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CHAPTER II.

OF JOINT STOCK COMPANIES BY STATUTE.

ALTHOUGH it is not within the scope and design of this treatise to enter minutely into the construction of the various acts of Parliament which have been passed for the protection and regulation of joint stock companies, yet it may be expected that a general view should be given of some of the leading enactments on this subject. And, first, it may be noticed, that by the stat. 1 Vict. c. 73, power is given to the Crown by letters patent to limit the responsibility of shareholders, and to authorize a more convenient mode of suing and being sued than is warranted by the common law. As it is intended, however, to include that statute in the Appendix to this work, it is unnecessary to particularize its provisions in this place.

II. The most important companies, (not being bodies corporate), for which provisions are made by statute, are Joint Stock Banking Companies. By recent acts of Parliament, those companies have been allowed certain advantages, both in respect to the numbers of their members, and their power of suing and being sued, which previously, by reason of certain statutable restrictions, they were not permitted to enjoy.

The restriction which formerly existed as to the numbers of partners in private banks, arose from a desire on the part of the Legislature to support the exclusive privilege of the Bank of England, which privilege is in substance this: that there shall not be a bank of issue of anything which is a substitute for money, and to circulate as such, during the continuance of the Bank of England (a). Therefore, by virtue of the several Bank

(a) Per Maule, arguendo, 3 Bing. N. C. 601.

Acts which preceded the stat. of 7 Geo. 4, c. 46, no company or partnership in England, exceeding the number of six persons, other than the Bank of England, could trade as a bank of circulation and issue; or, in the words of the statute of Anne, could “borrow, owe, or take up any sum or sums of money on their bills or notes, payable at demand, or at any less time than six months from the borrowing thereof (a).

By the 3 & 4 Will. 4, c. 98, sect. 3, any body politic or corporate, or society, or company, or partnership, although consisting of more than six persons, may carry on the trade or business of banking in London, or within sixty-five miles thereof, provided that such body politic or corporate, or society, or company, or partnership, do not borrow, owe, or take up in England, any sum or sums of money on their bills or notes payable on demand, or at any time less than six months from the borrowing thereof, during the continuance of the privileges granted by this act to the Governor and Company of the Bank of England.

Upon the construction of this last-mentioned enactment, the terms of which, it will be perceived, are borrowed from the statute of Anne, it has been held that a London joint stock banking company, consisting of more than six persons, cannot accept a customer's bill at less than six months date ; for the acceptance of a bill under such circumstances, is a “borrowing” in point of law; and, at all events, the meaning of the term “ borrow” must be taken to be substantially the same as “owe or take up;" and that such a transaction amounts to an “owing" by the banker to his customers, there can be no doubt (b).

II. 2. With respect to actions and suits by and against joint stock banking companies, the 7 Geo. 4, c. 46, sect. 9, enacts, “that all actions and suits, and also all petitions to found any commission of bankruptcy against any person or persons, who may be at any time indebted to such copartnership, carrying on business under the provisions of this act, and all proceedings, at law or in equity, under any commission of bankruptcy, and all other proceedings, at law or in equity, to be commenced or instituted

(a) See stats. 8 & 9 Will. 3, c. 20; 6 Anne, c. 22.

(6) Bank of England v. Anderson, 3 Bing. N. C. 589; 2 Keen, 328.

See also Bank of England v. Booth,
2 Keen, 466; and per Lord Denman,
Sims v. Bond, 5 B. & Ad. 389; Penny
Cyclop. tit. Bank.

for or on behalf of any such copartnership, against any person or persons, bodies politic or corporate, or others, whether members of such copartnership or otherwise, for recovering any debts, or enforcing any claims or demands due to such copartnership, or for any other matter relating to the concerns of such copartnership, shall and lawfully may, from and after the passing of this act, be commenced or instituted and prosecuted in the name of any one of the public officers, nominated as aforesaid, for the time being, of such copartnership, as the nominal plaintiff or petitioner for and on behalf of such copartnership; and that all actions or suits, or proceedings at law or in equity, to be commenced or instituted by any person or persons, bodies politic or corporate, or others, whether of such copartnership or otherwise, against such copartnership, shall and lawfully may be commenced, instituted, and prosecuted against any one or more of the public officers, nominated as aforesaid, for the time being, of such copartnership, as the nominal defendant for and on behalf of such copartnership.

