JoNES> 
 
 " To M. , Paris/' 
 
 288. The bill, once drawn and completed, cannot be altered 
 without the consent of the parties. An alteration made in the 
 sum, or any other material'part, would be sufficient to discharge 
 the acceptor; 2 and no evidence is admitted of a collateral or con- 
 comitant circumstance to vary the purpose of the bill or note. 3 
 
 » Hatch v. Searles, 22 L. T. 280 (V. C. S.) 23 L. T. 467. 
 
 s Burchficld v. Moore, 23 L. T. 143, Q. B. 
 
 3 Foster v. Jolly, 1 C. M. & R. 705. Master v. Miller, 4 T. R. 320.
 
 238 ON BILLS OF EXCHANGE. 
 
 289. The laws of foreign countries prescribe in detail the 
 requisites of bills of exchange and promissory notes. By the 
 new law of Germany, and by the Russian Swod, and the law 
 of Sweden, the words, "bill of exchange," must be inserted 
 in the bill. In France, the essential character of a bill, as 
 the remittance of money from one place to another, has been 
 preserved in the Code ; a bill must be drawn in one place, and 
 payable in another ; it must bear date, and state the sum to 
 be paid, the name of the drawee, the time and place of payment, 
 the value given and in what kind, and the name of the payee. 
 When a bill is wanting in any of the above requisites, it is 
 held as a simple promise, and not negotiable. Bills of ex- 
 change contain also other clauses, such as " In case of need, at 
 
 Messrs. ," or, " Au besoin chez Monsieur ." 
 
 This is a provision by the drawer that, in case of non- 
 payment by the drawee or acceptor, the holder may obtain 
 payment from another person in the same place. 
 
 Section II.— STAMP DUTIES ON BILLS AND NOTES. 
 
 290. A bill or note cannot be issued or circulated unless it 
 be duly stamped. A new statute on stamp duties has been 
 enacted, extending over Great Britain and Ireland, which 
 came into operation on the 9th of August, 1854. 1 The 
 stamp duties on bills and notes are now regulated by a uniform 
 scale according to the amount, and irrespective of the date at 
 which the bills or notes may be drawn or issued. These 
 duties, however, did not come into operation until the 11th of 
 October. All inland or foreign bills issued in this country 
 prior to that date are still subject to the old stamp duties ; 
 nor did any alteration take place until the 11th October as to 
 the negotiation or payment of unstamped foreign bills, drawn 
 abroad and payable in this country, or foreign bills drawn 
 abroad and payable abroad, but negotiated to English mer- 
 chants. In all such cases the law was not altered till the 11th 
 October, and therefore, though dealt with as by the old law, 
 
 1 17 Vict. c. 83.
 
 STAMP DUTIES ON BILLS AND NOTES. 
 
 239 
 
 such documents would not be invalid. If, however, such bills 
 became payable after the 11th October, the holder must affix 
 to them an adhesive stamp of the proper value, before he in- 
 dorses, transfers, negotiates, or presents each for payment ; but 
 adhesive stamps are not applicable to inland bills, or foreign 
 bills drawn in this country, which must, in both cases, be 
 drawn upon stamped paper as hitherto. 
 The stamp duties are as follow : — 
 
 Inland Bills of Exchange, Draft, or Order, for the Payment to the Bearer or to 
 Order, at any tiiac otherwise than on Demand, of any Sum of Money. 
 
 
 
 
 £ s. 
 
 (/. 
 
 
 
 £5 . 
 
 . 
 
 1 
 
 Exceeding £5 and not exceeding 
 
 10 . 
 
 . 
 
 2 
 
 10 
 
 >) 
 
 25 . 
 
 . 
 
 3 
 
 25 
 
 » 
 
 50 . 
 
 . 
 
 6 
 
 50 
 
 »> 
 
 75 . 
 
 . 
 
 9 
 
 75 
 
 }> 
 
 100 . 
 
 . 1 
 
 
 
 100 
 
 >> 
 
 200 . 
 
 . 2 
 
 
 
 » 200 
 
 >» 
 
 300 . 
 
 . 3 
 
 
 
 „ 300 
 
 »j 
 
 400 . 
 
 . 4 
 
 
 
 „ 400 
 
 !> 
 
 500 . 
 
 . 5 
 
 
 
 500 
 
 >) 
 
 750 . 
 
 . 7 
 
 6 
 
 750 
 
 J> 
 
 1,000 . 
 
 . 10 
 
 
 
 „ 1,000 
 
 » 
 
 1,500 . 
 
 . 15 
 
 
 
 1,500 
 
 >> 
 
 2,000 . 
 
 . 1 
 
 
 
 2,000 
 
 » 
 
 3,000 . 
 
 . 1 10 
 
 
 
 „ 3,000 
 
 » 
 
 4,000 . 
 
 . 2 
 
 
 
 4,000 and upwards . 
 
 
 2 5 
 
 
 
 ssory Notes, for the Payment in any other manner 
 
 than to the 
 
 Be* 
 
 Demand 
 
 , of any Sum 
 
 of Money. 
 
 £ s. 
 
 d. 
 
 
 
 £5 . 
 
 ..00 
 
 1 
 
 Exceeding £5 and not exceeding 
 
 10 . 
 
 ..00 
 
 2 
 
 10 
 
 » 
 
 25 . 
 
 ..00 
 
 3 
 
 25 
 
 it 
 
 50 . 
 
 ..00 
 
 6 
 
 50 
 
 >> 
 
 75 . 
 
 ..00 
 
 9 
 
 75 
 
 » 
 
 100 . 
 
 ..01 
 
 
 
 Promissory Notes, for the Payment either to the Bearer on Demand, or in any other 
 manner than to the Bearer on Demand, of any Sum of Money. 
 
 £ s. d. 
 
 Exceeding £100 and not exceeding £200 ... 2 
 200 „ 300 ... 3
 
 240 
 
 ON BILLS OF EXCHANGE. 
 
 
 
 
 
 £ 5. d. 
 
 eding £300, and not exceeding 
 
 £400 . . 
 
 .040 
 
 400 
 
 
 j» 
 
 500 . 
 
 .050 
 
 „ 500 
 
 
 >> 
 
 750 . 
 
 .076 
 
 750 
 
 
 )> 
 
 1,000 . 
 
 . 10 
 
 1,000 
 
 
 » 
 
 1,500 . 
 
 . 15 
 
 1,500 
 
 
 >> 
 
 2,000 . 
 
 .10 
 
 2,000 
 
 
 >> 
 
 3,000 . 
 
 . 1 10 
 
 3,000 
 
 
 >> 
 
 4,000 . 
 
 .200 
 
 4,000 
 
 and 
 
 
 
 2 5 
 
 291. Stamp duties are now chargeable on all bills of 
 exchange drawn out of the United Kingdom, which may be 
 paid, endorsed, transferred, or otherwise negotiated within the 
 United Kingdom, wheresoever the same may be payable. 1 
 Every bill purporting to be drawn at any place out of the 
 United Kingdom is henceforth subject to stamp duties as 
 foreign bills, notwithstanding that, in fact, the same may have 
 been drawn within the United Kingdom. 2 The duties are 
 denoted by adhesive stamps, to be affixed by the holder of the 
 bill before he presents the same for payment, or endorses, 
 transfers, or in any manner negotiates such bill, cancelling the 
 stamp so affixed by writing thereon his name, or the name of 
 his firm, and the date of the day and year on which he wrote 
 the same, so that the same stamp may not be used for other 
 purposes. Any person who presents for payment, or pays, 
 endorses, or negotiates such bills, without an adhesive stamp 
 being duly affixed, or any person refusing or neglecting to 
 cancel such stamp, incurs the penalty of 50/., whilst such bill 
 becomes invalid as an evidence in court, and no person can 
 recover thereon. 3 The duty of stamping the bill lies not with 
 the acceptor, but with the first holder ; nor is it necessary 
 that it be stamped before acceptance, except that before 
 paying it the acceptor must see that the bill was duly 
 stamped. Even when a bill is sent to the drawee himself 
 in payment, and the same is never accepted, but cancelled, 
 the bill must be stamped, so that it may be produced as 
 evidence of payment. 
 
 1 1 Vict. c. 83, § 3. 2 Ibid. § 4. 
 
 3 Ibid. § 5.
 
 STAMP DUTIES ON BILLS AND NOTES. 241 
 
 292. Any person drawing or issuing in the United King- 
 dom any bill of exchange payable out of the United Kingdom, 
 purporting to be drawn in a set, and who should not draw and 
 issue on stamped paper the whole number of bills which such 
 bill purports the set to consist of; or any person transferring or 
 negotiating, within the United Kingdom, any such bill (drawn 
 or issued in the United Kingdom) purporting to be drawn 
 in a set, and not at the same time transferring and delivering, 
 on paper duly stamped, the whole number of bills which such 
 bill purports to consist of, such person becomes liable to a 
 penalty of 100?. ; and any person receiving the same, either 
 in payment or as a security, without having transferred or 
 delivered to him, duly stamped, the whole number of bills 
 included in the set, would not be entitled to recover on such 
 bill, or make the same available for any purpose whatever. 1 
 
 293. The following are the present stamp duties on foreign 
 bills :— 
 
 Foreign bills of exchange drawn in, but payable out of, the 
 United Kingdom : if drawn singly, or otherwise than in a set 
 of three or more, the same duty as on an inland bill of the 
 same amount and tenor. If drawn in sets of three or more, 
 for every bill of each set, — 
 
 £ s. d. 
 
 Where the sum payable thereby shall not exceed £25 .001 
 
 And when it shall exceed £25, and not exceed 50 . 2 
 
 50 „ 75 . 3 
 
 75 „ 100 . 4 
 
 100 „ 200 . 8 
 
 200 „ 300 . 1 
 
 „ 300 „ 400 . 1 4 
 
 „ 400 „ 500 . 1 8 
 
 „ 500 „ 750 . 2 6 
 
 „ 750 „ 1,000 .034 
 
 „ 1,000 „ 1,500 .050 
 
 „ 1,500 „ 2,000 . G 8 
 
 2,000 „ 3,000 . 10 
 
 „ 3,000 „ 4,000 . 13 4 
 
 „ 4,000 and upwards .... 15 
 
 1 17 Vict. c. 83, § 6. 
 E
 
 242 ON BILLS OF EXCHANGE. 
 
 Foreign bills of exchange, drawn out of the United Kingdom, 
 and payable within the United Kingdom, require a stamp of 
 the same duty as on an inland bill of the same amount and 
 tenor : if drawn in a set, it is sufficient that one of the set be 
 stamped with, the full rate. Foreign bills of exchange, drawn 
 out of the United Kingdom, and payable out of the United 
 Kingdom, but endorsed or negotiated within the United 
 Kingdom, require a stamp of the same duty as on a foreign 
 bill drawn within the United Kingdom, and payable out of 
 the United Kingdom. 
 
 294. If any material part of a bill or note, such as the 
 time or place of payment, or the sum, be altered, a new stamp 
 is necessary j 1 so if a name were inserted, as " payable at 
 Messrs. , Chiswell-street," without the acceptor's know- 
 ledge, the alteration would be material, because it would lead 
 
 to a presentment at Messrs. , and not at his own house, 
 
 which might cause the bill to be treated as dishonoured with- 
 out any presentment at the place where the acceptor expected 
 it. But to require a new stamp, the alteration must have been 
 made after the bill was issued ; and the bill is not considered 
 as issued until it has been passed away by the drawer or 
 maker, and accepted by the payee. 
 
 295. If a stamp be necessary to the validity of a bill of 
 exchange drawn or made in a foreign country, then, unless 
 it had such stamp, the bill ought not to be received as evidence 
 in our courts of justice. A contract must be valid where it 
 is entered into, or otherwise it is void all the world over. But 
 the revenue laws of other countries are not regarded as bind- 
 ing in international jurisprudence. 
 
 Section III.— PARTIES TO A BILL OR NOTE. 
 
 296. All who have capacity to contract may draw, endorse, 
 or accept a bill of exchange. In this are comprised all per- 
 sons of age, sound mind and understanding, whether males or 
 females, alien friends, trustees, agents, guardians, executors, 
 
 1 Bowman v. Nichol, 5 T. R. 537. KniU v. Williams, 10 East, 431.
 
 ENDORSEMENT. 243 
 
 and administrators; excepting infants, married women, or 
 persons insane or imbecile of mind, who are incompetent to 
 bind themselves by such an instrument. For farther infor- 
 mation on this head the reader is referred to the chapter on 
 Merchants. 
 
 Section IV.— ENDORSEMENT. 
 
