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HISTORY OF CORPORATE LAW:
CASES AND MATERIALS
VOLUME I:
THE DEVELOPMENT OF CORPORATE LAW TO 1849
BY
MARIO NAIM, ESQ.

What is owed to the corporation is not owed to the individual members, and what the corporation owes the individual
members do not owe.
Ulpian, Digest of Justinian, 3.4.7.1
© 2013 by Mario Naim.

Published under the Creative Commons Attribution-NonCommercial 3.0 Unported license.
http://creativecommons.org/licenses/by-nc/3.0/
ISBN: 978-0-9919388-0-3
Volume I - Contents
Introduction
Part I. The Emergence of Company Law in the United Kingdom from 1503 to 1693.
Part II. The Bubble Act and its Aftermath: 1694 to 1843.
Part III. Corporate Law in the United States from 1776 to 1849.
Part II. The Bubble Act and its Aftermath: 1694 - 1843
VOLUME I
Detailed Part II Table of Contents
Chapter 1. Securities Intermediaries at the Beginning of the Period .............................................. 1
a. The Pernicious Art of Stock Jobbing (1696-7)..................................................................................................... 1
b. Anderson on the Act of 1697 .................................................................................................................................. 5
c. Regulation of Brokers by the City of London (1707) ......................................................................................... 6
d. Nature of City of London Regulations Concerning Brokers (1723) .............................................................. 13
e. Regulation of Commissions and Rates of Interest (1711-3) ............................................................................ 14
Chapter 2. The South Sea Bubble and the so-called “Bubble Act”...............................................17
a. Creation of the Bank of England (1694) ............................................................................................................. 17
b. Creation of the South Sea Company (1711) ....................................................................................................... 26
c. Defoe on the Nuisance of Stock-Jobbing (1719)............................................................................................... 32
d. Agreement with the South Sea Company to redeem the Public Debt (1720) .............................................. 34
e. Appointment and Report of a Parliamentary Committee (February - April 1720) ..................................... 44
f. The Bubble Act’s Legislative History (May-June 1720).................................................................................... 69
g. The Bubble Act (11 June 1720)............................................................................................................................. 75
h. Anderson on the South Sea Bubble ..................................................................................................................... 82
i. Dismissal of Petitions for Patents and Charters; List of Bubbles (12 July 1720) ......................................... 87
j. An Unsuccessful Proposal to Address Excessive Speculation in the Stock Market .................................... 92
k. Sentencing of a Defendant Convicted under the Bubble Act (1722)............................................................. 93
l. Extension of the Bubble Act to the American Colonies (1741) ..................................................................... 94
Chapter 3. Regulation of Securities Intermediaries after the Bubble Period ...............................97
a. Debates in the Lords on a Bill to Prevent the Infamous Practice of Stock Jobbing (1734) ...................... 97
b. Barnard’s Act (1734) ............................................................................................................................................. 101
c. Consequences of Barnard’s Act on Exchange Alley ....................................................................................... 105
d. Who is a Broker?.................................................................................................................................................... 106
e. Nature of City of London Regulation Concerning Brokers (1816) .............................................................. 117
Chapter 4. Deeds of Settlement ........................................................................................................125
a. The Deed of Settlement of the Society for Equitable Assurances (1762) ................................................... 125
b. Prospectuses of Mining Companies (1825)....................................................................................................... 131
c. Form of Provisional Agreement for Joint Stock Company (1842)............................................................... 135
Chapter 5. Canal Mania ......................................................................................................................137
a. MacPherson on Canal Mania ............................................................................................................................... 137
b. Acts for the Creation of Canal Corporations (1793-4) ................................................................................... 137
Chapter 6. Hostility to the Incorporation of Insurance Companies ...........................................143
a. Report on the Petition for a Charter for the Equitable Assurance (1761) .................................................. 143
b. Report on the Petition for the Globe Insurance Charter (1802)................................................................... 147
c. Unincorporated Joint Stock Companies with the Right to Sue and Be Sued (1807) ............................... 155
Chapter 7. Banking Laws and Joint Stock Banking Companies ..................................................159
a. An Act for establishing an Agreement with the Bank of England (1800)................................................... 159
b. Parliamentary Debates on the Bank Charter Amendment Bill (1826) ......................................................... 160
c. An Act for the better regulating Copartnerships of certain Bankers in England (1826) .......................... 167
Chapter 8. The Late and Unexpected Revival of the Bubble Act ...............................................173
a. Rex v. Dodd (1808) ............................................................................................................................................... 173
b. Rex v. Webb (1811) ............................................................................................................................................... 177
c. Pratt v. Hutchinson (1812)................................................................................................................................... 184
d. Josephs v. Pebrer (1825) ....................................................................................................................................... 187
e. Nockels v. Crosby (1825) ..................................................................................................................................... 189
f. Kinder v Taylor (1825) ......................................................................................................................................... 194
Chapter 9. Repeal of the Bubble Act ...............................................................................................214
a. A comprehensive proposal for reform (1825) .................................................................................................. 214
b. Parliamentary debates on the repeal of the Bubble Act (1825) ..................................................................... 218
c. The Act to repeal the Bubble Act (1825) .......................................................................................................... 221
Chapter 10. A Period of Uncertainty in the Courts .......................................................................222
a. Van Sandau v Moore (1826). ............................................................................................................................... 222
b. Duvergier v. Fellows (1828). ................................................................................................................................ 236
c. Walburn v. Ingilby (1833)..................................................................................................................................... 246
d. Blundell v. Winsor (1837)..................................................................................................................................... 254
e. Garrard v. Hardey (1843) ..................................................................................................................................... 257
f. Harrison v. Heathorn (1843) ............................................................................................................................... 263
Chapter 11. Parliamentary Resistance to Granting the Incidents of Corporateness.................292
a. Incorporation and Exclusive privileges (1810) ................................................................................................. 292
b. Control of the Affairs of a Partnership and Limited Liability (1819)........................................................... 307
c. Parliamentary Resistance to Legislative Incorporations (1824) ..................................................................... 308
d. Resistance to Incorporation and the Interests of Creditors (1824) .............................................................. 309
e. Shareholders’ Unlimited Liability as a Condition to Incorporation (1824) ................................................. 311
f. Except in Scotland, Partnerships Should not be Capable of Suing and Being Sued (1825) .................... 311
g. Fear of Granting Advantages that will Result in Monopoly (1833).............................................................. 313
Chapter 12. First Attempts at Reform of the Law Applicable to Companies ...........................316
a. Adoption of the First Trading Companies Bill (1834) .................................................................................... 316
b. Second Trading Companies Act (1837) ............................................................................................................. 319
c. Defeat of An Attempt to Amend the Trading Companies Act (1838) ........................................................ 328
Table of cases..............................................................................................................................331
Table of statutes .........................................................................................................................332
Bibliography ................................................................................................................................333
Chapter 1. Securities Intermediaries at the Beginning of the Period
a. The Pernicious Art of Stock Jobbing (1696-7)

House Commission Report on the State of Trade (1696)1
“State of Trade.
Mr. Blathwaite, from the Commissioners appointed to look after the Trade of England, presented
the Answer of the said Commissioners, in Obedience to the Order of the House, requiring them to
lay before this House the present State of our Trade.
…
The pernicious Art of Stock-jobbing2 hath, of late, so wholly perverted the End and Design of
Companies and Corporations, erected for the introducing, or carrying on, of Manufactures, to the
private Profit of the first Projectors, that the Privileges granted to them have, commonly, been made
no other Use of, by the First Procurers and Subscribers, but to sell again, with Advantage, to ignorant
Men, drawn in by the Reputation, falsly raised, and artfully spread, concerning the thriving State of
their Stock: Thus the first Undertakers, getting quit of the Company, by selling their Shares for much
more than they are really worth, to Men allured by the Noise of great Profit, the Management of that
Trade and Stock comes to fall into unskilful Hands; whereby the Manufactures, intended to be
promoted by such Grants, and put into the Management of Companies, for their better Improvement,
come, from very promising Beginnings, to dwindle away to nothing, and be in a worse Condition than
if they were perfectly left free, and unassisted with such Laws, or Patents; an Instance whereof, we
humbly conceive, is to be found in the Paper and Linen Manufactures, which, we fear, feel the Effects
of this Stock-jobbing Management; and are not in so thriving a Condition, as they might have been,
had they not fallen under this kind of Misfortune.
This likewise is that, which seems to us to lay a mighty Obstacle in the Way to the Raising and
Recovering again of our Home-fishery; which is; with Reason, thought to require more than a private
Stock, and the scattered Endeavours of Men acting separately, to set it a going, and make it subsist:
If, therefore, that Part of our Trade be not in so good and stourishing an Estate, as it could be wished,
we are humbly of Opinion, it is in some Danger to remain so, till the Hands of the Poor be all brought
to Labour, and till a common Stock can be raised, and a Company erected, upon such Terms, as may
secure the Management of it from the destructive Shuffling of the Stock-jobbing.
1 From: 'House of Commons Journal Volume 11: 25 November 1696', Journal of the House of Commons: volume 11:
1693-1697 (1803), pp. 593-598. URL: http://www.british-history.ac.uk/report.aspx?compid=39333.
2 A “stock-jobber” or “jobber” is someone that buys and sells securities as a principal. Although the 1697 Act sought to
prevent brokers from acting for their own account, many continued to openly do so. Cope, S. R., “The stock exchange
revisited: a new look at the market in securities in London in the eighteenth century”, Economica, XLV (I978), p.
3. On this point see: Mortimer, Thomas, Every Man his own Broker, London, S. Hooper, 7th ed., 1769, pp. 136-7. URL:
http://goo.gl/rKA3I.
Part 2: The Bubble Act and its Aftermath: 1694 to 1843.
…
Whitehall, November, 24th, 1696.”
__________________________________
Act to restrain the number and ill practice of brokers and stock-jobbers (1697)3
From 1 May 1697 no Person to as a Broker in London or Westminster, or Bills of Mortality, without
Licence of the Lord Mayor of London &c.
Broker on Admittance to take an Oath.
Lord Mayor, &c. to administer the Oath.
Broker in three Months after Admittance to take the Oaths 1 W. & M. ss. 1. c. 8. and subscribe the
Association, 7&8W. 3.C. 27. and enter into an Obligation.
Number of Brokers not to exceed 100.
Admittance Fees not to exceed 40 s.
Brokers Names and Places of Abode to be affixed on the Royal Exchange, and in Guildhall, London.
Penalty on Person acting as a Broker, if not admitted according to this Act, and on Persons
employing them.
Penalty on Person not being a Sworn Broker, who shall act, in discounting Tallies, Exchequer Bills,
&c.
Sworn Broker to keep a Register Book, and to enter all Contracts, &c. within three Days after
made, &c.
Broker shall not take more than 10 s. per Cent. Brokage.
Broker after Admittance to carry about him a Silver Medal of the King's Arms, &c. with the
Broker's Name, &c.
Penalty on Broker dealing for himself, &c. or making any Gain, &c. over and above the Brokage
allowed by this Act.
Policies, Contracts, &c, entred into, on which any Praemium shall be given to accept any Share, &c.
in Joint Stock, Tallies, &c. to be void; except such Policies, &c. as are to be performed in three Days.
Penalty on Sworn Broker not making Discovery of other Persons acting as such.
3 8 & 9 W. III c. 32. URL: http://goo.gl/hJZRE. Paragraphs added.
2
1. Regulation of Securities Intermediaries at the Beginning of the Period
This Act to continue for three Years.

Person buying or selling Cattle, Corn, &c. not to be esteemed a Broker.
Sworn Brokers from 1 May 1697, &c. not to drive any Bargain for Tallies, &c. on any Fund granted
by Parliament, unless licenced by the Treasury.
__________________________________
An Act for making good the Deficiencies of several Funds therein mentioned; and for
enlarging the Capital Stock of the Bank of England; and for raising the Publick Credit (1697) 4
“XXXIV. And for preventing of clandestine or fraudulent Contracts for Bargains or Dealings in
Bank Stock for the future; Be it further enacted by the Authority aforesaid, That from and after the
be said five and twentieth Day of March, which shall be in the Year of our Lord One thousand six
hundred ninety seven, no Promise, Contract, Bargain, Covenant or Agreement, made either by Word
of Mouth, or in Writing, for the buying or selling of any Bank Stock, or for the transferring, changing
or altering the Property thereof, either in Trust, or otherwise however it be, may be good or valid in
Law or Equity, or adjudged to be legal, obligatory or binding to either or any of the Parties making
the same, or concerned therein, or for whose Use or Account the same is or shall be made, unless
such Promise, Contract, Bargain, Covenant or Agreement, shall be actually registered in Words at
Length, in the Book or Books of the Bank, by the Officer there, thereunto appointed, within seven
Days, and actually transferred within fourteen Days next after the making of such Promise, Contract,
Bargain, Covenant or Agreement.”
…
LX. And be it enacted by the Authority aforesaid, That all and every Person and Persons, who
shall be employed as a Broker or Brokers, Solicitor or Solicitors, or otherwise, in the Behalf of any
other Person or Persons, to make or drive any Bargain or Contract for the buying or selling of any of
the said Orders or Tallies, who shall, after the said tenth Day of June One thousand fix hundred ninety
seven, take or receive, directly or indirectly, any Sum or Sums of Money, or other Reward or Thing,
for Broakidge, soliciting, driving, procuring or making such Contract or Bargain, over and above the
Sum of two shillings and Six pence for the Broakidge, soliciting, driving or procuring such Contract
or Bargain for one hundred Pounds, and so rateably for a greater or lesser Sum, shall forfeit for every
such Offence twenty Pounds, to such Person or Persons as will sue for the same, by Action of Debt,
or of the Case as aforesaid; and if any Broker, Solicitor or Driver of any Bargain or Contract, for any
such Tallies or Orders, as aforesaid, shall, after the said tenth Day of June One thousand six hundred
ninety seven, drive or make any such Bargain or Contract for any Tally or Order, or any Money due
thereupon, in which Contract or Bargain there shall be any Premium or Allowance made, or agreed
4 8&9 W. III c. 20. URL: http://goo.gl/GwsMC.
3
to be made contrary to this Act, then he or they so offending, shall, for every such Offence, forfeit
the Sum of five hundred Pounds, to wit, one third Part thereof to the King, and the other two thirds
thereof to such Person or Persons who will sue for the same, to be recovered as aforesaid; and that
every such Broker, Solicitor or Driver of such Bargain, who shall be guilty of such Offence, and be
thereof convicted, shall be deemed, and is hereby adjudged to be a common Extortioner, and shall
suffer such further Pains and Penalties as by the Laws and Statutes of this Realm may be inflicted for
common Extortion.”
__________________________________
Daniel Defoe: The Villainy of Stock-Jobbers Detected (1701)5

“IT has more then once been foretold that Stock Jobbers and Brokers wou'd Ruine the Trade, and
several Times they have bid fair for the Performance.
But never was a greater Wound given to the Trade in General, than now; Never so unhappily Tim'd
to the Disadvantage both of the Publick Revenue and the Current Credit of the Nation, nor never
was there so much Bare fac'd Villany acted, in the Affairs of Publick Trade as their is now.
Trade in general is Built upon, and supported by two essential and principal Foundations, Viz.
Money and Credit, as the Sun and Moon in their Diurnal Motion alternately Enlighten and Envigorate
the World, so these two Essentials maintain and preserve our Trade; they are the Life and Soul of
Trade, and they are the support of one another too. Money raises Credit, and Credit in its turn is an
Equivalent to Money.
From hence it follows, That Trade always bears a proportion to Money and Credit ; and
consequently, they who by any methods Diminish the Stock of Cash or Credit, equally injure our
Trade.
Tho’ it would seem needless to go back to particular Cases for the proof of this Assertion,' [2]
yet it may not be amiss to lee a little from whence it comes to pass, That out Trade is less now the War
is over, than it was before it began.
The calling in our Coin visibly put a stop to Trade, because the Stream which drove the Mill, the Oil that
moved the Wheel, was ceas'd. The prodigious Paper-Credit which past in Lombard-street and which
supply’d more than twice the Quantity of the Coin, equally supported Trade with the Money, and
funk at once with the Coin.
The Merchants finding the sensible loss to Trade, for want both of that Money and Credit, put
their Invention on the tepters; and found out the Expedient of a Bank. The Exchequer also feeling,
5Daniel Defoe, The villainy of stock-jobbers detected, and the causes of the late run upon the bank and bankers discovered and considered,
London, 1701. URL: http://archive.org/details/villainyofstockj00defo.
4
the loss of the Coin supplied with an imaginary Species in Exchequer-Bills, and yet both these fail'd
in the Performance. So impossible it is to force Credit without Cash. For till the ready Money began
to appear again, the Brokers and Jobbers made a prey of all Mankind in the matter of Bills; and in
spight of the endeavours of the Bank or the Exchequer, they bought and sold their Notes at the
shameful Discount of 10, to 16 and 20 l. per Cent.
I shall not think it needful to view the ill effect this had upon our Trade; how the needy Trades-
men, who sold their Goods at common [3] rates, were sain to Discount more than their profit to get
their Money. How the Exchequer-Notes design'd for a currency in Payments were Jobb'd about the
Town; and by the Policy of these Gentlemen put upon the Trades-men, in order to be bought again
at high Discounts, and then Engrossed again by the Money’d Men, who obtained the Discount as a
Premio added to the Interest upon the Originals.
I could fill a large Volume with the relation of such Particulars, and easily make out the dammage
that befell our Trade in General; but I have instanc't this only to prove how fatal the sinking of Paper-
Credit has been to the Nation.
…
If that new Mistery or Machine of Trade we [5] call Stock-Jobbing, be first proved to be at the
bottom of all this mischief; I hope the Great Representative of the Nation, the Parliament, will need
very few Arguments to satisfie them of its being a Publick Grievance.
The Old East-India Stock by the arts of these unaccountable People, has within 10 Years or
thereabouts, without any material difference in the Intrinsick value, been Sold from 300l. per Cent. to
37l. per Cent, from thence with fluxes and refluxes, as frequent as the Tides, it has been up at 150l. per
Cent, again; during all which differences, It would puzzle a very good Artist to prove, That their real
Stock (if they have any) set loss and gain together, can have varied above 10 per Cent, upon the whole;
nor can any Reasons for the rise and fall of it be shown, but the Politick management of the Stock-
Jobbing Brokers; whereby, according to the Number of Buyers and Sellers, which ‘tis also in their
Power to make and manage at will, the Price shall dance attendance on their designs, and rise and fall
as they please, without any regard to the Intrinsick worth of the Stock.
b. Anderson on the Act of 16976

“King William's ministry had flattered themselves, from year to year, with the hope of a speedy
peace. Many of the funds, therefore, upon the credit of which money had, in different years, been
granted by Parliament, had, by this time, been found, or suffered to be, very deficient; the Treasury
gentlemen, though otherwise men of abilities, having, in various instances of appropriating the duties,
judged very widely of the true amount of those duties: as particularly might be instanced with respect
6Adam Anderson, An Historical and Chronological Deduction of the Origin of Commerce, London, 1787 ed., v. 2, p. 630, URL:
http://goo.gl/bLdZ1. Anderson was a clerk at the South Sea Company at the time of the 1720 Bubble.
5
to glass-bottles, earthenware, tobacco-pipeclay, &c.—The deficiencies of which funds, for answering

the principal and interest charged thereon, were soon observed by the monied men who were creditors
of the public, and who also took advantage of the remoteness of the courses of payment of the tallies
and orders charged on some other funds. This had, since the revolution, given rise to a new trade of
dealing in government or national securities, very much to the damage of the public, as well as to such
proprietors of the funds as were under the necessity of parting with them, at the discount of from
forty to fifty per cent. Concerning which melancholy time, Dr. D'Avenant, in his Essay upon Loans,
printed in the year 1710, justly remarks,
“That the government appeared like a distressed debtor, who was daily squeezed to death
by the exorbitant greediness of the lender. The citizens began to decline trade and to turn
usurers. Foreign commerce, attended with the hazards of war, had infinite discouragement;
and people, in general, drew home their effects, to embrace the advantage of lending their
money to the government.”
To prevent the ill effects of this unhappy trade, a law was made in this same session of Parliament,
cap. xxxii. To restrain the number and ill practice of brokers and stock-jobbers; which premises, “That
sworn-brokers were anciently allowed in London, for the making of bargains between merchants and
traders, for merchandize and bills of exchange:—But, of late, divers such have carried on most unjust
practices, in selling and discounting of tallies, bank-stock, bank-bills, shares in joint-stocks, &c.
confederating themselves together to raise or sell, from time to time, the value thereof, as may most
suit their own private interest. Wherefore,” &c. they were now restrained from acting without a licence
from the lord mayor and court of aldermen.—To take also an oath of fidelity.—To be limited to one
hundred in number, whose names shall be written on the Royal Exchange.—To incur a penalty of two
hundred pounds is they deal for themselves in any merchandize, or in those tallies, stocks, &c—To
enter into an obligation for their faithful actings; and, on failure, to forfeit five hundred pounds, &c.”
c. Regulation of Brokers by the City of London (1707)

House Debates on the Further Renewal of the Act of 1697
January 177
“A Petition of several Merchants, and others, of the City of London, was presented to the House,
and read: setting forth, that Time out of mind, for the Conveniency of Trade, sworn Brokers have
been admitted in the City of London, and Liberties thereof, and in most foreign trading capital Cities;
but there having been many notorious Abuses committed by Stock-Jobbers, and pretended Brokers,
to prevent the same, an Act of Parliament passed in 1697, to ascertain the Number of Brokers, for
three Years; which was continued for seven Years longer, and expires at the End of this Session: That
the Petitioners think it necessary, that such Person should be employed, for the Conveniency of Trade:
7 Journals of the House of Commons: volume 15: 1705-1708 (1803), p. 502. URL: http://goo.gl/1Eiv9.
6
And praying, that Leave may be given to bring in a Bill for continuing the said former Acts, and making
the same more effectual in such Matters, as shall be found necessary.
Ordered, That a Committee be appointed, to examine, what Laws are expired, or near expiring:
and to report, what are fit to be revived, and continued…”
3 February8
“A PETITION of divers Freemen of the City of London, bred up to Trade and Merchandize, in
behalf of themselves, and others, was presented to the House, and read; setting forth, that a Petition
is presented to the House, for continuing an Act of Parliament, for limiting the Number of Brokers
in London: That many of the Petitioners have been ruined by Losses in the late and this War, and
have no other Means of getting a Livelihood, but by the Employment of Brokers: That such a
Restraint not only prejudices Trade in general, but is a Detriment to particular Traders, Who are
thereby debarred from employing such Persons in their Business, as they judge best capable to serve
them; and other Employment in this Kingdom is limited to a certain Number: And praying, that the
Petitioners may enjoy an equal Freedom with the rest of their Fellow-subjects, in following such
Employments, as they find themselves most fit for, and that the said Act may not be continued.
Ordered, That the said Petition do lie upon the Table, until the Report shall be made from the
Committee, to whom it was referred to examine, what Laws were expired, or near expiring; and to
report, what were fit to be continued.”
4 February9
“A Petition of divers Merchants, and other Traders, in the City of London, was presented to the
House, and read; setting forth, that the Petitioners are informed, a Petition has been presented to the
House, praying, that an Act for limiting the Number of Brokers in the said City (now expiring) may
be continued: That the Petitioners conceive, such a limited Number is a Prejudice to Trade in general,
and to Traders in particular; for that they are necessitated, under a Penalty, to employ some of the
limited Number, ‘tho' others (not admitted) are more capable of serving the Traders in their several
Negociations; and such a Restraint is a great Hardship upon many Persons, who have been ruined by
the War, not to allow them a Liberty of getting a Livelihood by such Means, as they are versed in: And
praying, that the Number of Brokers may not be limited, but that every Trader may be at liberty to
employ such Persons, as they think fit.
Ordered, That the Petition do lie upon the Table, until the Report shall be made from the
Committee, to whom it was referred to examine, what Laws were expired, or near expiring, and to
report, what were fit to be revived, and continued.”
6 February10
8 Ibid., p. 523.
9 Ibid., p. 526.
10 Ibid., p. 530.
7
“Mr. Woollaston reported from the Committee, to whom it was referred to examine, what Laws
are expired, or near expiring, and to report, what are fit to be revived, and continued; that they had
come to a Resolution, which they had directed him to report to the House: And which he read in his
Place, and afterwards delivered in at the Clerk's Table; where the same was read, and is as followeth;
viz.
Resolved, That it is the Opinion of this Committee, That the Act, made in the eighth and ninth
Years of the Reign of the late King William the Third (intituled, An Act to restrain the Number, and
ill Practices, of Brokers and Stock-jobbers) which was to continue for three Years, and from thence
to the End of the next Sessions of Parliament; and which was further continued by an Act, made in
the eleventh and twelfth Years of the Reign of his said late Majesty, for seven Years, from the
Expiration thereof; which will expire at the End of this Session of Parliament, is fit to be continued.
Ordered, That the said Report, and the Petitions, which were ordered to lie upon the Table, till the
Report was made, be taken into Consideration Tomorrow Seven-night.”
14 February11
“Ordered, That the Consideration of the Report from the Committee, to whom it was referred to
enquire, what Laws were expired, or expiring, and to report what were fit to be revived, and continued,
and who reported, that the Acts to restrain the Number, and ill Practices, of Brokers and Stock-
jobbers, were fit to be continued, be adjourned till this Day Month.”
19 February12
“A Petition from William Stewart, present Garbler13 for the City of London, was presented to the
House, and read; setting forth, that in the Year 1686, the Petitioner was admitted by the Court of Lord
Mayor and Aldermen of London to the Office of Garbler of the said City, and had a Lease of that
Office for 61 years, be paying £.976. 10s. Fine, and £.300 per Annum Rent, for the same: That the said
Office hath been since confirmed to the Petitioner by the Act of Parliament, for reversing the Quo
Warranto against said City: That, if the House should pass the Bill now before them, for repealing the
Act, of the first of King James the First (for the well garbling of Spices) without any Recompense to
the Petitioner, he will be dispossessed of his Property in the said Office: And praying, that he may be
heard by Counsel, what he hath to offer against the said Bill, and that some Recompense may be made
the Petitioner, suitable to the Value of his present Interest in the said Office.
Ordered, that the Petition do lie upon the Table, until the Bill be read a Second time.
…
11 Ibid., p. 544.
12 Ibid., p. 553-4.
13 The Garbler is the official charged with inspecting shipments of spices. The Company of the Levant had presented a
petition on 24 January 1707. For the House Committee report on the Petition from the Levant Company &c. against the
Act for the well garbling of Spices, see: Ibid., p. 535-8.
8
A Bill for repealing the Act, of the first Year of King James the First, intituled, An Act, for the
well garbling of spices, was read a Second time.
Resolved, That the Bill be committed to Sir Robert Davers, [&c.] and all the Merchants of the
House; and all, that serve for London, and the Sea-Ports; And they are to meet this Afternoon, at Five
a Clock, in the Speaker’s Chamber; and have Power to send for Persons, Papers, and Records.
Ordered, That the Consideration of the Petition of William Stewart (this Day presented to the
House) be referred to the said Committee; and that he be heard by his Counsel before the Committee
thereupon, if he think fit.”
20 February14
“The House being informed, that the Sheriffs of the City of London attended, they were called in,
and, at the Bar, acquainted the House, that they were directed by the Lord Mayor, Aldermen, and
Common Council, to present to this House a Petition of the Lord Mayor, Aldermen, and Common
Council, of the City of London.
And they presented the same to the House accordingly.
And then they withdrew.
And the Petition was read; setting forth, that the House having given Leave to bring in a Bill for
regulating the Garbler’s Office within the said City, the Petitioners conceive the same will greatly
prejudice them, by so much as the Benefit, arising by the said Office, will in the Whole, or in Part, be
taken away, and lessened, because it is a Part of the City Revenue Time out of Mind, vested in them
by Charters for valuable Consideration, and settled by Act of Parliament, towards raising £.8,000
yearly, as a perpetual Fund of Interest to be paid to the Orphans of London: That the residue of the
Revenue belonging to the said City is not near sufficient to defray the Charges of the Government,
and publick Charges, thereof: And praying, that, in lieu of the Loss they may sustain (if the House
shall think fit to pass the said Bill) they may hace a reasonable Equivalent, or that the said Office and
Franchise of the City may be still continued.
Ordered, that the Consideration of the said Petition be referred to the Committee, to whom the
Bill for repealing the Act, of the first Year of King James the First, intituled, An Act for the well
garbling of Spices, is committed; and that they do examine the Matter thereof, and report the same to
the House.”
1 March15
“Mr. Ward (according to Order) reported from the Committee, to whom the Bill for the repealing
the Act, of the first Year of King James the first, intituled, An Act for the well garbling of Spices, was
committed; that they had heard the Counsel for the Petitioners, upon the Petitions to them referred;
and that the Committee had directed him to report the Bill to the House, Without any Amendment;
14 Ibid., p. 556.
15 Ibid., p. 582-3.
9
but that the Committee conceived, a Recompence to the Garbler was worthy the Consideration of
this House: And he delivered the said Report, and Bill, in at the Clerk's Table; where the Report was
read, and is as followeth:
That the Committee having heard the Counsel upon the several Petitions to them referred, and
gone through the Bill without making any Amendments thereto;
And that the Committee taking into their Consideration the Petitions of the Lord Mayor,
Aldermen, and Common Council of the City of London and of Mr. Wm. Stewart, the present Garbler,
whereby it is prayed, that, in lieu of such Loss, as they shall sustain by the Bill for repealing the Act,
of the first Year of King James the First, for the well garbling of Spices, they may have such an
Equivalent and Recompence, as to this House shall be thought fit:
And that the Committee apprehended, the Matter of such Equivalent and Recompence was not
proper before them; and thereupon came to the Resolution following; viz.
Resolved, That it is the Opinion of this Committee, That the Matter of such Equivalent and
Recompence to the said Petitioner is worthy the Consideration of this House.
A Clause was offered to be added to the Bill, That a Sum of £.976. 10s. should be paid to Wm.
Stewart, for a Compensation for his Interest.
And the Same was twice read, and amended; and, upon the Question put thereupon, agreed unto
by the House to be made part of the Bill.
…
Ordered, That the Bill, with the Amendments, be ingrossed.”
4 March16
“An Ingrossed Bill for repealing the Act of the first Year of King James the First, intituled, An
Act for the well garbling of Spices, was read the Third time.
Resolved, That the Bill do pass; and that the Title be, An Act for repealing the Act, of the first
Year of King James the First (intituled, An Act for the well garbling of Spices) and for granting an
Equivalent to the City of London, by admitting Brokers.
Ordered, that Mr. Ward do carry the Bill to the Lords, and desire their Concurrence thereunto.”
__________________________________
16 Ibid., p. 588.
10
An act for repealing the act of the first year of King James the First, intituled, An act for
the well garbling of spices; and for granting an equivalent to the city of London by admitting
brokers17
“WHEREAS by an act of parliament made in the first year if the reign of King James the First, intituled, An
act for the well garbling of spices, several drugs, wares, spices and merchandizes are to be garbled within the city of
London, and the liberties thereof, as therein is mentioned, under the penalties and forfeitures therein specified, and several
powers are thereby given to the garbler for the time being, for that purpose; which act for the garbling of spices, and other
wares and merchandizes, in many cases is now become useless, and in other cases would be prejudicial, and to the damage
of several wares and merchandizes so to be garbled, to the obstruction and discouragement of the trade of this kingdom,
and the foreign exportation, and to the vexation of the subjects, by unnecessary prosecutions in her Majesty's court of
Exchequer; be it therefore enacted by the Queen's most excellent majesty, by and with the advice and
consent of the lords spiritual and temporal, and commons, in this present parliament assembled, and
by the authority of the same, That the said act shall be, and from henceforth stands absolutely
repealed, and all powers, penalties, and forfeitures ed. therein mentioned or given, shall from
henceforth be null and void.
…
IV. And whereas the profits of the said office are part of the revenues and incomes of the city of London, and
are now lett by lease to William Stewart, under the rent of three hundred pounds per annum, the profits of which
office, and the right of the said William Stewart to the same, by repealing the said ad will be very much diminished;
be it enacted by the authority aforesaid, That from and after the determination of this present session
of parliament, all persons that shall act as brokers within the city of London and liberties thereof,
shall from time to time be admitted so to do by the court of mayor and aldermen of the said city for
the time being, under such restrictions and limitations for their honest and good behaviour as that
court shall think fit and reasonable, and shall upon such their admission pay to the chamberlain of the
said city for the time being, for the uses herein after mentioned, the sum of forty shillings, and shall
also yearly pay to the said uses the sum of forty shillings upon the nine and twentieth day of
September, in every year; all which monies yearly, shall in the first place be applied for and towards
the paying and satisfying to the said William Stewart the sum of nine hundred sixty seven pounds and
ten shillings, for a compensation for his interest in the said office; and that from and after the full
payment of the said sum of nine hundred sixty seven pounds and ten shillings to the said William
Stewart, all the monies arising by such admissions and yearly payments, shall go to, and be enjoyed by
the said mayor and commonalty and citizens of the city of London; and that from and after the
determination of this present sessions of parliament the said lease to the said William Stewart, and
every clause therein contained, shall cease, determine, and be absolutely void.
V. And be it further enacted by the authority aforesaid, That if any person or persons from and
after the determination of this present sessions of parliament, shall take upon him to act as a broker,
or employ any other under him to act as such, within the said city and liberties, not being admitted as
aforesaid, every such person so offending shall forfeit and pay to the use of the said mayor and
17 6 Anne, c. 16 (1707). URL: http://goo.gl/aK5Hm.
11
commonalty and citizens of the said city, for every such offence, the sum of five and twenty pounds,
to be recovered by action of debt, in the name of the chamberlain of the said city, in any of her
Majesty's courts of record, in which no protection, essoin, or wager of law shall be allowed, or any
more than one imparlance.”
__________________________________
Regulations passed by the City of London (1708)18

