companies is, that the right of partnership in them is an article of commerce by the transference of shares. As in ordinary partnership, there is a difference between the circumstances which will give one the privileges attached to a stock-holder, and those which will render him liable to the corresponding obligations. There are generally rules for the transference of stock, requiring not only the execution of certain writings by the parties, but the acceptance of the purchaser as a member of the firm. There are sometimes conditions such as the payment of all the calls on the previous holder, which are precedent to his right to derive any benefit from the stock. Yet he may have in the mean time rendered himself a partner of the company, as it was found where one had not adopted the form of transfer prescribed by the contract, yet, having intimated his purchase, it was entered in the transfer book. A party may be bound as a partner, by signing the contract as trustee for another, while he has none of the advantages of a stock-holder. As in other cases of sale and purchase, fraudulent representation may be a ground for annulling a sale of stock,3 but it is very questionable if it would affect the purchaser's responsibility as a partner of the company. The transfer of shares is a piece of business in which parties are entitled to prompt arrangements, as the value of shares is apt to fluctuate, and the prospect of such fluctuation may have been a motive to the transaction. Where one party delays or refuses to perform his part, the other party seeking to preserve his recourse, should be prepared to perform his. In a case where there was an agreement for the sale of shares in a railway, and the seller would not sign the transfer until certain other stock transactions were completed, but was ready next day to complete the transfers, the purchaser not having tendered the purchase money was found not entitled to repudiate the transaction.4

In 1844, two acts were passed relating to joint stock companies in England, which, however, may have some incidental relation to Scottish companies. The 7th & 8th Vict. c. 110, is entitled "An Act for the Registration, Incorporation, and Regulation of Joint Stock Companies." It applies to every "Joint Stock Company," according to what is to be so held in terms of the definitions of the act "established

'Turnbull v. Allan, 1st March 1833, affirmed 7 W. S. 281. See also Weatherley & Turnbull, 3d June 1824.-2 Malcolm v. West Lothian Railway, 10th June 1835.-3 Brown v. Syme, 8th March 1834.— Wilson v. Watson, 21st January 1841.

in any part of the United Kingdom of Great Britain and Ireland except Scotland, or established in Scotland, and having an office or place of business in any other part of the United Kingdom." The act 7 & 8 Vict. c. 3, is entitled "An act for facilitating the winding up the affairs of joint stock companies unable to meet their pecuniary engagements." It is not expressly limited to England, but as it puts in motion the machinery of the English Court of Bankruptcy, for winding up the affairs of insolvent companies, it must be presumed that it can only apply to those which are locally within the operation of the law of England. Companies comprehended under the act for the Registration of joint stock companies, as above cited, come specially within its operation. It is worthy of remark that there is a provision in the aet for enforcing orders made in England, for payment of money by persons in Scotland, as partners of such a bankrupt company (§ 24). The courts in Scotland would not, however, be bound to give effect to these orders, if the proceedings in England should, through the vagueness of the local application of the act, be applied to companies that do not come properly within it.

SECT. 2.-Companies under the Patents Act.

To avoid those cumbrous peculiarities of a corporation which are inconvenient to a mere trading company, and to render the expense of an act of Parliament unnecessary, the legislature has provided for the limitation and regulation of the responsibility of partners by means of letters patent. These may be granted under the great seal for Scotland to individuals and their representatives, empowering them to sue and be sued through one of two registered officers, and limiting the amount of their individual responsibility to a certain sum per share. The company must be constituted by a Deed of Partnership, containing its designation, object, and place of business, with the designations of the members; and appointing two officers to sue and be sued. Within three months after the date of the letters patent a return of these particulars, and of the shares (as designated by their numbers) held by each individual, together with the extent of responsibility of each, must be made to the register house; and when transfers of shares are

17 Wm. IV. & 1 Vict. c. 73, §§ 2, 3, 4.—3 Ibid. § 5.

I

made, a similar notice must be sent within three months.' No person is entitled to a share of profits, unless he be registered as a member, and each member continues to be responsible, until a return of his ceasing to be a member is registered. When responsibility is limited to a certain sum per share, no action can be brought against a member for a larger sum than the unpaid balance of his subscription.3

SECT. 3.-Joint Stock Banks.