 297. A bill of exchange originally was always made pay- 
 able to a specific individual. The words, " or order," by 
 which the bill is made transferable, arc comparatively of 
 recent invention, and they are ascribed to Cardinal Richelieu, 
 between 1624 — 1642. A bill or note not containing the di- 
 rection to pay "to the order of the payee," or "to bearer," 
 though valid is not transferable, 1 In Scotland, however, this 
 clause is not essential to the negotiability of the bill. 2 
 
 298. No particular form is necessary for an endorsement, 
 provided that it contains the signature of the endorser at the 
 back of the bill, and that there be a delivery with intent to 
 pass the property in the bill to the endorsee. The endorse- 
 ment, however, may be made in any part of the bill, and even 
 in another paper annexed thereto ; but it must be in writing, 
 though it may be in ink or pencil. If the bill or note be for 
 less than five pounds, the endorsement must specify the name 
 and the place of abode of the endorsee, it must bear date, and 
 be attested by a subscribing witness. A bill may be transferred 
 by endorsement to a given person and to his order, or by blank 
 endorsement and delivery to him. In order, however, to 
 effect a valid transfer, it is not sufficient to put the signature 
 on the back of a bill : that is only an act towards it. To 
 constitute a legal and valid endorsement of a bill of exchange, 
 there must be an evident intention to transfer, and the manual 
 delivery of the bill to the endorsee. 3 
 
 299. A bill of exchange is a negotiable instrument, the 
 property of which passes by delivery. It is enough if the 
 
 1 Smith v. Kendall, 6 T. R. 123. 
 5 Chrickton v. Gibson, January 1726. 
 3 Sainsbury v. Parkinson, 18 L. T. 198, C. B. 
 R 2
 
 244 ON BILLS OF EXCHANGE. 
 
 owner received such a bill bond fide and for value, to give 
 him full authority to transfer it ; and the property vests in the 
 endorsee, by whatever way the endorser got possession of it. 
 The holder coming fairly by a bill or note, has nothing to do 
 with the transaction between the original parties. Although 
 a bill was stolen, the title of a bond fide holder would not be 
 liable to any extrinsic objections ; it is sufficient if he can 
 prove that good consideration was really given for the bill, 
 and that he actually took it bond fide. 1 Where a bill has 
 been transferred by endorsement to a specific person, a thief 
 or a finder could convey no interest in it to another person. 
 It is only when it is transferable by mere delivery, that he 
 might convey a title to a person receiving it bond fide. But 
 in all cases the utmost caution must be proved to have been 
 used by such person in the acquisition of such bill, in order 
 that he may be able to sustain his title against the original 
 owner of it. 2 It is the same for notes endorsed in blank, 
 and notes payable to bearer, and also for exchequer bills, 
 which, when taken bond fide and for a valuable consideration, 
 pass by delivery. 3 
 
 300. The negotiability of a bill may be restrained by 
 special endorsement, either by describing the specific object 
 or use for which it is to be applied, or by making it payable 
 to a particular party only, in which case the endorsee would 
 not acquire a general unlimited authority, and third persons who 
 take it notwithstanding such restriction, would take it at their 
 own peril, provided, however, the restriction be clearly ex- 
 pressed, as it would not be presumed from equivocal language. 4 
 Every endorsement is in the nature of a new bill ; and, if 
 there are several endorsers, each becomes individually liable 
 as a new drawer, so long as the bill remains in circulation. 5 
 
 1 Miller v. Race, Burr. 452. Lawson v. Weston, 4 Esp. 56. 
 
 2 Solomons v. Bank of England, 13 East, 135. Goodman v. Harvey, 
 4 Ad. & E. 870. Gill v. Cubitt, 3 B. & C. 466. 
 
 a Vookey v. Pole, 4 B. & Aid. 1. 
 
 * Archer v. Bank of England, 2 Doug. 637. Sigourney v. Lloyd, 5 Bing. 525. 
 
 5 Pleylyn v. Adamson, 2 Burr. 669.
 
 ENDORSEMENT. 245 
 
 301. A bill of exchange for any sum above five pounds may 
 be indorsed either before the time of maturity or afterwards ; 
 but though its negotiability continues, there is a difference in 
 the credit attached to the instrument. So long as the bill or 
 note is not due, it carries no suspicion whatever on the face 
 of it, and the party receives it on its own intrinsic credit ; but 
 if the bill or note be over-due, though it is still negotiable, yet 
 it is out of the common course of dealing, and does give rise 
 to suspicion. So it is just that the endorsee should take it, 
 subject to all equities and objections to which it is subject in 
 the hands of the endorser, so far as they are intrinsic to the 
 bill. 1 These objections, however, must be in the note itself, 
 and not collateral and independent of the note transaction, 
 such for example as any right of set-off against a former 
 holder. In Scotland, the endorsee of a bill over-due is not 
 subject to latent objections attaching to the bill, if there be 
 no mark of dishonour on the bill, and nothing suspicious in 
 the transaction. 2 
 
 302. The property in a bill may also be transferred without 
 endorsing or putting the name on it, and the party transferring 
 it would incur no liabilities except such as are incident to the 
 transfer itself. 3 So he warrants that he was the lawful holder 
 of the bill, and that the bill is not fictitious or forged. 4 If he 
 knew the bill to be bad, it would be like sending out a counter- 
 feit into circulation to impose upon the world, instead of the 
 current coin. Generally, where a bill of exchange is trans- 
 ferred by the endorsee by delivery only, without any fresh 
 endorsement, the transferee takes as against the acceptor any 
 title which the intermediate endorsee possessed." An endorse- 
 ment admits all antecedent endorsements, and the endorser 
 becomes thereby liable, notwithstanding prior endorsements 
 bore false signatures, because he stands in the capacity of the 
 
 1 Brown v. Davies, 3 T. R. 80. Boehni v. Sterling, 7 T. R. 428. 
 
 2 Wilke v. Wilson, 16 F. C. 361. 
 
 3 Fenn v. Harrison, 3 T. R. 757. 4 Jones v. Ryde, 5 Taunt. 488. 
 5 Fairclough v. Sterling, 23 L. T. 187, Q. B.
 
 246 ON BILLS OF EXCHANGE. 
 
 drawer of a new bill. The endorsee, moreover, acquires a 
 right of action against all parties whose names are on the bill, 
 in case of non-acceptance or non-payment. 
 
 303. The right to transfer a bill rests in the payee or his 
 assigns. An infant could convey no interest by an endorse- 
 ment. If a bill is payable to a single woman, and she 
 marries, her husband is the proper person to transfer it. 1 
 A bill may be transferred by the personal representative of a 
 deceased payee, 2 or by the assignees of one who became 
 bankrupt. 3 
 
 304. The endorsement of bills or notes in most countries 
 of the continent of Europe must be special or complete. The 
 French code demands that the endorsement shall contain the 
 date, the value furnished, and the name of the endorsee. In Sar- 
 dinia and other Italian States, full endorsements are required. 
 The German law sanctions blank endorsement. It is impor- 
 tant to observe that a bill transferred by blank endorsement, 
 in a country where complete endorsement alone is sufficient, 
 would not give a right of action in this or any other country. 
 
 Section V.— PRESENTMENT FOR ACCEPTANCE. 
 
 305. It is always advisable to present bills for acceptance 
 without delay, in order that the holder may exonerate himself 
 from the responsibility of any possible contingency. Present- 
 ment is necessary when the bill is drawn payable at sight, or 
 at a certain period after sight; 4 and the presentation must take 
 place within a reasonable time, using always prompt diligence, 
 according to the case in question. Though the bill need not 
 be sent for acceptance by the very earliest opportunity, there 
 must be no improper delay ; and it would be no answer to the 
 objection of laches, that the parties remained perfectly solvent 
 from the date of the bill to the day of presentment, and that no 
 
 1 Mason v. Morgan, 2 Ad. & E. 31. Hart v. Stevens, 6 Q. B. 937. 
 
 2 Rawlinson v. Stone, 3 Wils. 1. 
 
 3 Yates v. Sherrington, 11 M. & W. 42 ; overruled, 12 M. & W. 855. 
 
 4 Muilman v. D'Eguino, 2 H. Bl. 565. Melli*h v. Rawdou, 9 Bing. 416.
 
 ACCEPTAX< B, 247 
 
 actual loss was occasioned "by the delay. 1 Bills payable at a 
 certain time after date, or on demand, need not be presented 
 for acceptance. 2 In the United Kingdom, no specific time is 
 allowed for the presentation of foreign "bills; in all cases, 
 reasonable diligence is required. In other countries, however, 
 the law fixes the times allowed within which such "bills must 
 be presented, and these times vary with, the place where the 
 bill is drawn, and the place where the bill is payable. 
 
 306. To charge the drawer of an unaccepted bill, some 
 actual evidence of a demand to accept must be proved. In 
 England, proof of presentment may be made by oral evidence ; 
 but in Scotland, presentation can only be proved by notarial 
 protest ; and the drawee may have the whole day to view the 
 bill, and deliberate to accept it or not. If the party cannot 
 be found at his usual residence, the holder may consider him 
 as absconded ; but if he has only changed place, the holder 
 must endeavour to find him out. 
 
 Section VI— ACCEPTANCE. 
 
 307. An acceptance is an engagement to pay the bill when 
 due. The party to whom the bill is addressed, or any one for 
 his honour, can alone accept it. If the drawee be an infant, or 
 a married woman, or an alien enemy, the holder may consider 
 the bill as dishonoured. A bill drawn on several persons not 
 in partnership must be accepted by each party individually : 
 but if they are partners, the acceptance of one will bind all 
 the others. The acceptance of an inland bill must be in 
 writing on the bill; 3 but it is not essential that the name of 
 the acceptor should be signed. Any other expression pur- 
 porting to express acceptance would be sufficient. In Scot- 
 land, a written promise on a separate paper to accept a bill 
 would amount to acceptance, though the bill so accepted 
 
 1 Mullick v. Kadakissen, 23 L. T. 25 P. C. 
 
 2 Blesard v. Hirst, 5 Burr. 2670. 
 
 3 1 & 2 Geo. IV. c. 78, for England; 8 & <J Geo. IV. c. 2i, for Ireland. 
 Mahoney v. Aslilin.
 
 248 ON BILLS OF EXCHANGE. 
 
 ■would not be entitled to the same privileges of summary 
 execution. 
 
 308. The acceptance of foreign "bills in England need not 
 be in writing on the bill ; the acceptance may be verbal, or 
 on a separate paper, provided it be communicated to the party 
 who takes the bill, and he is induced by the promise to take 
 it ; ' and as it has already been stated that England, Scotland, 
 and Ireland are still considered foreign to each other, a bill 
 drawn in England on a person in Scotland, or drawn in Ire- 
 land on a party in England, being deemed a foreign bill, 
 might be accepted verbally, or by any other document distincl 
 from the bill. 2 Such words as the following, would be con- 
 sidered to imply an acceptance : "I promise that it shall 
 meet with due honour;" "I will accept, or certainly pay ;" 
 " Leave the bill, and I will accept it ;" or, " Send the bill to 
 my counting-house ;" but if the drawee says, " I will give 
 direction for its being accepted," that is not of itself an 
 acceptance ; " That is your bill, it is all right," is no accep- 
 tance. If the drawee keeps the bill which has been presented 
 to him for acceptance, or destroys it, that would be deemed 
 an acceptance. It is, however, understood that where a bill 
 is sent by post to the drawee for acceptance, he may detain 
 it for a few days without incurring liability as an acceptor. 
 
 309. An acceptance may be conditional, varying the abso- 
 lute terms of the bill either in the sum, the place, the time, or 
 the mode of payment. The holder is at liberty to accept or 
 refuse such conditional acceptance ; but in the latter case, he 
 must protest the bill as for non-acceptance. Generally the 
 acceptance is expressed by the drawee signing his name on 
 the bill ; but such words as " Presented such a day," or only 
 the day of the month, or " Presented," " Accepted," " Seen," 
 are sufficient to amount to an acceptance. 3 
 
 310. So long as the bill remains in the drawee's hands, the 
 acceptance is not fully binding on him ; it is not the act of 
 
 Pierson v. Dnnlop, 2 Cowp.572. Pillans v. Van Mierop, 3 Burr. 1663. 
 Wynne v. Raikes, 5 East, 514. 3 Dufaur v. Oxenden, 1 M. & Rob. 90.
 
 PRESENTATION FOR PAYMENT. 249 
 
 writing something on the hill which constitutes the accep- 
 tance, but it is the act of communicating to the holder what is 
 written that hinds the acceptor. Therefore an acceptor, who 
 has put his signature to a bill but has not parted with it, 
 may, before he does part with it, change his mind, and erase 
 the acceptance, and say, " I have not yet entered into an 
 engagement to accept. 1 In Holland, when once the bill has 
 been accepted, the drawee cannot withdraw, efface, or cancel 
 the acceptance, even though he had not parted with it. and 
 be would be not less bound to payment. The same has been 
 established by the new law in Germany. 
 