“In 1708, the year after this act passed, the Court of Mayor and Aldermen made certain rules and
regulations for the government of brokers, which have ever since been, and still are in force, and by
virtue of which every person, previous to his being admitted a broker, is required to enter into a bond
to the Mayor, Commonalty and citizens of London, and also to take an oath, the forms of which are
prescribed by the same rules and regulations, and are, in substance, as follows:
Condition of the bond. “That the said A. B., for and during such time as he shall and doth continue
in the said office and employment, shall and do well and faithfully execute and perform the same
without fraud, covin, or deceit; and shall, upon every contract, bargain, or agreement by him made,
declare and make known to such person or persons with whom such agreement is made the name or
names of his principal or principals, either buyer or seller, if thereunto required, and shall keep a book
or register, and therein truly and fairly enter all such contracts, bargains, and agreements, within three
days at the farthest after making thereof, together with the names of all the respective principals for
whom he buys or sells, and shall upon demand made by any, or either of the parties buyer or seller
concerned therein, produce and shew such entry to them or either of them to manifest and prove the
truth and certainty of such contracts and agreements, and for satisfaction of all such persons as shall
doubt whether he is a lawful and sworn broker or not, shall, upon request, produce a medal of silver
with his Majesty's arms engraven on one side, and the arms of this city with his name on the other,
and shall not, directly or indirectly, by himself or any other, deal for himself or any other broker in
the exchange or remittance of money, or in buying any tally or tallies, order [157] or orders, bill or
bills, share or shares, or interest in any joint stock to be transferred or assigned to himself, or any
broker, or to any other in trust for him or them, or in buying any goods, wares, or merchandizes, to
barter and sell again upon his own account, or for his own or any other broker's benefit or advantage,
or to make any gain or profit in buying or selling any goods over and above the usual brokerage; and
shall and do discover and make known to the said Court of Mayor and Aldermen, in writing, the
names and places of abode of all and every person and persons, as he shall know to use and exercise
the said office or employment, not being thereunto duly authorized and empowered as aforesaid,
within thirty days after his knowledge thereof, and shall not employ any person under him to act as a
18Taken from: Ex parte Dyster in the Matter of Moline, 1 Mer. 156 (1816). URL: http://goo.gl/EZfLc. See infra, p. for the
full text of the opinion. See also: Mortimer, Thomas, Every Man his own Broker, London, S. Hooper, 7th ed., 1769, pp.
138-142. URL: http://goo.gl/0KWAW.
12
broker within the said city and liberties thereof, not being duly admitted as aforesaid, and shall not
presume to meet and assemble in Exchange-alley, or other public passage or passages within this city
and liberties thereof, other than upon the Royal Exchange, to negotiate his business and affairs of
exchange, to the annoyance or destruction of any of his Majesty's subjects, or any other, in their
business or passage about their occasions.”
Form of oath. “You shall sincerely promise and swear, that you will truly and faithfully execute and
perform the office and employment of a broker between party and party in all things appertaining to
the duty of the said office or employment, without fraud or collusion, to the best of your skill and
knowledge.”
d. Nature of City of London Regulations Concerning Brokers (1723)

Ludlam v. Lopez19
“BY the statute 6 Ann. c. 16. intitled “An act for repealing an act for the well garbling of spices,
and for granting an equivalent to the city of London by admitting brokers,” it is taken notice, that the
office of garbler of the spices is an inheritance of the city of London, and by them leased out for 300l.
per annum, which office and duty it was convenient to abolish, by which the revenues of the city would
be diminished; it was therefore enacted that every broker should on his admission pay 40 s. to the
chamberlain, and a yearly sum of 40 s. for the use of the city, and that every person acting as a broker
without such admittance should forfeit and pay to the use of the mayor, commonalty and citizens of
the said city, for every offence the sum of 25l. to be recovered by action of debt in the name of the
chamberlain.
The defendant acted as a broker without admittance; and in an action for the penalty the question
was, whether this forfeiture was pardoned by the last act of grace?
For the defendant it was insisted, that this is a statute offence of a publick nature, and the action
arises ex maleficio, like the case of exercising a trade contrary to 5 Eliz. which is always pardoned,, unless
it be excepted. Cro. Eliz. 632. In an appeal of murder the defendant was convicted of manslaughter;
and though this was the suit of a private person, yet it was held that the King might pardon the burning
in the hand. And as the penalty is but a consequence of the offence, if that be done away, the penalty
must fall: and it makes no difference that the penalty is given to the chamberlain, and not to a common
informer. 5 Co. 49.
Sed per curiam: This is not to be compared to the case of a common informer, who has no interest
vested in him till action brought, whereas here the city has an interest vested upon committing the
offense, and they may release the penalty without bringing any action. They are purchasers of this
revenue, and the laying a penalty does not make it a publick offense; it is only a security for the duty,
that if brokers do not take a licence, they shall pay so much; and if this penalty were not added, the
19 Ludlam v. Lopez, 1 Str. 529 (1723). URL: http://goo.gl/G44dt.
13
revenue would be worth nothing. 3 Inst. 238. is express, that the King cannot pardon, where the action
is given to the party grieved; for that would be for him to discharge the interest of another. The
offense against 5 Eliz. is of a publick nature, and indictable, but this is not. Et per Eyre Justice, I much
question, whether that case of the appeal be law, for the burning the hand is part of the judgment.
This being upon a point saved at nisi prius, the plaintiff had judgment.”
e. Regulation of Commissions and Rates of Interest (1711-3)

The Cards and Dice Act20
“An act for laying several duties upon all sope and paper made in Great Britain, or imported into the same; and
upon chequered and striped linens imported; and. upon certain silks, callicoes, linens, and stuffs, printed, painted, or
stained; and upon several kinds of stampt vellum, parchment, and paper and upon certain printed papers, pamphlets,
and advertisements; for raising the sum of eighteen hundred thousand pounds by way of lottery towards her Majesty s
supply; and for licensing an additional number of hackney chairs; and for charging certain stocks of cards and dice; and
for better securing her Majesty’s duties to arise in the office for the stampt duties by licences for marriages and otherwise;
and for relief of persons who have not claimed their lottery tickets in due time, or have lost Exchequer bills, or lottery
tickets; and for borrowing money upon stock (part of the capital of the South Sea company) for the use of the publick.
…
CXXL And be it enacted by the authority aforesaid, That all and every person and persons, who
shall be imployed as a broker or brokers, sollicitor or sollicitors, or otherwise, in the behalf of any
other person or persons, to make any bargain or contract for the buying or selling of any tallies, orders,
Exchequer bills, Exchequer tickets, bank bills, or any share or interest in any joint stock erected by act
of parliament, or by letters patents under the great seal, or bonds of any company thereby erected,
who shall, after the first day of Augusts one thousand seven hundred and twelve, take or receive,
directly or indirectly, any sum or sums of money, or other reward, exceeding the sum of two shillings
and nine pence for every hundred pounds, and so in proportion for any greater or lesser sum, for his
or their service in soliciting or procuring such contract or bargain, shall forfeit for every such offence
twenty pounds, with full costs of suit, to such persons as shall sue for the same, by action of debt,
bill, plaint, or information, in any of her Majesty's courts of record at Westminster, in which no essoin,
protection, or wager of law, or more than one imparlance shall be allowed.”
__________________________________
20 10 Anne, c.19 (1711). URL: http://goo.gl/Njt7O.
14
An act to reduce the rate of interest, without any prejudice to parliamentary securities 21.
“WHEREAS the reducing of interest to ten, and from thence to eight, and thence to fix in the hundred, hath,
from time to time, by experience been found very beneficial to the advancement of trade, and improvement of lands:
[A]nd whereas the heavy burden of the late long and expensive war hath been chiefly born by the owners of the
land of this kingdom, by reason whereof they have been necessitated to contract very large debts, and thereby, and by the
abatement in the value of their lands, are become greatly impoverished:
[A]nd whereas by reason of the great interest and profit which hath been made of money at home, the foreign trade
of this nation hath of late years been much neglected, and at this time there is a great abatement in the value of the
merchandizes, wares, and commodities of this kingdom, both at home and in foreign parts, whither they are transported:
[A]nd whereas for the redress of these mischiefs, and the preventing the encrease of the same, it is absolutely
necessary to reduce the high rate of interest of six pounds in the hundred pounds for a year to a nearer proportion with
the interest allowed for money in foreign states;
[B]e it therefore 'enacted by the Queen's most excellent majesty, by and with the advice and consent
of the lords spiritual and temporal, and commons, in this present parliament assembled, and by the
authority of the same, That no person or persons whatsoever, from and after the nine and twentieth
day of September in the year of our Lord one thousand seven hundred and fourteen, upon any
contract, which shall be made from and after the said nine and twentieth day of September, take, directly
or indirectly, for loan of any monies, wares, merchandize, or other commodities whatsoever, above
the value of five pounds for the forbearance of one hundred pounds for a year, and so after that rate
for a greater or lesser sum, or for a longer or shorter time; and that all bonds, contracts, and assurances
whatsoever, made after the time aforesaid, for payment of any principal, or money to be lent or
covenanted to be performed upon or for any usury, whereupon or whereby there shall be reserved or
taken above the rate of five pounds in the hundred, as aforesaid, shall be utterly void; and that all and
every person or persons whatsoever, which shall after the time aforesaid, upon any contract to be
made after the said nine and twentieth day of September, take, accept and receive, by way or means
of any corrupt bargain, loan, exchange, chevizance, shift, or interest of any wares, merchandizes or
other thing or things whatsoever, or by any deceitful way or means, or by any covin, engine, or deceitful
conveyance, for the forbearing or giving day of payment for one whole year, of and for their money
or other thing, above the sum of rive pounds for the forbearing of one hundred pounds for a year,
and so after that rate for a greater or lesser sum, or for a longer or shorter term, shall forfeit and lose
for every such offence the treble value of the monies, wares, merchandizes, and other things so lent,
bargained, exchanged or shifted.
II. And be it further enacted by the authority aforesaid, That all and every scrivener and scriveners,
broker and brokers, solicitor and solicitors, driver and drivers of bargains for contracts, who shall after
the said nine and twentieth day of September take or receive, directly or indirectly, any sum or sums of
money, or other reward or thing for brokage, soliciting, driving, or procuring the loan, or forbearing
of any sum or sums of money, over and above the rate or value of five shillings for the loan, sides
21 12 Anne Stat. 2, c.16 (1713). URL: http://goo.gl/jsbTu. Paragraphs added.
15
stamp or forbearing of one hundred pounds for a year, and so ratably, duties, for or above twelve
pence, over and above the stamp-duties, for making or renewing of the bond or bill for loan, or
forbearing thereof, or for any counterbond or bill concerning the same, shall forfeit for every such
offence twenty pounds, with costs of suit, and suffer imprisonment for half a year; the one moiety of
all which forfeitures to be to the Queen's most excellent majesty, her heirs and successors, and the
other moiety to him or them that will sue for the same in the same county where the several offences
are committed, and not elsewhere, by action of debt, bill, plaint or information, in which no essoin,
wager of law or protection shall be allowed.”
16
Chapter 2. The South Sea Bubble and the so-called “Bubble Act”
a. Creation of the Bank of England (1694)22

“An all for granting to their Majesties several rates and duties upon tunnage of ships and vessels, and upon beer,
ale, and other liquors, for securing certain recompences and advantages in the said act mentioned, to such persons as shall
voluntarily advance the sum of £ 1,500,000, towards the carrying on the war against France.
Most gracious sovereigns,
WE your majesties most dutiful and loyal subjects, the commons assembled in parliament, for the
further supply of your Majesties extraordinary occasions, for and towards the necessary defence of
your realms, do humbly present your Majesties with the further gift of the impositions, rates, and
duties herein after mentioned; and do beseech your Majesties that it may be enacted:
…
XVII. And be it further enacted by the authority aforesaid, That yearly and every year, reckoning
the first year to begin from the 1st day of June, which shall be in the year of our Lord 1694, the full
sum of £ 140,000, by or out of the monies to arise by the said several duties upon the tunnage of
ships and vessels, and by the said rates and duties of excise hereby granted, or any of them, and to be
brought into the receipt of the Exchequer by weekly payments as aforesaid, (in case the said weekly
payments shall extend thereunto) shall be the whole and entire yearly fund; and in case the said weekly
payments shall not amount to £ 140,000 per annum, then the said weekly monies or payments, so far
as the same will extend, shall be part of the yearly fund for and towards the answering and paying off
the several and respective annuities herein after mentioned, and for other the purposes hereafter in
this act expressed; and in case the said duties upon the tunnage of ships and vessels, and the said rates
and duties of excise by this act granted, or any of them, shall at any time or times appear to be so
deficient or low in the produce of the same, as that within any one year, to be reckoned as aforesaid,
the weekly payments upon the same rates or duties, or any of them, shall not amount to so much as
£ 140,000, or to so much as shall be sufficient to discharge and satisfy the said several and respective
annuities, and other benefits or advantages by this act appointed or intended to be paid, within or for
the same year respectively, that then and so often, and in every such case, the commissioners of their
Majesties treasury, and the under treasurer, of the Exchequer now being, and the treasurer and under
treasurer of the Exchequer, or commissioners of the treasury for the time being, are hereby straitly
enjoined and required by virtue of this act, and without any further or other warrant to be sued for,
had, or obtained from their Majesties, their heirs or successors in this behalf, to cause every such
deficiency to be 'made good, by applying, issuing, or paying so much of any treasure or revenue,
belonging or to belong to their Majesties, their heirs or successors, (not being appropriated to any
particular use or uses by any act or acts of parliament) towards the discharging or paying off the said
annuities or other benefits or advantages appointed to be paid by this act, as together with the monies
22 5 & 6 W. & M., c. 20. URL: http://goo.gl/CLJij.