It seems to have been doubted whether, under the provisions of this act, a joint stock banking company could have brought an action against any of their own shareholders; and it is apprehended, that, in order to remedy this doubt, amongst others, the stat. 1 & 2 Vict. c. 96, was passed; which, after reciting the before-mentioned clause in the 7 Geo. 4, c. 46, and a similar clause in the Irish statute of 6 Geo. 4, c. 42, enacts, “that any person now being or having been, or who may hereafter be or have been, a member of any copartnership now carrying on or which may hereafter carry on the business of banking under the provisions of the said recited acts, may, at any time during the continuance of this act, in respect of any demand which such person may have, either solely or jointly with any other person, against the said copartnership, or the funds or property thereof, commence and prosecute, either solely or jointly with any other person, (as the case may require), any action, suit, or other proceeding, at law or in equity, against any public officer appointed or to be appointed, under the provisions of the said acts, to sue and be sued on the behalf of the said copartnership; and that any such public officer may, in his own name, commence and prosecute any action, suit, or other proceeding, at law or in equity, against any person being or having been a member of the said copartnership, either alone or jointly

with any other person, against whom any such copartnership has or may have any demand whatsoever; and that every person being or having been a member of any such copartnership shall, either solely or jointly with any other person, (as the case may require), be capable of proceeding against any such copartnership by their public officer, and be liable to be proceeded against, by or for the benefit of the said copartnership, by such public oflicer as aforesaid, by such proceedings and with the same legal consequences as if such person had not been a member of the said copartnership; and that no action or suit shall in anywise be affected or defeated by reason of the plaintiffs or defendants, or any of them respectively, or any other person in whom any interest may be averred, or who may be in anywise interested or concerned in such action, being or having been a member of the said partnership; and that all such actions, suits, and proceedings shall be conducted and have effect as if the same had been between strangers."

The 4th section enacts, “ that no claim or demand which any member of any such copartnership may have in respect of his share of the capital or joint stock thereof, or of any dividends, interest, profits, or bonus, payable or apportionable in respect of such share, shall be capable of being set off, either at law or in equity, against any demand which such copartnership may have against such member on account of any other matter or thing whatsoever; but all proceedings in respect of such other matter or thing may be carried on as if no claim or demand existed in respect of such capital or joint stock, or of any dividends, interest, profits, or bonus payable or apportionable in respect thereof.”

In the late case of Ex parte Hall (a), a question arose, founded on the decision in Guthrie v. Fisk (6), whether, upon the construction of the two acts of 7 Geo. 4, c. 46, and 1 & 2 Vict. c. 96, or either of them, a banking company could, through the medium of their public officer, sue out a fiat in bankruptcy against one of their own shareholders in respect of a debt due to them for calls, and to a small extent on his banking account. The Court of Review seemed to consider that the company could not, under the first act alone, sue out such a fiat, inasmuch as the debt was purely equitable; but they held, that, cou

(a) 1 Mont. & Chit. 365.

(6) 3 B. & C. 178; 5 D. & R. 24.

pling the apparent intention of the Legislature in the former act, which expressly mentions petitions in bankruptcy, with the more specific and stringent provisions in the latter, such a fiat was sustainable. Erskine, C. J., said, that in this case an objection had been taken to the petitioning creditor's debt, which objection had been founded on the fact, that the fiat had been issued out by a company of which the bankrupt was a member, in respect of a debt due from him to the firm; and that, unless the case came within the provisions of the acts of Parliament, authorizing the public officers of certain banking companies to sue on their behalf the members of their own firm, this objection would have been fatal; inasmuch as the debt being equitable only, there could be no action brought, and, consequently, no fiat sued out. “But,” added his Honour, “ by the 1 & 2 Vict. c. 96, amending the former act of 7 Geo. 4, c. 46, the Legislature has thought it right to enact, that any person, now being or having been, or who may hereafter be or have been, a member of any copartnership now carrying on, or which may hereafter carry on, the business of banking, under the provisions of the said recited act, may, at any time during the continuance of the same, in respect of any demand which such person may have, either solely, or jointly with any other person, against the copartnership, or the funds or property thereof,' sue, and be sued by, the public officer appointed under the recited acts. And it goes on to state, 'that the person, having been and being a member, shall be capable of proceeding against the copartnership by the public oflicer, and be liable to be proceeded against, by or for the benefit of the copartnership, by such public officer as aforesaid, by such proceedings, and with the same legal consequences, as if such person had not been a member of the said copartnership.' Without referring, then, to the language of the 7th of Geo. 4, by the force of this statute, (1 & 2 Vict. o. 96), coupled with the 4th section, which takes away any right of set-off which such member might have in respect of dividends of shares or profits of the concern, the public officer would have a right to bring an action; and it would necessarily follow, as it appears to me, that he might also petition for a fiat in bankruptcy; for though it has been objected that it has been decided in the case of Guthrie v. Fisk, that an act of Parliament authorizing

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