 311. The liability of an acceptor even of an accommoda- 
 tion bill, can only be discharged by payment or release; 2 
 nothing but an express declaration of the holder will dis- 
 charge the acceptor of a bill. 3 The drawee, by accepting the 
 bill, admits that it has been regularly drawn, and he cannot 
 afterwards deny the authority of the drawer to draw and 
 endorse such bill. 4 If the bill is not accepted by the drawee, 
 it may be accepted by any party for the honour of the 
 drawer or of any of the endorsers : this, however, does not 
 render it less incumbent on the owner of the bill to present it 
 for payment to the drawee when the bill becomes due. It is 
 equivalent to say to the owner of the bill, " Keep this bill, 
 don't return it ; and when the time arrives at which it ought 
 to be paid, if it be not paid by the party on whom it was 
 originally drawn, come to me, and you shall have the 
 money." 5 
 
 Section VII— PRESENTATION FOR PAYMENT. 
 
 312. The principal points in connexion with this part of 
 our subject, are the time when the bill becomes due — the 
 place where it is payable — the mode of presentment — the 
 
 1 Cox v. Troy, 5 B. & Aid. 474. Grant w. Hunt, 1 C. B. 44. 
 
 2 Fentum v. Pocock, 5 Taunt. 190. 
 
 3 Dingwall v. Dunster, 1 Doug. 247. 
 * Price v. Neal, 6 Taunt. 76. 
 
 5 Hoare v. Cazenove, 1G East. 391. Williams v. Germaine, 7 B. & C. 4C8.
 
 250 ON BILLS OF EXCHANGE. 
 
 person by whom the bill is to be presented — the person to 
 whom it is to be presented — and, lastly, what will excuse or 
 justify a want of presentment. First, then, the time when 
 the bill becomes due. It is all-important that the holder of 
 a bill of exchange should not be guilty of any neglect in the 
 presentment of the bill. If it cannot be proved that the bill 
 has been presented on that very day when it became due, the 
 drawer and endorsers will be discharged, and the holder cannot 
 excuse himself by stating that it would have proved useless. 1 
 Even a presentment for payment prematurely, or before the 
 bill became due, would be inoperative. 2 
 
 313. Although a bill or note is expressed to become due on 
 a given day, it does not become payable until three days 
 after the expiration of such time. These days are called days 
 of grace, and they form an essential part of the contract, so 
 that the bill or note does not become due, in fact or in law, 
 till the last day of grace. 3 If it happen that the last day of 
 grace is a Sunday, or Good Friday, or Christmas-day, the 
 bill must be presented on the second day ; in Scotland, how- 
 ever, Christmas-day and Good [Friday not being held as 
 holidays, bills are presented on the third clay as usual. The 
 days of grace are not allowed on bills payable on demand, or 
 on cheques, but they are allowed on all bills of exchange and 
 promissory notes, whether they are payable at a certain time 
 after date or after sight, or even at sight. The three days 
 are reckoned exclusive of the day on which the bill falls due, 
 and inclusive of the last day of grace. 
 
 314. Days of grace vary in almost all mercantile towns 
 and countries, but the tendency of modern legislation is to 
 abolish them altogether. In France, Belgium, Lombardy, Tus- 
 cany, the Two Sicilies, and other States, where the French 
 Code has been introduced, there are no days of grace. So, 
 throughout the German States they are altogether done away. 
 In Great Britain and Ireland, and the United States of 
 
 1 Nicholson v. Gouthet, 2 H. Bl. 610. Esdaile v. Sowerby, 11 East. 113. 
 
 2 Wiffen v. Roberts, 1 Esp. 261. 
 
 3 Brown v. Harraden, 4 T. R. 118.
 
 PRESENTATION FOR PAYMENT. 251 
 
 America, there are three days ; in Denmark, there are eight 
 days; in Sweden, six days; in Russia, three days for bills at 
 sight, ten days for bills at a fixed time; in the Canton of 
 Berne, Switzerland, six days ; in Spain and Portugal, none ; 
 and in the Netherlands none. 
 
 315. The Law Merchant respects the religion of different 
 peoples. A Jew would not be bound to pay a bill on a day 
 sacred to him. So if the first day of grace should be on 
 Saturday, and Monday Christmas-day, and the maker a Jew, 
 the note would be payable on Friday. The word month 
 means generally a calendar month. A note dated on the 30th 
 of August would end with the corresponding day of the 
 month, and if there be none, on the next day. In calculating 
 the day when the bill falls due, the day of the date is always 
 excluded ; so a bill drawn on the first of January, at ten days 
 after date, would become due on the 11th, and not on the 
 10th. 
 
 316. The difference between the old and new style — be- 
 tween Russia and other States — in calculating the time of pay- 
 ment, requires to be referred to here. The Julian Calendar, 
 computing the year by 365^ days, was proved to be eleven 
 minutes in excess, so that every 130 years the equinox 
 receded one day. The Gregorian Calendar was thereupon 
 adopted in 1577, and introduced in 1582, and eleven days 
 were dropped, from the 4th to the 15th October. A year was 
 taken to be 365 days, 5 hours, 49 minutes, and 12 seconds. 
 Almost all countries adopted the new calendar at different 
 periods, except Russia ; the consequence of which is, that a 
 bill drawn in this country on the first of January, new style 
 (that is, the 20th of December, old style), payable at St. 
 Petersburg at one month after date, would be held there as 
 drawn on the 20th of January ; and a bill drawn in St. Peters- 
 burg on the 1st of January (old style), at one month, payable 
 in England, would be payable on the 13th February (new 
 style). This is the difference between what is technically 
 called the old and new style. 1 
 
 1 Bayley ou Bills, c. vii. § 1, p. 249.
 
 252 ON BILLS OF EXCHANGE. 
 
 317. A "bill of exchange may be drawn at usance, that is, 
 at such time as is usually appointed for the payment of bills 
 between the two countries : the word usance, therefore, varies 
 in meaning with the different countries. Between some coun- 
 tries, a usance means one month ; between others, two ; and 
 others, three. A bill payable at usance is always construed 
 according to the meaning attached to it where the contract 
 is made. A usance between London and Dantzig, Leipsic 
 and Vienna, is fourteen days after acceptance ; between Lon- 
 don and Frankfort, fourteen days after sight ; London and 
 Lisbon and Oporto, thirty days' sight ; London and Paris, 
 Geneva and Malta, thirty days' date ; London and Barce- 
 lona and Cadiz, sixty days after sight ; London and New 
 York, sixty days after sight ; London and Amsterdam, Rot- 
 terdam, Antwerp, Altona, Bremen, and Hamburg, one month 
 after date ; London and Bilboa, two months after date ; 
 Lonon and Madrid and Gibraltar, two months after sight ; 
 London and Leghorn, Genoa, Venice, Naples, and Palermo, 
 three months after date. 
 
 318. A bill or note must be presented for payment at the 
 place where it has been made payable, and at reasonable 
 hours, according to the custom of the place, and even accord- 
 ing to the custom of the drawees. Thus, when the bill is 
 payable at a banker's, a bill must be presented during the 
 banker's business hours. A bill accepted payable at a 
 banker's or other place, without any other expression in the 
 acceptance, is considered as accepted generally; the holder 
 may present it at the house of the acceptor, or at the place 
 described. If, however, the acceptance makes the bill payable 
 at a banker's house or other place only, and not elsewhere, 
 the acceptance is deemed qualified, and demand of payment 
 must be made at such place. 1 But where the words, " payable 
 at," are written beneath the body of a promissory note, they 
 constitute a memorandum only, and do not form part of the 
 contract. 
 
 1 1 & 2 Geo. IV. c. 77. De Bergareche v. Pillins, 3 Bing. 476.
 
 PROTEST. 203 
 
 319. Presentment may Le made at the drawee's dwelling- 
 house, or at his counting-house. 1 If there be no particular 
 and certain place appointed other than a city at large, and the 
 party has no residence there, the "bill may be protested on the 
 day appointed, using in all cases due diligence to find out the 
 party. But if the party has changed residence, the holder 
 must make endeavour to find it. Where the party has ab- 
 sconded, presentment is unnecessary ; if he has removed out 
 of the State, it would be sufficient to present the same at his 
 former place of residence. 2 In the city of London, it is usual, 
 when the drawee cannot be found, to pass the bill to the 
 notary, who takes it to the Exchange, and draws up a notice 
 that such a bill, accepted, became due on such a day. The 
 holder must demand present actual payment, and in money ; 
 cheques or other drafts are not sufficient. The bill should be 
 presented for payment by the holder, or his authorized agent, 
 and be presented to the acceptor or maker himself. If he be 
 a bankrupt, it will be sufficient to present the bill at his 
 counting-house or place of abode ; if dead, to his executor or 
 administrator. The bankruptcy or death of the acceptor would 
 not excuse a presentment; 3 such a neglect could only be 
 justified by inevitable accident, such as a serious illness of the 
 holder or his agent, public war, or any other irresistible force ; 
 but in all cases the plea would be at an end as soon as 
 the impediment has been removed. 
 
 Section VIII.— PROTEST. 
 
 320. When acceptance or payment is absolutely refused, or 
 offered conditionally, or qualified, the holder must have the bill 
 protested, and send immediate notice to the party from whom 
 he intends to be reimbursed. A neglect to protest, or to give 
 notice of dishonour, would discharge such parties. A protest 
 
 i Fayle v. Bird, 6 B. & C. 531. Turner v. Hayden, 4 B. & C. i. 3. 
 
 2 Philips v. Astling, 2 Taunt. 206. 
 
 3 Russell i'. Lau^staffe, Doug. 497. Esdaile v. Sowerby, 11 East. 114. 
 Howe v. Bowes, 16 Eaat. 112.
 
 254 ON BILLS OF EXCHANGE. 
 
 is a solemn declaration on behalf of the holder against any 
 loss to be sustained by the non-acceptance or the non-pay- 
 ment of the bill. It is performed by a public officer, who, 
 after due presentation of the bill to the drawee, makes a 
 minute on the bill, consisting of his initials, the date of the 
 day, and his charge. This is followed by a solemn declaration 
 of the refusal, and of the intention of the holder to recover all 
 damages which may be thereby sustained. The minute is 
 termed the noting of the bill ; the solemn declaration, the 
 protest. 
 
 321. The protest should be made by a notary public, and 
 if there be no notary, by an inhabitant of the place, in the 
 presence of two witnesses. An attorney or solicitor may act 
 as a notary public. Inland bills may be protested, in Eng- 
 land, for non-acceptance or non-payment, but it is not impera- 
 tive to do so, 1 and in practice a protest is seldom made ; 
 foreign bills, however, must be protested. 2 In Scotland a 
 protest is always necessary for an inland or foreign bill, in 
 order to preserve recourse against the drawer and endorser. 3 
 The protest should be entered at the place where the bill is 
 made payable, and on the day on which acceptance or pay- 
 ment is refused. 4 
 
 Section IX.— NOTICE OF DISHONOUR 
 
 322. The holder is required to give prompt notice of the 
 refusal or acceptance of payment to his immediate endorser, or 
 to those from whom he intends to be indemnified. 5 The notice 
 must be sent as early as can conveniently be done, and where 
 the parties do not live in the same place, it is usual to send it 
 by next post, or, where that is impracticable, by the next con- 
 venient opportunity. 6 In Scotland, notice of dishonour given 
 
 1 Windle v. Andrews, 2 B. & Aid. 696. 
 
 2 Rogers v. Herron, 27 R. 713. Gale v. Walsh, 5 T. R. 239. 
 
 3 Fergusson v. Belsh, 13 F. C. 244. 
 
 4 Mitchell v. Baring, 10 B. & C. 4. 
 
 5 Tindal v. Brown, 1 T. R. 167- 6 Muilnian v. D'Eguino, 2 H. Bl. 565.
 
 NOTICE OF DISHONOUR. 255 
 
 within fourteen days is sufficient to preserve recourse. 1 "Where 
 the party entitled to notice resides in a distant foreign country, 
 the notice should "be sent by the next packet-ship or sailing snip. 
 
 323. The notice must be sent by the holder, or by the party 
 entitled to call for reimbursement, or also by an agent or 
 banker, and the notice given by the last endorsee to the 
 drawer will operate as a notice from each endorser. 2 Where 
 the holder of a bill intends to charge an earlier party to the 
 bill by notice of dishonour from himself, he must send him 
 the notice as promptly as if to his own immediate endorser. 
 It is no reason that no injury was produced to the drawer or 
 endorser by the neglect of sending a notice. They would still 
 be discharged. 
 