which shall have been brought into the said receipt, of or for the said several rates or duties hereby
granted, shall be sufficient to pay off and discharge, and shall compleatly pay off and discharge, all
the monies which within the same year respectively shall be grown due, or ought to be paid upon the
said annuities, or other benefits or advantages, according to the true intent and meaning of this present
act.
XVIII. And be it further enacted by the authority aforesaid, That for the better raising and paying
into the receipt of the Exchequer the sum of £ 1,200,000, part of the sum of £ 1,500,000, the yearly
sum of £ 140,000, arising by and out of the duties and impositions granted by this act, shall be kept
separate and apart in the said receipt of Exchequer, to be paid over from time to time unto such person
and persons, and in such manner, proportion, and form, as is herein after directed.
XIX. And be it further enacted by the authority aforesaid, That it shall and may be lawful to and
for their Majesties, by commission under the great seal of England, to authorize and appoint any
number of persons to take and receive all such voluntary subscriptions as shall be made on or before
the first day of August, which shall be in the year of our Lord one thousand six hundred ninety four,
by any person or persons, natives or foreigners, bodies politick or corporate, for and towards the
raising and paying into the receipt of Exchequer the said sum of £ 1,200,000, part of the sum of £
1,500,000, and that the yearly sum of £ 100,000, part of the said yearly sum of £ 140,000, arising by
and out of the said duties and impositions before mentioned, shall be applied, issued, and directed,
and is hereby appropriated, to the use and advantage of such person and persons, bodies politick and
corporate, as shall make such voluntary subscriptions and payments, their heirs, successors, or assigns
in the proportion hereafter mentioned (that is to fay) that each weekly or other payment arising by
and out of the duties and impositions granted by this act, shall, by the auditor of the receipt of
Exchequer, from time to time, as the same shall be paid in, be separated and divided into five seventh
parts and two seventh parts, which is according to the seventh parts proportion of the said yearly sum
of £ 100,000, to the said yearly sum of £ 140,000, which five seventh parts, of the said several
payments arising by and out of the duties and impositions granted by this act, and so set apart, is and
are hereby intended and appropriated for and towards the payment and satisfaction of the said yearly
sum of £ 100,000, and shall from time to time be issued and paid, as the same shall come into the
said receipt of Exchequer, to the uses and advantages of such subscribers and contributors, their heirs,
successors, or assigns, as shall subscribe and contribute for and towards the raising and paying into
the receipt of Exchequer the said sum of £ 1,200,000, part of the said sum of £ 1,500,000.
XX. And be it further enacted, That it shall and may be lawful to and for their Majesties, by letters
patents under the great seal of England, to limit, direct, and appoint, how and in what manner and
proportions, and under what rules and directions, the said sum of £ 1,200,000, part of the said sum
of £ 1,500,000, and the said yearly sum of £ 100,000, part of the said yearly sum of £ 140,000, and
every or any part or proportion thereof, may be assignable or transferrable, assigned or transferred,
to such person or persons only, as shall freely and voluntarily accept of the same, and not otherwise
and to incorporate all and every such subscribers and contributors, their heirs, successors, or assigns,
to be one body corporate, and politick, by the name of the governor and company of the bank of
England, and, by the same name of the governor and company of the bank of England, to have
18
2. The South Sea Bubble and the so-called “Bubble Act”
perpetual succession, and a common seal, and that they and their successors, by the name aforesaid,
shall be able and capable in law to have, purchase, receive, possess, enjoy, and retain to them and their
successors, lands, rents, tenements, and hereditaments, of what kind, nature, or quality soever; and
also to sell, grant, demise, aliene, or dispose of the same, and by the same name to sue and implead,
and be sued and impleaded, answer and be answered, in courts of record, or any other place
whatsoever, and to do and execute all and singular other matters and things by the name aforesaid,
that to them shall or may appertain to do; subject nevertheless to the proviso and condition of
redemption herein after mentioned.
…
XXII. And for the better and more speedy payment of the Officers of the said yearly sum of £
100,000, part of the said yearly sum of £ 140,000, in the proportions herein before mentioned and
appointed, the commissioners of their Majesties treasury, and the under treasurer of the Exchequer
now being, and the lord high treasurer, and under treasurer, or commissioners of the treasury for the
time being, are hereby strictly enjoined and required by virtue of this act, and without any further or
other warrant to be sued for, had or obtained from their Majesties, their heirs or successors, to direct
their warrants yearly for the payment of the said yearly sums of £ 100,000, to the contributors of the
said sum of £ 1,200,000, in the manner and proportions as is herein before directed and appointed;
and the auditor of the receipt of Exchequer, and all other officers of the Exchequer now and for the
time being, are hereby directed and enjoined to issue the said monies so set apart for the uses before
mentioned, from time to time, without any fee or reward, in the manner and proportions before
mentioned, and under the like penalties, forfeitures, and disabilities, as are hereafter inflicted upon any
officer for diverting any money appropriated or applied by this act.
XXIII. Provided always, and be it further enacted by the authority aforesaid, That no person or
persons, bodies politick or corporate, shall by themselves, or any other person or persons in trust for
him or them, subscribe or cause to be subscribed, for and towards the raising and paying the said sum
of £ 1,200,000, any sum or sums of money, exceeding the sum of £ 20,000; and that every such
subscriber shall, at the time of such subscription, pay or cause to be paid unto the commissioners who
shall be authorized and appointed for taking and receiving subscriptions as aforesaid, one full fourth
part of his, her, or their respective subscriptions, and in default of such payments as aforesaid, every
such subscription shall be utterly void and null: and that the residue of the said subscriptions shall be
paid into the receipt of their Majesties Exchequer, as their Majesties shall direct, before the said 1st day
of January next; and in default of such payments, that then the fourth part, first paid as aforesaid, shall
be forfeited to and for the benefit of their Majesties, their heirs and successors.
…
XXVI. And it is hereby enacted by the authority aforesaid, that the said corporation so to be made,
shall not borrow or give security by bill, bond, covenant or agreement under their common seal for
anymore, further or other sum or sums of money, exceeding in the whole the sum of £ 1,200,000, so
that they shall not owe at any one time more than the said sum, unless it be by act of parliament upon
funds agreed in parliament; and in such case only such further sums as shall be so directed and allowed
19
to be borrowed by parliament, and for such time only, until they shall be repaid such further sums as
they shall borrow by such authority: and if any more, or further or other sum or sums of money shall
be borrowed, taken up, lent, or advanced, under their common seal, or for payment of which any
bond, bill, covenant or agreement, or other writing shall be made, sealed or given, under the common
seal of the said corporation so to be made; then and in such case all and every person and persons
who shall be a member or members of the said corporation, his and their respective heirs, executors,
and administrators, shall in his and their respective private and personal capacities be chargeable with,
and liable in proportion to their several shares or subscriptions to the repayment of such monies
which shall be so borrowed, taken up or lent, with interest for the same, in such manner as if such
security had been a security for payment of so much money, and interest for the same, sealed by such
respective member or members of the said corporation, and delivered by him or them as their
respective acts and deeds, in proportion to their several shares or subscriptions as aforesaid; and that
in every such case an action of debt shall and may be brought, commenced, prosecuted and maintained
in any of their Majesties courts of record in Westminster, by the respective creditor or creditors, to
whom any such security under the common seal of the said corporation shall be made, or his or their
respective executors or administrators, against all and every, or any one or more of the persons who
shall be members of the said corporation, or any of their respective heirs, executors or administrators,
in proportion to their respective shares or subscriptions as aforesaid, and therein recover and have
judgment for him or them, in such and the like manner, as if such security were respectively sealed by
the respective person or persons who shall be so sued, or his or their respective ancestor, or testator,
or intestate, and by him and them executed and delivered, as his or their respective acts and deeds; any
condition, covenant, or agreement, to be made to the contrary thereof in any wise notwithstanding:
and if any condition, covenant, or agreement shall be made to the contrary, the same shall be, and is
hereby declared to be void; any thing herein contained, or any law or usage to the contrary
notwithstanding; and in such action or actions so to be brought, no privilege, protection, essoin, or
wager of law, nor any more than one imparlance shall be allowed.
XXVII. And to the intent that their Majesties subjects may corporation not be oppressed by the
said corporation, by their monopolizing or ingrossing any sort of goods, wares or merchandizes, be it
further declared and enacted by the authority aforesaid, That the said corporation to be made and
created by this act, shall not at any time, during the continuance thereof, deal or trade, or permit or
suffer any person or persons whatsoever either in trust or for the benefit of the same, to deal or trade
with any of the stock, monies or effects of or any ways belonging to the said corporation, in the
buying or selling of any goods, wares, or merchandizes whatsoever; and every person or persons, who
shall so deal or trade, or by whose order or directions such dealing or trading shall be made,
prosecuted, or managed, shall forfeit for every such dealing or trading, and every such order and
directions, treble the value of the goods and merchandize so traded for, to such person or persons
who shall sue for the same by action of debt, bill, plaint, or information, in any of their Majesties
courts of record at Westminster, wherein no essoin, protection, nor other privilege whatsoever, nor any
injunction, order of restraint, nor wager of law shall be allowed, nor any more than one imparlance.
20
XXVIII. Provided, That nothing herein contained shall any ways be construed to hinder the said
corporation from dealing in bills of exchange, or in buying or selling bullion, gold, or silver, or in
selling any goods, wares, or merchandize whatsoever, which shall really and bona fide be left or
deposited with the said corporation for money lent and advanced thereon, and which shall not be
redeemed at the time agreed on, or within three months after, or from selling such goods as shall or
may be the produce of lands purchased by the said corporation.
XXIX. Provided always, and be it enacted by the authority aforesaid, That all and every bill or bills
obligatory and of credit under the seal of the said corporation made or given to any person or persons,
shall and may, by indorsement thereon under the hand of such person or persons, be assignable and
assigned to any person or persons who shall voluntarily accept the same, and so by such assignee, toties
quoties by indorsement thereupon; and that such assignment and assignments, so to be made, shall
absolutely vest and transfer the right and property in and unto such bill or bills obligatory and of
credit, and the monies due upon the same; and that the assignee or assignees shall and may sue for,
and maintain an action thereupon in his own name.
XXX. Provided always, and it is hereby further enacted, That if the governor, deputy governor,
the directors, managers, assistants, or other members of the said corporation so to be established,
shall upon the account of the said corporation, at any time or times purchase any lands or revenues
belonging to the crown, or advance or lend to their Majesties, their heirs or successors, any sum or
sums of money, by way of loan or anticipation, on any part or parts, branch or branches, fund or
funds of the revenues now granted or belonging, or hereafter to be granted or belonging to their
Majesties, their heirs or successors, other than such fund or funds, part or parts, branch or branches
of the said revenues only, on which a credit of loan is or shall be granted by parliament; that then the
said governor, deputy governor, directors, managers, or assistants, or other members of the said
corporation, who shall consent, agree to, or approve of, the advancing or lending to their Majesties,
their heirs or successors, such sum or sums of money as aforesaid, and each and every of them so
agreeing, consenting, or approving, and being thereof lawfully convicted, shall for every such offence
forfeit treble the value of every such sum or sums of money so lent, whereof one fifth part shall be
to the informer, to be recovered in any of their Majesties courts of record at Westminster, by action of
debt, bill, plaint, or information, wherein no protection, wager of law, essoin, privilege of parliament,
or other privilege shall be allowed, nor any more than one imparlance; and the residue to be disposed
of towards publick uses, as shall be directed by parliament, and not otherwise.
XXXIII. And whereas by an act of this present session of parliament, intituled, An act for granting to their
Majesties certain rates and duties upon salt, and upon beer, ale and other liquors, for securing certain recompences and
advantages in the said act mentioned, to such persons as shall voluntarily advance the sum of £ 1,000,000 towards
carrying on the war against France, it is enacted, That no member of the house of commons shall at any time be
concerned in the farming, collecting, or managing any sum or sums of money, duties or other aids by the said act or any
other act of parliament granted or to be granted to their Majesties, except the persons in the said act excepted; and
whereas some doubts may arise, whether any member or members of parliament may be concerned in the corporation to
be erected in pursuance of this act; be it therefore declared and enacted by the authority aforesaid, That it
shall and may be lawful to and for any member or members of the house of commons, to be a member
21
or members of the said corporation for the purposes in this act mentioned; any thing in the said
recited act contained to the contrary in any wise notwithstanding.
XXXIV. And be it further enacted by the authority aforesaid, That it shall and may be lawful for
any persons, natives or foreigners, to contribute towards the advancing of the sum of £ 300,000, other
part of the said sum of £ 1,500,000, by paying into the receipt of their Majesties Exchequer, at any
time before the 29th day of September, 1694, any sum or sums of money, not exceeding in the whole
the sum of £ 300,000, upon the terms following (that is to fay) That every such person, his executors,
administrators or assigns, out of the rates and duties granted by this act, shall have and receive for
every sum of £ 100, so by them respectively advanced and paid, such yearly annuity, rent or payment,
as herein after is directed (that is to say) That if such contributor shall advance and pay his money
upon one life only, then he shall have and receive a yearly annuity, rent or payment of £ 14 of lawful
English money, for every £ 100, and so proportionably for a greater sum, for and during the life of
such person so advancing and paying the same, or during any other life to be nominated by the person
advancing or paying any such sum …which yearly annuities, rents, or payments, shall commence from
the said 29th day of September, 1694, and shall be paid and payable quarterly, at the four most usual
feasts of the year … and every person, on payment of any such sum or sums as aforesaid, shall
immediately have one or more tally or tallies importing the receipt of the consideration money, and
orders for the payment of the said annuities, bearing the same date with the tally; the said tallies to be
levied, and the said orders to be signed, in the same manner as in and by an act of this present
parliament, intituled, An act for granting to their Majesties certain rates and duties upon salt, and upon beer, ale
and other liquors, for securing certain recompences and advantages in the said act mentioned, to such persons as shall
voluntarily advance the sum of £ 1,000,000 towards carrying on the war against France, is mentioned and directed
touching tallies and orders to be given to the contributors for annuities upon the said act; and the said
orders not to be determinable, revocable or countermandable, as touching the afore mentioned orders
in the said recited act is enacted, which said orders shall be assignable and transferrable in such and
the same manner as is mentioned in the said recited act touching orders given to the contributors in
the said act mentioned; and all the rates and duties by this act granted, or so much thereof as are and
shall be sufficient for the purposes aforesaid, are and shall be appropriated to and for the payment of
the said annuities of inheritance, and annuities for lives, after the several and respective rates aforesaid,
according to the true intent and meaning of this act … and the said officers are hereby required to
keep books and registers, and make entries of the names of all persons who shall advance any monies
before the said 29th day of September, as aforesaid, and of the several sums so advanced, and the
times of paying in the same respectively, and the names of such persons for whose lives the several
annuities or yearly payments are to be payable, without fee or reward, in such manner as in the said
recited act is mentioned, to which books all persons concerned shall have access, as in the said act also
is directed … and every person who shall so advance and pay any such sum, as aforesaid, before the
said 29th day of September, as aforesaid, shall receive, out of the money granted by this act, for all
money so advanced by him and Paid, from the respective days of payment, unto the said 29th day of
September, as aforesaid, interest at the rate of ten pounds per centum per annum.
22
XXXV. And be it further enacted, That all monies payable to any person or persons, upon or by
virtue of this act, shall not be charged or chargeable with any rates, duties, or impositions whatsoever.
…
XL. And it is hereby enacted, That all and every sum and sums of money, so to be borrowed, not
exceeding as aforesaid, together with interest for the same not exceeding the rate of eight pounds per
centum per annum, to be paid every three months, until satisfaction of the principal, shall be payable and
satisfied unto the respective lender or lenders of the same, his, her, or their executors, administrators,
or assigns, out of the monies which shall afterward arise and be brought into the Exchequer by or for
contributions upon this act, so far as the same will extend; and in case the money so arising by this act
shall not be sufficient for the paying thereof, then the said loans, which shall remain unsatisfied, with
the interest for the same shall be repaid out of the next aids or supplies to be granted to their Majesties
in parliament, and shall be transferred and transferrable thereunto, as soon as any such aid or supply
shall be granted to their Majesties; and if no such aids or supplies shall be granted to their Majesties
before the 2nd day of February, 1694, then the said sum and sums of money, so to be borrowed, not
exceeding as aforesaid, and the interest thereof, shall be payable and be paid and satisfied to the lender
or lenders, his, her, or their executors, administrators, or assigns respectively, by and out of any their
Majesties treasure, which from thenceforth shall come into, be, or remain in the receipt of their
Majesties Exchequer, not being already appropriated to any particular uses by any act or acts or
parliament before this time made.”
__________________________________
An Act for making good the Deficiencies of several Funds therein mentioned; and for
enlarging the Capital Stock of the Bank of England; and for raising the Publick Credit (1697) 23
XX. And for the better restoring of the credit of the nation and advancing the credit of the
corporation of the governor and company of the bank of England Be it enacted by the authority
aforesaid that the present common capital and principal stock of the said governor and company shall
be augmented and enlarged by the voluntary new subscriptions of all such person and persons natives
and foreigners bodies politick or corporate who shall be willing to subscribe any sum or sums of
money into the said present common capital and principal stock and to answer and make good the
same in manner as herein after is appointed.
XXIII. And for the better encouraging the said Subscriptions to be made; Be it further enacted by
the Authority aforesaid. That from and after the said 2nd Day of April it shall and may be lawful to
and for all and, every Person or Persons, Natives or Foreigners, Bodies Politick and Corporate, by and
for themselves, or any of them, or by themselves or any of them in Trust for any other Person or
Persons, Bodies Politick or Corporate, or any of them, freely to subscribe any Sum or Sums of Money,
23 8 & 9 W. III c. 20. URL: http://goo.gl/mqTvS.
23
into the Capital and Principal Stock of the said present Governor and Company, in order to the
augmenting and enlarging thereof as aforesaid; which said Subscriptions at the respective Times of
making the same, shall be answered and made good by the respective Subscribers thereof to the said
Capital and Principal Stock of the said present Governor and Company, in the Manner and Proportion
following; (that is to say) four fifth Parts of each respective and particular Subscription (the Value of
the said whole Subscriptions into five equal Parts being divided) shall be answered and made good to
the said Capital and Principal Stock of the said present Governor and Company, by assigning to them
the Principal and Interest whereunto such Subscribers respectively shall be then really intitled by Tallies
of Loan and Orders of Repayment, or by Tallies of Pro or Assignment, for Monies which were lent
or advanced, or are or shall be charged as aforesaid, upon some of the Aids, Supplies, Revenues,
Impositions or other Funds hereinafter mentioned, and by delivering up at the same Time to the said
Governor and Company, the Tallies and Orders so assigned … and the other fifth Part of each of the
said Subscriptions shall be answered and made good to the said Capital Stock of the said Governor
and Company in Bank Bills or Bank Notes, which have so much Money bona fide resting due
thereupon, as the said one fifth Part of the said respective Subscriptions shall fully amount to.
…
XXVI. And be it further enacted by the Authority aforesaid. That all and every the Person and
Persons, Natives and Foreigners, Bodies Politick and Corporate, who shall so subscribe, or for whom
such Subscriptions shall be made, to the said Capital Stock of the present Governor and Company of
the Bank of England by virtue of this Act, and who shall answer and make good their said
Subscriptions in the Proportion of Tallies, Orders, Bank Bills, and Bank Notes as aforesaid, and the
Executors, Administrators, Successors or Assigns of such Person or Persons, Bodies Politick or
Corporate as aforesaid, having any Title or Interest under any of the Subscribers by virtue of this Act,
at the Time of closing or shutting up of the said intended Book or Books of Subscriptions, on the
said 24th Day of June, shall immediately from and after the said 24th Day of June, be and shall be
deemed and reputed to be Members of, united to, and incorporated with the present Governor and
Company of the Bank of England, and their Successors, and shall at all Times from and after the said
24th Day of June, together with the present Governor and Company of the Bank of England, and
their Successors, be and be construed, reputed, accepted and taken to be one Body Politick and
Corporate, by the Name of The Governor and Company of the Bank of England, and by the same
Name of The Governor and Company of the Bank of England shall have a perpetual Succession,
and a Common Seal; and that they and their Successors, by the Name aforesaid, shall be able and
capable in Law to have, purchase, receive, possess, enjoy and retain to them and their Successors,
Lands, Rents, Tenements and Hereditaments, of what Kind, Nature or Quality soever; and also to sell,
grant, demise, aliene or dispose of the same, and by the same Name to sue and implead, be sued and
impleaded, answer and be answered, in Courts of Record, or any other Place whatsoever, and to do
and execute all and singular other Matters and Things, by the Name aforesaid, that to them shall or
may appertain to do; subject nevertheless to the Proviso or Condition of Redemption hereinafter
mentioned.
…
24
XXVIII. And be it further enacted, That during the Continuance of the Corporation of the
Governor and Company of the Bank of England, no other Bank, or any other Corporation, Society,
Fellowship, Company, or Constitution, in the Nature of a Bank, shall be erected or established,
permitted, suffered, countenanced or allowed by Act of Parliament within this Kingdom.
…
XXXI. And be it further enacted, That the Common Capital Stock and real and Principal Stock,
and also the real Fund of the Governor Fund and Company of the Bank of England, or any Profit
or Produce to be made thereof, or arising thereby, or the particular Share, Part, and Interest of any
Member of the said Corporation in the said Stock or Fund, or the Profit or Produce to be made
thereof, or arising thereby, shall be and is hereby exempted from any Taxes, Rates, Assessments or
Impositions whatsoever, during the Continuance of the said Bank.
…
XXXIII. And be it further enacted by the Authority aforesaid, That from and after the 25th Day
of March 1697, the Estate, Interest and Stock of the Money of the said Corporation of the Governor
and Company of the Bank of England, and of each and every particular Member thereof, shall be,
and be adjudged, taken and accepted, in Construction of Law, by all Judges in all Courts of Law and
Justice, and in all Courts and Places whatsoever within this Realm, to be a personal, and not a real
Estate, and shall go to the Executors or Administrators of the Person or Persons dying possessed
thereof, or intituled thereunto, and not to the Heirs of such Person or Persons; any Thing contained
in the said Act of Parliament for erecting the Bank, or in any other Act, or any other Law, Statute,
Usage or Custom, to the contrary in any wise notwithstanding.
…
XXXV. And be it further enacted by the Authority aforesaid, That no Act, Matter or Thing, Acts,
Matters or Things already done, or hereafter to be done, by the said Corporation of the Governor
and Company of the Bank of England, or by their Successors, or by the Court of Directors of the
said Corporation, or by any Sub-Committee appointed or to be appointed by the said Corporation,
shall forfeit or subject, or make liable to Forfeiture, the particular, private and personal Estate, Interest,
Stock and Property of any Member of the said Corporation; but that notwithstanding any Act or
Acts, Matter or Matters, Thing or Things, done or to be done by the said Governor and Company of
the Bank of England, or by the said Court of Directors or Sub-Committees as aforesaid, the Estate,
Stock, Interest and Property, with the whole Proceed, Benefit, Profit and Advantage thereof, belonging
to each and every Member of the said whole Corporation, and his particular Right, Claim, and Title
thereunto, and to every Part thereof, shall be and remain unforfeited, untouched, whole, safe and
intire, to the proper Use and Benefit of each and every of the said Members, subject nevertheless to
the Payment of all just Debts contracted by the said Corporation; any Law, Statute, Usage or Custom,
to the contrary notwithstanding.
25
b. Creation of the South Sea Company (1711)24

“An Act for making good Deficiencies and satisfying the public Debt and for erecting a corporation to carry on a
Trade to the South Sea and for the encouragement of the Fishery and for Liberty to trade in unwrought iron with the
subjects of Spain and to repeal the Acts for registering seamen.
…
XXV. And forasmuch as it will be for the great ease and advantage of the persons concerned in the said debts and
deficiencies, that they should be made one society or company, and that the payments from the Exchequer will be much
easier made to such society, or their cashiers for the use of, and to be by them distributed to the respective persons, interested
in the said debts, deficiencies, and other monies, intended to be charged on the said funds, than if the same were to be
paid in the usual forms of the Exchequer to every person concerned;
[A]nd to the end and intent that the trade to the South Seas, and other parts within the limits herein
after mentioned, may be carried on for the honour and increase of the wealth and riches of this realm;
[B]e it enacted by the authority aforesaid, That it shall and may be lawful for her Majesty, her heirs
and successors, by letters patents under the great seal of Great Britain, to incorporate all and every the
person and persons, natives and foreigners, bodies politick or corporate, who are and shall be
interested in or entitled unto any of the bills, tickets, debentures, or certificates, or other publick debts,
deficiencies, or sums of money, intended to be provided for by this act, and all and every person and
persons, bodies politick and corporate, who as executors, administrators, successors, or assigns, or by
any other lawful title, derived or to be derived from, by, or under the original proprietors, at any time
or times hereafter, shall have and be entitled to any part, share, or interest of or in the said yearly fund
by this act settled, as aforesaid, so long as they respectively shall have any such part, share, or interest
therein, to be one body politick or corporate, in deed and in name, and by such name as her Majesty,
her heirs or successors shall think fit, and by that name to have perpetual succession, and a common
seal, with power, from time to time, to choose their governors, directors, and other officers, in such
manner, and under such qualifications, as to the electors and elected, as shall be directed in such letters
patents;
[T]he first governor and directors to be nominated by her Majesty, her heirs and successors in the
said letters patents, the said first governor and directors being so qualified, as all subsequent governors
and directors shall be qualified, and to continue in their respective offices for one year only;
[A]nd that the persons so incorporated and their successors, by the same name, shall be able and
capable in law to have, purchase, receive, enjoy, possess, and retain, to them and their successors, lands,
rents, tenements, and hereditaments, not exceeding the yearly value of one thousand pounds, together
with such powers, capacities, privileges, immunities, and advantages, and subject to and under such
rules, conditions, limitations, and restrictions, as her Majesty, her heirs or successors, in her or their
249 Ann., c. 21. URL: http://goo.gl/wxvtv. Paragraphs added. See also concerning the South Sea Company, 10 Ann. c.
19, http://goo.gl/xB2IX; 10 Ann. c. 30, http://goo.gl/Fx3p6; 1 Geo. I, c. 21, http://goo.gl/An7QA; 3 Geo. I, c. 9,
http://goo.gl/Beqwu; and 5 Geo. I, c. 19, http://goo.gl/yjOnB
26
great wisdom shall think fit, and to do and execute all and singular matters and things by the same
name that to them shall or may appertain to do.
XXVI. And it is hereby further enacted by the authority aforesaid, That it shall and may be lawful
to and for her Majesty, her heirs and successors, by the said letters patents of corporation, or by any
commission or commissions under the great seal of Great Britain, to be granted before or after the
said letters patents, to direct and appoint how and in what manner the tallies and orders, bills, tickets,
certificates, or debentures, intended to be provided for by this act, and also the money hereby intended
to be made part of the capital stock of the said corporation, upon account of the publick, shall or
may be subscribed, admitted, or taken into, or be made part of the said capital stock of the said
company or corporation;
[A]nd also to direct how and in what manner such part of the stock of the said corporation, which
is hereby intended to be for the use of the publick, shall and may be disposed and applied to the use
of the publick, and accounted for; and also how and in what manner the said tallies, orders, tickets,
certificates, bills, or debentures, intended to be taken into the joint stock of the said corporation, shall
or may be disposed of, discharged, and accounted for; and also how the property of all persons
interested in the said tallies, orders, tickets, certificates, bills, or debentures, shall or may be ascertained,
adjusted, and settled;
[A]nd also that her Majesty, her heirs and successors, shall and may, in and by such commission
and commissions as is last mentioned, direct the commissioners therein to be named, how and in what
manner to proceed in the execution of such commission or commissions; and also that it shall and
may be lawful to and for her Majesty, her heirs and successors, in and by the said letters patents of
incorporation, or by such commission or commissions, as aforesaid, to direct how and in what manner
the proper officers of the Exchequer for the time being may know and be informed how much the
capital stock of the said company doth, for the time being, consist of, and all other things requisite
thereunto, that so the proper officers of the Exchequer may know whether they are to pay to the
cashier of the said company, to the use of the said company, the said whole annual sum of £.568,279.
10s, or only a proportionable part thereof.
XXVII. And whereas great part of the debt of the navy and victualling, and for transport service, and of the
office of ordnance, is ascertained by bills or debentures payable in course, and other part of the debt of the navy is also
ascertained by tickets made out for wages to seamen, and others who served on board any of her Majesty's ships, but
great part of the said debt is for wages due to the seamen and workmen in her Majesty's docks and yards, for which the
respective persons, to whom the same is due, have no bills, tickets, or debentures to ascertain the same;
[B]e it therefore enacted by the authority aforesaid, That the commissioners of the navy for the
time being shall and are hereby required forthwith to cause an exact and true account to be made up
and delivered unto the commissioners of the treasury now being, or the lord high treasurer, or the
commissioners of the treasury for the time being, of the respective sums due from the said navy
office… and so much as shall remain of the total sum herein computed to be the debt of the said
offices… shall be, and be deemed and taken to be publick money, and shall be made part of the capital
stock of the company, to be erected by virtue of this act, for the use of the publick, in such manner
27
as her Majesty, her heirs or successors, by the letters patents of incorporation, or any commission or
commissions under the great seal of Great Britain, or by privy seal or sign manual, shall think fit and
direct; and the same, and the produce thereof, shall be disposed and applied, either for or towards
paying the residue of the said debts, or for or towards any other publick uses, for which a supply has
been, or shall be granted by parliament, and not otherwise; and the loss or discount (if any) by or
upon the said stock in the said company, for the use of the publick, shall be accounted for, and the
respective persons accountable for the same, or any part thereof, shall be discharged from such loss
or discount, in such manner as her Majesty, her heirs or successors, by the said letters patents of
incorporation, or by any commission under the great seal of Great Britain, or by privy seal or sign
manual, shall direct.
…
XXIX. And be it further enacted by the authority aforesaid, That all and every person and persons,
bodies politick or corporate, who shall be interested in, or entitled unto, any bills or debentures,
payable in course, out of her Majesty's several offices of the navy, victualling, transport, or ordnance,
which were dated made or received in those respective offices, on or before the 25th day of March,
1711, or to any certificates or debentures made out for the army, or for transport service for the late
war, shall and may be admitted into the joint stock of the said company, and be and become members
thereof, in proportion to such sum and sums as they shall be so entitled unto, to be computed, as
herein after is mentioned, in such manner and form as her Majesty, her heirs or successors, by the said
letters patents of incorporation, or by such commission or commissions, as aforesaid shall direct…
XXX. And be it further enacted by the authority aforesaid, That any person or persons, natives or
foreigners, who are or shall be possessed of, interested in, or entitled unto, any of the tallies or orders
made out in pursuance of the said acts of the ninth year of his late majesty King William the Third,
and of the first year of her said now Majesty's reign, for laying certain duties on coals, culm, and
cynders, shall, for so much as the principal and interest of such tallies and orders, to be computed in
such manner as is herein before directed, concerning the computation to be made of principal and
interest upon and for such of the navy and victualling bills as do carry interest, be admitted into, and
made members of the said intended corporation, and shall have and be entitled unto a proportionable
part of the yearly annuity or fund payable to the said corporation, and of all other privileges and
advantages granted to the said corporation, in such manner as her Majesty, her heirs or successors, by
the said letters patents of incorporation, or by such commission or commissions, as aforesaid, shall
direct or appoint.
…
XXXII. Provided always nevertheless, and be it further enacted by the authority aforesaid, That it
shall and may be lawful to and for the managers and directors of the said intended corporation, at any
time after the 25th day of December1711, if they shall so think fit, to admit into the joint stock of the
said corporation, or to purchase, payoff, and discharge, (in order to the admission into the joint stock
of the said corporation, and to admit the same accordingly into the said joint stock) all or any of the
tallies and orders made forth in pursuance of the said last mentioned act of the said eighth year of
28
her said Majesty's reign; and the said tallies and orders shall be taken and admitted into the said joint
stock, for such sum as the principal and interest, which shall be due upon the same respectively, shall
amount unto, at the time or times of their admission into the said joint stock; and all the tallies and
orders made forth in Pursuance of the said last-mentioned act of the eighth year of her said Majesty's
reign, which shall, as well before as after the said 25th day of December, 1711, be taken or admitted
into the said joint stock of the said corporation, shall from thenceforth be discharged from being
payable in course out of the funds settled by the said act; and the respective owners and proprietors
thereof shall from thenceforth, in lieu thereof, have and be entitled to an annuity, after the rate of six
pounds per centum per annum, for the respective sums they shall amount unto, and proportionably for a
lesser sum than one hundred pounds, to be paid out or the annual fund by this act made payable to
the said company, until the said fund shall be redeemed, as in this act is mentioned.
…
XXXIV. And be it further enacted by the authority aforesaid, That until the 25th day of December,
which shall be in the year of our Lord 1713, the whole and entire annual sum of £. 568,279. 10s shall
be paid to the said corporation in such manner as in and by this act is directed…
XXXV. Provided nevertheless, for as much as the said intended company cannot be carried on,
without a very great charge, which if the same be wholly born by the members of the company, would
lessen their annual interest, and may prove a great discouragement to them; be it therefore enacted by
the authority aforesaid, That over and above the said annual sum hereby settled, to be paid to the said
company, there shall be paid and payable to the said company, to be erected by virtue of this act, and
their successors, until the said annual sum herein before settled, shall be redeemed, as aforesaid, or to
such cashier or cashiers, person or persons, as shall be authorized under the common seal of the said
company to receive the same, for the use of the said company, the further annual sum of £. 8,000,
for and towards the charge of management of the said company; which annual sum of £. 8,000 is
hereby charged and chargeable upon, and made to be paid and payable by and out of the same funds,
and at such time and times, and in such manner, and by the same ways, means, and methods as is and
are herein and hereby prescribed, settled, or appointed for payment of the said annuities, after the rate
of six pounds per centum per annum, for the total amount of the said capital stock of the said company.
XXXVI. And be it further enacted, That it shall and may be lawful to and for her Majesty, her
heirs and successors, by any such commission, charter, or letters patents, as aforesaid, under the great
seal of Great Britain, to limit, direct, and appoint, how, and in what manner and proportions, and under
what rules and directions, the shares of all and every person and persons whatsoever, in the said yearly
fund, and of and in the stock of the said intended company or corporation, and every or any part or
proportion thereof, shall and may be assignable or transferable to such person or persons only, as shall
freely and voluntarily accept of the same, and not otherwise; and that all assignments and
transferrences made in such manner, and no other, shall be good and available in the law.
XXXVII. And be it further enacted by the authority aforesaid, That the estates, interests and stocks
of money of the said intended company or corporation, to be created or established in pursuance of
this act, and the share and interest of each and every particular member thereof, and therein, and of
29
and in the capital stock of the said company, shall be, and be adjudged, taken, and accepted, in
construction of law, by all judges, and in courts of law and justice, and in all courts and places
whatsoever, to be a personal, and not a real estate, and shall go to the executors or administrators of
the person or persons dying possessed thereof, or entitled thereunto, and not to the heirs of such
person or persons; any law, statute, usage, or custom to the contrary notwithstanding.
…
XLII. And be it enacted, That no member of the said intended company, to be erected in
pursuance of this act, shall, in respect of his or her being a member, governor, director, or manager
thereof, or having any stock therein only, or by reason of any other matter or thing in this act
contained, be disabled from being or continuing a member of parliament, nor shall be adjudged liable
to be a bankrupt within the intent or meaning of all or any of the statutes made against or concerning
bankrupts; and that no stock in the said intended company shall be subject or liable to any foreign
attachment, by the custom of the city of London, or otherwise.
XLIII. And for the better securing the privilege of the governor and company of the bank of
England, granted to them to borrow by parliament, be it enacted by the authority aforesaid, That it
shall not be lawful to or for the corporation to be erected in pursuance of this act, to 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; and that it shall not be lawful for the corporation to be erected
by virtue of this act, to discount any bills of exchange, or other bills of exchange, or other bills or
notes whatsoever, or to keep any books or cash for any person or persons, bodies politick or corporate
whatsoever, other than and only the proper books, money, and cash of the said corporation to be
erected by virtue of this act.
…
XLVI. And whereas it is of the greatest consequence to the honour and welfare of this kingdom, and for the
increase of the strength and riches thereof and for the vending the product and manufacture, goods and merchandizes
of or brought into this kingdom, and employment of the poor, that a trade should be carried on to the South Seas, and
other parts of America, within the limits herein after mentioned; which cannot so securely and successfully be begun and
carried on, as by a corporation with a joint stock, exclusive of all others:
[N]ow for the better encouragement of all and every the person and persons, bodies politick or
corporate, who shall be or become members of the said company or corporation, to be erected, as
aforesaid; and to the end and intent that a trade to the South Seas, and other parts of America within
the limits herein after mentioned, may be carried on and promoted, for the advantage and honour of
this kingdom; be it enacted by the authority aforesaid, That the corporation to be erected in pursuance
of this act, and their successors, shall have and be entitled unto, and they are hereby entitled unto and
vested, from the 1st day of August, 1711, for ever, in the sole trade and traffick into, unto, and from all
the kingdoms, lands, countries, territories, islands, cities, towns, ports, havens, creeks, and places of
America, on the east side thereof from the river of Aranoco, to the southermost part of the Terra del
Fuego; and on the west-side thereof, from the said southermost part of the said Terra del Fuego, through
30
the South Seas, to the northernmost part of America; and into, unto, and from all countries, islands,
and places within the said limits, which are reputed to belong to the crown of Spain, or which shall
hereafter be found out or discovered within the said limits, not exceeding 300 leagues from the
continent of America, between the southermost part of Terra del Fuego and the northermost part of
America, on the west-side thereof, (except the kingdom of Brazil, and such other places on the said
east-side of America, as are now in the actual possession of the crown of Portugal, and the country of
Surinam in the possession of the states general of the United Provinces;) it not being intended that the
sole trade to any part of the east-side of America, now in the actual possession of the crown of Portugal,
or the states general, shall be granted or construed to be granted by this act; but that it may be and
remain lawful for all, and every, or any the subjects of her Majesty, her heirs or successors, to trade
and traffick to any part of the east-side of America, now in the actual possession of the crown of
Portugal, or the states general, (but to no other part of America within the limits aforesaid) as fully and
freely, in all respects, as they might or could do if this act had not been made; any clause, proviso,
power, privilege, matter or thing, herein contained to the contrary thereof in any wise notwithstanding.
XLVII. And be it further enacted, That the said company to be erected in pursuance of this act,
and their successors for ever, and all and every person and persons, who from time to time may be
licensed by the said corporation, to be erected in pursuance of this act, to trade in the stead of them,
shall and lawfully may, for ever, from and after the said 1st day of August, 1711, or by such factors,
agents, or servants, as they shall think fit to intrust, and to and for no other person or persons
whatsoever, freely to traffick and use the trade of merchandize, into, unto, and from the said South
Seas, and other the parts within the limits aforesaid (except as aforesaid) and into, unto, and from all
or any the kingdoms, lands, territories, islands, cities, towns, forts, havens, creeks, and places of
America, or any of them, within the limits aforesaid (except before excepted) where any trade or
traffick of merchandize is or may be used or had, and to and from every of them.
XLVIII. And be it further enacted by the authority aforesaid, That it shall and may be lawful to
and for her Majesty, by her said charter or charters of incorporation, to impower the said company or
corporation, and their successors, to make for reasonable laws, constitutions, orders, and ordinances,
from time to time, for the good government of the said trade to the South Seas, and other the parts
within the limits aforesaid (except before excepted) and of the traders, factors, agents, officers, and
others concerned in the same, and to inflict reasonable penalties and punishments by imprisonments,
mulets, fines, and amerciaments for any breach or breaches thereof, and to levy such mulets, fines, and
amerciaments, to the use of the said company or corporation.
…
L. And for the better encouraging of the said company to be erected in pursuance of this act, to
drive and carry on the trade hereby granted to them; be it further enacted by the authority aforesaid,
That the said company, and their successors, for ever, shall and may have, hold, and enjoy, to their
own use, and for the benefit of the members of such company, in proportion to their stock, and
without any account to be rendered thereof to her Majesty, her heirs or successors, or to any other
person or persons whatsoever, all and every the islands, cities, forts, towns and places whatsoever,
31
which the said company, or their factors, agents or servants, or other persons, which shall be employed
or licensed by them to trade, as aforesaid, or such of the ships of her Majesty, her heirs or successors,
as she or they shall think fit to grant or allow for convoys, or otherwise, for the defence, security, or
carrying on the said trade, shall discover or find out, seize, or possess, in any manner whatsoever,
within the limits aforesaid, (except before excepted) and shall be for ever the sole owners and
proprietors of all and every such islands, forts, towns and places, and all their dependencies, to be
holden of her Majesty, her heirs and successors, successors, in free and common socage by fealty, and
rendring to her Majesty, her heirs and successors, the annual rent of one ounce of gold for the same
(if demanded) and the said company and their successors shall and may have and hold for ever the
sole trade to all such islands, forts, towns, and places, last mentioned.
…
LIX. And for as much as nothing can more conduce to the encrease of the strength and riches of this kingdom,
and the breeding able seamen to serve her Majesty, as well in time of war as peace than the preserving and enlarging the
fishery of this realm;
[B]e it therefore enacted by the authority aforesaid, That it shall and may be lawful for her Majesty,
her heirs and successors, in and by her said letters patents of incorporation, or by any other letters
patents under the great seal of Great Britain, to direct a stock to consist of twenty shillings upon every
hundred pounds of the capital stock of the said intended company, to be raised by the members
thereof, in proportion to their stock, at such times, and in such manner, as her Majesty, her heirs or
successors, by such letters patents shall think fit and direct, so as no other of her Majesty's subjects
be thereby excluded from the fishing trade; the said stock to be kept apart, and always employed in
the improving, enlarging, and carrying on the fishery of this realm, or other fishery, for the use and
benefit of the members of the said company, in proportion to their stock.”
c. Defoe on the Nuisance of Stock-Jobbing (1719)25

