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which does not obtain here. It is a general rule, that in the latter, the partners are not bound absolutely (or in solidum, as the lawyers say) for the debts of the firm; neither can one partner bind his associates without their express authority. Each partner is bound, as respects creditors, for an equal proportion of the debts, though even this may be qualified by the articles of copartnership. By our law, no distinction is made between partnerships for different objects, all being considered as commercial operations.
Partnerships of commerce are subdivided as follows:
1. Partnerships en nom collectif, (or, under the name of a firm,) the ordinary mode of carrying on business by two or more in the United States and England.
2. Partnerships en commandite, or "limited partnerships;" and 3. Partnership anonyme-which is neither distinguished by a social name, or by that of any of its members; but is entitled or described by the designation of the object of the enterprise. Associations of this description correspond with our chartered companies; they require in France as here, the authorisation of the government.
There is still another kind to be noticed: commercial associations, en participation. They relate to one or more operations of commerce; that is, as we understand it, particular transactions; and are regulated according to the agreements of the parties as regards objects, forms and proportions of interest in each association; not being subject to the formalities prescribed for other partnerships.
We now return to the sociétés en commandite, being those which at present we are more particularly engaged with. (They were first established in France by the ordinance of 1673.)
Every merchant is obliged to keep a journal which exhibits, from day to day, his debts and credits; his operations of business; his negotiations; his acceptances or endorsements; and generally, whatever he receives and pays. It must also state the monthly expenses of his housekeeping. He must keep on file the letters he receives, and retain copies of those he sends. He must preserve, in his own handwriting, an inventory, yearly, of all his effects, movable and immovable, and of his debts and credits. This, and the journal, must be revised by him once during the year. The books must be preserved by the merchant for the space of ten years, and are to be examined either by a judge of the tribunal de commerce or by the mayor or an assistant.
The société en commandite consists of one or more absolutely responsible (or as we should say, general) partners, and one or more simple lenders of capital; viz. limited partners. The association is ruled under a social name, which is necessarily
the name of one or more of the general partners; that of the partner en commandite forming no part of it. He can do no act nor be employed about the business of the firm, even as an attorney, in fact. If he do, he is transmuted into a general partner. His responsibility, unless changed as a result of some illegal conduct, is limited to the amount of capital he advances or is bound to advance. The capital commanditory stock may be divided into shares of stock--the holders of these are called actionnaires.
A copy of the articles of copartnership must be transmitted within a fortnight of their formation, to the register of the tribunal of commerce of the arrondissement in which the counting-house is situated, in order to be entered of record, and affixed, for three months, in a conspicuous place in the public court-house. The non-observance of these formalities is punished by the articles of association being declared void as respects the defaulters; they, of course, not being allowed to set up their own neglect as a defence against third persons.
The extract must contain:-1. The names, titles, and residences of the partners, other than the actionaries or commanditaries.-2. The commercial object of the firm.-3. The designation of those of the partners who are authorised to manage the business, and sign for the firm.-4. The total of capital furnished, or to be furnished, as actionary or commanditary capital; and 5. The epochs both of the commencement and the termination of the business.
All changes in the firm, or continuations beyond the limited period, must be registered in like manner.
We will now turn to the check which the government exerts over these associations, when the reason for some regulations we have stated will be sufficiently obvious.
Every merchant who stops his payments, is pronounced to have failed. He becomes a bankrupt if he renders himself amenable to the law either by an omission of what, upon that contingency, he is bound to do; or by the commission of some other matter, pointed out in the code. He is declared either a simple or a fraudulent bankrupt, according to circumstances. Having failed, the merchant is bound to communicate the fact to the register of the tribunal of commerce; which tribunal fixes the date of the failure; and as a general rule, it may be stated, that all acts of the merchant, within ten days before that period, are void,-so are all acts or payments in fraud of creditors.
Upon inspection of the books by the judges, the merchant is pronounced a simple bankrupt, if, among other things, (we give it as an instance,) the expenses of his housekeeping are judged excessive-or he has lost sums at play or in operations of pure
hazard;--the punishment of simple bankruptcy is imprisonment, not less than a month nor more than two years. He is a fraudulent bankrupt if he has inserted in his accounts fictitious expenses or losses, or cannot explain the disbursement of all his receipts. Again, if he has kept no books, or has concealed or falsified those he has, the punishment of fraudulent bankruptcy is, among other things, imprisonment at hard labour.
Upon failure or bankruptcy, the heavy hands of the officers of justice are laid upon the business of the firm,--how effectually to wind up their concerns, we need not say; the details would carry us too far from our topic.
The case then, in France, stands thus: the general capital of the partnership (or that which the active partners themselves have) is known from their own books; the capital en commandite is stated in the registry: the whole trading capital of the association therefore is familiar to the public. No fulse credit is obtained upon the names of the limited partners, for they are not inserted in the register. Every opportunity of wild and thoughtless expenditure and speculation is removed by the vigilant supervision of the government: and the terrors of the "travaux forcés" in the back ground of the picture offer a spectacle to the eyes of the trader to which the mere whitewashing and purgation of our insolvent laws appear a paradise.
Now the French system must be viewed as a whole. It is a unique code; and its benefits can only be felt or appreciated by its adoption altogether. It will not do to carve out a portion,. separate from that which gives it life and vigour, and engraft it upon a trunk altogether unsuited for such a union.
We have been thus particular in our statement of the French law, as it is the parent of the illegitimate progeny which it is wished to naturalise in America. The information, too, may not be unacceptable at this moment.
In Louisiana, whose civil code has, as might have been anticipated, closely followed the Code Napoléon, it is adopted under the title of partnership in commendam. (Civil code of Louisiana, Art. 2810.)