 324. To render a notice of dishonour valid, it must plainly 
 notify the fact that the bill has been dishonoured after the 
 presentment took place. The notice must state what the bill 
 is, and that payment has been refused by the acceptor. 3 The 
 following notice, for example, was held insufficient: — "The 
 
 note for 200Z. drawn by , dated 18th July last, payable 
 
 three months after date, and endorsed by you, became due 
 yesterday, and is returned to me unpaid." Such a notice 
 was invalid because it did not state that the bill had been 
 presented. The following is a form of notice which contains all 
 the requisites : — " Sir, I hereby give you notice that the bill 
 
 of exchange, dated the 2 2d ult., drawn by A B of on 
 
 CD of , for 400?., payable one month after date to A B 
 
 or his order, and endorsed by you, has been duly presented 
 for payment, but was dishonoured, and is unpaid : I request 
 you to pay me the amount thereof." A notice may also be 
 given verbally, provided there be enough to warrant the 
 assumption that the party to whom the notice is given is 
 informed that the bill has been duly presented and disho- 
 noured, and that he is looked to for payment;' 1 and any 
 
 1 12 Geo. III. c. 72. Darbishire v. Parker, 5 East, 2. 
 
 2 Chapman v. Keane, 3 Ad. & E. 193. Harrison v. Rose, 15 M. & W. 231. 
 
 3 Strange v. Price, 10 Ad. & E. 125. Bailey v. Porter, 11 M. & W. 44. 
 
 4 Rousego v. Conne, 2 M. & W. 348.
 
 256 ON BILLS OF EXCHANGE. 
 
 declaration by him amounting to an acknowledgment of lia- 
 bility, or to a promise to pay, made to any party applying 
 on behalf of the party entitled to payment, is good evidence 
 of notice of dishonour. 1 There are certain circumstances that 
 will excuse notice, especially where there is a moral and phy- 
 sical impossibility of so doing, and when the bill is of no 
 value for want of a sufficient stamp, or when the holder does 
 not know where the party entitled to notice is to be found ; 
 but the utmost circumspection is needed to give timely and 
 proper notice, in order to preserve the right of recourse. The 
 question of notice and protest, considered in its relation to 
 international law, refers in the first case to the interpretation 
 of contract, and in the second to the mode of remedy. There- 
 fore the notice to the drawer and endorser is regulated by 
 the law of the place where the bill was drawn or endorsed, 
 and the protest by the law of the place where the bill is made 
 payable. 
 
 Section X.— PAYMENT. 
 
 325. The payment must be made to the holder of the bill 
 or his assigns, and the acceptor has the whole day to pay ; 
 but once refused, the bill is considered dishonoured. Payment 
 should be made in the coin or value designated in the bill. Goods 
 or notes, or cheques, will not satisfy, but Bank of England 
 notes are valid tender in England, as Bank of Scotland or Bank 
 of Ireland notes are valid tender in the respective countries. 
 An offer of part payment is not good, and, where the whole is 
 due, a tender for part would be bad even pro tanto. The 
 acceptor of the bill, having by his acceptance admitted the 
 genuineness of the form of the drawer, cannot afterwards 
 prove that the bill was forged. When money has been 
 paid under a mistake of facts, it may be recovered as having 
 been paid without consideration ; but the mistake must be 
 discovered on the morning of the day payment has been made, 
 
 1 Jones v. O'Brien, 2 Com. L. Rep. 853, (C. B.)
 
 PAYMENT. 257 
 
 and notice thereof given to the holder of the bill, in time to 
 enable him to give notice of dishonour to prior parties. 
 
 326. The holder of the bill cannot, without the consent of 
 the drawer or endorser, give the acceptor further time for pay- 
 ment ; he may make what arrangements he pleases with the 
 acceptor, provided, however, he does not alter thereby the 
 situation of any other person on the bill, to the prejudice of 
 that person, in which case he does it at his peril ; so he may 
 delay in suing the acceptor, without discharging thereby the 
 drawer or endorser, because such delay does not prevent them 
 from doing what, on receiving notice of non-payment by the 
 acceptor, they are authorized in doing themselves. The 
 several parties on a bill are chargeable in different order, com- 
 mencing with the acceptor and last endorser, back to the first 
 endorser ; but the suing or taking a security from one of the 
 parties liable, does not discharge another who is liable prior to 
 him in point of order. The holder has a right, however, to 
 have recourse to any of the parties in the bill indiscriminately, 
 by transmitting, as we have seen, direct and timely notice of 
 dishonour to him. 
 
 327. In England and Ireland, a claim on a bill of exchange 
 can only be enforced by common action, and the debtor may 
 produce the want of existence of an actual and valid consi- 
 deration. A consideration is anything given for the bill, some 
 benefit conferred on, or some detriment suffered by the party, 
 in consideration of which the bill is given to him ; but the 
 consideration must not be illegal or immoral ; bills founded 
 upon such would be void. In Scotland, payment of bills may 
 be enforced summarily without an action, by a decree of regis- 
 tration. It is necessary that the protest should be registered 
 on the books of a competent court, within six months from 
 the date of the bill in case of non-acceptance, or within six 
 months from the day of payment in case of non-payment. 1 
 
 1 A bill was introduced last session in the Houses of Lords and Commons, 
 ■ .nit the registration of dishonoured bills of exchange and promissory 
 
 S
 
 258 ON BILLS OF EXCHANGE. 
 
 All actions upon bills or notes must be brought within six 
 years, after which the remedy is taken away. The Statute of 
 limitation begins to operate from the time when the bill 
 becomes due. Upon a bill payable after sight, as it must be 
 presented for payment, the statute will run from the present- 
 ment ; on a bill payable on demand, from the date of the bill. 
 In Scotland, a similar period of six years prevails for pre- 
 scription, yet the remedy there is not altogether extinguished; 
 proof by other writings under the debtor's hands, or by refer- 
 ence to the oath of the debtor, may be made up to the end of 
 forty years ; but after that period the debt is altogether extin- 
 guished. The question of limitation is regulated by the law 
 of the place where the action is brought, and not by that of 
 the place where the bill is made. In France, all actions on 
 bills of exchange or promissory notes are prescribed after five 
 years ; in Prussia, after one year from the day of protest, the 
 bill loses its inherent force. 
 
 notes in England, and to allow execution thereon. It was thereby proposed 
 to allow all bills or notes to be protested by an attorney or solicitor ; the 
 same to be registei-ed in a competent court, upon which an order for the pay- 
 ment within six days should be issued; and upon the expiration of six days 
 after the service of such order, execution to issue against the party. The bill 
 having met with considerable opposition in the House of Commons, and 
 having been subjected to numerous alterations, was eventually withdrawn. 
 The question of introducing into England and Ireland the Scottish system of 
 summary diligence on bills of exchange and promissory notes, has formed the 
 subject of inquiry of the Committee of the Law Amendment Society, who 
 considered the beneficial working of the system in Scotland a sufficient recom- 
 mendation for its being extended to the United Kingdom generally. Even as 
 a question of jurisprudence, the Committee considered that the Scottish 
 system was founded on the principles of substantial justice. The holder of 
 an instrument, which bears on its face an acknowledgment of a debt as of a 
 liquidated sum, should be prima facie entitled to receive payment without any 
 preliminary proceeding ; whereas, in England, extensive facilities exist for the 
 acceptor of a bill of exchange in procuring delay, by raising frivolous and 
 vexatious questions. Pleas, demurrers, changes of venue, motions for a new 
 trial, and all the machinery of the law's delay, are avoided in Scotland by a 
 simple and natural system. The same course is also pursued in most of the 
 European States.
 
 BANK CHEQUES. 259 
 
 328. If a Ibill of exchange is drawn in one country and 
 payable in another, and the bill is dishonoured, the drawer is 
 liable according to the law of the place where the bill was 
 drawn, and not according to the law of the place where the 
 bill is made payable. But where a bill is drawn generally, 
 the liabilities of the drawer, the acceptor, and endorsers, are 
 governed by the law of the country in which the drawing, 
 acceptance, and endorsement, respectively took place. 
 
 Section XI.— BANK CHEQUES. 
 
 329. A cheque is an appropriation of the drawer's funds, in 
 the hands of the banker, to the amount thereof. Cheques 
 are distinguished from bills of exchange, in that they arc 
 always drawn on a bank or banker ; they are payable imme- 
 diately on presentment, and without days of grace ; and 
 they are not presentable for acceptance, but only for pay- 
 ment. 1 Cheques on bankers are intended for immediate pay- 
 ment ; but a party taking a cheque after any fixed time from 
 its date, does not do so at his peril — cheques being practically 
 regarded as continuing securities, unless under circumstances 
 which ought to have excited the suspicion of prudent men. 
 A cheque cannot, therefore, be treated as overdue, until it has 
 been presented for payment and payment refused. 2 If the 
 drawer of a cheque, payable instantly, have no funds in the 
 bank at the time, the holder can sustain an action upon 
 it ; not, however, till after notice of presentment and non- 
 payment. 3 
 
 330. When payment is made by cheque, it is the duty of 
 the person receiving it to use the utmost diligence in getting 
 it paid, as otherwise it would be at his peril. Payment by 
 
 1 In the matter of Brown, 2 Story, 502. 
 
 2 Rothschild v. Corney, 9 B. & C. 388. Barough v. White, 4 B. & C. 325. 
 Brooks v. Miteham, 9 M. & W. 15. 
 
 3 Harker v. Anderson, 21 Wind. 372. 
 
 s 2
 
 260 ON BILLS OF EXCHANGE. 
 
 cheque is not as cash; therefore the debt will remain liable 
 on it, although the evidence of the debt was returned to him. 
 But, nevertheless, to preserve this recourse against the drawer 
 of the cheque, there must be no negligence in the presentation 
 of it for payment. The receiver of a cheque has till the close 
 of the banking house on the following day to present it, 
 whether the presentment is made by himself or through his 
 bankers. A debtor paid his creditor by a crossed cheque, 
 and the creditor on the same day transmitted it to his 
 banker. The banker omitted to present it at the clearing- 
 house in time for that day, when it would have been paid, 
 and on the next it was dishonoured, the firm on which it 
 was drawn having stopped payment. This negligence did 
 not discharge the drawer, but rendered the banker liable to 
 his customer. 
 
 331. A cheque on a banker, payable to bearer on demand, 
 is not liable to stamp duties, provided that it be issued within 
 fifteen miles of the place where the banker carries on his 
 business ; that the place of issuing be truly specified in it ; 
 that it be dated on or before the day on which it is issued, 
 and not after ; and that it do not direct the payment to be 
 made by a bill or note. If the cheque is issued unstamped, at 
 a greater distance than fifteen miles from the banker on 
 whom it is drawn, it becomes illegal ; and the person issuing 
 it, and the banker knowingly paying it, incur the penalty of 
 100/. each ; and the person knowingly receiving it in pay- 
 ment, or as a security, incurs a penalty of 20L 1 A cheque is 
 considered as issued at the place where the drawer parts with 
 the possession of it, and if it be transmitted by him through 
 the post, the place of issuing is that where it is posted. An 
 unstamped cheque, issued within fifteen miles, cannot be nego- 
 
 1 16 & 17 Vict. c. 59. All drafts or orders payable to order on demand, 
 other than cheques on bankers payable within the distance of fifteen miles, 
 are subject to a stamp duty of Id. A similar duty of Id. has been imposed 
 on all receipts for sums of 21. and upwards. Such duties on receipts and 
 drafts may be denoted either by a stamp impressed upon the paper whereon 
 the instrument is written, or by an adhesive stamp affixed thereto.
 
 BANK CHEQUES. 261 
 
 tiated or circulated at any place beyond the same distance of 
 fifteen miles from the place where the same is made payable; 
 and it has been recently enacted, that such draft cannot be 
 remitted to any place beyond the distance of fifteen miles in 
 a direct line from the bank or place at which the same is 
 made payable ; or be received in payment, or as a security, or 
 be otherwise negotiated or circulated, at any place beyond the 
 same distance. And any person sending' such draft beyond 
 such distance, or receiving the same in payment, and circu- 
 lating it, would forfeit the sum of SO^. 1 But the same draft 
 may be rendered valid far beyond such distance of fifteen 
 miles, by the holder affixing to it a proper adhesive stamp, 
 and cancelling the same, by writing thereon his name, or the 
 initial letters of his name. 2 
 
 332. By a common practice, originally introduced at the 
 clearing house, 3 cheques .are crossed with the name or initial 
 of a particular banker, upon which bankers generally refuse 
 to pay it to any one except the banker. The object is to 
 secure the payment, not to any particular banker, but to a 
 banker, in order that it may be easily traced for whose use 
 the money was received. It was not intended thereby to 
 restrict the circulation or negotiability of the cheque, but 
 merely to compel the holder to present it through a quarter of 
 known respectability and credit. Consequently the crossing- 
 is a mere memorandum on the face of the cheque, and forms 
 no part of the instrument itself, and in no way alters its 
 effects. It is only a protection and safeguard to the owner of 
 the cheque; so that the payment of a crossed cheque otherwise 
 
 1 17 Vict. c. 83, § 7. 2 Ibid. § 11. 
 