“THE General Cry against Stock-Jobbing has been such, and People have been so long, and so
justly Complaining of it as a publick Nusance; and which is still worse, have complained so long
without a Remedy, that the Jobbers, harden'd in Crime, are at last come to exceed all [2] bounds, and
now, if ever, sleeping Justice will awake, and take some Notice of them, and if it should not now, yet
the diligem Creatures are so steddy to themselves, that they will some time or other, make it absolutely
necessary to the Government to demolish them.
I know they upon all Occasions laugh at the Suggestion, and have the Pride to think it
impracticable to restrain them; and one of the top of the Function the other Day, when I casually told
him, That if they went on, they wou'd make it absolutely necessary to the Legislature, to suppress
25Daniel Defoe, The anatomy of Exchange-Alley: or, a system of stock-jobbing, LONDON: Printed for E. Smith near
Exchange-Alley. 1719. From the University of Michigan Eighteen Century Collections Online. URL:
http://quod.lib.umich.edu/e/ecco/004843169.0001.000?rgn=main;view=fulltext.
32
them, return'd, That he believ'd it was as absolutely necessary for 'em to do it now, as ever it could be;
But how will they do it? Tis impossible, said he, but if the Government takes Credit, their Funds
should come to Market; and while there is a Market we will buy and sell; there is no effectual way in
the World, says he, to suppress us but this, viz. That the Government should first pay all the publick
Debts, redeem all the Funds, and dissolve all the Charters, viz. Bank, South-Sea, and East-India, and
buy nothing upon Trust, and then, indeed, says he, they need not hang the Stock-Jobbers, for they will
be apt to hang them selves … [3] But before I come to the needful ways for restraining those People,
I think 'twill be of some Service to expose their Practices to common view, that the People may see a
little what kind of Dealers they are… Coining false News, this way good, that way bad; whispering
imaginary Terrors, Frights, Hopes, Expectations, and then preying upon the Weakness of those, whose
Imaginations they have wrought upon, whom they have either elevated or depress'd. [4] If they meet
with a Cull, a young Dealer that has Money to lay out, they catch him at the Door, whisper to him,
Sir, here is a great piece of News, it is not yet publick, it is worth a Thousand Guineas but to mention
it: I am heartily glad I met you, but it must be as secret as the black side of your Soul, for they know
nothing of it yet in the Coffee-House, if they should, Stock would rise 10 per Cent. in a moment, and
I warrant you South-Sea will be 130 in a Week's Time, after it is known. Well, says the weak Creature,
prethee dear Tom what is it? Why really Sir I will let you into the Secret, upon your Honour to keep it
till you hear it from other Hands; why 'tis this, The Pretender is certainly taken and is carried Prisoner
to the Castle of Millan, there they have him fast; I assure you, the Government had an Express of it
from my Lord St----s within this Hour. Are you sure of it, says the Fish, who jumps eagerly into the
Net? Sure of it! why if you will take your Coach and go up to the Secretaries-Office, you may be
satisfied of it your self, and be down again in Two Hours, and in [5] the mean time I will be doing
something, tho' it is but little, till you return.
Away goes the Gudgeon with his Head full of Wildfire, and a Squib in his Brain, and coming to
the Place, meets a Croney at the Door, who ignorantly confirms the Report, and so sets fire to the
Mine; for indeed the Cheat came too far to be baulkt at home: So that without giving himself Time
to consider, he hurries back full of the Delusions, dreaming of nothing but of getting a Hundred
Thousand Pounds, or purchase Two; and even this Money was to be gotten only upon the Views of
his being before-hand with other People.
In this Elevation, he meets his Broker, who throws more Fire-works into the Mine, and blows him
up to so fierce an Inflamation, that he employs him instantly to take Guineas to accept Stock of any
Kind, and almost at any Price; for the News being now publick, the Artist made their Price upon him.
In a Word, having accepted them for Fifty Thousand Pounds more than he is able to pay, the Jobber
has got an Estate, the Broker 2 or 300 Guineas, and the Esquire remains at Leisure to sell his Coach
and Horses, his fine Seat and rich Furniture, to make good the Deficiency [6] of his Bear-Skins, and
at last, when all will not go through it, he must give them a Brush for the rest.
…
[24] Besides, I deny the Fact; these Men Friends to the Government! Jesu Maria! The Government
may be friendly to them in a manner they do not deserve; but as to their being Friends to the
33
Government, that is no more possible than the Cardinal Alberoni, or the Chevalier de St. George are
Friends to the Government; and therefore without reflecting upon Persons, naming Names, or the
like; there will be no need of Names, the Dress will describe them, I lay down this new fashion'd
Proposition, or Postulatum, take it which way you please, that I will make it out by the Consequences
of what I am going to say.
1. That Stock-jobbing, as it is now practised, and as is generally understood by the Word Stock-
jobbing, is neither less or more than High-Treason in its very Nature, and in its Consequences.
2. That the Stock-jobbers, who are guilty of the Practices I am going to detect, are eventually
Traytors to King George, and to his Government, Family and Interest, and to their Country, and
deserve to be used at least as Confederates with Traytors, when ever there are any alarms of Invasions,
Rebellions, [25] or any secret Practices against the Government, of what Kind soever.
…
[35] But it is needful, after having said thus much of the Crime, to say something of the Place,
and then a little of the Persons too; The Center of the Jobbing is in the Kingdom of Exchange-Alley,
and its Adjacencies; the Limits , are easily surrounded in about a Minute and a half (viz.) stepping out
of Jonathan's into the Alley, you turn your Face full South, moving on a few Paces, and then turning
Due East, you advance to Garraway's; from thence going out at the other Door, you go on still East
into Birchin-Lane, and then halting a little at the Sword-Blade Bank to do much Mischief in fewest
Words, you immediately face to the North, enter Cornhill, visit two or three petty Provinces there in
your way West: And thus having Box'd your Compass, and sail'd round the whole Stock-jobbing
Globe, you turn into Jonathan's again; and so, as most of the great Follies of Life oblige as to do, you
end just where you began.
d. Agreement with the South Sea Company to redeem the Public Debt (1720)
Debates in the House of Common on the South Sea Bill (March 23, 1720)26
“The Bill was warmly opposed by Walpole, who spoke in favour of the Bank. In vain he displayed
the fallacy of the South Sea Scheme, and the great difference between that and the Bank, by shewing,
that the company was not limited in the price they were to put on the Stock made over to them;
whereas the Bank entered a specific sum of 1,7001. stock, for every hundred pounds in the long
annuities, and the same proportion for the short annuities. In vain he urged, that it countenanced the
pernicious practice of stock jobbing, by diverting the genius of the nation from trade and industry;
that it held out a dangerous lure for decaying the unwary to their ruin by a false prospect of gain, and
to part with the gradual profits of their labour, for imaginary wealth. In vain he insisted, that if the
Proposal of the South Sea Company should be accepted, the rise of their stock ought to be limited.
In vain he dwelt on the miseries and confusion which then prevailed in France, from the adoption of
26 7 Cobb. Parl. Hist., pp. 644-5. URL: http://goo.gl/vdV9F.
34
similar measures. In vain he urged, that as the whole success of the scheme must chiefly depend on
the rise of the stock, the great principle of the project was an evil of the first magnitude; it was to
raise artificially the value of the stock, by exciting and keeping up a general infatuation, and by
promising dividends out of funds which would not be adequate to the purpose. In vain he predicted,
that if the establishment succeeded, the directors would become masters of the government, form an
absolute aristocracy in the kingdom, and control the resolutions of the legislature; or if it did not
succeed, the failure would cause a general discontent. He closed his speech by observing, that such
would be the delusive consequences, that the public would conceive it a dream His arguments and his
eloquence were of no avail. He was compared by his friends to Cassandra, predicting evils which
would only be believed when the event proved their reality, and only deprecated when they were felt;
and he whose speeches, in matters of finance, occupied the House with more’ than usual attention,
was now scarcely heard. The preference was given to the South Sea, and the bill was afterwards carried
by a majority of more than 3 so 1.”
Debates in the Lords on the South Sea Bill (April 4, 1720)27
“The Lords read that Bill the first time, and the question being put, That it be read a second time,
the same, after a small debate, was carried in the affirmative without dividing. The next day the Bill
was read a second time accordingly; and then it was moved, That it be committed to a Committee of
the whole House, which occasioned a great debate.
The Lord North and Grey spoke first against the Bill, and said, That in his judgment, it was unjust
in its nature, and might prove fatal in its consequences; since its seemed calculated for the enriching
of a few, and the impoverishment of a great many, and not only made way for, but countenanced and
authorised the fraudulent and pernicious practice of Stock-jobbing, which produced an irreparable
mischief, by diverting the genius of the people from trade and industry. His lordship was backed by
The Duke of Wharton, who endeavoured chiefly to evince, That the South-Sea project might prove
of infinite disadvantage to the nation; first, as it gave foreigners an opportunity to double and treble
the vast sums they had in our public funds, which could not but tempt them to withdraw their capital
stock, with their immense gains, to other countries, which might drain Great Britain of a considerable
part of its gold and silver. Secondly, that the artificial and prodigious rise of the South-Sea Stock was
a dangerous bait, which might decoy many unwary people to their ruin, and allure them by a false
prospect of gain, to part with what they had got by their labour and industry, to purchase imaginary
riches. And in the third place, That the addition of above thirty millions new capital, would give such
a vast power to the South-sea Company, as might endanger the liberties of the nation, and, in time,
subvert our excellent; constitution; since by their extensive interest they might influence most, if not
all the elections of the members, and consequently over-rule the Resolutions of the House of
Commons.
Earl Cowper spoke also against the Bill, and said, That like the Trojan horse, it was ushered in, and
received with great pomp and acclamations of joy; but was contrived for treachery and destruction.
27 Ibid.
35
His lordship urged in particular, That in all public bargains, it is a duty incumbent on them who are
intrusted with the administration, to cake care that the same be more advantageous to the state than
to private persons; but that a quite contrary method seemed to have been followed in the contract
made with the South Sea Company: for if the stocks were kept up to the advanced price to which they
had been raised up by the oblique arts of Stock-jobbing, either that company, or its principal members,
would gain above thirty millions sterling, of which they gave but one fourth part towards the discharge
of the national debts. That though this Scheme carried the face of public good, yet nothing could be
so, that was founded on injustice, as his lordship took this bill to be: that he apprehended, in particular,
that the main public intention of it, viz. the repurchase of annuities, would meet with insuperable
difficulties; and that, in such a case, none but a few persons, who are in the secret, and had early bought
stocks at a low rate., and afterwards sold them at a high price, would, in the end, be gainers by this
project.
The Duke of Buckingham, and some other Peers, spoke on the same side; but
The Earl of Sunderland answered most of their objections: and, among other things, said, That
they who encouraged and countenanced the scheme of the South-Sea Company, had nothing in their
view, but the easing the nation of part of that heavy load of debt it labours under; That on the other
hand, the managers for that Company had, undoubtedly, a prospect of private gain, either to
themselves, or to their corporation; but that, when that scheme was accepted, neither the one or the
other could foresee that the stocks would have risen to the price they were now advanced: That if they
had continued as they were at that time, the public would have had the far greater share of the
advantage accruing from that scheme; and if the stocks were kept up to the price they had been raised
to, which was not unlikely, it was but reasonable that the South Sea Company should enjoy the profit
procured to it by the wise management and industry of its directors, which would enable it both to
make large dividends among its members, and thereby to compass the ends intended by this scheme.
After this the question for committing the Bill being put, it was carried in the affirmative, by a majority
of 83 voices against 17.”
__________________________________
Excerpts from the Act to enable the South Sea Company to redeem the public debt with
its own stock (April 7, 1720)28
“An Act for enabling the South-Sea Company to increase their present capital stock and fund, by redeeming such
publick debts and incumbrances as are therein mentioned; and for raising money to be applied for lessening several of
the publick debts and incumbrances; and for calling in the present exchequer bills remaining uncancelled; and for making
forth new bills in lieu thereof, to be circulated and exchanged upon demand at or near the exchequer.
28 6 Geo. I, c. 4. URL: http://goo.gl/QmHkj. Paragraphs added to text.
36
…
[139] And whereas the governor and company of merchants of Great Britain trading to the South-Seas and other
parts of America, and for encouraging the fishery, are willing, at such time or times as they shall find convenient, before
the 1st day of March 1721, to take in, either by purchase or subscriptions, all or any the above-mentioned annuities,
payable during the respective remainders of the above-mentioned terms of 96 years, 89 years and 99 years, (in this act
before computed to amount in the whole to £. 666,821. 8s. 3d. per annum, or thereabouts) from the respective proprietors
thereof (and without any compulsion on any of the said proprietors) at such price and prices [140] as shall be agreed
between the said company and the respective proprietors of those annuities;
[A] nd where any of the annuities so payable during the remainder of any of the said long terms of 96 years, 89
years and 99 years, do or shall belong to several persons or corporations having particular estates or interest therein (in
possession, reversion or by way of future interest) who will voluntarily agree together to depart with such their particular
estates or interests, that so the said governor and company may lawfully take in such annuity or annuities during the
whole remainder of the said respective terms of 96 years, 89 years and 99 years, the said governor and company, in all
such cases, are willing, at such time or times as they shall find convenient, before the said 1st day of March 1721, to
take in, either by purchase or subscriptions, such particular estates or interests, whereby the said annuities for the whole
remainder of the said long terms respectively may effectually be taken in, according to the true meaning of this act, at
such price or prices as shall be agreed between the said company and those proprietors:
[P]rovided the said governor and company, for every annuity (part of the said annuities computed to amount in the
whole to £. 666,821. 8s. 3d. per annum, or thereabouts) so to be taken in by them, may, in lieu thereof, have an
addition made to their capital stock after the rate of twenty years purchase, and such respective additions (in respect
thereof) to their present annuity or yearly fund, secured to be paid for such time, and out of such duties and revenues as
are herein after prescribed and appointed, until the redemption thereof according to the tenor and true meaning of this
present act.
And the said governor and company are willing, at such time or times as they shall see convenient, before the said
st
1 day of March 1721, to take in, either by purchase or subscriptions, all or any of the abovementioned lottery-annuities
in this act computed to amount to £. 46,260. 6s. 1d. per annum, or thereabouts, for the term of twenty three years,
reckoned from Michaelmas 1719, and the pay-tickets for the same, from the respective proprietors thereof, at such price
or prices as shall be agreed between the said company and the respective proprietors of those annuities.
And where any of the lottery-annuities so payable during the said term of twenty three years, or the pay-tickets for
the same, do or shall belong to several persons or corporations, who will voluntarily agree together to depart with all the
pay-tickets for any such annuity for the said term of twenty three years, the said governor and company, in all and every
such case and cases, are willing, at such time or times as they shall see convenient, before the said 1st day of March
1721, to take in the same, either by purchase or subscriptions, at such price or prices as shall be agreed between the said
company and those proprietors: provided the said governor and company, for every such lottery-annuity so to be taken in,
may have an addition made to their capital stock after the rate of fourteen years purchase, and such respective additions
to their present annuity or yearly [141] fund secured to be paid for such time, and out of such duties and revenue as are
herein after prescribed and appointed in that behalf, until the redemption thereof according to the tenor and true meaning
of this present act.
37
And the said governor and company are also willing, at such time or times as they shall see convenient, before the
said 1st day of March 1721, to take in, either by purchase or subscriptions, all or any the above-mentioned annuities
(before in this act computed to amount to £. 81,000 per annum, or thereabouts) for the said term of twenty two years
and three quarters of a year, reckoned from Christmas 1719, or for the remainder of that term which shall be to come
and unexpired at the quarter-day next preceding the taking in the same from the respective proprietors thereof, without
any compulsion on any such proprietors, at such price or prices as shall be agreed between the said company and the
respective proprietors of those annuities.
And where any of the annuities so payable during the said term of twenty two years and three quarters of a year,
or such remainder thereof, do or shall belong to several persons or corporations having particular estates or interests
therein who, will voluntarily agree together to depart with such their particular estates or interests, so that such annuity
or annuities may effectually be taken in for the said whole time or term of twenty two years and three quarters of a year,
or such remainder thereof, the said governor and company in all and every such case and cases are willing, at such time
or times as they shall see convenient, before the said 1st day of March 1721, to take in the same, either by purchase or
voluntary subscriptions, at such price or prices as shall be agreed between the said company and those proprietors:
[P]rovided the said governor and company, for every such annuity so to be taken in, may have an addition made to
their capital stock after the like rate of fourteen years purchase, and such respective additions, in respect thereof to their
present annuity or yearly fund, secured to be paid for such time and out of such duties and revenues as are herein after
prescribed and appointed in that behalf, until the redemption thereof according to the tenor and true meaning of this
present act.
And the said governor and company are likewise willing, at such time or times as they shall see convenient, before
the 1st day of March 1721 (but subject to such notices for redemption as are herein after mentioned) to take in all and
every the said redeemable debts and annuities (the principal sums whereof are in this act before computed to amount to
£. 16,546,482 7s 1d, or thereabouts) either by purchases, taking subscriptions, or paying them off by the said governor
and company:
[P]rovided the said governor and company may have an addition of £. 100 to their present capital stock for every
£. 100 of the principal monies so taken in by them, and proportionally for greater or lesser sums, and so as such
additions be made to the present annuity or yearly fund of the said governor and company as shall be equal to the rates
now payable for the principal sums of those redeemable debts and annuities [142] which shall be so taken in, until the
redemption thereof according to this act.
And the said governor and company, for the liberty of increasing their capital stock and their annuity or yearly fund
by such means as aforesaid, have desired and consented, That their present annuities or yearly funds for their present
capital stock, and the annuities or yearly funds for their capital stocks, (to be increased pursuant to this act) be continued
at the respective rates herein after mentioned, till the feast of the nativity of Saint John Baptist which shall be in the
year of our Lord 1727 inclusively; and that from and after the same feast-day their then annuity or yearly fund for their
whole capital and increased capital stocks may be actually reduced to four pounds per centum per annum, and be likewise
from thenceforth redeemable by parliament;
[A]nd in consideration thereof, and of such other benefits and advantages as are hereafter in and by this act provided
and expressed, the said governor and company are willing to make such payments into the receipt of exchequer as are
38
herein after specified, for the use of the publick, to be applied for paying off the publick debts and incumbrances incurred
before Christmas 1716.
Now we your Majesty's most dutiful and loyal subjects, the commons of Great Britain in
parliament assembled, being desirous to have the said publick debts and incumbrances lessened as fast
as conveniently may be, with regard to justice and the publick faith, and that as well such publick
duties, revenues and incomes as are already settled for answering the present annuity or yearly fund
of the said governor and company, as also such other publick duties, revenues and incomes as are
specified in this act, may be settled in such manner, that the present annuities or yearly funds for the
present capital of the said governor and company, and the annuities or yearly funds which shall
become due and payable for their capital to be increased, pursuant to this act, may be continued at the
respective rates herein after mentioned, till the said feast of the nativity of Saint John Baptist which
shall be in the year of our Lord 1727 inclusive; and that from and after the same feast day their then
annuity or yearly fund for their whole capital and increased capital may be actually reduced to four
pounds per centum per annum, and likewise be thenceforth redeemable by parliament according to
the purport and true meaning of this act, have, for that end and purpose, given and granted, and do
by this present act give and grant to your Majesty, your heirs and successors, such rates, duties, revenues
and incomes as are herein after mentioned; and do humbly beseech your Majesty, That it may be
enacted;
[A]nd be it enacted by the King's most excellent majesty, by and with the advice and consent of
the lords spiritual and temporal and commons, in this present parliament assembled, and by the
authority of the same, That such or the like particular rates and duties of excise upon beer, ale, cyder
and other liquors, as by the said act of the eight year of the reign of Queen Anne were granted for the
term of thirty two years, which commenced from the feast of the annunciation of the blessed Virgin
Mary one thousand seven hundred and ten; and such new rates or duties upon pepper, raisins,
nutmegs, cinnamon, cloves, mace and snuff, as by the same act were granted for the term of thirty
two years, which commenced from the 6th day of February 1709, shall severally, by virtue of this act,
have continuance after the respective determinations of the several terms of thirty two years last
mentioned, and be paid and payable to his Majesty, his heirs and successors for ever …
IV. And be it enacted by the authority aforesaid, That all the monies to arise by the said rates,
duties, revenues and impositions by this act made perpetual, as aforesaid, as well before, as when and
as the same respectively (after the expiration of the respective terms formerly granted, as aforesaid)
shall take effect by virtue of this present act (the necessary charges of raising the same excepted) shall
from time to time be brought into the receipt of exchequer, to the intent and purpose that the said
governor and company of merchants of Great Britain trading to the South-Seas and other parts of
America, and for encouraging the fishery, and their successors, may out of the same be secured the
payment of such respective annuities or sums as shall or may become due or payable to them in
pursuance of this act, until the redemption thereof: nevertheless the said rates, duties, revenues and
impositions hereby made perpetual, and such annuities or sums as shall or may become due or payable
out of the same to the said governor and company, and their successors, shall be subject to redemption
39
by parliament, according to the proviso or condition of redemption hereafter in this act contained in
that behalf; any thing in this act contained to the contrary notwithstanding.
…
XLIV. And whereas the corporation of the said governor and company of merchants of Great Britain are willing,
in consideration of the liberty by this act given them of increasing their capital stock and their annuity or yearly fund in
respect of the same as aforesaid, by taking in or paying off all and every or any of the said redeemable debts and
incumbrances in this act before computed to amount to £.16,546,482 7s 1d, or thereabouts, to pay the full and intire
sum of £.4,156,306 4s 11d of good and lawful money of Great Britain, into the receipt of the exchequer, to be
applied towards discharging the principal and interest of such national debts and incumbrances as were incurred before
the 25th day of December 1716, declared to be national debts, and provided for by acts of parliament:
[B]e it further enacted by the authority aforesaid, That the same corporation shall pay into the
receipt of the exchequer, for the purposes last mentioned, the said sum of £.4,156,306 4s 11d, without
any deduction defalcation or abatement whatsoever for any cause, matter or thing whatsoever; the
same to be paid by such proportions and at such times as are herein after appointed for payment
thereof; that is to say, one full and equal fourth part thereof on or before the feast of the annunciation
of the blessed Virgin Mary which shall be in the year of our Lord 1721; one other full and equal
fourth part thereof on or before the feast of the nativity of Saint John the Baptist which shall be in
the said year of our Lord 1721; one other full and equal fourth part thereof on or before the feast of
Saint Michael the Archangel which shall be in the said year of our Lord 1721; and the remaining fourth
part of the said sum of £.4,156,306 4s 11d, and in full payment thereof, on or before the feast of the
birth of our Lord Christ which shall be in the said year of our Lord 1721.
XLV. And whereas the said corporation of the governor and company of merchants of Great Britain, in
consideration of the increase which, by virtue of this act, will be made as aforesaid of their capital stock and annuity
or yearly fund before-mentioned, by taking in by purchase or subscription at prices to be mutually agreed on with the
proprietors as aforesaid, the said annuities for the aforesaid remainders of the said several terms of 96 years, 89 years
and 99 years and 32 years, or such estates and interests therein as will compleatly make up the said several remainders
of the said several terms, which shall be to come and unexpired at the respective times of taking in the same annuities
respectively, are willing to pay such further sum and sums of good and lawful money of Great Britain, as the annuities
so purchased, or so many of them as shall be actually purchased and taken in within the time aforesaid, stall amount
unto at the rate of four years and an half ’s purchase; that is to fay, at the rate of 450 pounds for every such annuity,
amounting to 100 pounds per annum, and proportionally for any such greater or lesser annuities, which stall be taken
in for the said remainders of the said terms of years respectively; the money so arising to be also applied towards the
discharging the principal and interest of the said national debts and incumbrances which were incurred before the said
25th day of December 1716:
[B]e it further enacted by the authority aforesaid, That the same corporation shall pay into the said
receipt of the exchequer, for the purpose aforesaid, and without any deduction, defalcation or
abatement whatsoever, such further sums of good and lawful money of Great Britain, as the said rate
of four years and an half's purchase shall amount unto, upon all such of the annuities last mentioned
as shall be actually taken in by purchase or subscriptions pursuant to this act, on or before the said 1st
40
day of March 1721; the said sums, after the said rate of four years and an half ’s purchase, to be paid
into the said exchequer by four equal quarterly payments, as is herein after mentioned; that is to fay,
one full and equal fourth part thereof, of on or before the feast of the annunciation of the blessed
Virgin Mary which shall be in the year of our Lord 1722; one other full and equal fourth part thereof
on or before the feast of the nativity of St. John Baptist which shall be in the said year of our Lord
one thousand seven hundred and twenty two; one other full and equal fourth part thereof on or before
the feast of St. Michael the archangel which shall be in the said year of our Lord 1722; and the
remaining full and equal fourth part thereof on or before the feast of the birth of our Lord Christ
which shall be in the said year of our Lord 1722, in full payment and satisfaction of the said sums, to
be computed after the said rate of four years and an half's purchase.
XLVI. And whereas the said corporation of the said governor and company of merchants of Great Britain, to
manifest their sincere intention of using their best endeavours to take in, by purchase or subscription, and at prices to be
mutually agreed upon, as aforesaid, the said annuities now payable for and during the said residuary terms of 96 years,
89 years and 99 years, or such estates or interests therein as shall compleatly make up the remainders of the said terms
of 96 years, 89 years and 99 years, which shall be to come and unexpired at the respective times of taking in the same,
are willing to pay such further sum and sums of good and lawful money of Great Britain, as the rate of one year's
purchase to be computed upon such of the annuities last-mentioned, as shall not be actually purchased and be taken in
within the time limited, shall amount unto; that is to fay, 100 pounds for every such annuity, amounting to 100 pounds
per annum, and proportionally for every such greater or lesser annuity, which stall not be so taken in, by purchase or
subscription, within the time before limited; the monies so arising to be also applied towards the discharging the principal
and interest of the said national debts and incumbrances which were incurred before the said 25th day of December
1716:
[B]e it further enacted by the authority aforesaid, That the same corporation shall pay into the said
receipt of the exchequer for the purpose aforesaid, and without any deduction, defalcation or
abatement whatsoever, such further sums of good and lawful money of Great Britain, as the said rate
of one year's purchase shall amount unto, upon all such of the annuities last mentioned, as shall not
be actually taken in by purchase or subscriptions pursuant to this act, on or before the said 1st day of
March 1721; the said sums after the said rate of one year's purchase to be paid into the said exchequer,
at such times and in such proportions as are herein after mentioned; that is to say, one full and equal
fourth part thereof, on or before the feast or the annunciation of the blessed Virgin Mary which shall
be in the year of our Lord 1722; one other full and equal fourth part thereof on or before the feast
of the nativity of St. John the Baptist which shall be in the said year of our Lord 1722; one other full
and equal fourth part thereof on or before the feast of St. Michael the Archangel which shall be in the
said year of our Lord 1722; and the remaining full and equal fourth part thereof on or before the feast
of the birth of our Lord Christ which shall be in the said year of our Lord 1722, in full payment and
satisfaction of the said sums to be computed after the said rate of one year's purchase.
…
XLVIII. And for the better enabling the said governor and company of merchants of Great
Britain, and their successors, to raise money to be paid, for or in part of the said sum of £.4,156,306
41
4s 11d, or for or in part of the said sums to be paid after the said rates of four years and an half's
purchase and one year's purchase-respectively, or for purchasing or paying off all or any the annuities
and debts to be taken in or paid off in pursuance of this act, or for exchanging for ready money the
new exchequer-bills to be made forth, as hereafter in this act is mentioned, or for defraying the interest
thereof, or for carrying on their trade and other necessary occasions: be it further enacted by the
authority aforesaid, That it shall and may be lawful to and for the said governor and company of
merchants of Great Britain, and their successors, from time to time, as they shall see cause, to call in
or direct to be paid from and by their respective members for the time being, proportionably according
to their respective interests in the capital stock or stocks which do or shall belong to the said governor
and company of merchants of Great Britain, and which shall be increased, as aforesaid, or by opening
books of subscriptions, or by granting annuities redeemable by the same governor and company, and
their successors, or by any other method, ways and means as they shall think proper, to raise any sum
or sums of money, as in a general court of the same governor and company shall from time to time
be judged necessary, and ordered to be called in or raised; and that all executors, administrators,
guardians, trustees and mortgagees, shall be indemnified in paying, and are hereby impowered to pay
in their respective proportions of the money so called in or raised; and in case any such member or
members shall refuse or neglect to pay his, hers or their share of the said money so called for at the
time or times appointed for that purpose, by notice inserted in the London Gazette, and fixed upon the
Royal Exchange in London, it shall and may be lawful to and for the said governor and company of
merchants of Great Britain, and their successors, not only to stop the share, dividend, annuity and
profits, which shall from time to time become payable to such member or members so neglecting or
refusing, of the funds, stocks, annuities or profits of the said governor and company of merchants
of Great Britain, and to apply the same, from time to time, for or towards payment a the share of the
money so called for, and which ought to have been paid by such member or members so neglecting
or refusing, until the same shall be satisfied, but also to stop the transfers or assignments of the share
and shares of every such defaulter and defaulters, and to charge such defaulter and defaulters with
interest, after the rate of five pounds per centum per annum, for the money so by him, her or them
omitted to be paid, from the time the same was appointed to be paid until the payment thereof; and
that the share and stock, shares and stocks of such defaulter and defaulters shall be liable to make
good and answer the said monies so appointed to be paid, and the interest thereof, as aforesaid; and
in case the principal and interest, as aforesaid, shall be unpaid by the space of three months, then the
said governor and company of merchants of Great Britain, or their successors, or their court of
directors for the time being, shall have power to authorize such person or persons, as they shall think
fit, to sell, assign and transfer so much of the said stock or stocks of such defaulter or defaulters as
will satisfy and pay the same, rendring the overplus (if any be) to the proprietor: and the said governor
and company of merchants of Great Britain, or their successors, in a general court, from time to time,
when they shall judge their affairs will admit thereof, mall or may cause any sum or sums of money
which shall be so called in any part thereof, to be divided and distributed to and amongst the then
members of that corporation, according and in proportion to their respective interests in the capital
stock or stocks of the same; any former law or statute, restriction, or other matter or thing whatsoever
to the contrary notwithstanding.
42
XLIX. And for better enabling the said governor and company of merchants of Great Britain,
and their successors, to raise money to be advanced for or in part of the said sum of £.4,156,306 4s
11d … or for carrying on their trade, and other necessary occasions: it is also hereby enacted by the
authority aforesaid, That it shall and may be lawful to and for the said governor and company of
merchants of Great Britain, and their successors, from time to time (in case they shall think fit) to
borrow or take up money upon any contracts, bills, bonds or obligations under their common seal, or
upon credit of their capital stock or stocks, to be increased, as aforesaid, or any part their capita!
thereof, at such rate or rates of interest, for any time not less than six months from the borrowing
thereof, as they shall think fit, and to give security under their common seal, or by assigning or
transferring their stock or stocks, or any part thereof, or otherwise, as shall be to the satisfaction of
the lenders respectively.
…
LII. And it is hereby enacted by the authority aforesaid, That so much money as shall be called for
by the said governor and company of merchants of Great Britain from their respective members, for
or towards any the purposes before-mentioned; shall (if the said governor and company think proper)
be and be deemed an additional stock of the said governor and company, and shall be written into the
books of the said company, and each member thereof shall have credit in the said books for his or
her proportion or share thereof; and that the members of the said company, who shall have a share
or interest in the stock or additional stock of the same company, shall or may assign and transfer the
same in the books of the same company, in such or the like method, manner and form as are
prescribed by the act or acts of parliament and charter now in force, for assignments or transfers of
original stock to be made in the books of the same company; or may dispose or devise the same, or
any part thereof, by will, in such manner and form as any share in the original stock of the same
company is deviseable;
…
LIV. And it is hereby enacted by the authority aforesaid, That the respective members of the same
corporation, who shall have a share or interest in the present capital stock or the increased stock
thereof, shall and may assign and transfer such his, her or their share or interest, or any part thereof
(except as is otherwise provided in this act) in the books of the said corporation, in such or the like
method, manner and form as are prescribed in and by the act or acts of parliament and charter now
in force for assignments or transfers of original stock to be made in the books of the said corporation;
or shall or may dispose or devise the same, or any part thereof, by will, in such manner and form as
any share in the original stock of the said corporation is deviseable.
LV. And be it further enacted by the authority aforesaid … that no person, in respect of his being
governor or sub-governor, deputy-governor, director, manager or a member of the same corporation,
or for having any stock or share therein, or by reason of his being named or acting as a manager,
director or otherwise, for taking the said subscriptions, or for taking in orders and tickets, or for any
other matter or thing to be by him done or performed by or in pursuance of this act only, shall be
now or at any time hereafter disabled from being or continuing, or from being elected or serving as a
43
member of parliament, nor be liable or subject to any penalty, forfeiture or disability prescribed by
any other act or acts of parliament, for not qualifying himself to execute his trust upon or in pursuance
of this act, as persons who shall take or execute any office, or place of profit or trust, are subject and
liable unto by any of the laws now in force;”
e. Appointment and Report of a Parliamentary Committee (February - April 1720)