Any joint stock banking company in Scotland may sue and be sued in the name of the manager, cashier, or other principal officer, provided that before commencing business and between the 25th of May and the 25th of July annually, a return be made to the collector of stamps, of the name of the firm, of the names and designations of all the partners, of the places where branches are established, and of the office-bearer in whose name the company is to sue and be sued. The return must be made on the affidavit of that office-bearer. Certified special returns must be made of any additional office-bearer appointed to represent the company, of all retiring and newly adopted partners, and of any new agencies. A company delaying to make the specified return forfeits £500 per week during the delay, and if a false return is made, £500 is forfeited by the company, and £100 by the office-bearer who makes the return."

The act 9 & 10 Vict. c. 75, extends the Joint Stockbanks' Act for England, of the session of 1844 (7 & 8 Vict. c. 113) to Scotland, with the provision that nothing contained in either of the acts is to deprive any creditor of his recourse against the company, or the partners, or to affect any recourse by the partners against each other, which they might have by the ordinary law of Scotland. The act is, with the exception stated below, only to extend to Banking Partnerships entered into on or after 9th August 1845.

The English act thus extended to Scotland, prohibits the formation of companies of more than six partners, for conducting the business of banking, unless in terms of letters patent granted under the act. It does not refer to companies established before the above date, unless they apply for letters patent under the act (§ 1). The Letters Patent of Incorporation are to be granted on the Report of the Board of Trade, founded on a petition from the company according

17 Wm. IV. & 1 Vict. c. 73, §§ 6, 9, 16.- Ibid. §§ 20, 21.- Ibid. § 24. -47 Geo. IV. c. 67, §§ 2, 3, 7.— Ibid. § 6.— Ibid. § 14.

to the specific directions of the act (§§ 2, 3, 6). A deed of settlement must be executed, also according to the terms of the act. It must be subscribed by the holders of a half at least of the shares on which fully 10 per cent. has been paid, before the letters patent are petitioned for; and the company must not commence business until, all the shares have been subscribed for, the deed has been signed by all the shareholders, and half the amount of each share has been paid up (§§ 4, 5). The incorporation is not to limit the ordinary legal responsibility of the shareholders (§ 7). There are certain provisions, to the effect that proceedings shall be taken against the property of the company in the first place before that of the individual partners can be affected, but these appear to be neutralized by the special clauses of the Scottish act mentioned above. There are provisions for enabling a shareholder who has been obliged to meet any of the liabilities of the company, to partition the payment among the other partners, and to make a second distribution in case of bankruptcies among them (§§ 10-15). The bank must make an annual "memorial," containing certain specified particulars, to the Commissioners of Stamps and Taxes. Special memorials are to be made when changes occur in the partnerships, and any person whose name appears in the last existing memorial is liable as a shareholder (§§ 17-21). There is a form in the act which may be used for transfers, and all transfers must be registered in a "Register of Transfers." No member is entitled to transfer his shares till he has paid all calls on them (§§ 23, 24). The payment of calls is enforceable by action, and by forfeiture and sale of the shares, sanctioned by a general meeting (§§ 33-39).

PART VII.

CONTRACT OF INSURANCE.

INSURANCE is a contract by which one party, in consideration of a sum of money or Premium, engages to indemnify another for the loss, if it should take place, of property or life, occurring in certain specified or understood circumstances; the extent of the indemnity being settled by stipulation, or depending on the general laws applicable to the contract. It is a species of speculation in which capital is embarked for the purpose of equalizing the effects of accidents, the one party speculating on the general average profit which the limited number of such accidents may leave him, and the other obviating the effect of a sudden calamity by a temporary sacrifice. The deed by which the contract of insurance is created is termed a Policy. The three staple classes of this contract are, Marine, Fire, and Life Insurance. It is gradually, however, becoming extended to other risks, such as that of official fraud or negligence, an insurance company taking on itself, for an average premium, the risk of cautionary for faithful performance, as described in Part VIII. Chap. II. Sect. 4.

CHAPTER I.

MARINE INSURANCE.

SECT. 1.—Nature and Requisites.

In marine insurance the person who insures is termed the Underwriter, from his writing his name under the sum for which he will stand good. The insurance is generally negotiated by a Broker or middleman. Capitalists who are ready to underwrite, invest their brokers with authority to incur