 3 The clearing house is a place used by bankers for facilitating their 
 exchange on each other's houses. All cheques which have been paid in during 
 the day on other bankers, are brought at half-past three o'clock to the 
 clearing house, where the clerks exchange their cheques on each other, and 
 settle the difference; so that the balances are easily struck from all the 
 accounts, and the claims transferred from one to another. Stock-lr 
 settle all their receipts and payments by cheques, to be paid through the 
 clearing house.
 
 262 ON BILLS OF EXCHANGE. 
 
 than through a hanker, would be strong evidence of negli- 
 gence on the part of the hanker, if the party presenting the 
 cheque proved not to he the lawful owner of it. 1 It would 
 make no difference whether the cheque is crossed with the 
 name of a specific hanker, such as London and Westminster 
 Bank, or Bank of England, for the account of the Accountant 
 
 General or and Co. ; in all such cases the meaning 
 
 is, that the cheque shall he paid through a hanker. 
 
 The duty of a hanker to honour the cheques of his customers, 
 when he has proper funds in the hank, has already been 
 defined under the head of the relation between bankers and 
 customers. 
 
 1 Bellamy v. Majoribanks, 7 Exch. 389.
 
 POSTSCRIPT. 
 
 Whilst the foregoing sheets were passing through the 
 press, a measure on the subject alluded to under the Chapter 
 on Merchants, p. 42, has passed into law. By the 17th and 
 18th Vict. c. 34, the Courts of Law in England, Ireland, 
 and Scotland, were enabled to issue process to compel the 
 attendance of witnesses out of their jurisdiction, and to give 
 effect to the service of such process in any part of the United 
 Kingdom. 
 
 All laws relating to Usury have been abolished. As the 
 law stood, no person could take more than five per cent, 
 interest, for loan of any monies or other commodities ; except, 
 however, that Bills or Notes not having more than twelve 
 months to run, and any contract for the loan or forbearance 
 of money above the sum of 10?., were not affected by the 
 Usury Laws. 
 
 By the 17th and 18th Vict. c. 90, the Acts relating to 
 Usury were repealed throughout the United Kingdom. 
 These extended over about twenty Acts, and parts of Acts, 
 of the Parliaments of England, Scotland, and Ireland, from 
 the time of Henry VIII. to the present reign. The futility 
 of prescribing a limit to the price which a person in want of 
 a commodity is willing or compelled to give for it, has at 
 last been recognised. Measures of this description neither 
 protect the needy borrower from oppression, nor guard the 
 greedy lender against the temptations of high premiums.
 
 26-4 POSTSCRIPT. 
 
 The Common Law Procedure Act, 1854, (17 & 18 Vict. 
 c. 125,) incorporated some clauses of the Arbitration Bill, 
 referred to in p. 125. According to this statute, when refer- 
 ence has been made to two arbitrators, one to be chosen by 
 each party, and one party fail to appoint, the other party may 
 appoint the arbitrator to act alone. Every agreement or 
 submission in writing may be made a rule of court, unless 
 a contrary intention appears ; and when the document 
 authorizing the reference has been made a rule of any one of 
 the superior courts, no other of such courts shall have any 
 jurisdiction to entertain any motion respecting the arbitration 
 or award. There are also other clauses in the statute with 
 reference to the power of the judge to leave matters to arbi- 
 tration. This statute does not extend to Ireland or Scotland. 
 The introductory Chapter, on the Progress of Commerce, 
 was illustrated by three Tables of the Exports of Produce 
 and Manufactures of the United Kingdom of Great Britain 
 and Ireland, the United States of America, and France, for 
 1852. The Table of the Exports of the United Kingdom 
 for 1853 has since been published, and is herein appended. 
 It will show an increase of about 21 millions over the exports 
 of 1852, and that they are now double the amount of those 
 of the United States, and France. 
 
 The distribution of the Exports divided, as to Foreign 
 Countries and British Possessions, exhibits a considerable 
 increase in the proportion sent to the latter. In 1853, the value 
 of exports to Foreign Countries amounted to 65,551,579/., 
 and that of those to the British Colonies to 33,382,202/. Of 
 these, the greatest items were 14,513,700?. to the British 
 Settlement in Australia ; 8,185,695?. to the British Terri- 
 tories in the East Indies ; and 4,896,544?. to the British 
 North American Colonies.
 
 EXPORTS OF THE UNITED KIXGDOil FOR 1853. 
 
 COUNTRIES. 
 
 1. United States and California 
 
 2. British Settlements in Australia 
 
 3. British Territories in the East Indies 
 
 I. Hanseatic Towns 
 
 5. J5ritish North American Colonics 
 
 G. Netherlands 
 
 7. Brazil 
 
 8. France 
 
 9. Turkey 
 
 10. British West Indies 
 
 11. Spain Continental, Balearic and Canary Islands... 
 
 12. China 
 
 13. Belgium 
 
 14. Portugal Proper, Azores, and Madeira 
 
 15 Chili ' 
 
 16. Peru 
 
 17. Russia, Northern Ports, and Ports within the 
 
 Black Sea 
 
 18. Cuha 
 
 19. Sardinian Territories 
 
 20. British Possessions in South Africa 
 
 21. Mexico 
 
 22. Egypt 
 
 23. Gibraltar 
 
 24. Duchy of Tuscany 
 
 25. Naples and Sicily 
 
 26. Austrian Territories 
 
 27. Western Coast of Africa not particularly designated 
 
 28. Prussia 
 
 29. Denmark 
 
 30. Java and Sumatra 
 
 31. Sweden and Norway 
 
 32. Buenos Ayres 
 
 33. Uruguay 
 
 31. Hanover 
 
 35. Channel Islands 
 
 36. New Granada 
 
 37. Philippine Islands 
 
 38. Mauritius ■• 
 
 39. Hung Kong 
 
 40. Syria and Palestine 
 
 41. Malta 
 
 12. Venezuela 
 
 43. Papal Territory 
 
 II. Wallachia and Moldavia 
 
 45. Kingdom of Greece 
 
 46. llayti 
 
 47. Ionian Islands 
 
 48. Morocco 
 
 IS). French Possessions, Senegamhia 
 
 50. Other Countries 
 
 51. Other Possessions 
 
 Proportional 
 | 
 exported 
 
 23.9134 
 
 I 
 
 8.2739 
 7.1707 
 4.9513 
 4.5009 
 3.3218 
 
 2.0511 
 
 1.9271 
 1.4831 
 1.3884 
 1.3S66 
 1.3407 
 1.2785 
 1.2785 
 
 1.13S9 
 1.2416 
 1.1221 
 1.2257 
 0.8001 
 0.7955 
 
 0.6466 
 0.6463 
 0.6117 
 0.6244 
 0.5S59 
 0.5758 
 0.5643 
 0.5569 
 0.5568 
 0.5366 
 1772 
 0.4751 
 0.4555 
 
 0.3900 
 0.37L>9 
 0.3098 
 SI l 1 
 0.2508 
 0.2097 
 0.1875 
 0.1367 
 0.13.52 
 0.1178 
 0.0760 
 0.0017 
 0.9224 
 0.3515 
 
 Declared Value. 
 
 7,093,31 1 
 1,898, ii 
 4,452,955 
 3,186,407 
 
 2,029,305 
 
 1,873,689 
 
 1,371,817 
 
 1,3 
 
 1,264,942 
 
 1,246,730 
 
 1,124,864 
 1,228,404 
 1,112,447 
 
 1.212,630 
 791,940 
 787,111 
 670,840 
 
 639,794 
 639,544 
 637,353 
 617,764 
 
 57!J..-,SS 
 5611,733 
 558,212 
 556,183 
 551,035 
 529,S83 
 472,179 
 470,107 
 450,804 
 386,552 
 
 375,908 
 
 306.5S0 
 
 297, i 
 
 248,190 
 207,491 
 179,510 
 135,815 
 133,804 
 116,567 
 75.257 
 1,725 
 912,662 
 . !7.7sT 
 
 98,933,781
 
 ERRATA. 
 
 Page 14, line 12, instead of 32. per cent., read 75 per cent. 
 
 — 15, remarks on table, line 4, instead of between the same dates, 
 
 read between 1S42 and 1852. 
 
 — 53, note, instead of Report of the Prizes, read Report of the 
 
 Juries. 
 
 — 85, note 6, read Wolfe v. Oxholm, 6 M. & S. 92. 
 
 — 127, note 3, instead of Nasusch, read Natush.
 
 INDEX. 
 
 ACCEPTANCE FOR HONOUR, by whom, 249. 
 
 duties of the holder of a bill so accepted, 249. 
 ACCEPTANCE OF FOREIGN BILLS need not be in writing, 248. 
 
 what will amount to an acceptance, 248. 
 ACCEPTANCE OF INLAND BILLS must be in writing, 247. 
 law in Scotland, 247. 
 
 may be conditional, 248. 
 
 may be withdrawn before the bill is delivered, 248. 
 
 ACCEPTOR, liability of, 249. 
 
 ACCOUNTS, partnership, 127. 
 
 of Joint-Stock Companies, 182. 
 
 ACTS OF A PARTNER bind the firm, 141. 
 AGE OF MAJORITY. See Majority. 
 ALIENS, FRIENDS, AND ENEMIES, 42. 
 
 friends, right of, to hold personal property, 42. 
 may become naturalized, 42. 
 rights of, in the United States, 43. 
 
 in France, 43. 
 
 in Sardinia, 43. 
 
 in Spain, 43. 
 
 in Portugal, 43. 
 
 in Austria, 43. 
 
 in Russia, 43. 
 
 in Sweden, 43. 
 
 in Two Sicilies, 43. 
 enemies, who are, 85. 
 
 disabilities of, 85, 118. 
 
 AMALPHITAN TABLE, when compiled, 28. 
 
 AMERICA, discovery of, 7. 
 
 See United States. 
 AMERICAN COLONIES, Declaration of Independence, 10. 
 APPRENTICESHIP, statute of, 34. 
 ARBITRATION, effect of clause in partnership deed, 124. 
 
 in France, 125. 
 
 bill on the subject, 125. 
 ARBITRATION LAW, clauses of Common Law Procedure Act re- 
 ferring to, 2G3. 
 ATHENIANS, laws of, 27.
 
 2G8 ENDEX. 
 
 11. 
 
 BANK CHARTER, principles of, 202, 203. 
 RANK OF ENGLAND, how constituted, 200. 
 
 charter of, 202. 
 
 privileges of, 204. 
 
 capital of, 202. 
 RANK OF ENGLAND NOTE, a legal tender in England, 205. 
 RANK OF FRANCE, capital of, 20G. 
 RANK OF IRELAND, constitution of, 206. 
 
 capital of, 206. 
 EANK OF IRELAND NOTE, legal tender in Ireland, 206. 
 RANK OF SCOTLAND, constitution of, 205. 
 
 capital of, 206. 
 RANK OF SCOTLAND NOTE, legal tender in Scotland, 206. 
 RANK NOTES, issue of, in England, 202. 
 
 in Scotland, 208. 
 
 in Ireland, 208. 
 RANKER, definition of, 212. 
 
 rights of, over property in his hands, 213. 
 
 hen over securities, 214. 
 
 duties of, to pay cheques of customers, 214. 
 
 bankruptcy of, its effects on secm'ities in his hands, 214. 
 
 relation of, to customers, 212. 
 RANKING, history of, 199. 
 RANKING COMPANIES, formation of, 206. 
 
 power of, to issue notes, 207. 
 EANKING JOINT-STOCK COMPANIES, requisites of the Act 
 regulating them, 210. 
 
 directors of, may make calls on shareholders, 211. 
 
 EANKING SYSTEMS in England, Ireland, and Scotland, differences 
 of, 208. 
 
 EANKRUPT, minor cannot be, 44. 
 may in Scotland, 45. 
 married females cannot, 48.' 
 
 may in the City of London, 48. 
 RANKRUPT PARTNER need not be joined in a suit against partner- 
 ship, 152. 
 cannot be joined in a suit by partners, 160. 
 ceases to exercise control over partnership effects, 160. 
 from what time dissolution will take place in consequence 
 of, 160. 
 RANKRUPTCY of a partner causes dissolution of partnership, 160. 
 of partnership, consequences of, 166. 
 in Scotland, 166, 167. 
 
 RANKRUPTCY COURT, jurisdiction of, 34. 
 
 on the winding up of Companies, 195. 
 
 BARRAHIANS, descent of, into Italy, 3.
 
 INDEX. 
 