The Committee was appointed on February 22, 172029:
“A Complaint being made to the House of several publick and private Subscriptions, in and about
the Cities of London and Westminster, for several unjustifiable Projects and Undertakings, whereby great
Mischiefs may accrue to the Publick;
Ordered, That a Committee be appointed to inquire into, and examine, the several Subscriptions
for Fisheries, Insurances, Annuities for Lives, and all other Projects carried on by Subscription in and
about the Cities of London and Westminster; and to inquire into all Undertakings for purchasing Joint
Stocks, or obsolete Charters: And that they do report the same, with their Opinion thereupon, to the
House:
And it is referred to Mr. Hungerford…And have Power to send for Persons, Papers, and Records.”
________________________________
The Committee presents its report to the House on April 27, 1720 30:
“Mr. Hungerford reported from the Committee appointed to inquire into, and examine, the several
subscriptions for Fisheries, Insurances, Annuities for Lives, and all other Projects carried on by
Subscriptions in and about the Cities of London and Westminster; and to inquire into all Undertakings
for purchasing Joint Stocks, or obsolete Charters; the Matter, as it appeared to them, with the
Resolutions of the Committee thereupon; which they had directed him to report to the House; and
he read the same in his Place; and afterwards delivered the Report in at the Clerk's Table: Where the
Report and Resolutions were read; and are as follow: viz.
That the Committee, in pursuance of the Order of the House, of the 22d of February, have taken
into Consideration the several Matters to them referred; and inquired into the several Undertakings
following, carried on by Subscription; viz.
29 Journals of the House of Commons, v. 19, 1718-1721 (1803) (February 22, 1719), 274. URL: http://goo.gl/bMt3h
30 Journals of the House of Commons, v. 19, 1718-1721 (1803) (April 27, 1720), 341. URL: http://goo.gl/hs1mc
44
A Subscription £. 1,500,00031 for carrying on a Fishing Trade, by the Name and Title of The
Company of the Grand Fishery, of Great Britain:
A Subscription of £. 1,200,000 for carrying on a Fishing Trade, by the Name of The Company
of the Royal Fishery of England:
A Subscription of £. 3,000,000 taken at Garraway’s Coffee-house32, for carrying on a Fishery, by
the Name of The British Fishery:
A Subscription of £. 1,500,000 taken at Robin’s Coffeehouse, for establishing another British
Fishery:
A Subscription of £. 1,500,000 as a Joint Stock, for the immediate and effectual carrying on the
Greenland Whale-fishery;
A Subscription of £. 1,152,000 for insuring Ships and Merchandize, kept at the Royal Exchange33:
A Subscription of £. 2,000,000 for insuring Ships and Merchandize, called Ram’s Insurance34:
A Subscription of £. 1,000,000 for insuring Ships and Merchandize, called Shales his Insurance:
A Subscription of £. 2,000,000 for insuring Goods and Houses from Fire, called Sadler’s-hall
Insurance:
A Subscription off £. 1,000,000 fora General Insurance from Fire, called Overall’s Insurance:
A Subscription of £. 2,000,000 taken at the Three Tun Tavern in Swithen’s Alley, near the Royal
Exchange, for a General Insurance on Houses and Merchandize ;
A Subscription of £. 1,500,000 for purchasing Government Securities; and lending Money upon
the same:
A Subscription opened at Garraway’s Coffee-house in Exchange-alley, for raising £. 1,200,000 to be
employed, by way of Loan, on Stocks, Annuities, Tallies, &c.:
A Subscription of £. 1,200,000 for granting Annuities, called Mr. Thomas Burgesse’s Subscription:
A Subscription of £. 1,000,000 taken by the Governor and Company for raising Thames Water, in
York Buildings:
31 For an order of reference, the Bank of England had been created in 1694 with nominal capital of £. 1,200,000. See:
5&6 W&M c. 20, URL: http://goo.gl/ka8WV. The South Sea Company’s capital in the spring of 1719 was £11,746,844.
See: French, D. E., Early Speculative Bubbles and Increases in the Supply of Money, Ludwig von Mises Institute, 2009, p. 91.
32 In Exchange-Alley, where brokers (and stock-jobbers) plied their trade.
33 Subscription directed by Lord Onslow, in secret agreement with Lord Chetwynd, of Ram’s Insurance. These are the
two companies which will obtain charters (under the respective names of Royal Exchange Assurance Corporation and
London Assurance Corporation) as well as exclusive rights over maritime insurance after petitioning the King (See
below, n.46). See Martin, Frederick, The History of Lloyd's and of Marine Insurance in Great Britain, Macmillan, London,
1876, pp. 93-95. URL: http://books.google.ca/books?id=8B8pAAAAYAAJ.
34 See note 44 above.
45
Subscription of £. 2,000,000 taken in at Cooper’s Coffee-house in Cornhill, for preventing and