The only state that we know of in our Union which has, so far, admitted the doctrine, is the state of New York: an example, undoubtedly, of great authority, but not sufficient to outweigh reason and general principles. The provisions of the New York statute are, in all essential particulars, the same with those of the Code de Commerce.
The plan which has been submitted to the wisdom of our legislature, we shall now notice. Though of considerable length, it is our purpose to give it in extenso, as its importance would seem to require it, and, by so doing, our remarks upon it will be the better understood. It is in these words:
"Section 1. Be it enacted by the senate and house of representatives of the commonwealth of Pennsylvania in general assembly met, and it is hereby enacted by the authority of the same, That limited partnerships for the transaction of any mercantile, mechanical, or manufacturing business within this state, may be formed by two or more persons upon the terms, with the rights and powers, and subject to the conditions and liabilities, herein prescribed. But the provisions of this act shall not be construed to authorise any such partnership for the purpose of banking or making insurance.
"Section 2. Such partnerships may consist of one or more persons who shall be called general partners, and who shall be jointly and severally responsible as general partners now are by law, and of one or more persons who shall contribute, in actual cash payments, a specific sum as capital to the common stock, who shall be called special partners, and who shall not be liable for the debts of the partnership beyond the fund so contributed by him or them to the capital.
"Section 3. The general partners only shall be authorised to transact business and sign for the partnership, and to bind the same.
"Section 4. The persons desirous of forming such partnerships shall make and severally sign a certificate which shall contain,
"I. The name or firm under which such partnership is to be conducted. "II. The general nature of the business intended to be transacted. "III. The names of all the general and special partners interested therein, distinguishing which are general and which are special partners, and their respective places of residence.
"IV. The amount of capital which each special partner shall have contributed to the common stock.
"V. The period at which the partnership is to commence, and the period at which it will terminate.
"Section 5. The certificate shall be acknowledged by the several persons signing the same in the manner and before the same persons that deeds are now acknowledged, and such acknowledgment shall be certified in the same manner as the acknowledgment of deeds is now certified.
"Section 6. The certificate, so acknowledged and certified, shall be recorded and filed in the office of the recorder of deeds of the proper county, in which the principal place of business of the partnership shall be situated, and shall also be recorded by him at large in a book to be kept for that purpose open to public inspection. If the partnership shall have places of business situated in different counties, a transcript of the certificate and of the acknowledgment thereof duly certified by the recorder, in whose office it shall be filed and under his official seal, shall be filed and recorded in like manner in the office of the recorder of every such county.
"Section 7. At the time of filing the original certificate with the evidence of the acknowledgment therof, as before directed, an affidavit of one or more of the general partners shall also be filed in the same office, stating the sums specified in the certificate to have been contributed by each of the special partners to the common stock and to have been actually and in good faith paid in cash.
"Section 8. No such partnership shall be deemed to have been formed until a certificate shall have been made, acknowledged, and filed and recorded, nor until an affidavit shall have been filed as above directed; and if any false statement be made in such certificate or affidavit, all the persons interested in such partnership shall be liable for all the engagements thereof as general partners.
"Section 9. The partners shall publish the terms of the partnership when registered, for at least six weeks immediately after such registry, in two newspapers to be designated by the recorder of deeds of the county in which such registry shall be made, and to be published in the senate district in which their business shall be carried on, and if such publication be not made the partnership shall be deemed general.
"Section 10. Affidavits of the publication of such notice by the printers of the newspapers in which the same shall be published, may be filed with the recorder directing the same, and shall be evidence of the facts therein contained.
"Section 11. Every renewal or continuance of such partnership beyond the time originally fixed for its duration, shall be certified, acknowledged, and recorded, and an affidavit of a general partner be made and filed, and notice be given in the manner herein required for its original formation, and every such partnership which shall be otherwise renewed or continued, shall be deemed a general partnership.
"Section 12. Every alteration which shall be made in the names of the partners, in the nature of the business or in the capital or shares thereof, or in any other matter specified in the original certificate, shall be deemed a dissolution of the partnership; and every such partnership which shall in any manner be carried on after such alteration shall have been made, shall be deemed a general partnership, unless renewed as a special partnership according to the provisions of the last section.
"Section 13. The business of the partnership shall be conducted under a firm in which the names of the general partners only shall be inserted, without the addition of the word Company, or any other general term, and if the name of any special partner shall be used in such firm with his privity he shall be deemed a general partner.
"Section 14. Suits in relation to the business of the partnership may be brought and conducted by and against the general partners in the same manner as if there were no special partners.
"Section 15. No part of the sum which any special partner shall have contributed to the capital stock shall be liable for any debts previously contracted by the general partners, nor shall any part of such sum be withdrawn by him, or paid or transferred to him, in the shape of dividends, profits or otherwise, at any time during the continuance of the partnership. But any partner may annually receive lawful interest on the sum so contributed by him, if the payment of such interest shall not reduce the original amount of such capital, and if, after the payment of such interest any profits shall remain to be divided, he may also receive his portion of such profits.
"Section 16. If it shall appear that by the payment of interest or profits to any special partner the original capital has been reduced, the partner receiving the same shall be bound to restore the amount necessary to make good his share of capital with interest.
"Section 17. A special partner may from time to time examine into the state and progress of the partnership concerns, and may advise as to their management, but he shall not transact any business on account of the partnership, nor be employed for that purpose as agent, attorney, or otherwise. If he shall interfere contrary to these provisions he shall be deemed a general partner.
"Section 18. The general partners shall be liable to account to each other and to the special partners for management of their concern, as other partners now are by law.
"Section 19. Every partner who shall be guilty of any fraud in the affairs of the partnership shall be liable civilly to the party injured to the VOL. XVIII.-NO. 37.