 BELLI rS, rights of, 83— 87. 
 
 what goods may be confiscated, 80. 
 
 right of search, 88, 89. 
 right to capture enemy's pro] 
 
 BILLS OF EXCHANGE AND PROMISSORY NOTES, origin of, 4. 
 probable amount of, in circulation, 232. 
 definition of, 232. 
 form of, 234. 
 
 no precise word necessary to a bill, 234. 
 may be written with pencil, 23 \. 
 must be payable absolutely, 235. 
 name of payee must be certain, 236. 
 
 to be negotiable, must contain the words, " To order." 236, 
 negotiability of, may be restrained, 244. 
 may be transferred by endorsement or delivery, 243. 
 I ly whom may be accepted, 247. 
 
 cannot be altered without consent of the parties to it, 237. 
 must be stamped, 238. 
 
 any material alteration requires new stamp, 242. 
 when considered as issued, 242. 
 drawn in England on a person in Scotland or Ireland, and vice 
 
 versa, 237. 
 foreign, drawn in a set, 237. 
 
 form of, 237. 
 who may be parties to a bill, 242. 
 
 the signature of one partner in a bill binds the firm, 140. 
 endorsement of, 243. 
 acceptance of, 247. 
 presentation of, for acceptance, 246. 
 
 for payment, 249. 
 protest of, when necessary, 253. 
 notice of dishonour of, 254. 
 payment of, 256. 
 
 BLANK ACCEPTANCE, effect of, against party signing it, 236. 
 
 BLOCKADE, definition of, 96. 
 h hen it exists, 96. 
 what is a notice of, 97. 
 when it ceases, 97. 
 object of, '.)!. 
 not suspended by accidental change, 96. 
 
 BOOK, definition of, 66. 
 
 copyright in, 66. (See COPTBIG 
 BREACH OF BLOCKADE, effect of, 96. 
 
 C. 
 
 CAPACITY OF PARTIES TO A CONTRACT, 104. 
 CAPITAL invested in railways, 12. 
 
 CAPTOR, duties of, with respect I i captured property, f)2, 95. 
 must not break bulk 95. 
 
 CAPTURE, right of, 00.
 
 270 ixi)i:x. 
 
 CERTIFICATE OF PROPRIETORSHIP of shares in companies, value 
 of, 184. 
 
 CHANCERY, COURT OF, origin of its jurisdiction, 145. 
 principles on which it is founded, 145. 
 nature of evidence admitted in, 146. 
 
 what remedy it administers in partnership disputes, 147. 
 may direct partnership accounts to be taken, 148. 
 will grant injunction in cases of partnership, 149. 
 may appoint a receiver in cases of gross abuse, 149. 
 may order sale of partnership effects, 128. 
 jurisdiction of, in winding-up of companies, 195. 
 
 CHARTERS OF INCORPORATION, duration of, 171. 
 
 CHEQUES ON BANKERS, definition of, 259. 
 crossing of, its effects, 261. 
 are continuing security, 259. 
 
 duty of bankers to pay those of their customers, 214, 262. 
 payable on demand, 259. 
 need not be stamped, 260. 
 
 CHINA TRADE, opening of, 12. 
 
 CHRISTMAS DAY, bills payable on, payable the day before, 51. 
 
 CLEARING HOUSE, object of, 261. 
 
 CLERGYMEN cannot trade, 118. 
 
 COASTS, what include, 21. 
 
 CODE OF COMMERCIAL LAW, importance of, 31. 
 
 CODIFICATION, extension of, in France, 30. 
 
 COLONIES, BRITISH, law of, 27. 
 as to minors, 44. 
 as to patents, 58. 
 COMMANDITAIRE PARTNER, right of, 216. 
 
 name of, not included in the firm of partnership, 218. 
 
 cannot take part in the business, 216. 
 
 may examine the accounts, 216. 
 
 liable only for the sum originally subscribed, 218. 
 
 COMMANDITE PARTNERSHIP. See Partnership. 
 
 COMMERCE, definition of, 1. 
 
 progress of, 1 — 17. 
 
 of the Grecians, 2. 
 
 of the Romans, 2. 
 
 of the Italians, 3. 
 
 of the Hanse Towns, 5, 8. 
 
 with India, 6. 
 
 with America, 7. 
 
 effects of the Edict of Nantes, 9. 
 
 progress of navigation, 10. 
 
 effects of gold discoveries, 14. 
 
 of the United Kingdom, 15. 
 
 of the United States, 16. 
 
 of France, 17. 
 COMMERCE, RESTRAINTS OF. See Trade.
 
 INDEX. 271 
 
 COMMERCIAL INTERNATIONAL LAW, 18—22. 
 
 COMMERCIAL LAW, nature, spirit, and history of, 23—31. 
 nature of, 23. 
 elements of, 24. 
 history of, 27. 
 of the Greeks, 27. 
 of the Romans, 27. 
 of England, progress of, 29. 
 
 COMMERCIAL SYSTEM, fallacy of, 19. 
 
 COMMERCIAL TRIBUNAL, value of, 150. 
 
 COMMUNITY OF INTEREST is not partnership, 111. 
 
 COMPANIES BY CHARTER, formation of, 169. 
 liability of members thereof, 171. 
 
 may sue and be sued in the names of their officers, 170. 
 liability of members thereof may be limited, 171. 
 formed by deed, 170. 
 
 may sue shareholders for payment of instalments, 184. 
 for public works, how constituted, 1S6. 
 how to effect mortgages, 187. 
 contracts of, 184. (See Joint-Stock Company.) 
 
 COMPASS, invention of, 5. 
 
 COMPLETE REGISTRATION of companies, how obtained, 190. 
 effects of, 181. 
 
 CONGRESS, statistical resolution of, for assimilation of mercantile 
 law, 32. 
 
 CONSENT, when not valid, 101. 
 
 when, by correspondence, 102. 
 
 CONSIDERATION necessary for a promise, 104. 
 difference between good and valuable, 105. 
 
 CONSOLATO DEL MARE, nature of, 28. 
 when and where published, 28. 
 
 CONSUL, national character of, 39. 
 
 CONTRABAND OF WAR, which articles are, 98. 
 when provisions may become so, 99. 
 no freight due on it, 99. 
 may be seized, 100. 
 
 CONTRACT, validity of, 40. 
 
 by what law it is governed, 40. 
 
 by correspondence, when concluded, 340. 
 
 with the enemy void, 86. 
 
 nature of, 101. 
 
 essentials of, 101. 
 
 what may be the subject matter of, 104. 
 
 form of, 105. 
 
 must be in writing, 105. 
 
 construction of, 106.
 
 272 INDEX. 
 
 CONTRIBUTORIES of companies, who are so held, 107. 
 liabilities of, 197. 
 list of, how formed, 197. 
 CONVOY SHIPS do not protect from search, 89. 
 COPYRIGHT, nature of, G4. 
 
 is regulated by statute law, 70. 
 history of, G5. 
 
 in France, 65. 
 in the United States, 65. 
 in Prussia, 65. 
 in Denmark, 65. 
 in Sweden, 65. 
 in Norway, 65. 
 in Spain, 65. 
 in Austria, 65. 
 in Holland, 65. 
 infringement of, liable to action, 73. 
 what is infringement of, 73, 74. 
 test of piracy, 76. 
 COPYRIGHT IN BOOKS, duration of, 66. 
 
 copies of books must be delivered to public libraries, 67. 
 to be registered at Stationers' Hall, 68. 
 assignment of, must be registered, 69. 
 
 a foreigner has none, when the book was written abroad, 71. 
 COPYRIGHT IN WORKS OF ART AND MANUFACTURES, 
 nature of, 71. 
 duration of, 72. 
 COPYRIGHT, INTERNATIONAL, statute regidating it, 76. 
 requisites of works to be so entered, 79. 
 treaty with Prussia, 80. 
 „ with Saxony, 80. 
 „ with Brunswick, 80. 
 „ with Thuringian Union, 80. 
 „ with Hanover, 80. 
 „ with Oldenburg, 80. 
 „ with the Ranaults, 80. 
 „ with France, 80. 
 CORN-LAWS, repeal of, 13. 
 COST-BOOK PRINCIPLE, definition of, 189. 
 contents of cost-book, 190. 
 rights of purser, 190. 
 rights of adventurers, 190 — 192. 
 CROSSING OF CHEQUES, effect of, 261. 
 CREDITORS, hen of, in partnership property, 166. 
 CUSTOM DUTIES, effects of, 19. 
 CUSTOMS of merchants, authority of, 24. 
 
 cannot be set against Acts of Parliament, 25. 
 
 D. 
 
 DAYS OF GRACE, how computed, 250. 
 in foreign countries, 250.
 
 INDEX. 273 
 
 DEATH OF PARTNER causes dissolution of partnership, L61. 
 
 effects of, on surviving partners, 161. 
 
 on the property of deceased partners, 161. 
 
 DECLARATION OF WAR, when issued, 83. 
 not necessary on both sides, 84. 
 effects of, 84. • 
 
 DEED OF PARTNERSHIP, nature of, 123. 
 
 of chartered companies, contents of, 170. 
 
 of settlement uecessary for obtaining complete registration, 181 , 
 
 must be stamped, 106. 
 
 DEEDS, requisites of, 105. 
 
 DIRECTORS OF COMPANIES, rights of, to make contracts, 184. 
 
 to sign bills of exchange, 164. 
 DISCOVERY, BILL OF, when granted by Court of Chancery, 166. 
 
 DISSOLUTION OF PARTNERSHIP, modes of, 159. 
 
 by the will of the parties, 159. 
 
 by the loss of the object in partnership, l 89. 
 
 by lapse of time, 157. 
 
 by marriage of a single woman, 160. 
 
 by public war, 162. 
 
 by death of partner, 161. 
 
 by insanity of partner, 160. 
 
 by insolvency or bankruptcy of partner, 160. 
 is governed by partnership articles, 155 
 effects of, as among the partners, Kit*, 
 right of partners to partnership property, 163. 
 effects of, with respect to creditors, ] 65. 
 how notified, 153. 
 
 partial, by retirement, 153. {See Retiring Partner.) 
 DIVIDENDS by companies for public works, how made, 188. 
 DOMICILE of birth, 37. 
 
 of choice, 37. 
 DORMANT PARTNERS, who are, 122. 
 liability of, 116, 122. 
 need not give notice of retirement, 153. 
 liable for prior contracts, 153. 
 must give notice of retirement in Scotland, 154. 
 when their responsibility ceases, 154. 
 need not join in a suit, 154. 
 
 E. 
 
 EAST INDIA extent of possessions in, 8. 
 EAST INDIA COMPANY, formation of, 8. 
 ECCLESIASTICS prohibited from trading, 36. 
 EMANCIPATION OF MINORS, at what age, 47. 
 effects of, 47. 
 
 EMBARGO, effects of, 8 t. 
 
 EMPLOYEE AND EMPLOYED, relations of, 114. 
 
 T
 
 274 ixdkx. 
 
 ENDORSEMENT OF BILLS AND NOTES, origin of, 243. 
 no particular form necessary, 243. 
 may be in any part of the bill, 243. 
 may be general or special, 243. 
 is of tbe nature of a new bill, 244. 
 may be made before or after maturity, 245. 
 admits all antecedent endorsements, 245. 
 who lias right to transfer, 246. 
 ENDORSER is liable as a new drawer, 244. 
 
 who may endorse, 246. 
 EXULAND, IRELAND, AND SCOTLAND, LAW OF, differences 
 between, as to municipal law, 26. 
 minors, 45. 
 married women, 48. 
 contracts on the Sabbath, 50. 
 Good Friday and Christmas Day, 51. 
 statute of limitations, 107. 
 acknowledgment, 108. 
 partnership, 129. 
 
 division of profits between partners, 132. 
 rights of partners, 142. 
 actions between companies, 150. 
 remedies of partnerships, 151. 
 dormant partners, 154. 
 bankruptcy of partners, 160. 
 ranking of debts, 167. 
 Joint-Stock Companies Act, 176. 
 Winding-up Acts, 198. 
 bank notes, 206. 
 banking systems, 208, 209. 
 Joint-Stock Bank Act, 212. 
 EQUITY. See Chancery. 
 
 difference between law and equity, 146. 
 EVIDENCE of parties, when admitted, 146. 
 EXPORTS of British produce to the Free Towns, 8. 
 
 produce and manufactures of the United Kingdom, table of, 15. 
 of the United States of America, table of, 16. 
 of France, table of, 17. 
 EXPORTS OF GOLD from America to Europe, 7. 
 EXPULSION OF PARTNERS, provisions for, in deed of partner- 
 ship, 128. 
 
 F. 
 
 FIRM, held to be a separate or moral person, 128. 
 liability of partners included in it, 121. 
 effect of the words "& Co." in the United States, 122. 
 
 FISHING, right of, 21. 
 
 FOREIGN BILLS, drawn in set, 241. 
 
 must be protested, in case of non-payment or non-accept- 
 ance, 254. 
 
 must be stamped, 240. 
 
 may he accepted without writing on the bill, 24s.
 
 INDKX. 275 
 
 FOREIGN CONTRACTS, form and effeqts of, 39. 
 by what law they are governed, 39. 
 with respect to personal disabilities, 41. 
 