suppressing Thieves and Robbers both by Sea and Land; and insuring all Persons Goods from the
same, as also from Fire:
A Subscription of £. 1,200,000 for building or buying Ships to lett or freight:
A Subscription of £. 1,000,000 for a Joint Stock, to be employed in carrying on the Navigation
and Traffick of Coals from Newcastle to London:
A Subscription of £. 1,200,000 for raising a Joint Stock, to be employed in Undertaking and
Furnishing of Funerals:
[342] A Subscription of £. 1,200,000 Sterling, to be a Fund for establishing and carrying on a
trade to his Majesty’s German Dominions:
A Subscription taken to carry on the Undertaking or raising the Growth of raw Silk:
A Subscription of £. 10,000,000 taken at Sadler’s-hall, for raising a Joint Stock, in order to the
establishing the Fishery of Great Britain and Ireland.
That the Committee have examined the several Agents or Managers of the aforesaid
Subscriptions; and also have examined into the several Papers and Books relating to the same, as well
as the Papers referred to them by the House; and thereby do find the several Matters of Fact following;
viz.
That a Petition, signed by the Lords Stamford, Clarendon, and Yarmouth, with others, praying a
Charter of Incorporation for carrying on a Fishing Trade, by the Name of The Grand Fishery of
Great Britain, was presented to his Majesty; and referred, by Order of Council of the 2d of February
1717, to the present Attorney and late Solicitor General; who have made a Report thereupon to his
Majesty, dated the 12th November 1719; which sets forth, That they have examined the Allegations of
the said Petition; and likewise, Application being made to them by several Persons claiming to be
Members of a Corporation supposed to be erected by his late Majesty King Charles the Second, by his
Letters Patent under the Great Seal of England, bearing Date the 16th Day of September 1677, by
the Name of The Company of the Royal Fishery of England; who desired to be heard, on behalf of
the said Corporation, against the granting any such Charter as is prayed by the said Petition; have
several times heard Counsel thereupon; and, in the said Report, do certify to his Majesty, That the
Persons claiming to be Members of the said Corporation have not been able to make it appear to
them, that the Corporation so erected, as aforesaid, now is, or, for many Years last past, has had any
Existence; but, not having been successful in the said Undertaking, soon after the passing the said
Letters Patents, for aught appears to them, no Care has been taken to preserve the Succession of the
Members of the said Corporation, in the manner required by the said Letters Patents; so that the
Corporation is long since determined; nor have they been able to make it appear, that, for many Years
last past, any attempts or Endeavours have been made or used for the carrying on of the Fishing
Trade, by or under the Authorities or Rights granted by the said Letters Patents:
46
On which Considerations, it being most undoubted, that nothing can more conduce to the increase
of the Strength and Riches of his Majesty's Kingdoms, and the breeding able Seamen to serve his
Majesty as well in time of War as Peace, than the preserving the Fishery of this Realm; they are of
Opinion, That his Majesty has not only full Power legally to grant the Letters Patents prayed; but that
such Incorporation, being granted under proper Regulations and Restrictions, will be very beneficial
to the Nation.
The Committee do likewise find, That, on or about the 14th of October 1719, a Subscription of
£. 1,000,000. was opened for carrying on the said Fishing Trade, by the Name of The Grand Fishery;
and that £. 800,000. Part of the said £. 1,000,000. was designed for England, and £. 200,000. for
Scotland: That £. 175,000. of that Sum was subscribed here by the Gentlemen of that Country, who
insisted on it as their Right; but, when the Subscription Book was sent to Edinburgh, for the
Gentlemen residing there to subscribe, they complained, that the remaining Part of £. 200,000. was
not sufficient for them ; and thereupon, applying to the Managers, they enlarged the Subscription for
Scotland to £. 500,000. which makes the whole Subscription, £. 1,500,000.:
That, in the Preamble of the Subscription Book, the Subscribers agree to pay 2 s. 6d. per Cent, into
the Hands of Messieurs. Cox and Cleve, Goldsmiths in Cornhill, London, in Part of the said
Subscription, to be applied towards defraying the Charge of taking out a Patent, and other Expences,
as shall appear to be absolutely necessary for carrying on the said Undertaking; and that no Part
thereof be issued but by an Order under the Hands of Three of the Committee of Managers for the
said Undertaking.
It appeared to the Committee, by an Account delivered to them by the said Messieurs Cox and
Cleve, That there has been paid into their Hands, upon the said Subscription, £. 1,875.; whereof they
have disbursed £.527. to Mr. Phillips, Secretary to the said Subscribers, by Order of Three of the
Committee of Managers, as aforesaid; and that, by an Account delivered to the Committee by Mr.
Phillips, £. 509. appears to be expended, and £. 18. now remaining in his Hands:
That there has been several Plans formed for carrying on the said Undertaking, but none of them
intirely completed.
That the Committee do find, That King Charles the Second, by Letters Patents, bearing Date the
25th Day of September, in the 29th Year of his Reign, did constitute several Persons, therein named,
and such others as should thereafter be, from time to time, admitted into their Company, to be One
Body Politick and Corporate, by the Name of The Company of the Royal fishery of England: That
they should have perpetual Succession; and that they were to meet annually, to choose a Governor,
Sub Governor, Deputy Governor, and Committees: That they had Power to increase, contract, or
divide, their Stock; with a further Power for each Member to transfer and assign their Stock to any
Person or Persons whatsoever:
That it was represented to the Committee, by Mr. Mackburney, who has been Secretary to the said
Company 28 Years, That, soon after the granting the said Charter, a considerable Stock was raised,
laid out, and expended, in carrying on the said Fisheries; and several other great Sums, in the Time of
47
King Charles, raised and employed in the same manner; but, by Misfortunes and Accidents, the said
several Stocks were lost:
That afterwards, in 1694, there was laid open a Subscription Book for £. 300,000.; and that, 10 per
Cent, being called in, there was raised thereupon £. 10,000. which was laid out in building and buying
Doggers, and other Fishing Vessels, employed in Catching of Herrings and Cod; and that also, by the
Inconveniences occasioned by the War, was lost: And that then they borrowed Money upon Bottomre;
Part of which was repaid, by selling the Doggers, and other the Effects, of the Company: That, at that
time, the Government giving £. 14. per Cent, for Money, they could not raise any further Sums sufficient
to carry on that Undertaking; and, by that means, the Trade was in a declining Condition.
Upon further examining Mr. Mackburney, it appeared to the Committee, That, since that time,
there hath been many Meetings of the Company; and that, the Minutes taken at them being upon
loose Papers, most of them are mislaid and lost; but he did not pretend, or insist, that the Company
had continued to act as a Corporation for several Years; or that they had, for the Seven Years last past,
met every Year; but that, Four or Five Years before this new Subscription, the Company have had
several Meetings, and consulted how to set the Fishery on Foot; and, in order for that, a Subscription
was opened the 10th Day of February 1719 for £. 1,200,000. for a Joint Stock, to carry on the said
Fishery; and that the Conditions thereof are as follow; viz.
“That the present Proprietors shall have the Liberty to subscribe, by such Persons as they have
appointed in that behalf, under their Common Seal, the Sum of £. 100,000.: That no other Person
shall be admitted to subscribe above the Sum of £.5,000. or under the Sum of £. 500.: That every
Subscriber, except those who are to subscribe to the £. 100,000. shall pay into the Hands of
Messieurs Mead, and Company, One Pound per Cent.; 10s whereof for the sole Use of the present
Proprietors; and the other 10s. to be paid within Ten Days after publick Notice given; 5s. whereof
to [343] be applied for the joint Benefit of the new Subscribers to the £. 1,200,000. in order to
carry on this undertaking; and the other 5s. for the Use and Benefit of the said present Proprietors;
to be also paid into the Hands of Messieurs Mead, and Company: That, in Ten Days after the said
£. 1,200,000. or £. 500,000. at least, shall be subscribed, as aforesaid, public Notice shall be likewise
given for a general Meeting of the Subscribers; at which time every Subscriber, not already
admitted, shall and may be admitted a Member of the said Company; and, from that time, all and
every such Subscriber and Subscribers shall have a Vote or Votes for the choosing of a Governor,
Sub Governor, Deputy Governor, and Committee; and for making Rulers, Orders, and By-laws;
and in transacting all other Matters and Things which are to be transacted and done in and by a
General Court, according to the Tenors, Powers, and Directions, of the said Charter, and in
Proportion to their respective Interest in the said Stock; that is to say, for £. 1,000. in the said
Stock, One Vote; for £.2,000. Two Votes; for £.3,000. Three Votes; for £.4,000. Four Votes; and
for £.5,000. Five Votes: And. the Qualification of the Governor, Sub Governor, and Deputy
Governor, to be as follows; viz. The Governor to have £. 5,000.; the Sub Governor, £.4,000.; and
the Deputy Governor, £.4,000.; in the said Stock; and each of the Committees to have £. 3,000.
in the said Stock:”
48
That the said Company, called The Royal Fishery, have lodged a Petition to his Majesty, in the
Council Office; whereby they pray further Powers and Privileges; but nothing is yet done thereupon.
The Committee find, That the Subscription of £.1,500,000. taken in at Garraway’s Coffee-house
the 15th January 1719, for establishing the British Fishery, is on the following Terms, and transacted
in the following Manner; viz.
“That no Person be admitted to subscribe above £.5,000. in his own Name: That 2s. 6d. per
Cent. be paid into the Hands of Messieurs Mertins and Mitford, Goldsmiths in London, to be applied
towards procuring a Charter, and defraying other Charges:
That, in Fourteen Days after the Subscription is completed, a General Meeting of the
Subscribers be held, of which publick Notice shall be given, for choosing Seven Managers for
carrying on this Affair, in order for procuring a Charter; and that Three of the said Seven be a
Quorum:
That no Money be issued out of the said Goldsmiths Hands, but by Order under the Hands
of the said Managers:
That any Subscriber, or Bearer of a Receipt of the said Subscription, failing to pay
according to the Call of the Governor and Directors, when chose, the said 2 s. 6d. and both
Subscription and Receipt, to be void.”
It appeared to the Committee, by the Minute Book of the said Subscribers to £. 1,500,000. That
there was a Meeting of the said Subscribers, at Mercers-hall, the 4th of February 1719; and it was then,
and at other Meetings, agreed, That the Managers, or a Quorum have a Power to dispose of the Money
advanced for the Interest of the Proprietors; and, at the said Meeting, agreed to make an additional
Stock of £. 1,500,000.; and to invite into it the Fishing Towns of England and Scotland, as conducive
to the Advantage of the said Undertaking, and the Interest of the said Towns: And was further agreed,
That such of the said Towns in South Britain, by their Representatives in Parliament, in their behalf,
may subscribe a Sum, not exceeding £.10,000.; and that a Sum, not exceeding £. 500,000. in the Whole,
maybe subscribed for North Britain, paying 2s. 6d. per Cent. according to the Condition of the First
Subscription:
That, at another Meeting, it was agreed, That a Petition should be drawn up, in order to be
presented to his Majesty; praying his Majesty's Letters Patent to incorporate them to carry on the
Fishing Trade, by the Name of The British Fishery: Which was accordingly drawn up; as also a Scheme,
shewing the Advantages to the Nation, the Profits of the Company, and the Methods proposed in
carrying on the same.
It likewise appeared to the Committee, by the said Minute Book, That there has been paid into the
Hands of Messieurs Milford and Mertins, upon the Two Subscriptions, £.1,875. J whereof £. 50. has
been paid to Mr. Kinnier.
Resolved, That it is the Opinion of this Committee, That the said Undertaking, proposed to be
carried on by the Name of The British Fishery, wherein the Sea Ports and Royal Boroughs are
49
concerned, may be successfully carried on, and prevent great Sums going annually out of the Nation,
and secure a valuable Trade; and may, upon any Emergence, furnish Seamen to man the Royal Navy;
and therefore highly deserves Encouragement "
That the Committee find, That the Subscription of £. 1,500,000. taken in at Robins Coffee-house,
for carrying on a Fishing Trade, by the Name of The British Fishery, was opened the 14th of January
1719, on the following Conditions; viz.
“That the Subscribers thereunto are to pay 2s. 6d. per Cent, on their respective Subscriptions,
to be lodged in the Bank of England, subject to the Order and Direction of a Committee of
Managers, to be chosen by the Majority of the Subscribers, in a General Meeting to be held when
the said Subscription is completed.”
Col. Horsey, a Person concerned in the Management of the said Undertaking, being examined,
gave the Committee the following Account of the Proceedings in taking in the said Subscription; viz.
“That there was, some time since, a Subscription taken in at the Marine Coffee-house in Birchin-
lane, for erecting and carrying on a Fishery, under the Title of the Grand Fishery of Great Britain,
which being soon completed, several Gentlemen, who were desirous to be concerned in so useful
and beneficial an Undertaking, were prevented coming into the same.
Therefore it was thought proper to open a Book, for a Subscription of £. 1,500,000. for the
better carrying on so good a Design:
That, when the Subscription was near completed, an Offer was made to the Managers of the
said Grand Fishery, for an Union with them; it being judged, that the united Stock of both
Subscriptions would the better enable them to carry on the Fishing Trade, whenever his Majesty
should be pleased to grant a Charter for that Purpose.
That there has been several Meetings, in order to effect the said Union; but, this
Committee having under their Consideration the several Undertakings carried on by Subscription,
a Stop is put to any further Proceedings, till the Pleasure of the House shall be known:
That a Petition to his Majesty is signed by the Subscribers; praying his Majesty's Letters Patents,
to incorporate, and enable them to carry on the Fishing Trade; which was resolved not to be
presented to his Majesty, till the Proceedings towards a Union with the Grand Fishery were
determined:
That, in order to prevent the jobbing this Subscription, the Receipts for the Deposit-money
were not given out till Saturday the 20th of February last; and had not even then been delivered,
but upon Complaint of some of the Subscribers, who thought themselves injured by their being
withheld:
That, if the House does not think fit to allow Liberty for this Undertaking to go forward, the
said Deposit-money will be immediately repaid to the Subscribers.”
50
That the Committee do find, That a Subscription for £. 1,500,000. was taken for carrying on the
Greenland Whale Fishery, and recovering the Credit of the same, on the following Terms; viz.
[344] That every Subscriber do pay, at the Time of their subscribing, into the Hands of Messieurs
Jenkins and King, Bankers in Lombard-street the Sum of 5s. 6d. per Cent.; 5s thereof for the sole Use and
Benefit of the Subscribers; and the remaining 6d. per Cent, to be paid, by the said Messieurs Jenkins and
King, to the Proprietors, as satisfaction for their Trouble in the Management of this Affair:
That no Person shall subscribe above £. 10,000. or less than (£. 1,000.)
Jonathan Forward, One of the Managers of the said Undertaking, being examined, said, That
Receipts were issued; but that, if the Undertaking does not succeed, all the Money subscribed is to be
returned, except the 6d. per Cent. afore-mentioned:
That Whalebone, which was formerly sold for £.52. per Ton, is now sold for £. 550 and £600 per
Ton and that the Trade is now carried on by the Dutch and Germans; and that, last Year, the Dutch sent
30 Ships, and this Year 84, to Strait St. Davis, on Hudson’s Bay Coast.
That the Committee have also examined into the Undertaking carried on by Subscription, kept at
the Royal Exchange, as well as several others, for insuring Ships and Merchandize at Sea; and do find;
That the said Subscription was opened on or about the 14th of August 1717; for £. 1,000,000. or
upwards, not exceeding £. 2,000,000. under the Hands and Seals of the several Persons therein
mentioned, with several Agreements and Conditions therein contained, for carrying on the said
Undertaking: *
That another Subscription was taken on or about the 14th March 1717, for £. 1,000,000.; the
Subscribers whereof were to pay 10 per Cent. for each Hundred Pound they should Subscribe, to be
paid to the First Directors for the Management of the Affairs of the intended Corporation; and that
5 per Cent, should be paid to Sir Alexander Cairnes, Sir Justus Beck, and others, to defray the Charges in
forming the said intended Corporation, and obtaining and passing a Charter: That, if a Charter be
obtained, the remaining Part of the Quarter per Cent be Part 6f the 10 per Cent. in proportion to their
several Subscriptions, and be made Part of the Joint Stock:
That there was a Petition signed by Sir Justus Beck, John London Esquire, Sir Alexander Cairnes, and
several other Subscribers, presented to his Majesty; praying his Majesty's Letters Patents, to
incorporate them for insuring Ships and Merchandize at Sea; which referred, by Order of Council,
dated the 2d February 1717, to the late Attorney and Solicitor General: That there were also Two
Petitions presented to his Majesty, against the said Petition, for an Insurance by a Corporation; one
from the Merchants of London, and the other from the Merchants of Bristoll; which were likewise
referred, by Order of Council, of the 2d of February 1717, to the said Attorney and Solicitor General;
who, having considered the said Petition of Sir Justus Beck, and others, as also the said Petition of the
Merchants of London, made a Report thereupon to his Majesty, dated the 12th March 1717-18; in
which they give the following Opinion; viz.
51
“On the whole Matter, it is agreed on all Sides, That the Insuring of Ships is of absolute
Necessity for the Carrying on of foreign Trade; and that the same has been always managed in the
Method the same is now in; and it has not been made out, that there is any Corporation in Europe
for insuring Ships: That the Want of a good Method of Insuring will be very fatal to Trade; and
we are humbly of Opinion, That the making of an Experiment in a Thing of this Nature, if it
should prove amiss, would be of the utmost Consequence to the Trade of this Nation; and that it
so highly concerns Trade and Commerce, that it will be proper for the Consideration of the
Parliament: And therefore we cannot advise the erecting a Corporation for the insuring Ships and
Goods at Sea, against which these are so many and great Objections; especially the Method now
used being approved of both at home and abroad; and we are not able to determine of what
Consequence the erecting of another Corporation in London, with a Stock of a Million of Money,
may be to the Publick.”
The Committee do further find, That there is another Subscription for carrying on the said
Undertaking o£ £. 1,152,000. dated the 27th of August 1718, under the Charters for the Mines Royal,
the Mineral and Battery Works, on the following Conditions; viz.
“That 5 per Cent, be paid by the Subscribers, to make good what they are obliged to perform
towards the said Undertaking: That every Subscriber shall pay 5 per Cent, to the Governor and
Company within Thirty Days after the Subscription is closed; and Five per Cent, in Three Months
then next ensuing; and that the whole Money so subscribed, shall be the Joint Stock of the said
Governor and Company, for carrying on the said Insurance of Ships and Merchandize: That the
Profits arising from the said Joint Stock shall be divided half-yearly amongst the Subscribers, in
proportion to the Sums by them respectively subscribed; and that each Subscriber shall be
admitted a Member of the Societies of and for the Mines Royal, the Mineral and Battery Works,
when the Subscription shall be completed, and £. 5. per Cent. paid in.”
Sir John Williams, One of the Governors of the said. Company, being examined, said, That he
apprehended they were doing what was legal, and for the Advantage of Trade; for that, they had
consulted, and had the Opinions of, several eminent Counsel, that they might insure Ships by virtue
of the Charters for the Mines Royal, the Mineral and Battery Works: And that Two of the said Counsel
are Sir Robert Raymond and Mr. Reeves:
That they have affixed the Seal of the said Corporation to Policies, by virtue of the said Charter:
That no Man, as a Member of that Company, is liable to pay any Losses in his private Capacity; but,
as a Member of the Company, is obliged to pay in what Sums the Company shall think fit to call; and
that the Corporation can sue, and be sued:
The Witness, being asked what the Charters for the Mines Royal, the Mineral and Battery Works,
cost, said, That they did not buy the Charters; but that they had bought out the Shares of the old
Proprietors, in Number about 124, at £.23. 8s. 6d. per Share; and that there is riot above Two or Three
of the old Proprietors remaining:
52
That the Subscribers have paid in £. 10 per Cent.; and that the Company have already insured Ships
and Merchandize to the Value of £. 1,259,604. 10s.; and that no Man, that has dealt with them, can
say, but that they have had Satisfaction: And that it was a preliminary Agreement, That there should
be no Law-suits commenced against Persons assured, where the Difference could be decided by
Reference:
That, when they first applied for a Charter, they had great Opposition, and they were then advised
to make this Experiment; but that most of them that signed the First Petition against a Charter of
Incorporation, now petition for it, and desire it to be established:
That the Reason of Merchants coming to them, is, because they think themselves more secure;
for that there are Affidavits from abroad, That, before this Insurance, Business has been done at
Amsterdam for English Merchants, which are now done here;
That there is a great deal of foreign Money brought into this Kingdom by Merchants insuring
from Holland, and other foreign Parts.
Several Merchants desiring they might be heard against this Undertaking; the Committee did
accordingly examine,
Mr. Bernard, Merchant: Who said, That the Merchants of the City of London, being very much
alarmed [345] at an Attempt of a Body of People insuring as a Company, presented a Petition to his
Majesty, signed by 370 of the most eminent Merchants in London: And that Petition, as also the Petition
of the Merchants of Bristoll and the Petition tor a Charter, were referred to the Board of Trade, and
to his Majesty’s then Attorney and Solicitor General; That the Board of Trade have reported Matter
of Fact; but gave no Opinion: And the Attorney and Solicitor General reported to his Majesty, That
a Corporation for insuring would turn to a Monopoly, and be prejudicial:
That, notwithstanding the said Reports, all the old Subscribers signed a new Subscription, and
began to insure Ships:
That then the said Merchants of London and Bristoll petitioned to have the Charters of the Mines
Royal, the Mineral and Battery Works, set aside: That there were several Hearings thereupon before
the present Attorney General; and he believes the Report is in favour of them:
That it was the Business of the Company to bring the Merchants in to insure with them, by
insuring cheaper than the private Insurers; and by even paying when they had no Occasion, in order
to beat the private Insurers out of their business: And that there was a List, proved upon Oath, of
150 or 160 private Insurers, delivered in to Mr. Attorney General:
The Witness owned, That there were other Merchants and Gentlemen that had formed themselves
into a Body, and had taken in a Subscription for £. 2,000,000.; for that Two Corporations would, in
some measure, prevent a Monopoly, though it would effectually drive out the private Insurers:
That they had proved, before the Attorney General, That the private Insurers insure as cheap as
possible; but the Company insure cheaper, to make themselves acceptable: And that, as to foreign
53
Money, the greatest Part of it arose from the Ostend Traders, who were insured Two Guineas per Cent.
cheaper by the Company than the private Insurers could:
That Foreigners used to give One per Cent, for insuring the Insurers; and that it was allowed to the
English Merchants, for procuring good Insurers for the Foreigners:
That the private Insurers are sometimes under a Necessity of going to Law, when they meet with
unjust Demands:
That what Gentlemen aimed at by incorporating themselves, is, to get a great Estate at once; for
that the Company have blown their Stock up to a great Height: And that it was very few of those
Merchants that signed the First Petition against a Charter, that now signed the Petition for one.
The Committee further find, That a Petition of the Governor, Assistants, and Societies of the
City of London, of and for the Mines Royal, Mineral and Battery Works; and for assuring Ships and
Merchandize; praying his Majesty's Letters Patents, to insure Ships and Merchandize; has been
presented to his Majesty; and referred, by his Council, to the present Attorney General, the 9th of
May 1719: That a Petition of the most considerable Merchants of London and Bristoll; praying a
Resumption of the said Charters of and for the Mines Royal, the Mineral and Battery Works; was
presented to his Majesty; and likewise referred, the said 9th of May 1719, to Mr. Attorney General;
who has made a Report thereupon to his Majesty, dated the Third March 1719 and therein has given
the following Opinion; viz.
“Upon the whole Matter, I am humbly of Opinion, That the Transactions stated in the Report
to have been carried on for the Insurance of Ships and Merchandize under Colour or Pretence of
the Charters aforesaid, and in the Names of the supposed Corporations, are illegal and
unwarrantable; and, if drawn into Precedent, would be of dangerous Consequence to the Publick;
those Charters being granted for the particular Ends specified and limited therein; not giving
sufficient Authority to the Corporations thereby erected, if they are existing, to carry on a Business
or Employment of so publick a Nature as that of Insurance of Ships and Merchandize, and which
is wholly foreign to the Design of those Incorporations:
And it not having been made appear to me, that those Corporations, or either of them, are
now in being; or that any of the Persons who pretend and claim to be Members of the same, are
duly chosen or qualified to be Members of the said Corporations according to the Directions of
the Charters, or either of them; for these Reasons, if your Majesty shall be pleased, Writs of Scire
facias may be brought, for the repealing and cancelling the said Charters; and also Informations, in
Nature of Quo warranto against any Persons who have, and shall continue to act as in a Corporate
Capacity, in the Name, or under Colour, of the said supposed Corporations, or either for Insuring
of Ships and Merchandize: But I do humbly certify your Majesty, That it doth appear, that the
Design of the Petitioners for a Charter, in making use of the old Charters, was, to make the
Experiment of insuring Ships and Merchandize as a Corporation; and that they have carried on
that Undertaking, though, in that respect without legal Authority, yet without any Complaint from
54
the Persons with whom they have made Insurances, or any Objections to the Fairness of their
Proceedings.
As to the Matter chiefly contested between the Parties, that is to say, Whether it be fit for your
Majesty to grant a Charter for erecting a Corporation, with a large Joint Stock, for Insuring of
Ships and Merchandize; that, being a Matter of the greatest Moment to the general Trade of the
Kingdom, deserves the most mature Consideration: And it does appear, that Insurance of Ships
and Merchandize, being a publick and national Concern, has been, in some measure, under
Regulations by Two Acts of Parliament now in Force; the First made in the 43 Eliz. C. 12; the
Second in the 14 Car. II. C. 23.
But it is your Majesty's undoubted Prerogative, by Letters Patents under the Great Seal, if you
shall think fit, to create a Corporation for the Ends desired: And I am humbly of Opinion, That
such a Corporation, not being made in any Manner exclusive of others, and being granted under
such Regulations as are suitable to a Matter of so great Moment, may be of great Advantage to
Trade; but, whether it is adviseable to erect such a Corporation with so large a Joint Stock as is
mentioned in the Petition, may deserve particularly to be considered.”
The Committee do further find, That there was another Petition, signed by Lord Onslow, Sir John
Williams, John London Esquire, and others, Subscribers to the afore-mentioned Sum of £. 1,152,000. as
a Joint Stock, for insuring Ships and Merchandize; praying his Majesty's Letters Patents for
incorporating the Petitioners, and the other Subscribers to the said Joint Stock, for more effectual
carrying on the said Undertaking; which Petition was presented to his Majesty; and referred, by his
Order in Council, of the 8th January 1719, to the present Attorney General; who has made a Report
thereupon to his Majesty, dated March 5th 1719 by which it appears, that the Petitioners, as also divers
Merchants, and other Persons, who follow the Employment of private Insurers, who desired to be
heard against any Charter tor Insuring of Ships and Merchandize, have been severally heard, by their
Counsel:
And that the present Petition to his Majesty was occasioned by a Mistake which they had fallen
into, in the Stile and Prayer of a former Petition, humbly presented to his Majesty, in the Name of the
Governors, Assistants, and Societies of the City of London, of and for the Mines Royal, the Mineral
and Battery Works; and for assuring Ships and Merchandize: And praying, That the said Governors,
Assistants, and Societies may be incorporated [346] for the Insurance of Ships and Merchandize: On
Examination of which Petition it was objected, that was no such Corporation as the Governors,
Assistants, and Societies, of and for the Mines Royal, the Mineral and Battery Works; and for assuring
Ships and Merchandize: And the Prayer thereof being for a Charter to the Petitioners, in a corporate
Capacity; although his Majesty should think fit to grant a Charter for the Purposes aforesaid, yet the
Prayer of the said Petition, as the same was framed, could not be complied with:
That the Persons who are now Petitioners to his Majesty for the Charter aforesaid, are the same
Persons who preferred the said former Petition, though in a mistaken Form; and who, with others,
have carried on the Business of' Insurance as a Corporation, in order to prove and confirm, by
Experience, the Usefulness and Benefit that such an Incorporation will be of to the Trade of the
55
Kingdom: And it does appear, that the present Petitioners, with others, have subscribed £. 152,000. as
a Joint Stock, for the Purposes mentioned in their Petition:
That the Petitioners, having been fully heard as to the Merits of this, upon the said former,
Petition, refer themselves to the Arguments then made use of, and to fhe Memorials and Affidavits
then produced:
And that the Counsel of the private Insurers, having again insisted upon the several Matters
formerly objected to such an Incorporation, and which are fully stated in the former Report to his
Majesty of Mr. Attorney General, do likewise refer themselves to the several Affidavits and Papers
thereto annexed:
Which Report is herein before mentioned.
That the Committee do find, That the Subscription of £. 2,000,000. Sterling, for insuring Ships
and Merchandize, commonly called Ram's Insurance, was opened the 22d of December 1719; and
that it is taken on the following Terms; viz.
“That the Subscribers do agree to pay 17 s. 6 d. per Cent, in Money, together with a Receipt of
2s. 6d. of either Mr. Stephen Ram, or Mr. James Colebrooke: which Receipts are lately given by them,
for former Subscriptions; which, together, will make One Pound per Cent, and is in Part of each
Hundred by us now subscribed: That the Sums, so received, are to be lodged in the Bank of
England, under the Direction Sir William Chapman, Sir Jacob Jacobson, Joseph Eyles Esquire, and others;
who have agreed the Terms of a Coalition between the Two former Subscriptions, to be disposed
of by the Majority of them, for the sole Use of the Society, subject to the Direction of any General
Meeting of the Subscribers, or their Assigns: They further agree; it being the Intention of this
Society to endeavour to attain a Charter for the Purposes aforesaid;
That the Election of the Governor, shall be in such Manner as shall be directed in the said
Charter: But, until such Charter can be obtained, they agree to submit themselves, and their
Assigns, to such Rules, Orders and Regulations, as shall thereafter be made by any General
Meeting; who are fully impowered thereby to choose a Governor, Deputy Governor, and so many
Managers as they shall see fit, and to order any Call or Calls of Money as they shall judge expedient
for the giving an effectual Security to all such Persons as think proper to be assured by this Society,
and to make Rules and Orders necessary for the good Management of their Affairs:
It is likewise agreed, That all Questions in any General Meeting be determined by the Majority
of Votes; and that Three Days Notice, at least, should be given in publick Prints before any such
General Meeting:
It is agreed, That if any Subscriber shall refuse or neglect to pay, within the time limited for
such Payment, any Sum or Sums of Money which shall hereafter be called in by such Persons as
shall be thereto impowered by any General Meeting of the Subscribers, and their Assigns; which
Subscriber, or his Assigns, shall 1ose and forfeit, to the sole Use and Benefit of this Society, the
One per Cent. now paid in on this Subscription, together with such other Payment as shall have
56
been made at the time of Failure of Payment on such Call or Calls; and he and thev shall
thenceforth be no longer deemed a Member, or Members, of this Society:
In all Cases where a Ballot is demanded, which shall not be refused, if required by Seven or
more Members qualified to vote, by Writing under their Hands, every Subscriber, or his Assigns,
having, in his own Right, £. 2000. shall have One Vote; £. 5000. Two Votes; £8,000. Three Votes;
and £. 12,000. Four Votes; and no Person to have more than Four Votes.”
Sir William Chapman being examined, said, That they had petitioned his Majesty for a Charter of
Incorporation to carry on the Said Undertaking, within a Day or Two after the Subscription was taken:
That he can't tell whether any of the Stock is sold out, or whether it continues in the Name of the
First Subscribers; but that no Transfer was made of any of the Stock; for it was the chiefest Care of
the Persons concerned to think of Methods to prevent Stock-jobbing:
That the most cheap and expeditious Way of insuring is the most beneficial Manner to the
Merchants; and that £. 20,000. is as soon insured by a Corporation, as £.500. by private Insurers: And
that there has been a great Insufficiency in private Insurers; for that the Merchants have been Losers
by private Insurers, within 20 or 25 Years, the Sum of £. 2,000,000.: And that it concerned the Interest
of the Merchants, that the Premiums should be made easy:
That there has been several General Meetings of the Subscribers; and that there was a great
Appearance at the last; the Import of which was, to acquaint Gentlemen of the Progress they had
made; and to consult, in order to bring this Undertaking to effect; which was set up to prevent
Monopoly, and the too great Advantages that would accrue to One Company:
That they have received £. 20,000. and that £. 18,060. is deposited in South Sea Bonds: That there
is near £.1,000. in the Bank; and, in Mr. Baker’s Hands, about £. 146.; and that of the whole Money
there is about £. 150. expended: That if £. 10. per Cent, or any further Sum, were called in, they would
come into a Security for the Advantage of the Assured.
The Committee do find, That the Petition aforementioned, signed by Lord Chetwynd, Sir William
Chapman, and others; praying a Charter of Incorporation for insuring Ships and Merchandize; was
presented to his Majesty; and referred, by his Majesty's Order in Council, the 8th Day of January 1719,
to Mr. Attorney General; who made a Report thereupon to his Majesty, dated the 7th March 1719; by
which it appears, That he has been several times attended by Counsel, on behalf of this Petition; and
has also, at the Desire of private Insurers, heard them, by their Counsel, against this Petition: And that
his Opinion, upon the whole Matter, is, That it does appear, by the several Certificates and Memorials
which have been made, upon the Examination of the present Petition, That the Sense of the greater
Part of the Merchants of the City of London, who have concerned themselves on this Occasion, is
in Favour and Approbation of such an Incorporation as is prayed: But, as no satisfactory Reason has
been offered to me, for erecting such an Incorporation upon so large a Joint Stock as is prayed also in
this Petition, the Ends of Trade will, I think, be sufficiently served by a far less Joint Stock than is
therein proposed, in case his Majesty should think fit, that any such Charter should be granted; and
by a Reduction of such Joint Stock to a competent Sum, sufficient only for the Purposes aforesaid,
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of Insurance, any Misapplication, which might otherwise be made of such Joint Stock, to Purposes
different from that of Insurance of Ships and Merchandizes, and which may be of great
Inconvenience to the Publick, will be prevented: But if his Majesty shall be graciously pleased to erect
such a Corporation under [347] proper Regulations, I am humbly of Opinion, That it is by no means
advisable to erect Two or more Corporations of that Nature. .
That the Committee do find, That the Subscription of £. 1,000,000. for insuring Ships and
Merchandizes, commonly called Shales his Insurance, was opened the 23d Day of December 1719: the
Preamble to which Subscription is to the Effect following; viz.
That the several Persons, whose Names are thereunto subscribed, are willing to engage themselves
in the said Subscription of £.1,000,000. Sterling for Insurance of Ships and Merchandize, under such
Regulations and Restrictions as his Majesty shall think fit to grant them, by his Royal Charter, for that
Purpose; do engage themselves severally one to another, to pay the several Sums set down against
their respective Names, in the Subscription Book, if there shall be Occasion; and, in the mean time,
to pay One Pound per Cent. as a Deposit, into the Hands of Mr .Charles Shales, in Lombard-street,
Goldsmith; and to make up the same, upon obtaining such Charter, as aforesaid, £. 10. per Cent. as a
present Fund, to answer all Engagements.
Mr. Shales, one of the Managers of the said Undertaking, being examined, said, That the whole
Money paid in is £. 10,000.; and that £. 100. is disbursed, some of which is laid out in purchasing their
Receipts, at Twelve Shillings and Six Pence Advance, in order to oblige some Persons, by letting them,
into the Subscription, whose Names are in the Subscription Book :
That Thirty or Forty Persons, private Insurers, went off about Twenty Years ago: That one Helbut,
a Jew, now a broken Merchant, proposed to have 12 d. per each £.100. subscribed for himself; that he
is in the Subscription, and believes he has sold out, and got some Money by it; and that the Advance
Price of the Stock is 10s. per Cent.:
That there has been several Meetings of the Subscribers; and that a Petition, signed by John Merrys,
George Pye, and others; praying a Charter of Incorporation for insuring Ships and Merchandize at Sea;
was presented to his Majesty; and referred, by Order of Council, 21st January 1719, to the present
Attorney General; who has made a Report thereupon to his Majesty, dated March 9th 1719; in which
he refers to former Reports upon Petitions, praying Charters for the same Purposes as this: Which
Reports are herein before-mentioned.
That the Committee have also examined into the several Undertakings, carried on by Subscription,
for insuring Houses and Goods from Fire; and do find, That the Subscription of £. 2,000,000. taken
at Sadlers-hall, for insuring Goods and Houses from Fire, is agreed to be disposed of, according to the
Preamble of the Subscription Book, under the Terms following; viz.
“The Subscribers agree to pay into the Hands of Mr. Stephen Rani, Goldsmith, in Lombard-street,
at the time of their respective subscribing, 5 s. per Cent, in Part thereof, for the sole Use and Benefit
of the intended Company:
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That, as soon as conveniently may be, publick Notice shall be given for the Subscribers to meet,
and elect such, and so many, Directors and Managers as the Majority present shall determine; at whose
Disposal the 5 s. per Cent, now paid, and under whose Direction the Affairs of the intended Company,
or Joint Stock, shall then be and remain: .
It is also agreed, if any Subscriber shall refuse or neglect, after publick Notice given, to pay in such
further Part of the Subscription as shall be ordered by the Directors or Managers, chosen as aforesaid,
and impowered thereto by the General Court, such Subscriber shall forfeit and lose, for the Benefit
of the Society, the 5s. per Cent. paid on Subscription, and be no longer deemed a Member of this
Society.”
Mr. Loome, a Manager in the said Undertaking, being examined, said, That £.4,095. is paid in of
the aforesaid Subscription; and, as yet, they have had no Meeting of the Subscribers: That what is
bought or sold of the said Subscription, is about 15s. per Cent, Advance;
That, the Persons wanting to subscribe crouding very much, Part of the Subscription was taken
at the Feathers; and that he has not made One Farthing Advantage by any the Letters for admitting
Persons to subscribe:
That One Person subscribed Four or Five hundred thousand Pounds in Mr. Overall's Subscription;
and that Mr. Overall got Six Pence per Cent. by all that subscribed; and that he had a Scheme long before
him.
Mr. Cooper, another Manager in the said Undertaking, was examined; and said, That each
Subscriber signed a Petition, to be presented to his Majesty, when they signed the Subscription Book:
And that the whole 2,000,000 is not subscribed; for that £. 300,000. is reserved for divers Persons in
England, distant from London; and that no Publication has been made, that the Subscription is full: And
said, That the Receipts delivered to the Subscribers were not transferrable.
Mr. Waters said, That he is called a Manager in the said Subscription for £. 2,000,000. at Sadlers-
hall: That one Mr. Thomas Brown, of Fish-street-hill, told him of the Subscription of Mr. Overall's, and
desired him to subscribe, and be concerned in it: That they thought themselves injured by Mr. Overall;
and thereupon sat up another Subscription, not thinking his good enough.
The Committee have also examined the Persons, following, who desired to be heard against the
said Undertaking; viz.
Mr. Walker said, That Letters were given out for Premiums, for Persons to be let into the aforesaid
Subscription: And that £. 20,000. has been got by this Stock, the Managers thereof filling the
Subscription with Letters of their own:
That Mr. Overall’s Insurance was first intended to be set up; and that the Purport of the said Letters
were, That if they could not come into Overall's Subscription, they should be admitted unto theirs:
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That the Methods of proceeding by the said Managers were such, that the 2 s. 6 d. per Cent. paid
in, in Two or Three Days time, sold for 40 s.; and those Persons that the Managers intended should
subscribe, had Letters sent them, paying a Premium for them:
That when he found that all the City run into a Method of Stock-jobbing, he did subscribe in
some of them, and has been invited Three several times to be a Manager; which he refused: And that
no Trade has been minded since the several Subscriptions have been set on foot.
Mr. Overall said, That he had been concerned in the Fire Offices Four or Five Years; and that he
published Proposals for a Subscription for insuring Houses; which was set on foot the 15th Instant;
and that Mr. Loome ingrafted upon his Projection; and that the Agents of the Insurance at Sadlers-hall
took 20 and 30 Guineas from Gentlemen, to give them a Power to subscribe:
That the Lustring Company's Charter is in the Hands of Colonel Peter Racuise, Governor of that
Company; and that he has not contracted for that Charter; but that the present Proprietors have come
to a Resolution to enlarge their Capital:
That the Committee find the Subscription of £. 1,000,000. towards raising a Joint Stock for
insuring Houses and Goods from Loss by Fire, called Overall's Insurance, was opened the 15th of
February 1719-20; and that the Preamble to the said Subscription is as follows; viz.
“That the Subscribers agree to pay into the Hands of Mr. William Smith, Linen-draper, Three
Shillings per Cent. on the said Million, under such Regulations as shall hereafter be agreed upon
by such Directors as shall be chosen at the General Meeting; which shall be within 30 Days after
the Subscription is completed; and approved of by them, at a subsequent General Meeting
And do further agree, That Six Pence per Cent. Part of the afore-mentioned Three Shillings
per Cent. shall be paid, by Mr. William Smith, to Mr. Edmond Overall, for his Expence and Trouble in
procuring this [348] Subscription; and that they will answer all such further Calls upon them as shall be
made by the Consent of the first General Meeting, within such a time as they shall order; or forfeit their
Money now paid in, and all further Interest which they might have by this Undertaking; provided Notice
of such General Meeting be given in some publick Paper, and Three Days, at least, be appointed for the
Payment thereof.”
Mr. Overall, being examined, said, that what hath been transacted with the Lustring Company is,
that they have agreed to inlarge their Capital, and thereby let in several Persons into their Company:
That he had made several Inquiries about the Letters that were sold for Premiums, to admit
Persons to subscribe in Sadlers-hall Insurance; and had found several Persons who had sold those
letters; and that it was transacted in Change-alley, by Mr. Mertin, Mr. Edwards, Mr. Rogers, Mr. Samuel
Butler, and Mr. Blackwell.
Colonel Peter Racuise, Governor of the Lustring Company, produced their Charter to the
Committee; and said, That the Company had no Dealings with Mr. Overall; but that Mr. Loome,
concerned in the Subscription taken at Sadlers-hall, had been up and down with them, about buying
the Lustring Charter ; but that it was not sold:
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That they have enlarged their Capital, in Order, for the more effectual carrying on the Lustring
Trade, not to carry on an Insurance.
That the Committee do find, That a Subscription of £. 2,000,000. was opened the 16th Day of
February 1719, at the Three Tons, in Swithin’s Alley, as a Fund for insuring Houses and Goods, in any
Part of England, from Loss by Fire; and that the Subscribers were to pay no Money as a Deposit, till a
Goldsmith is appointed, and Notice thereof given, which is to be 2 s. 6 d. per Cent.; and that a General
Meeting for choosing Directors shall be appointed as soon as the Subscription is completed:
That the Subscribers have had several Meetings, and agreed to enter into a Deed of Association;
which has been executed under the Hands and Seals of several of the Subscribers; which said Deed
recites, That the Subscribers have concerted Measures to carry on a Design of a General Insurance,
throughout England, from Fire; and for raising £. 2,000,000. or so much thereof as shall be adjudged
by Persons impowered, for answering all Losses, to the insured, by Fire; and therefore associate them-
selves; out of whom Directors and Auditors are to be elected, to manage the said Undertaking: That
they declare, that all Monies to be paid by the Subscribers to the Treasurers shall be only in Trust for
them, subjected to Limitations, Rules, &c. therein prescribed; viz.
“That all Persons that are Subscribers, shall be bound with these Presents; and receive and bear
Profit and Loss, in proportion to their Sums subscribed:
That the Subscribers shall pay £. 5. per Cent, at Five Payments; each Payment to be made at Thirty
Days Notice in some News Paper: That there shall be Two Calendar Months between each Payment;
and that the Subscribers, making Default, shall Forfeit Twenty Shillings for every £. 1,000. Stock, on
every Default, and not have any Benefit, till Payment:
That the £. 5. per Cent, and the accruing Interest, is declared to be a Deposit in the Hands of the
Treasurers, to answer all Losses; which Deposit-money shall be put out to Interest on Mortgages, or
laid out on Government Securities, for the Subscribers Use:
That the Directors shall and may, on any Loss, make such after Calls on the Capital of £.2,000,000
as shall be necessary to preserve the Deposit of £100,000. from being lessened; of which after Calls
Three Calendar Months Notice shall be given to the Subscribers, or their Assignees:
That they will insure any Sum, not exceeding £10,000. on Merchandizes, &c. in Brick or Stone
Building; and a Sum, not exceeding £5,000. in Timber Buildings:”
With several other Rules and Regulations, therein particularly mentioned, for their better
Government in carrying on the said Undertaking.
Mr. Mathew Snabling, being examined, said, That the Subscription is completed; and that between
17, or £. 18,000. is paid in; and that he don't know that there is any Premium upon it in Change-alley:
That most of the Subscribers have signed the Deed of Association, as before-mentioned: And likewise
that a Petition is drawn, in order to be presented to his Majesty, for a Charter of Incorporation:
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That the Committee have also examined into the several Undertakings, carried on by Subscription,
for lending Money upon Government Securities; and for granting Annuities for Lives; and do find,
That there is a Subscription taken of £. 1,500,000. for the Uses, and under the Regulations,
following; viz.
“That the said Sum of £. 1,500,000. should be raised by Subscriptions, under the Name of The
Annuity Company, for purchasing of Government Securities; granting Annuities for Life; and lending
of Money to Merchants, on good Securities, that they may be enabled to pay their Duties to the Crown
more punctually, and thereby have the Discount for prompt Payment:
And, considering how advantageous it will be to several Branches of the Revenue, and Trade in
general, it is hoped, by proper Application, to obtain his Majesty's most gracious Letters Patents for
incorporating the said Subscribers into a Company; and, if a Charter cannot be obtained, then to
propose the Uniting of this with some other Company or Society, who have already made several
advanced Steps, towards their Establishment:
Therefore Books are laid open this Day, being; Friday the 5th February 1719, at Garraway’s Coffee-
house, in Exchange-alley, at Ten of the Clock in the Forenoon; and so to continue until the Subscription
is completed; upon the following Terms;
“That no Person shall be admitted to subscribe for more than £. 10,000. in his own Name:
That no Person shall Subscribe for less than £. 1,000. in his own Name:
That every Subscriber shall pay Three Shillings per Cent, on his Subscription; which shall be
lodged in the Hands of Messieurs Mitford and Mertins, Bankers, in Cornhill; Eight Pence whereof
being for the Use and Benefit of the Proposer, and towards defraying incident Charges; the
Remainder to be in their Hands, towards the Charge of obtaining a Charter, under the Direction
of Managers, when chosen, to issue out the same:
That, in 14 Days after the Books are completed, a General Meeting of all the Subscribers shall
be advertised, to consider of what Methods will be proper to proceed upon; and to choose
Managers for the Direction of the same; for which Purpose printed Lists of all the Subscribers
will be prepared, and Proposals be laid before them for Improvement of the said Stock:
That every Person subscribing, intitled to the Stock, by his Receipt, shall be subject and liable
to what Calls of Payment the Managers shall think fit, or shall lose his Title to, and Subscription
Money in, the said Stock:
That every Person subscribing £. 1,000. is intitled to a Vote; he that subscribes £. 5,000. to
Two Votes; and he that subscribes £. 10,000. to Three Votes; and the £.5,000. and £. 10,000.
Subscribers are intitled to be chosen Managers, or Directors.”
Mr. Baker, the Proposer of the aforesaid Subscription, being examined, said, That all the Money
received was paid to Messieurs Mitford and Mertins; and that the Subscription has no Rise in its Value;
neither are there any Transfers made:
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That there has been one Meeting of the Subscribers, at the Swan Tavern, 5th of last Month; and
that the Court chose a Governor ; and it was agreed by the said General Court, that Messieurs Mitford
and Mertins should be accountable to Colonel Wyndham, and Five other Gentlemen, for the Money
already paid into their [349] Hands, Hands, according to the Preamble of the Subscription Book
before-mentioned :
And then directed the Proposer to lay before them, what further Schemes he has for the Advantage
of the Society; and agreed, That a General Court should be held on that Day Sevennight:
That a Petition is drawn up, in order to be presented to his Majesty, but not signed:
That the Committee do find, That there is a Subscription opened at Garraway’s Coffee-house, in
Exchange-alley, the 19th of January 1719, :of £. 1,200,000. for lending Money on Stocks, as Annuities,
Tallies, Orders, Bills, and other negotiable Securities, on the Terms following; viz. #
“That every Subscriber shall pay down, at the time of subscribing, as a Deposit in the Hands
of Messieurs John Cox and Edward Cleve, Goldsmiths, the Sum of 2.s. 6d. per Cent, and One Shilling
per Cent more at the same time, for the Undertaker Ralph Keate, towards defraying the Charge of
the Undertaking:
That a: printed Receipt for the 2s. 6d. per Cent. will be delivered out in a few days after the
Subscription is completed:
That no Person is to subscribe more than £. 10,000 nor less than £.1,000.; and not above 5 per
Cent. be called in at the same time.”
Mr. William Lambe, being examined, said, That a Charter was intended to be applied for; and that
there is about £. 1,100,000. subscribed; and that there has been several Meetings of the Subscribers,
in order to carry on the said Undertaking.
Mr. Lennard said, That Mr. Keate, who was the Proposer of this Undertaking, claiming to himself
One Shilling per Cent. for his Trouble, Messieurs Car and Cleeve would not give Receipts but for the
whole Sums paid to them which was 3s. 6d. per Cent.
That the Committee do find, That the Subscription of £. 1,200,000. for selling Annuities, settling
of Jointures, and assuring of Lives, commonly called Mr. Thomas Burgesse’s Subscription, is taken on
such Terms and Conditions as is herein after-mentioned; viz.
“That the Subscribers do agree to pay the respective Sums against their Names, in such
Proportions as shall be called for by a Court of Directors; and, in order to obtain a Charter, the
better to carry on the said Design, they agree to pay, on Subscription, the Sum of 2s. 6d. per Cent,
on the Sums by them subscribed; which Subscription-money is to be paid into the Hands of
Messieurs Green and Eades; and is not to be taken thence but by an Order, signed by a Majority of
the Committee:
And also agreed, That any Subscriber may have Liberty to withdraw his Subscription, on
Notice, in Writing, to Mr. Henry Symonds, at his House in Friday-street, any time within Seven Days
63
before the Day appointed, by Advertisement, in the London Gazette, of the Choice of Directors,
on the Forfeiture only of the said 2s. 6d. paid at subscribing.”
It appeared to the Committee, by a Book of Minutes of the Proceedings of the Subscribers, That
they have had several Meetings; and that a Petition was drawn up and presented to his Majesty, in the
Name of Sir James Hallet, and several other Persons, subscribing the same; praying his Majesty's Royal
Letters Patents for incorporating them, for granting Annuities, securing Fortunes to Widows,
Orphans, and others; which was referred to the present Attorney General, by his Majesty's Order in
Council, dated 8th of January 1719:
That Mr. Attorney, having been attended by Counsel, as well on behalf of the said Petition, as of
the Corporation of the Amicable Society for a perpetual Insurance Office, who desired to be heard
against this Petition, has made a Report thereupon to his Majesty, dated the 10th March 1719; and
therein gave his Opinion, That it is not adviseable for his Majesty to erect any such Incorporation as
is desired by the aforesaid Petition.
Mr. Burgess, being examined, said, That £. 1464. 5s had been paid in as a Part of the Subscription;
and, that £.113. 2s. 4d. thereof had been disbursed: That there had been no transferring any of the
Stock; and that the Receipts are not made payable to the Bearer;
That the Committee having summoned the Governor and Company for raising Thames Water, in
York Buildings, Sir Alexander Cairnes, and Mr. * * * did accordingly attend; and, being examined,
produced to the Committee an attested Copy of an Act, of the 2d of King. Wm. and Queen Mary,
intituled, An Act for incorporating the Proprietors of the Water-works in York Buildings; and for
encouraging, carrying on, and settling the said Water-works; wherein it is recited, That King Charles
the Second, in the 27th Year of his Reign, had, by Letters Patents, granted to Ralph Bucknall and Ralph
Weync, their Executors, Administrators and Assigns, full Power to erect a Water-house in York-house
Garden and to lay Pipes into the River Thames, and to convey the same for the Use of the Inhabitants
and adjacent Places; which Water-houses had been since erected : It is therefore enacted, That the
several Persons in the Act named, the then Proprietors of the Water-houses and Watery works, and
the Proprietors thereof for the Time being; should be a Corporation, by the Name of the Governor
and Company of the Undertakers for raising Thames Water, in York. Buildings, able and capable, in Law,
to have, purchase, receive, possess, enjoy, and retain, Lands Tenements, and Hereditaments, Goods,
and Chattels to them, and their Successors; and also to give, grant, demise, alien, assign, and dispose
of, the same:
And alleged. That the said Governor, and Company were sufficiently impowered by the said Act
to purchase Lands, and grant Annuities, &c. upon the same.
That as to the Petition, of the Earl of Westmorland; and others, praying a Charter for granting
Annuities for Life, and assuring Lives, it was presented to his Majesty, without the Consent or
Approbation of the said Company; for that they disclaimed and refused the Application, and that the
Petition was not in the Name of the Corporation, but in the Names of private Persons.
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It appeared to the Committee, That the said Petition had been presented to his Majesty, and
referred, by his Order in Council, dated 8th January 1719, to the present Attorney General; who made
a Report thereupon to his Majesty, 10th March 1719: That, having heard the Petitioners, as also the
Amicable Society for a perpetual Insurance Office, Mr. Attorney General gives the following Opinion;
viz. '
“As to the Proceedings upon the said Petition, I am most humbly of Opinion, That the
Corporation, created by the Act of Parliament above-recited, was so instituted for the particular
Purposes therein specified: And though the Power therein given to purchase Lands is not, by
express Words, restrained to any particular annual Value; yet, by a reasonable Construction, the
Exercise of that Power ought to be governed and limited by the Purposes for which the
Corporation was erected; and cannot be understood to give Authority to that Corporation,
supposing it to exist, to purchase Lands of what Value soever, and for Purposes wholly foreign to
the Ends of that Incorporation:
And as to the Transaction between some of the Petitioners and the supposed Governor and
Assistants of the said Corporation, as the same is represented by the Affidavit, and Articles, stated
in the said Report, I am of Opinion, That it is an unwarrantable Practice, and of a very dangerous
Tendency, and highly in Derogation of your Royal Prerogative; there being no Ground or Colour
in Law for the said Corporation to contract with others for taking in Subscriptions for any Sum,
but much less for so great a Sum as £.1,000,000. for the carrying on an Undertaking, in the Name
of the said Corporation, so different from the Purposes of their Incorporation; which
Subscriptions, if taken in, pursuant to such Contract, are a Misuser of the [350] the Powers of
the said Corporation; for which they are liable to Prosecution, if your Majesty shall so please.”
That the Committee have likewise examined into several other Undertakings, of different kinds,
carried on by Subscription; and do find,
That there is a Subscription of £. 2,000,000. for suppressing Thieves and Robbers, taken at Cooper’s
Coffeehouse in Cornhill; the Preamble to which is as follows; viz.
“We, whose Names are hereunto set down, do become Subscribers towards raising a Joint
Stock of £. 2,000,000. Sterling, for preventing and suppressing all Thieves and Robbers both
by Sea and Land; and for insuring all Persons Goods and Effects from the same, and likewise
from all other Casualties, as the Proprietors and Company shall judge proper, pursuant to a
Patent now passing for that Purpose.”
Francis Richardson, Projector of the said Undertaking, being examined, said, That about £. 200,000.
was subscribed for; and that a Petition was presented to his Majesty, (which is referred to his Majesty's
Attorney General, by Order in Council of 21st January 1719) praying his Majesty's Letters Patents, for
an Incorporation to carry on the said Undertaking; but nothing further is done thereupon:
That he intended to proceed in what Method the Company, when chosen, should think proper.
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That the Committee do find, That the Subscription of £1,200,000. for building and buying Ships
to lett or freight, was opened the 11th of February 1719-20, on the following Terms; viz.
“That no Person shall be admitted to subscribe less than £. 1,000.:
That 2s. 6d. per Cent. for every Sum subscribed be paid to the Undertakers, for procuring a
Charter, and defraying all other Charges and Expences:
That 2s. 6d. per Cent. more for every Sum subscribed be paid into the Hands of Messieurs
Mitford and Mertins, Goldsmiths in London, as Part of the capital Stock of the said Company:
That in Fifteen Days time after the Subscription is completed, a General Meeting of the
Subscribers shall be held, whereof publick Notice shall be given, for choosing Nine Managers,
who shall have the whole Direction in carrying on this Affair; and that Three of the said Nine be
a Quorum:
That no Money be issued out of the Hands of the said Messieurs Mitford and Mertins, but by
Orders under the Hands of Three of the said Managers:
That any Subscriber, or Bearer of the Receipt of the said Subscription, failing to pay according
to the Call of the Governors and Directors, when chosen, shall forfeit the said 2 s. 6d.; and that
both Subscription and Receipt shall be void:
That, in case the said Sum of £. 1,200,000. be not fully subscribed within Sixty days from
henceforth, then the said 2 s. 6 d. per Cent. paid into the Hands of Messieurs Mitford and Mertins, as
also the said 2s. 6d. per Cent, paid to the Undertaker, shall be forthwith repaid to every Subscriber.”
Benjamin Bravoe, being examined, said, That the Subscription is not quite full; and that 200 and odd
Pounds are paid in; and that there has been some Steps made towards obtaining a Patent.
That the Committee do find, That the Subscription of £. 1,000,000. for a Joint Stock, to be
employed in carrying on the Navigation and Traffick of Coals from Newcastle to London, was opened
on the 23d February 1719; and on the following Terms; viz.
“That the Directors of the said Undertaking are to be chosen out of the Subscribers; and the
Money to be called in, in such Proportions and Payments as they shall find necessary to promote,
and carry on, a Joint Trade; all the Profits that accrue to be equally divided among the Proprietors
in proportion to their respective Subscriptions.”
John Smith, One of the Managers, being examined, said, That the whole £.1,000,000. is subscribed;
and that 6d per Cent. is paid in, which the Undertakers are to have for their Charges; and that no Part
of the Stock is transferred:
That they proposed to lower Coals to 25 s. per Chaldron.
That the Committee do find, That the Proposal for raising a Joint Stock of £. 1,200,000. to be
employed in Undertaking and Furnishing of Funerals to any Part of Great Britain, is as follows; viz.
66
“It is proposed, That the said Business shall be undertaken, and carried on, in the Names of
John Taverner, and another Person, as Copartners, in Trust, for themselves, and the several other
Persons, whose Names are herein after subscribed: Which said John Taverner, and such other
Person, are hereby impowered to transact and manage the Affairs and Business of the said
Copartnership, in Trust, as aforesaid, until a General Meeting of the Subscribers shall be called;
and other Persons appointed, in their stead, to manage the said Undertaking:
That every Subscriber and Subscribers shall, upon every reasonable Notice, raise and pay the
several Sums by them respectively subscribed, or such Part thereof as shall be thought necessary
for carrying on the said Undertaking, into the Hands of such Person or Persons as are, or shall
be, appointed, in their behalf, to receive the same:
It is further proposed, That the whole Stock shall be divided into £. 1,200. Shares; and that
every Person having a Share shall be intitled to a Vote for future Managers; and that no One Person
shall have more than Five Votes:
That, with all convenient Speed, after the said Subscription shall be completed, publick Notice
shall be given for a General Meeting of the Subscribers; at which time a Committee of Managers
shall be appointed to take the Advice of Counsel learned in the Law, for a lawful and proper
Establishment of the said Copartnership:
In case any Subscriber shall refuse to submit to such Regulations and Agreements as Counsel
shall advise, as aforesaid; that then every such Subscriber or Subscribers, so refusing, shall, upon
returning their respective Receipts, be repaid the whole Money specified therein, without any
Deduction whatsoever.”
John Maple, One concerned in taking the said Subscription, being examined, said, That 5s. 6d. per
Cent. was paid in; and that they had made no Application for an Establishment.
That the Committee do find, That the Subscription for the Sum of £.1,200,000. Sterling, to be a
Fund for establishing and carrying on a Trade to his Majesty's German Dominions, upon several
Privileges already granted, and upon such further Privileges as his Majesty shall hereafter please to
grant, is taken on the following Conditions ; viz.
“That the Subscribers agree to pay the respective Sums against their Names in such
Proportions as shall be called for by a Court of Directors; and for the carrying on the Design, and
towards the obtaining a Charter, they do agree to pay, on Subscription, the Sum of Two Shillings
and Six Pence on the Sums by them subscribed, to be paid into the Hands of Messieurs Eades and
Green”
Mr. Burgess, One of the Managers of the said Undertaking, being examined, said, That a Petition
was drawn up, in order to be presented to his Majesty; praying a Charter of Incorporation.
That the Committee having summoned the Managers of the Undertaking for raising the Growth
of raw Silk; they accordingly attended; and laid before the Committee a Charter, which appeared to
67
be granted by his Majesty's Royal Letters Patents, bearing Date the 23d Day of May 1717, for carrying
on the said Undertaking,
The Committee being informed, that a new Subscription of £. 10,000,000, for establishing the
Fishery of Britain and Ireland, was opened 011 Monday the 4th of April 1720;
The Committee did that Day summon the Managers of that Undertaking to attend them.
George James did accordingly attend; and, being examined, owned to the Committee, That he did
contrive the Scheme for the said Undertaking; and that he was the Person acting therein: He assured
the Committee, That no Money had been paid in upon the subscription for that nobody yet had
subscribed; and that he would not proceed to carry on the said Undertaking.
Upon the several Matters before stated, the Committee have come to the Resolution following;
viz.
Resolved That it is the Opinion of this Committee, That, for some time last past, several large
Subscriptions having been made by great Numbers of Persons in the City of London, to carry on
publick Undertakings; upon which the Subscribers have paid in small Proportions of their respective
Subscriptions, though amounting in the Whole, to great Sums of Money: and that the Subscribers
having acted as Corporate Bodies, without any legal Authority for their so doing, and thereby drawn
in several unwary Persons into unwarrantable Undertakings; the said Practices manifestly tend to the
Prejudice of the publick Trade and Commerce of the Kingdom.
The First of the said Resolutions being read a Second time, That the said Undertaking, proposed
to be carried on by the Name of the British Fishery, wherein the Sea Ports and Royal Boroughs are
concerned, may be successfully carried on, and prevent great Sums going annually out of the Nation;
and secure a valuable Trade; and may, upon any Emergence, furnish Seamen to man the Royal Navy;
and therefore highly deserves Encouragement;
Resolved, That the said Resolution be postponed,
The Second Resolution being read a Second time;
Resolved, Nemine contradicente, That the House do agree with the Committee in the said Resolution,
That, for some time last past, several large Subscriptions having been made by great Numbers of
Persons in the City of London, to carry on publick Undertakings; upon which the Subscribers have
paid in small Proportions of their respective Subscriptions, though amounting in the Whole to great
Sums of Money; and that the Subscribers having acted as Corporate Bodies, without any legal
Authority for their so doing, and thereby drawn in several unwary Persons into unwarrantable
Undertakings; the said Practices manifestly tend to the Prejudice of the publick Trade and Commerce
of the Kingdom.
Ordered, That Leave be given to bring in a Bill to restrain the extravagant and unwarrantable
Practice of raising Money by voluntary Subscriptions, for carrying on Projects dangerous to the Trade
68
and Subjects of this Kingdom: and that Mr. Secretary Craggs, Mr. Walpole, Mr. Comptroller, Mr.
Chancellor of the Exchequer, and Mr. Hungerford do prepare, and bring in, the same.
f. The Bubble Act’s Legislative History (May-June 1720)

May 4, 172035
“HIS Majesty having received several Petitions from great Numbers of the most eminent
Merchants of the city of London, humbly praying, That he would be graciously pleased to grant them
his Letters Patents for erecting Corporations to assure Ships and Merchandize; and the said Merchants
having offered to advance and pay a considerable Sum of Money, for his Majesty's Use, in case they
may obtain Letters Patents accordingly; his Majesty, being of Opinion, that erecting Two such
Corporations, exclusive only of all other Corporations and Societies, for Assuring of Ships and
Merchandize, under proper Restrictions and Regulations, may be of great Advantage and Security to
the Trade and Commerce of the Kingdom, is willing and desirous to be strengthened by the Advice
and Assistance of this House, in a Matter of this Nature and Importance: He therefore hopes for
their ready Concurrence, to secure and confirm the Privileges his Majesty shall grant to such
Corporations; and to enable him to discharge the Debts of His Civil Government, without burdening
his People with any new Aid or Supply.
A Motion being made, and the Question being put That a Bill be brought in to enable his Majesty
to grant Letters of Incorporation, to the Uses and Purposes mentioned in his Majesty's most gracious
Message;
The House divided.
The Yeas go forth [186 to 72].
Ordered, That Mr. Chancellor of the Exchequer, Mr. Baylie, Mr. Chancellor of the Duchy, Mr.
Solicitor General, Mr. Clayton, and Mr. Lowndes, do prepare, and bring in, the Bill.”
________________________________
May 12, 172036
“Ordered, That it be an Instruction to the Gentlemen who are appointed to prepare, and bring in,
a Bill to enable his Majesty to grant Letters of Incorporation to the Uses and Purposes mentioned in
his Majesty's most gracious Message of the Fourth instant; and also to the Gentlemen who are
appointed to prepare, and bring in, a Bill to restrain the extravagant and unwarrantable Practice of
raising Money, by voluntary Subscriptions, for carrying on Projects dangerous to the Trade and
35 Journals of the House of Commons 19, 355-6. URL: http://goo.gl/gn1jE.

36 Ibid., 361.
69
Subjects of this Kingdom: That they do meet, and prepare, and bring in, One Bill, for the Purposes
aforesaid.”
________________________________
May 20, 172037
Mr. Lowndes presented to the House, according to Order, a Bill concerning Assurances of Ships
and Merchandizes at Sea; and lending Money on Bottomry; and for restraining several extravagant and
unwarrantable Practices therein mentioned: And the same was received; and read the First time.
Resolved, That the Bill be read a Second time.
Ordered, That the Bill be read a Second time Tomorrow Morning.
________________________________
May 21, 172038
The Bill concerning the Assurances of Ships and Merchandizes at Sea; and lending Money on
Bottomry; and for restraining several extravagant and unwarrantable Practices therein mentioned; was,
according to Order, read a Second time.
Resolved, That the Bill be committed.
Resolved, That the Bill be committed to a Committee of the whole House.
Resolved, That this House will, upon Wednesday Morning next, resolve itself into a Committee of
the whole House, upon the said Bill.
________________________________
May 25, 172039
A Petition of Sundry Merchants, in behalf of themselves, and others, concerned in the
Undertaking for reviving, and effectual carrying on, a Greenland Whale-fishery, was presented to the
House, and read; setting forth, That the Petitioners were encouraged to such Undertaking by several
Acts of Parliament; and particularly an Act of the First of Queen Ann, that enacts, That it shall and
may be lawful for any of her Majesty's Subjects whatsoever, that would adventure to Greenland for
fishing for Whales, to have and enjoy all the Privileges granted to the Company by former Acts, and
to pay no farther Duty than if they had been of the said Greenland Company: That the Undertaking
manifestly tends to promote Navigation: That they are willing to proceed therein; have taken Partners,
and raised a very considerable Joint Stock, to carry on the Trade with Vigour, to enable them to vie
with Foreigners, who now engross that Trade to themselves, and vend the Proceed of their Voyages
to his Majesty's Subjects at exorbitant Prices: And praying, That they may not be disabled to carry
37 Ibid., 365.
38 Ibid.
39 Ibid., 366.
70
on the said Greenland Whale-fishery; but that they may act in a publick Capacity, for carrying on the
same, as is prescribed by sundry Acts of Parliament for that Purpose.
Resolved, That the said Petition be rejected.
A Petition of divers Merchants, and other Partners in a Joint Stock advanced for lending Money
on Bottomry in behalf of themselves, and many others concerned therein, was offered to the House:
And the Question being put, That the said Petition be brought up; It passed in the Negative.
The House, according to Order, resolved itself into a Committee of the whole House, upon the
Bill concerning the Assurances of Ships and Merchandizes at Sea; and lending Money on Bottomry;
and for restraining several extravagant and unwarrantable Practices therein mentioned.
Mr. Speaker left the Chair.
Mr. Farrer took the Chair of the Committee.
Mr. Speaker resumed the Chair.
Mr. Farrer reported from the Committee, That they had made some Progress in the Bill; and had
directed him to move, That they may have leave to sit again.
Resolved, That this House will, To-morrow, at Twelve of the Clock, resolve itself into a Committee
of the whole House, to consider further of the said Bill.
________________________________
May 26, 172040
The House, according to Order, resolved itself into a Committee of the whole House, to consider
further of the Bill concerning the Assurances of Ships and Merchandizes at Sea; and lending Money
on Bottomry; and for restraining several extravagant and unwarrantable Practices therein mentioned.
Mr. Speaker left the Chair.
Mr. Farrer took the Chair of the Committee. -
Mr. Speaker resumed the Chair.
Mr. Farrer reported from the Committee, That they had gone through the Bill, and made several
Amendments thereunto; which they had directed him to report, when the House will please to receive
the same.
Ordered, That the Report be received Tomorrow Morning.
________________________________
40 Ibid., 367.
71
May 27, 172041

Mr. Farrer, according to Order, reported from the Committee of the whole House, to whom the
Bill concerning the Assurances of Ships and Merchandizes at Sea; and lending Money on Bottomry;
and for restraining several extravagant and unwarrantable Practices therein mentioned; was
committed; the Amendments they had directed him to report to the House; which he read in his Place;
and afterwards delivered the Bill, with the Amendments, in at the Clerk's Table: Where the said
Amendments were once read throughout; and then a Second time, one by one; as far as Clause B; and,
upon the Question severally put thereupon, several of them were disagreed with, and the rest of them,
with Amendments to some of them, were agreed unto, by the House.
Clause B being read a Second time, to prevent either of the Corporations to be erected in
pursuance of this Act from lending any Money on the Bottom of any Ship, or on Goods and
Merchandizes on board, or to be put on board, any Ship belonging to, or employed by, the South Sea
Company, without special Licence of the Court of Directors of the said Company;
And the Question being put, That the House do agree with the Committee in the said
Amendment;
It passed in the Negative.
A Clause was offered, to be added to the Bill, That the South Sea Company might lend Money on
the Bottom of any Ship, and on the Goods and Merchandizes on board any Ship, of, or employed by,
the said Company:
And the said Clause was twice read, and amended, so as to give the same Power to the East India
Company to lend or advance Money for that Purpose:
And then the Clause was, upon the Question put thereupon, agreed unto by the House to be made
Part of the Bill.
Another Clause was offered, to be added to the Bill, That the Act should not hinder or deprive
the African Company from having and enjoying such Powers, Privileges, and Advantages, as do or shall
belong to them; except as to Insurance on Ships and Merchandizes at Sea, and going to Sea; and
lending Money on Bottomry:
And the said Clause was twice read; and amended:
And the Question being put, That the Clause be made Part of the Bill; It passed in the Negative:
Another Clause was offered, to be added to the Bill, That the Act shall not prohibit the Carrying
on of any Home or Foreign Trade in Partnership, in such manner as hath been hitherto usually, and
may legally be done, according to the Laws of the Realm; excepting only as to the Insuring of Ships;
and lending Money on Bottomry:
41 Ibid., 368.
72
And the said Clause was twice read; and, upon the Question put thereupon, agreed unto by the
House to be made Part of the Bill.
Another Clause was offered, to be added to the Bill, That neither of the Corporations intended
to be erected and established, in pursuance of this Act, shall, on Account of the said Corporations,
or either of them, advance or lend to his Majesty, his Heirs or Successors, any Sums of Money, by way
of Loan, or any Part of the Revenue belonging to the Crown, other than such Parts only on which a
Credit of Loan is, or shall be, granted by Parliament:
And the said Clause was twice read, with Blanks; which were filled up:
And then the Clause was, upon the Question put there upon, agreed unto by the House to be
made Part of the Bill.
Another Clause was offered, to be added to the Bill, for restraining Stock-jobbing:
And the Question being put, That the Clause be brought up;
It passed in the Negative.
Ordered, That the Bill, with the Amendments, be ingrossed.
__________________________________
May 31, 172042
AN ingrossed Bill concerning Assurances of Ships and Merchandizes at Sea; and lending Money
on Bottomry; and for restraining several extravagant and unwarrantable Practices therein mentioned;
was read the Third time.
An ingrossed Clause was offered, as a Rider, to be added to the Bill, That the Act shall not extend
to any Corporation formerly created for the carrying on a Trade which they have publickly continued
to exercise from The time of their Establishment; or to any Subscription made, or to be made, for
enlarging the Capital Stock of the South Sea Company; or to any Receipts made out, and given, or to
be made out, or-given, in respect of such Subscriptions; but that all such Subscriptions shall be firm
and valid; and all Receipts, made out concerning the same shall be assignable, at Law, by Indorsement
thereon:
And the said Clause was thrice read : and, upon the Question put thereupon, agreed unto by the
Another ingrossed Clause was offered, to be added to the Bill, by way of Rider, That this Act shall
not hinder or deprive the Corporation of the United Company of Merchants trading to the East Indies
from enjoying all such Powers, Privileges, Franchises, Benefits, Matters, and Things, as do or shall
belong to them:
42 Ibid., 368.
73
And the said Clause was thrice read; and, upon the Question put thereupon, agreed unto by the
Then the Amendments following were severally pro-posed to be made to the Bill; viz.
Press 2. L. 14. After “Partnerships” to insert “now are, or:”
Press 24. L. 9. To leave out “Occasions,” and insert “Affairs:”
Press 26. L. 22. After “Ships,” to insert “and Goods or Merchandizes at Sea, or going to Sea:”
And the said Amendments were, upon the Question severally put thereupon, agreed unto by the
House: And the Bill was amended at the Table accordingly:
Then a Motion being made, and the Question being put, That the Bill do pass;
The House divided.
The Yeas go forth [123 to 22].
So it was resolved in the Affirmative.
And that the Title be, An Act for better securing certain Powers and Privileges intended to be
granted by his Majesty, by Two Charters, for Assurance of Ships and Merchandizes at Sea; and for
lending Money upon Bottomry; and for restraining several extravagant and unwarrantable Practices
therein mentioned.
Ordered, That Mr. Farrer do carry the Bill to the Lords, and desire their Concurrence.
________________________________
10 June 172043
A MESSAGE from the Lords, by Mr. Hiccocks and Mr. Meller:
Mr. Speaker,
The Lords have agreed to the Bill, intituled, An Act for better securing certain Powers and
Privileges intended to be granted by his Majesty, by Two Charters, for Assurance of Ships and
Merchandizes at Sea; and for lending Money upon Bottomry; and for restraining several extravagant
and unwarrantable Practices therein mentioned; without any Amendment.
________________________________
11 June 172044
A Message from his Majesty, by Sir William Saunderson, Gentleman Usher of the Black Rod:
43 Ibid., 373.
44 Ibid., 376.
74
Mr. Speaker,
The King commands this honourable House to attend his Majesty, immediately, in the House of
Peers.
Accordingly, Mr. Speaker, with the House, went up to the House of Peers: Where his Majesty was
pleased to give the Royal Assent to several publick and private Bills.
g. The Bubble Act (11 June 1720)45