 FOREIGN JUDGMENTS, value of, 41. 
 
 FRANCE, exports of, to various countries, 17. 
 
 FREIGHT cannot he claimed for goods contraband of war, 99. 
 
 G. 
 
 GERMAN UNION OF CUSTOM, formation of, 1. 
 
 GOLD imported from America into Europe, 7. 
 coinage of, in six years, 14. 
 effects of gold discovery, 13. 
 
 GOOD FRIDAY, bills of exchange falling due on that day, 51. 
 
 not held in Scotland, 51. 
 GOODWILL of a trade treated as partnership property, 131. 
 GRAIN, quantity of, imported into the United Kingdom, 14. 
 GREAT BRITAIN, discovery of, 2. 
 GREECE, commerce of, 2. . 
 
 GUARANTEE by a partner on partnership affairs binds the partner- 
 ship, 141. 
 
 GUILDS, admission into, in Russia, 36. 
 
 H. 
 
 HANSE MERCHANTS, privileges of, 6. 
 
 HANSE TOWNS, amount of exports to, from United Kingdom, 15. 
 
 commerce of, 8. 
 
 league, origin of, 6. 
 HOLDER OF BILLS, duties of, with respect to stamp-duties, 240. 
 
 to present bills for acceptance, 246. 
 for payment, 246. 
 to protest bills, 253. 
 
 to give notice of dishonour, 254. 
 
 cannot give the acceptor time for payment, 257. 
 
 may have recourse to any party in the bill, 257. 
 
 duties of, with respect to cheques, 259. 
 
 HOLIDAYS, bills becoming due on, 51. 
 
 respected by the law-merchant, 251. 
 
 I. 
 
 IDIOTS cannot be partners, 118. 
 
 INCOMING PARTNER not liable for prior contracts and debts, 144. 
 when liable, 144. 
 
 INDIA, discovery of, 6. 
 
 T 2
 
 276 INDEX. 
 
 INFANT PARTNER, uot necessary to be joined in the suit, 151. 
 cannot endorse bills, 246. 
 cannot convey interest by endorsement on bills, 246. 
 
 INJUNCTION, when granted by the Court of Chancery, 149. {See 
 
 Partnerships.) 
 INSANITY OF PARTNER a ground of dissolution of partnership, 160. 
 INSURANCE COMPANIES, how constituted, 193, 194. 
 
 liability of members, 194. 
 INTERNATIONAL CODE of commercial law, want of, 31. 
 INTERNATIONAL COMMERCIAL LAW, 18—22. 
 INTERNATIONAL COPYRIGHT. {See Copyright.) 
 
 INTERNATIONAL LAW, nature of, 81. 
 
 rise of, 83. 
 
 writers on, 83. 
 ITALY, rise of commerce of, 3. 
 
 origin of banking in, 198. 
 
 JEWS, proscription of, 4. 
 
 JOINT-STOCK, when it remains the separate property of partners, 114. 
 
 JOINT-STOCK COMPANIES, progress of, 171. 
 
 table of those provisionally and completely registered, 181. 
 provisions of Joint Stock Companies Act, 176 — 186. 
 power of members, when completely registered, 181. 
 nature and origin of, 168. 
 causes of the Bubble Act, 169. 
 
 JOINT-STOCK BANKING COMPANIES ACT, requisites of, 209. 
 JOINT-STOCK COMPANIES ACT, to what business it applies, 176. 
 duties of proposers of joint-stock companies, 176. 
 
 JUDGMENTS, FOREIGN, value of, 41. 
 
 L. 
 
 LABRADOR, discovery of, 7. 
 
 LIABILITY of minors for their acts, 44. 
 in Scotland, 45 
 
 of married women for their acts, 48. 
 in Scotland, 48. 
 
 of nominal partner, 120. 
 
 of voluntary partner, 120. 
 
 of dormant partners, 122. 
 
 of incoming partner, 144. 
 
 of retiring partners, 153. 
 
 of members of partnership, 134. 
 
 of partners en commandite, 216. 
 LICENCES are high acts of sovereignty, 87. 
 
 construction of, 87. 
 
 for enumerated articles, 87,
 
 INDEX. 277 
 
 LICENCES (continued)— 
 
 effect of deviation from them, 88. 
 never operate retroactively, 88. 
 effects of fraud in the using of, 88. 
 
 LIMITATION OF ACTION, periods of, 107. 
 in Scotland, 108. 
 
 M. 
 
 MAJORITY, AGE OF, in the United Kingdom, 44. 
 
 in Fiance, 44. 
 
 in Sardinia, 44. 
 
 in Bavaria, 44. 
 
 in Russia, 44. 
 
 in Saxony, 44. 
 
 in Denmark, 44. 
 
 in Spain, 44. 
 
 in Portugal, 44. 
 
 in Holland, 44. 
 
 in Prussia, 44. 
 MAJORITY rule minority in partnership disputes, 127. 
 MANSFIELD, LORD, his influence on commercial law, 29. 
 MARINERS, national character of, 39. 
 MARITIME CAPTURE, right of, 90. (See Capture.) 
 
 MARRIED FEMALES, status of, 47. 
 cannot trade, 48. 
 
 may in the city of London, 48. 
 
 in Scotland, 48. 
 authority of, in the United States of America, 47. 
 
 in France, 48. 
 bills payable to, by whom endorsed, 246. 
 cannot form partnership, 117. 
 
 may, in the city of London, 117. 
 may be partners even with their husbands, in France, 117. 
 
 MERCHANT, definition of, 34. 
 
 who may be, 34. 
 
 national character of, 39. 
 MERCHANT LAW, what, 24. 
 MERCHANT VESSELS subject to search, 89. 
 
 effect of resistance from search, 89. 
 
 papers to be carried on board, in time of war, 89. 
 
 MINING COMPANIES, how formed, 189. 
 
 on the cost-book principle, 189. 
 MINORITY, by what law governed, 41. See Majority. 
 
 MINORS, who are, 44. 
 
 what they may do, 44. 
 
 their disabilities, 44. 
 
 validity of contracts of, 44. 
 
 may bind themselves apprentices, 45. 
 
 authority of, in Scotland, 4. r >.
 
 278 INDEX. 
 
 MINORS (continued)— 
 
 authority of, in France, 47. 
 emancipation of, 47. 
 duty of, on attaining majority, 45. 
 may be partners, 116. 
 
 but not liable to losses, 117. 
 
 MORTGAGES, how affected by companies, 187. 
 register of, to be kept, 187. 
 
 N. 
 
 NANTES, revocation of edict of, 9. 
 
 NAPOLEON, codes of, 10. 
 
 NATIONAL CHARACTER of the merchant, 37. 
 
 how acquired, 38. 
 
 of the consul, 39. 
 
 of a ship, 39. 
 
 of master and mariner, 39. 
 
 NATIONS, LAW OF, nature of, 83. 
 province of, 18. 
 
 NATIONS, right of, to permit or prohibit trade, 18. 
 
 NAVIGATION LAWS, enactment of, 8. 
 repeal of, 13. 
 
 NEUTRALITY, definition of, 98. 
 
 how it may be infringed, 99, 100. 
 NEUTRAL PROPERTY on board enemies' ships, whether confis- 
 cable, 91. 
 
 treaties on the subject, 91 — 94. 
 NEUTRAL SHIP is neutral territory, 95. 
 
 cannot enter a blockaded port, 98. 
 
 duties of, when in a blockaded port, 98. 
 NEUTRAL TERRITORY, inviolability of, 93. 
 NEUTRALS, right of, to carry enemy's property, 92. 
 
 colonial trade prohibited to, 98. 
 rule of 1756, 98. 
 
 coasting trade prohibited to, 98. 
 
 cannot carry contraband of war, 98. 
 
 Order in Council respecting, 100. 
 
 NOBLES prohibited from trading, 36. 
 
 NOMINAL PARTNERS, who are, 119. 
 liability of, 120. 
 
 NOTICE OF DISHONOUR of Bills and Notes, form of, 255. 
 
 when to be sent, 254. 
 
 law in Scotland, 254. 
 
 by whom to be sent, 255. 
 
 may be given verbally, 255. 
 
 what will excuse notice, 256. 
 NOTICE OF DISSOLUTION OF PARTNERSHIP, how given, 153. 
 
 effects of, 153.
 
 INDEX. 279 
 
 o. 
 
 OLD AND NEW STYLES, account of, 251. 
 
 ORDER IN COUNCIL, nature of, 86. 
 
 permitting neutral trade, 100. 
 
 on copyright, 76, 80. 
 ORDINANCE DE LA MARINE ET DE COMMERCE of France, 9. 
 ORDINANCE OF FOREIGN STATES, authority of, 25. 
 OSTENSIBLE PARTNERS, who are, 119. 
 
 PAROLE EVIDENCE, when admissible in written contracts, 106. 
 PARTICIPATION IN PROFITS AND LOSSES, when constitutes 
 partnership, 112. 
 
 PARTNERS, who may be, 116. 
 infant, 116. 
 
 married females may not be, 117. 
 alien enemy, 118. 
 nominal, who are, 119. 
 ostensible, who are, 119. 
 dormant, who are, 122. 
 
 liability of, 116 (note), 
 voluntary, 120. 
 authority of, 139. 
 
 have special lien on partnership property, 168. 
 may alter terms of partnership, 123. 
 may bind the firm by bills, 140. 
 
 by a guarantee, 141. 
 cannot bind the firm by submission to arbitration, 142. 
 
 nor by deed, 142. 
 
 may, in Scotland, 142. 
 may bind the firm by their representations, 142. 
 authority of, may be restricted, 143. 
 
 when it commences, 143. 
 interest of, in partnership property, 131. 
 
 in the profits and losses, 131. 
 
 in the same in Spain, 132. 
 
 in Portugal, 132. 
 
 in Austria, 132. 
 
 in Scotland, 132. 
 
 duties of, 133. 
 
 incoming, not liable for prior debts, J 44. 
 responsibility of, 133. 
 
 for gross negligence, 133. 
 
 for wrongs, 133. 
 liability of unlimited, 134. 
 effect of community of profits. 114. 
 
 as agents, 141. 
 
 as members of companies, 177
 
 280 INDEX. 
 
 PARTNERS {continued)— 
 
 insanity of, effect of, 160. 
 bankruptcy of, effects of, 160. 
 remedies between them at common law, 144. 
 may maintain an action against copartners for money lent, 14"3 
 upon bills, 147. 
 
 for a specific agreement, 147. 
 
 on a special transaction, 147. 
 
 for non-payment of instalment, 147. 
 
 when balance of account has been struck, 147. 
 cannot maintain an action on general account, 147. 
 
 not for work and labour performed for partnership, 147. 
 remedies of, at equity, 148. 
 
 for wilful breach of articles, 148. 
 
 for raising money for private use, 148. 
 
 by injunction, 149. 
 
 by the appointment of a receiver, 149. 
 right of, against third persons, 150. 
 
 all must join in the suit, 151. 
 
 infant, need not be a party to the suit, 151. 
 
 bankrupt, not necessary to be joined, 151. 
 retiring, liability of, when determined, 116. 
 
 PARTNERSHIP, origin of, 109. 
 definition of, 109. 
 essential ingredients of, 110. 
 formed by consent, llu. 
 what constitutes, 111. 
 
 as between the parties, 111. 
 
 as toward third persons, 112. 
 and agency, difference of, 113. 
 where there is participation of profits, 112. 
 in shipping contracts, 113. 
 in mining contracts in Cornwall, 113. 
 formation of the contract, 122. 
 deed, contents of, 123. 
 kinds of, 118. 
 
 in the United States of America, 119. 
 in France, 119. 
 
 in Holland, Belgium, and Spain, 119. 
 and joint tenancy, difference between, 130. 
 held to be a personal, or a moral person, 128. 
 how held at law, 129. 
 
 in Scotland, 129. 
 articles, 127. 
 
 when take effect, 126. 
 
 when deemed as altered, 123. 
 
 regarding winding up and dissolution, 127. 
 
 expulsion of partners, 128. 
 disputes ruled by majority, 127. 
 property of, what it consists in, 130. 
 
 all partners have common interest in, 130. 
 
 may remain the private property of one partner, 130. 
 
 real and personal, treated alike, 131.
 
 ixi.kx. 281 
 
 PAETNERSHIP (continued)— 
 
 may i ae in the name of the firm, in Scotland, 151. 
 effect of execution on the private property of one partner, 152. 
 may be partly dissolved by retirement of partner, 153. 
 dissolution of, 155. 
 
 effects of, on continuing business, 1 55. 
 dissolution of, at will, 156. 
 
 notice of, how given, 157. 
 
 by tacit renunciation, 158. 
 
 by extinction of the business, 159. 
 
 by insanity of partners, 1 60. 
 
 by other diseases, 160. 
 
 by marriage of a single woman, 160. 
 
 by insolvency or bankruptcy of partner, 160. 
 See Dissolution, Partners, Partnership en Commandite. 
 
 PARTNERSHIP EN COMMANDITE, history of, 215. 
 constitution of the contract, 216. 
 how formed, in the United States and France, 217. 
 no part of original capital can be withdrawn, 217. 
 name of the firm, 218. 
 
 deed of, must be registered and advertised, 217. 
 dissolution of, how effected, 219. 
 extensively adopted on the Continent, 219. 
 uncertainty of the law in Great Britain, 220. 
 report of the Royal Commissioners, 221 — 223. 
 who are the contracting parties, 225. 
 difference between general and commandite partnership, 225. 
 
 loan and commandite, 225. 
 effects of, on retiring partners, 226. 
 inventors, how interested in, 226. 
 application of, to public companies, 227. 
 
 to banking companies, 229. 
 
 exception as to banks issuing notes, 230. 
 statistics of, 230. 
 province of Government with respect to, 231. 
 
 PATENT LAW, nature of, 52. 
 effects of, 53. 
 in the United States, 54. 
 in France, 54. 
 in Prussia, 54. 
 subject-matter of, 54. 
 requisites of, 56. 
 
 priority of invention necessary, 56. 
 who is entitled to it, 57. 
 how to obtain it, 57. 
 to what country it extends, 57. 
 in Nova Scotia, 58. 
 in New Brunswick, 58. 
 in Prince Edward's Island, 58. 
 in Newfoundland, 58. 
 in Jamaica, 58. 
 in Antigua, 58.
 
 282 INDEX. 
 
 PATENT LAW {continued)— 
 in Barbadoes, 58. 
 in Victoria, 58. 
 in Van Diernen's Land, 58. 
 in San Christopher, 58. 
 in Trinidad, 58. 
 in New South Wales, 58. 
 in East India, 58. 
 cost of a patent in the United Kingdom, 62. 
 
 in the United States, 63. 
 
 in France, 63. 
 
 in Spain, 63. 
 
 in Austria, 63. 
 
 in Belgium, 63. 
 
 in Russia, 63. 
 
 in the Netherlands, 63. 
 for importation of foreign inventions, 59. 
 title and specification of, 59. 
 disclaimer of, 60. 
 property in, 61. 
 assignment of, 61. 
 
 remedies against infringement of, 62. 
 stamp-duties on, 62, 63. 
 
 PAYMENT OF BILLS, by whom must be made, 256. 
 in what money, 256. 
 
 may be enforced by common action, 257. 
 in Scotland, by decree of registration, 257. 
 of cheques, when made, 259. 
 
 PREEMPTION, right of, 99. 
 
 PRESENTMENT OF BILLS for acceptance, where necessary, 246. 
 evidence of, 247. 
 law in Scotland, 247. 
 for payment, when made, 250. 
 
 when and where to be made, 252. 
 what will excuse it, 253. 
 
 PROMISSORY NOTES, definition of, 233. 
 form of, 233. 
 See Bills op Exchange. 
 
 PROTECTIVE DUTIES, policy of, 19. 
 
 PROTEST OF BILLS, when necessary, 253. 
 effects of neglect of, 254. 
 nature of, 254. 
 by whom made, 254. 
 
 not necessary for inland bills in England, 254. 
 always necessary in Scotland, 254. 
 
 PROVISIONAL COMMITTEE MEN, liability of, 179. 
 must render account to their subscribers, 180. 
 may sue for contributions, 180. 
 
 PURSER of a mining company, duties of, 190.
 
 INDEX. 283 
 
 l: 
 
 RAILWAY SYSTEM, introduction of, 11. 
 progress of, 12. 
 capital employed in, 12. 
 
 RANK AND PROFESSIONS incompatible with trading, 36. 
 
 RECEIVER, when appointed by Court of Chancery, 149, ISO. 
 
 REGISTRATION of joint-stock company, to whom does it belong, 176. 
 effect of provisional registration, 177. 
 power of committee, 177. 
 of partnership in France, 127. 
 
 RELEASE of one partner binds the firm, 142. 
 
 REMEDIES between partners, 144—150. 
 at law, 147. 
 at equity, 148. 
 
 when barred by statute of limitation, 150. 
 at equity, 150. 
 of partners against third persons, 150 — 152. 
 
 REPRESENTATION of one partner binds the firm, 122. 
 
 RESTRAINTS of trade, 33. 
 
 general or partial, 35. 
 
 by obligation not to trade, 35. 
 
 RESTRICTION OF LIABILITY of partners valid, if notified to third 
 parties, 143. 
 
 RETIREMENT FROM PARTNERSHIP, when notification neces- 
 sary, 153. 
 what debts are affected by, 153. 
 
 RETIRING PARTNERS, duties of, in retiring, 153. 
 
 remain responsible for balance of account, 155. 
 
 old and new accounts, 155. 
 
 leaving a sum at interest or annuity, 155. 
 
 for participation of profits, 155. 
 publication of retirement necessary, 153. 
 effect of a want of a notice of retirement, 153. 
 
 RETURNS to be made by chartered companies, 1?0. 
 
 RIVER, navigation of, 21. 
 
 ROMANS, their aversion to commerce, 2. 
 laws of, 27. 
 
 ROLES D'OLERON, provisions of, 5. 
 
 S. 
 
 SABBATH, statute for observance of, 49. 
 contracts made on, 50. 
 in France, 50. 
 in Scotland, 50.
 
 284 INDEX. 
 
 SCOTLAND, union of, with England, 9. 
 
 law of, difference with the law of England and Ireland, (bee 
 England.) 
 
 SEA, common property of, 2. 
 
 sovereignty of, 22. 
 SHARES IN JOINT-STOCK COMPANY, transfer of, 184. 
 SHIP, national character of, 39. 
 SOLDIERS prohibited from trading, 36. 
 SOUND DUES, tariff of, 22. 
 SPECIFICATION OF A PATENT, requisites of, 59. 
 
 when to be filed, 60. 
 STAMP DUTIES on patents, 62, 63. 
 
 on bills and notes, 239. 
 
 on foreign bills, 241. 
 
 duties of holders respecting, 240. 
 
 penalty for infringement of, 240. 
 
 in foreign countries, 242. 
 
 on cheques, 260. 
 
 on drafts on demand, 260. 
 
 on receipts, 260. 
 STATIONERS' COMPANY, when formed, 64. 
 STATUTE OF LIMITATION, as to bills, 258. 
 
 as to contracts, 107. 
 
 STATUTES, number of, 26. 
 defects of, 26. 
 27 Ed. 6, c. 17, p. 85. 
 5 Eliz. c. 4, p. 34. 
 21 Jac. 1, c 3, p. 54. 
 21 Jac. 1, c. 16, p. 107. 
 29 Car. 2, c. 3, p. 105. 
 29 Car. 2, c. 7 r p; 50. 
 
 1 W. & M. c. 20, p. 201. 
 
 3 & 4 Anne, c. 9, p. 233. 
 
 8 Anne, c. 19, p. 64. 
 
 6 Geo. 1, c. 18, pp. 169, 193. 
 8 Geo. 1, c. 14, p. 213. 
 
 8 Geo. 2, a. 13, p. 71. 
 
 9 Geo. 2, c. 5, p. 21. 
 
 7 Geo. 3, c. 38, p. 71. 
 17 Geo. 3, c. 57, p. 71. 
 21 Geo. 3, c. 49, p. 50. 
 
 21 & 22 Geo. 3, c. 16, p. 206. 
 54 Geo. 3, c. 56, p. 72. 
 38 Geo: 3, c. 71, p. 72. 
 48 Geo. 3, c. 88, p. 234. 
 54 Geo. 3, c. 96, p. 35. 
 
 54 Geo. 3, a 156, p. 65. 
 
 55 Geo. 3, c. 134, p. 205. 
 55 Geo. 3, c. 184, p. 235. 
 
 1 & 2 Geo. 4, c. 77, p. 252. 
 1 & 2 Geo. 4, c. 78, p. 247.
 
 INDKX. 
 
 STATUTES {continued)— 
 
 6 Geo. 4, c. 91, p. 169. 
 
 7 Geo. 4, c. 6, p. 234. 
 
 7 & 8 Geo. 4, c. 15, p. 51. 
 
 8 & 9 Geo. 4, c. 24, p. 247. 
 
 9 Geo. 4, c. 14, p. 46. 
 
 9 Geo. 4, c. 23, pp. 204, 207. 
 
 9 Geo. 4, c. 24, p. 51. 
 17 Geo. 4, c. 30, p. 234. 
 
 3 & 4 Will. 4, c. 15, p. 72. 
 3 & 4 Will. 4, c. 42, p. 152. 
 3 & 4 Will. 4, c. 98, p. 204. 
 5 & 6 Will. 4, c. 65, p. 72. 
 
 5 & 6 Will. 4, c. 83, pp. 60, 62. 
 
 6 & 7 Will. 4, c. 59, p. 71. 
 1 Vict. c. 73, p. 169. 
 
 1 & 2 Vict. c. 106, p. 37. 
 5 & 6 Vict. c. 45, p. 65—70. 
 
 5 & 6 Vict. c. 100, p. 72. 
 
 6 Vict. c. 65, p. 71. 
 
 6 & 7 Vict. c. 65, p. 72. 
 
 6 & 7 Vict. c. 68, p. 72. 
 
 7 & 8 Vict. c. 12, p. 77. 
 
 7 & 8 Vict. c. 32, p. 207. 
 7 & 8 Vict. c. 66, p. 42. 
 7 & 8 Vict. c. 69, p. 55. 
 7 & 8 Vict. c. 110, p. 176. 
 
 7 & 8 Vict. c. 113, p. 210. 
 
 8 Vict. c. 16, p. 188. 
 
 8 & 9 Vict. c. 38, p. 208. 
 
 8 & 9 Vict. c. 98, p. 198. 
 
 9 & 10 Vict. c. 75, p. 212. 
 
 10 & 11 Vict. c. 78, p. 177. 
 
 11 & 12 Vict. c. 45, p. 195. 
 
 12 & 13 Vict. c. 45, p. 198. 
 12 & 13 Vict. c. 106, p. 34. 
 12 & 13 Vict. c. 108, p. 195. 
 12 & 13 Vict. c. 109, p. 61. 
 
 14 & 15 Vict. c. 99, pp. 62, 146. 
 
 15 & 16 Vict. c. 12, pp. 78, 79. 
 
 15 & 16 Vict. c. 83, pp. 53, 57. 
 
 16 Vict. c. 83, p. 62. 
 
 16 & 17 Vict. c. 59, p. 260. 
 16 & 17 Vict. c. 107, p. 20. 
 
 16 & 17 Vict. c. 115, p. 60. 
 
 17 Vict. c. 5, p. 13. 
 
 17 Vict. c. 83, pp. 241, 269. 
 17 & 18 Vict. c. 90, p. 263. 
 
 STEAM-ENGINE, application of, to navigation, 10, 11. 
 STOCK-TAKING, on dissolution of partnership, 164. 
 STOLEN BILLS, property of, 244. 
 SUMMARY DILIGENCE in Scotland, 258. 
 
 285
 
 286 INDEX. 
 
 T. 
 
 TERRITORY of a nation, extension of, 21. 
 
 TRADE, restraints of, 33. 
 
 by obligations not to trade, 35. 
 
 by regulations and privileges, 49. 
 
 by patent law, 52. 
 
 by the law of copyright, 64. 
 
 in time of war, 81. 
 TRADING WITH ENEMIES, as affected by order in Council, 86. 
 TRANSFER OF SHARES in a chartered company, how effected, 171. 
 
 in joint-stock banking companies, how proved, 211. 
 TREATIES OF COMMERCE, when introduced, 9. 
 
 objects of, 18. 
 
 as to free ship free goods, 91 — 95. 
 
 U. 
 
 UNITED KINGDOM, table of exports, 15, 265. 
 
 UNITED STATES OF AMERICA, formation of, 10. 
 population of, 10. 
 table of exports, 16. 
 
 USANCES between London and foreign countries, 252. 
 
 USURY, repeal of Laws of, 263. 
 
 V. 
 
 VOLUNTARY PARTNERS, who are, 120. 
 liability of, 120. 
 
 W. 
 
 WAR, causes of, 81. 
 
 declaration of, 83. 
 
 WAREHOUSING SYSTEM of United Kingdom, 20. 
 
 WINDING UP OF JOINT-STOCK COMPANIES ACTS, 195. 
 
 when, may be petitioned for, 195. 
 
 when the court will interfere, 195. 
 
 to what association do they apply, 196. 
 
 where the order may be obtained, 196. 
 
 do not apply to Scotland, 198. 
 WITNESSES, Act to compel the attendance of, 263. 
 
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