“An Act for better securing certain Powers and Privileges intended to be granted by his Majesty by two Charters for
Assurance of Ships and Merchandizes at Sea, and for Lending Money upon Bottomry; and for restraining several
extravagant and unwarrantable Practices therein mentioned.
MOST gracious Sovereign, whereas it hath for many ages past been esteemed good policy, by all proper ways and
means, to secure and encourage the trade of this realm, whereby the wealth and strength of the same, and particularly
the shipping, navigation and public revenues thereof, have been increased;
[A]nd it hath been, time out of mind, a custom or usage amongst merchants, as well of this realm as of foreign
nations, when they make any adventures at sea (especially into remote or dangerous parts) to give a premium or
consideration to particular persons, to have from such particular persons assurance of or upon ships, goods or
merchandizes adventured, or some of them, at such rates or prices as the parties assurers and the parties assured can
agree, which kind of contract or dealing is commonly called a policy of assurance, and several laws and statutes now in
force have been made concerning the same assurances;
[N]notwithstanding which it is found by experience, that many particular persons, after they have received large
premiums or consideration-monies for or towards the insuring ships, goods and merchandizes at sea, have become
bankrupts or otherwise failed in answering or complying with their policies of assurance, whereby they were particularly
engaged to make good or contribute towards the losses which merchants or traders have sustained, to the ruin or
impoverishment of many merchants and traders, and to the discouragement of adventurers at sea, and to the great
diminution of the trade, wealth, strength and publick revenues of this kingdom:
[A]nd whereas it is conceived, That if two several and distinct corporations, with a competent joint stock to each
of them belonging, and under proper conditions, restrictions and regulations, were erected and established for assurance
of goods or merchandizes at sea, or going to sea (exclusive of all or any other corporations or bodies politick already
created, or hereafter to be created, and likewise exclusive of such societies or partnerships as now are or may hereafter be
entered into for that purpose) several merchants or traders, who adventure their estates, or part of their estates, in such
ships, goods or merchandizes at sea, or going to sea (especially in remote or hazardous voyages) would think it much
safer for them to depend on the policies or assurances of either of those two corporations to be erected and established,
than on the policies or assurances of private or particular persons;
45 6 Geo. 1 c. 18. URL: http://goo.gl/VyhJn. Paragraphs have been added in editing the text.
75
[A]nd that such merchants or adventurers as shall hereafter be minded to agree for assurance of their ships, goods
or merchandizes with private or particular persons, may still be at liberty so to do according to their own option or choice:
[A]nd whereas it has also been a custom or usage in this as well as in other nations, for merchants or traders, who
adventure their ships and merchandizes at sea, to borrow money to be repaid upon the return or arrival of such ships,
which kind of borrowing is commonly called, taking up money on bottomry; in which cases the lenders run a risque or
hazard, more or less, of losing their principal, and are therefore allowed to contract for such interest or consideration-
money for the use or forbearance of the principal, as can be agreed upon between the borrowers and the lenders:
[A]nd it is considered, That it may be a great advantage and encouragement to trade and navigation, if such
merchants and traders might have it in their power, at their own election, either to have recourse to one of the corporations
to be erected and established in pursuance of this act, or to private or particular persons, for borrowing money upon
bottomry as aforesaid, at such rate or rates as stall be agreed upon between such borrowers and lenders respectively:
and whereas the sole right and prerogative of granting charters of incorporation (not being such as are repugnant
to any law or statute of this realm) doth belong to your Majesty;
[A]nd it is considered, That if your Majesty stall be graciously pleased to grant two such distinct charters as
aforesaid, the members of each corporation so to be erected and established (for and in consideration of the advantages
which may accrue to them respectively thereby, and for having reasonable powers and privileges secured to them in
pursuance of this act) may be willing to pay to your Majesty's use such sums of money, at such times and by such
proportions, as are herein after mentioned:
[B]e it therefore enacted by the King's most excellent majesty, by and with the advice and consent
of the lords spiritual and temporal and commons, in this present parliament assembled, and by the
authority of the same, That it shall and may be lawful to and for his Majesty, by one charter or
indenture under the great seal of Great Britain, to declare and grant, that such and so many persons
(who shall be named therein, and of whose abilities and fitness his Majesty shall thereby declare
himself to be well satisfied) and all and every such other person and persons as hereafter from time
to time shall be duly admitted as members into their corporation, shall be one distinct and separate
body politick and corporate for the assurance of ships, goods and merchandizes at sea, or going to
sea, and for lending money upon bottomry, by such name as his Majesty shall think most proper:
[A]nd that it shall and may be lawful to and for his Majesty, by another charter or indenture under
the great seal of Great Britain, to declare and grant, that such and so many other persons (who shall
be named therein, and of whose abilities and fitness his Majesty shall thereby declare himself to be
well satisfied) and all and every such other person and persons as hereafter from time to time shall be
duly admitted as members into their corporation, shall be one other distinct and separate body politick
and corporate for assurance of ships, goods and merchandizes at sea, or going to sea, and for lending
money upon bottomry, by such name as his Majesty also shall think most proper…
II. And it is hereby further enacted by the authority aforesaid, That each of the said two
corporations to be erected and established as aforesaid (for and in consideration of the benefits and
advantages winch may accrue to them respectively by virtue of the said respective charters or
indentures, and the grants thereby to be made to each of them) shall be obliged by force and virtue
76
of this act, and of the respective charters or indentures before-mentioned, to pay or cause to be paid
into the receipt of the exchequer at Westminster, for the use of the King's majesty, in order to discharge
the debts and expences of his civil government, the full sum of three 300,000 pounds of lawful money
of Great Britain (which for both corporations will amount in the whole to six hundred thousand
pound;)…
V… [I]t is hereby further enacted by the authority aforesaid, That each of the said corporations,
intended to be established by this act shall be obliged by force and virtue of this act, and of the
respective charters or indentures before-mentioned, to raise such sums of money capital stock as his
Majesty shall therein direct, not exceeding £.1,500,000, within such time or times, and by such
proportions at a time, and in such manner, as in and by the said charters or indentures respectively
shall be appointed; and the monies so raised shall be and be called the capital stock belonging to each
of the same corporations respectively.
IX. And be it further enacted by the authority aforesaid, That the particular share and shares of
the respective members of and in the capital or joint stock or stocks of the two respective corporations
before mentioned, from time to time, shall be transferrable, assignable and deviseable, and their bills,
bonds and obligations, shall be assignable and recoverable, in such manner and form as his Majesty,
by the said respective charters or indentures, shall prescribe and appoint, as well in relation to such
share and shares of stock, as in reference to such bills, bonds or obligations respectively; and that the
capital stocks of the said respective corporations, intended to be erected and established in pursuance
of this act, and the share and interest executors of each and every particular member thereof and
therein, shall be deemed and adjudged in all courts of law and equity, and elsewhere, to be a personal
and not a real estate, and shall go to the executors or administrators of the person or persons dying
possessed thereof, or entitled thereunto, and not to the heir of such person or persons; any law, statute,
usage or custom to the contrary notwithstanding.
XII. And be it further enacted by the authority aforesaid, That from and after the granting or
making of the said respective charters or indentures for erecting the two corporations before-
mentioned, and passing the same under the said great seal, for and during the continuance of the same
corporations respectively, or either of them, all other corporations or bodies politick, before this time
erected or established, or hereafter to be erected or established, whether such corporations or bodies
politick, or any of them, be sole or aggregate, and all such societies and partnerships as now are, or
hereafter shall or may be entered into by any person or persons, for assuring ships or merchandizes at
sea, or for lending money upon bottomry, shall by force and virtue of this act be restrained from
granting, signing or under-writing any policy or policies of assurance, or making any contracts for
assurance of or upon any ship or ships, goods or merchandizes at sea or going to sea, and from lending
any monies by way of bottomry, as aforesaid; and if any corporation or body politick, or persons
acting in such society corporations or partnership (other than the two corporations intended to be
established by this act, or one of them) shall presume to grant, sign or underwrite, after the 24th day
of June 1720, any such policy or policies, or make any such contract or contracts for assurance of or
upon any ship or ships, goods or merchandizes at sea or going to sea, or take or agree to take any
premium or other reward for such policy or policies, every such policy and policies of assurance of
77
or upon any such ship or ships, goods or merchandizes, shall be ipso facto void, and all and every sum
and sums so signed or underwritten in such policy or policies shall he forfeited, and shall and may be
recovered, to wit, one moiety thereof to the use of his Majesty, his heirs and successors, and the other
moiety thereof to the use of such person or persons as will inform or sue for the same, in any of his
Majesty's courts of record at Westminster, in which action, suit or information, no essoin, protection,
privilege, wager of law, or more than one imparlance shall be granted or allowed: and if any
corporation or body politick, or persons acting in such society or partnership, as aforesaid, other than
the two corporations intended to be established by this act, or one of them, shall presume to lend, or
agree to lend, or advance, by themselves, or any others on their behalf, after the said 24th day of June
1720, any money by way of bottomry, as aforesaid, contrary to this act, the bond or other security for
the same shall be ipso facto void, and such agreement shall be adjudged to be an usurious contract, and
the offenders therein shall suffer as in cases of usury:
[N]evertheless it is intended and hereby declared, That any private or particular person or persons
shall be at liberty to write or underwrite any policies, or engage himself or herself in any assurances
of, for, or upon any ship or ships, goods or merchandizes at sea or going to sea, or may lend money
by way of bottomry, as aforesaid, as fully and beneficially as if this act had never been made, so as the
same be not upon the account or risque of a corporation or body politick, or upon the account or
risque of persons acting in a society or partnership for that purpose, as aforesaid; any thing herein
contained to the contrary notwithstanding.
XVIII. And whereas it is notorious that several undertakings or projects of different kinds have
at some time or times since the 24th June, 1718, been publicly contrived and practised, or attempted
to be practised within the City of London and other parts of this kingdom, as also in Ireland and
other his Majesty's dominions, which manifestly tend to the common grievance, prejudice, and
inconvenience of great numbers of your Majesty's subjects in their trade or commerce, and other their
affairs; and the persons who contrive or attempt such dangerous and mischievous undertakings or
projects, under false pretences of public good, do presume, according to their own devices and
schemes, to open books for public subscriptions, and draw in many unwary persons to subscribe
therein towards raising great sums of money, whereupon the subscribers or claimants under them do
pay small proportions thereof, and such proportions in the whole do amount to very large sums; which
dangerous and mischievous undertakings or projects do relate to several fisheries and other affairs,
wherein the trade, commerce, and welfare of your Majesty's subjects, or great numbers of them, are
concerned or interested:
And whereas in many cases the said undertakers or subscribers have since the said 24th June, 1718,
presumed to act as if they were corporate bodies, and have pretended to make their shares in stocks
transferable or assignable, without any legal authority, either by act of parliament, or by any charter
from the crown for so doing, and in some cases the undertakers or subscribers, since the said 24th
June, 1718, have acted or pretended to act under some charter or charters formerly granted by the
crown for some particular or special purposes therein expressed, but have used or endeavoured to use
the same charters for raising joint-stocks, and for making transfers or assignments, or pretended
transfers or assignments for their own private lucre, which were never intended or designed by the
78
same charters respectively, and in some cases the undertakers or subscribers since the said 24th June,
1718, have acted under some obsolete charter or charters, although the same became void or voidable
by non-user or abuser, or for want of making lawful elections, which were necessary for the
continuance thereof; and many other unwarrantable practices, too many to enumerate, have been and
daily are and may hereafter be contrived, set on foot, or proceeded upon, to the ruin and destruction
of many of your Majesty's good subjects, if a timely remedy be not provided:
And whereas it is become absolutely necessary that all public undertakings and attempts tending
to the common grievance, prejudice, and inconvenience of your Majesty's subjects in general, or great
numbers of them, in their trade, commerce, or other lawful affairs, be effectually suppressed and
restrained for the future by suitable and adequate punishments for that purpose to be ascertained and
established.
Now for suppressing such mischievous and dangerous undertakings and attempts, and preventing
the like for the future, &c. be it enacted, that from and after the 24th June, 1720, all and every the
undertakings and attempts described as aforesaid, and all other public undertakings and attempts
tending to the common grievance, prejudice, and inconvenience of his Majesty's subjects, or great
numbers of them, in their trade, commerce, or other lawful affairs, and all public subscriptions,
receipts, payments, assignments, transfers, pretended assignments and transfers, and all other matters
and things whatsoever for furthering, countenancing, or proceeding in any such undertaking or
attempt, and more particularly the acting or presuming to act as a corporate body or bodies, the raising
or pretending to raise transferable stock or stocks, the transferring or pretending to transfer or assign
any share or shares in such stock or stocks without legal authority, either by act of parliament, or by
any charter from the crown, &c. shall be deemed to be illegal and void.
XIX. And be it further enacted by the authority aforesaid, that from and after the said 24th day
of June 1720, all such unlawful undertakings and attempts, so tending to the common grievance,
prejudice and inconvenience of his Majesty’s subjects, or a great number of them, in their trade,
commerce, or other lawful affairs, and the making or taking of any subscriptions for that purpose, the
receiving or paying of any money upon such subscriptions, the making or accepting of any assignment
or transfer, or pretended assignment or transfer, of any share or shares upon any such subscription,
and all and every other matter and thing whatsoever, for furthering, countenancing, or proceeding in
any such unlawful undertaking or attempt, and more particularly the presuming or pretending to act
as a corporate body, or to raise a transferrable stock or stocks, or to make transfers or assignments of
any share or shares therein, without such legal authority, as aforesaid, and all acting or pretending to
act under any charter formerly granted from the crown for any particular or special purposes therein
expressed, by persons making or endeavouring to make use of such charter for any such other purpose
not thereby intended, and all acting or pretending to act under any such obsolete charter as is before
described, and every of them (as to all or any such acts, matters or things, as shall be so acted, done,
attempted, endeavoured or proceeded upon, after the said 24th day of June 1720) shall be deemed to
be a public nuisance and nuisances, and the same, and all causes, matters and things relating thereto,
and every of them, shall for ever hereafter be examined, heard, tried, and determined as common
nuisances are to be examined, heard, tried and determined by or according to the laws of this realm;
79
and all offenders therein, being thereof lawfully convicted upon information or indictment, in any of
his Majesty’s courts of record at Westminster, or in Edinburgh, or in Dublin, shall be liable to such
fines, penalties and punishments, whereunto persons convicted for common and public nuisances are,
by any of the laws and statutes of this realm, subject and liable; and moreover shall incur and sustain
any further pains, penalties and forfeitures, as were ordained and provided by the statute of provision
and praemunire46 made in the sixteenth year of the reign of King Richard the Second.
XX. And be it further enacted by the authority aforesaid, that if any merchant or trader, at any
time after the said 24th day of June 1720, shall suffer any particular damage in his, her, or their trade,
commerce, or other lawful affairs, by occasion or means of any undertaking or attempt, matter or
thing, by this act declared to be unlawful as aforesaid, and will sue to be relieved therein, then and in
every such case, such merchant or trader shall and may have his and their remedy for the same by an
action or actions to be grounded upon this statute, against the persons, societies or partnerships, or
any of them, who contrary to this act shall be engaged or interested in any such unlawful undertaking
or attempt; and every such action and actions shall be heard and determined in any of his Majesty’s
courts of record aforesaid, wherein no essoin, protection, wager of law, or more than one imparlance
shall be granted or allowed; and in every such action the plaintiff shall or may recover treble damages
with full costs of suit.
XXI. And it is hereby further enacted by the authority aforesaid, that if any broker or person
acting as a broker for himself, or in behalf of any others, at any time or times after the said 24th day
of June 1720, shall bargain, sell, buy, or purchase or contract, or agree for the bargaining, selling,
buying, or purchasing of any share or interest in any of the undertakings by this act declared to be
unlawful, or any stock or pretended stock of such undertakers, that then and such every such case,
every such broker or person acting as such, shall not only be disabled and rendered incapable to be or
act as a broker for the future, but shall also forfeit and lose the sum of five hundred pounds, to be
recovered, to wit, one moiety thereof to the use of the king’s Majesty, his heirs, and successors, and
the other moiety thereof to the use of any person or persons who will inform or sue for the same in
any of his Majesty’s said courts of record, as aforesaid, with full costs of suit.
XXII. Provided always, and be it enacted by the authority aforesaid, said, that this act, or anything
therein contained, shall not extend to any undertakings, or other matters or things settled, established
or practised in point of time before the said 24th day of June 1718, but that the same, and every of
them, shall be of such or the like force, effect or validity, and no other, as they respectively would be
of, in case this act had never been made; anything herein contained to the contrary notwithstanding.
XXIII. Provided also, and it is hereby further intended, declared and enacted by the authority
aforesaid, that of the clauses, matters or things in this act contained, shall not extend, or be construed
to hinder his Majesty from erecting or establishing the two corporations intended by this act to be
erected and established, as is above mentioned, or either of them, or to prejudice those two
46On the penalty of praemunire, see Sir Edward Coke, I Inst. 129-130a: “The judgment in a praemunire is, that the
defendant shall be from henceforth out of the king’s protection, and his lands and tenements, goods and chattels
forfeited to the king, and that his body shall remaine in prison at the king’s pleasure.”
80
corporations, or either of them, (when erected) in the exercise or enjoying of the powers, privileges,
benefits, or advantages intended to be granted to them respectively, by such respective charters or
indentures as are above mentioned in that behalf, subject nevertheless to such powers of redemption
or revocation as are above in this act prescribed for that purpose; anything in this act contained to the
contrary notwithstanding.
XXIV. Provided also, That any thing in this act contained shall not extend, or be construed to
extend to hinder or deprive the corporation of the governor and company of merchants of Great
Britain, trading to the South-Seas and other parts of America, and for encouraging the fishery, or their
successors, from having and enjoying of all and every or any such powers, privileges, benefits, profits,
properties, matters and things, as do or shall belong to them, or which they could or might enjoy, in
any manner of wise whatsoever, if this act had not been made (except as to insurance upon ships and
merchandize at sea or going to sea;) any thing herein contained to the contrary in any wise
notwithstanding.
XXV. Provided always, that nothing in this act shall extend, or be construed to extend to prohibit
or restrain the carrying on of any foreign trade in partnership, in such manner as hath been hitherto
usually, and may be legally, done, according to the laws of this realm now in force, excepting only as
to the insuring of ships and goods or merchandizes at sea, or going to sea, or lending money upon
bottomry; anything in this act to the contrary in anywise notwithstanding.
XXVI. Provided nevertheless, That it shall and maybe lawful to and for the governor and company
of merchants of Great Britain, trading to the South-Seas and other parts of America, and for encouraging
the fishery, and for the united company of merchants of England trading to the East-Indies, and they
and either of them have respectively hereby liberty, at any time or times hereafter, to advance or lend
on the bottom of any ship or vessel, ships or vessels, and on goods and merchandizes on board any
ship or vessel, ships or vessels of the said respective companies, or that is, are or shall be employed in
the service of the said companies respectively, to any captains or commanders, agents, sailors, or
servants, or other person or persons, which shall at any time or times be imployed in the service of
the said respective companies, any sum or sums of money whatsoever by way of bottomry; any thing
in this act contained to the contrary notwithstanding.
XXVII. Provided always, and be it further enacted by the authority aforesaid, that nothing in this
act contained shall extend, or be construed to extend to any corporation formerly created for the
carrying on a trade, which they have publicly continued to exercise from the time of their
establishment. or to any subscriptions made or to be made for enlarging the capital stock of the
governor and company of merchants of Great Britain, trading to the South-Seas and other parts of
America, and for encouraging the fishery (by or by order of the general court, or court of directors of
the same company) or to any receipts made out and given, or to be made out or given, in respect of
such subscriptions, but that all such subscriptions made and to be made, shall be firm and valid, and
all receipts made out and given, or to be made out or given, concerning the same, shall be assignable
at law by endorsement made or to be made thereon; any thing in this or in any other act, or any law,
usage or custom to the contrary notwithstanding.
81
XXVIII. Provided also, That any thing in this act contained shall not extend, or be construed to
extend to hinder or deprive the corporation of the united company of merchants of England trading
to the East-Indies, from having and enjoying all and every such powers, privileges, franchises, benefits,
matters and thing, as do or shall belong to them, or which they could or might enjoy in any manner
of wise if this act had not been made; any thing in this act to the contrary notwithstanding.”
h. Anderson on the South Sea Bubble47

“We are now to enter upon the year 1720 ; a year remarkable beyond any other which can be
pitched upon by historians for extraordinary and romantic projects, proposals, and undertakings, both
private and national ; as well respecting commercial concerns, as the great internal interests of the two
most potent kingdoms of Europe :— and which, therefore, ought to be had in perpetual
remembrance, not only as being what never had its parallel, nor, it is to be hoped, ever will hereafter;
but, likewise, as it may serve for a perpetual memento to the legislators and ministers of our own
nation, never to leave it in the power of any, hereafter, to hoodwink mankind into so shameful and
baneful an imposition on the credulity of the people, thereby diverted from their lawful industry.
…
[98] But of all the rash proceedings of the [South Sea] managers, during the execution of their
scheme, none proved more quickly fatal than their obtaining of the government, on the eighteenth of
August, a scire facias against those airy projects called bubbles, which, at this time, were become very
numerous, and had greatly advanced in their prices, even after an act of Parliament of this same
session, cap. xvii. had passed for suppressing them, entitled, An Act for better securing certain Powers
and Privileges intended to be granted by his Majesty by two Charters for Assurance of Ships and
Merchandize at Sea; and for lending Money upon Bottomree;— and for restraining several extravagant
and unwarrantable Practices therein mentioned, as well as of a royal proclamation for enforcing the
laws against them: so that Exchange Alley, like the Rue Quinquempoix 48 at Paris, was daily crowded
from morning to night (as well as the [99] coffee houses) with dealers in those bubbles; many of
which, having obsolete and forfeited charters, under that pretext,
First, Took large money subscriptions for carrying on what they had no right to do.
Secondly, Others of them grafted new and additional projects, on these obsolete charters,
originally granted for very different purposes.
Thirdly, A third species of bubbles, and the most numerous, did not even pretend so much as to
any such obsolete charters, or other authority whatever.
47 Adam Anderson, An Historical and Chronological Deduction of the Origin of Commerce, London, 1801 ed., v. 3, pp.91-123,
URL: http://goo.gl/ub1mb.
48 Rue Qincampoix was the street where the Banque Générale, the bank founded by John Law in 1716, had its
headquarters, and wherein the shares in the Mississippi Company (then, “Company of the Indies”) were mostly traded.
82
It is indeed very true, that the traffic in these did greatly promote luxury, idleness, and extravagance
in the middling and lower classes of people; diverting them from their wonted industry and frugality.
But the great mistake of the South Sea managers concerning those bubbles was their belief that their
traffic obstructed the rise of South Sea-stock; whereas, on the contrary, it was quickly found, that the
trade in them was assisting in keeping up the price of South Sea-stock: for, very many of the lower
people, not being at first able to purchase South Sea-stock, ran greedily into the bubbles, and even
into smaller shares or parts of them; and having soon gained considerably therein, they usually or very
often came afterwards into South Sea-stock and subscriptions. And thus those lesser currents or
rivulets were a constant supply to the great South Sea River: but this the managers did not perceive
till it was too late …
[102] The more to enforce this statute, the King, on the very day he passed it, viz. on the eleventh
of June 1720, issued a proclamation, strictly enjoining the observation of the latter part of it relating
to those projects vulgarly called bubbles; in consequence of which it might have been expected, that
they would have all shrunk to their original nothing in a moment. For a few days, indeed, some check
was given by this measure to that frantic traffic: yet, in the face of all authority, it soon revived and
even increased more than ever, and whilst they daily advanced in price, every one was a gainer, so that
the lower clase of people fell into luxury and prodigality, as well as their betters. From morning till
evening the dealers therein, as well as in South Sea-stock, appeared in continual crowds all over
Exchange Alley, so as to choak up the passage through it. Not a week-day passed without fresh projects
recommended by pompous advertisements in all the newspapers, which were now swelled
enormously, directing where to subscribe to them. On some, six-pence per cent was paid down; on
others, one shilling per cent and some came so low as one shilling per thousand, at the time of
subscribing. Some of the obscure keepers of those books of subscription, contenting themselves with
what they had got in the forenoon, by the subscriptions of one or two millions, (one of which the
author particularly well remembers,) were not to be found in the afternoon of the same day, the room
they had hired for a day being shut up, and they and their subscription-books never heard of more.
On others of those projects, two shillings and two shillings and six-pence per cent was paid down;
and on some few ten shillings per cent was deposited; being such as had some one or more persons
of known credit to midwife them into the alley. Some were divided into Shares, instead of hundreds
and thousands, upon each of which so much was paid down, and both for them and the other kinds,
there were printed receipts signed by persons utterly unknown.
Persons of quality of both sexes were deeply engaged in many of these bubbles, avarice prevailing
at this time over all considerations of either dignity or equity; the males coming to taverns and coffee
houses to meet their brokers, and the ladies to the shops of milliners and haberdashers for the same
ends. Any impudent impostor, whilst the delusion was at its greatest height, needed only to hire a
room at some coffee house or other house near that alley, for a few hours, and open a subscription
book, for somewhat relative to commerce, manufacture, plantation, or of some supposed invention,
either newly hatched out of his own brain, or else stolen from some of the many abortive projects of
which we have given an account in former reigns, having first advertised it in the newspapers the
preceding day, and he might, in a few hours, find subscribers for one or two millions (in some cases
83
more) of imaginary stock. Yet many of those very subscribers were far from believing those projects
feasible: it was enough for their purpose that there would very soon be a premium on the receipts for
those subscriptions; when they generally got rid of them in the crowded alley to others more credulous
[103] than themselves. And in all events, the projector was sure of the deposit money. The first
purchasers of those receipts soon found second purchasers, and so on, at still higher prices, coming
from all parts of the town, and even many from the adjacent countries: and so great was the wild
confusion in the crowd in Exchange Alley, that the same project, or bubble, has been known to be
sold, at the same instant of time, ten per cent, higher at one end of the alley than at the other end.
Amongst those many bubbles, there were some so bare-faced and palpably gross, as not to have so
much as the shadow of any thing like feasibility. The infatuation was at length so strong, that one
project was, in the newspapers, advertised thus; For subscribing two Millions to a certain promising
or profitable Design, which will hereafter be promulgated.
We can well remember, one of those named Globe Permits, which came to be currently sold each
for sixty guineas and upwards in the alley, which nevertheless was only a square bit of a playing card,
on which was the impression of a seal in wax, being the sign of the Globe tavern in the
neighbourhood, with the motto or inscription of Sail Cloth Permits, without any name signed thereon,
the possessors thereof being to be hereafter permitted to subscribe to a new sail cloth manufactory,
projected by one who was then known to be a man of fortune, though afterwards involved in great
calamities and disgrace.
These instances out of hundreds more that might be produced are sufficient to display the frenzy
of the time; when the taverns, coffee houses, and even victualling houses, near the Exchange were
constantly crowded, and became the scenes of incredible extravagance. The very advertisements of
those bubbles were so many as to fill up two or three sheets of paper in some of the daily newspapers
for some months. Yet, all men were not infatuated: and one advertisement in a weekly newspaper well
enough burlesqued the then madness of men, in the following strain. “At a certain (sham) place, on
Tuesday next, books will be opened for a subscription of two millions, for the invention of melting
down saw-dust and chips, and casting them into clean deal boards, without cracks or knots!”
Before we return to the remainder of the execution of the grand South Sea scheme, we shall,, as
an useful warning to posterity, here exhibit a more complete catalogue than any we have seen, of the
stocks, subscriptions, projects, or bubbles, of this unparalleled time, when their highest prices in
Exchange Alley, before the fatal scire facias had (like the touch of Ithuriel's spear) reduced them all to
their proper size and value.
…
[112] Many of the before-mentioned bubbles were indeed so nonsensical and absurd, appearing
even from their very titles, as it might be imagined could only draw in the more ignorant part of the
people; yet even those had a very considerable run, much money being got and lost by them: and as
for the great bulk of them, there were almost incredible numbers of transactions in them daily and
hourly, for ready money, and mostly at very advanced prices; as may partly be conceived by those
whose highest prices we have set down. Moreover, great numbers of contracts were made for taking
84
many of them at a future time; and also for Puts and Refusals 49 of them, at very high prices; more
especially in the York-Buildings Company:— In the Temple Mills, Brass Manufacture :—In the two
Copper Companies, &c. in the books of one of which, viz. the Welch Copper Company or Bubble,
(long since come to nothing) I have seen some hundreds of contracts registered, according to act of
Parliament, at very extravagant prices. And it is much to be lamented, that persons of high rank and
dignity placed themselves at the head of many of those even illegal projects. So great was the
infatuation of this time.
The fatal writs of scire facias at length were issued, on the eighteenth of August, against the
following pretended companies, viz. the York-Buildings Company; Lustring Company; the English
Copper and Welch Copper Companies; expressly by name; and in general against all other projects
promulgated contrary to law; and the crown-lawyers were strictly to prosecute [113] all such as had
opened books of subscriptions, and all who subscribed to them, or who made or accepted any transfer
in them.
It was apprehended by many thinking people, that this general infatuation might last till winter,
when it was imagined it would insensibly subside of itself. But the earnestness of the South Sea Junto
to obtain the scire facias brought it sooner to an issue, though very differently from what they assuredly
expected. The publication of it, by authority, in the London Gazette, instantly struck so general a
panic amongst the conductors of all the undertakings, projects, or bubbles, that the suddenness as
well as greatness of their fall was amazing. York-Buildings stock, for instance, fell at once from three
hundred to two hundred, and, in two days after, neither it nor the other three undertakings, expressly
named in the scire facias, had buyers at any price whatever. The more barefaced bubbles of all kinds
immediately shrunk to their original nothing; their projectors shut up their offices, and suddenly
disappeared; and Exchange-Alley with its coffee-houses were no longer crowded with adventurers,
many of whom having laid out their substance in those airy purchases, now found themselves to be
utterly undone; whilst, on the other hand, such as had dealt in them to great advantage, became
extremely shy of owning their gains.
This state of things, how calamitous soever it might appear, was but the prelude to the grand
calamity which soon ensued by the fall of South Sea stock and subscriptions. For when the scire facias
came abroad, that stock was at eight hundred and fifty per cent, for the opening of the books in
August, including the Midsummer dividend; but, from that time forward, it gradually declined in price,
though with many great fluctuations, occasioned by the various arts and endeavours of the Junto to
keep it up; some of the particulars whereof have, in part, been already mentioned.
…
[114] The frailty of the whole South Sea scheme now too plainly appearing to all: the stock, on
the twenty-ninth of September, had fallen to one hundred and seventy-five per cent, and their bonds
were at twenty-five per cent, discount; whereupon there appeared great uneasiness and clamour
49A "refusal" is, in modern parlance, a "call" or an option to buy at a future date at a certain price (Cope, S. R., “The
stock exchange revisited: a new look at the market in securities in London in the eighteenth century”,
Economica, XLV (I978), p. 1).
85
amongst the monied men, which produced a great run or demand for cash at the Bank, and a greater
one on the private bankers who had generally lent out much of their cash on South Sea stock and
subscriptions, in consequence of which several very substantial ones were obliged to stop payment
for some time. And now, just when drowning, all people began seriously to reflect on the calamities
brought on people in France, but a few months sooner, [115] by the famous Mississippi stock or
bubble; and to draw a melancholy parallel; which reflexions, made a few months sooner, would have
saved many a worthy family from distress: great clamour was also raised on account of contracts at
high prices, for the third and fourth money subscriptions performable on delivery of the company's
receipts, although no receipts had ever been issued for them. At a general court, on the thirtieth of
September, the supposed contract with the Bank was again mentioned as a positive agreement, at four
hundred percent, for South Sea stock, which now therefore, from one hundred and thirty rose to three
hundred and twenty, but could by no methods be kept so high: the fascination was over, and therefore
it fell daily lower, more especially when it was known after all, that the supposed Bank contract was
no reality, but a mere temporary and very unjust expedient to quiet the clamours of the people.
…
[123] The unaccountable frenzy in stocks and projects of this year 1720 may by some be thought
to have taken up too much room in this work: but we are persuaded that others, of superior judgment,
will approve of the perpetuating, in so large a work, the remembrance thereof, as a warning to after
ages.
We shall sum up every thing which relates to the deceitful arts of raising South Sea stock by new
and extravagant high subscriptions, by a sensible, familiar, and most plain simile, written at this time
by that ingenious gentleman Archibald Hutcheson, Esquire, long since dead, whose fair and candid
calculations on this subject, and on our general national debts, make up a moderate folio volume, viz.
“A, having one hundred pounds stock in trade, though pretty much in debt, gives it out to be
worth three hundred pounds, on account of many privileges and advantages to which he is
entitled. B, relying on A's great wisdom and integrity, sues to be admitted partner on those terms,
and accordingly brings three hundred pounds into the partnership. The trade being afterwards
given out or discovered to be very improving, C comes in at five hundred pounds; and afterwards
D, at one thousand one hundred pounds. And the capital [124] is then compleated to two thousand
pounds. If the partnership had gone no farther than A and B, then A had got and B had lost one
hundred pounds. If it had stopped at C, then A had got and C had lost two hundred pounds; and
B had been as he was before: but D also coming in, A gains four hundred pounds, and B two
hundred pounds; and C neither gains nor loses: but D loses six hundred pounds. Indeed, if A
could shew that the said capital was intrinsically worth four thousand four hundred pounds, there
would be no harm done to D; and B and C would have been obliged to him. But if the capital at
first was worth but one hundred pounds, and increased only by the subsequent partnerships, it
must then be acknowledged, that B and C have been imposed on in their turns, and that
unfortunate thoughtless D paid the piper.”
86
This simile is too obvious to need explanation. A plainly representing the original South Sea capital,
as B and C do the first and second subscriptions for stock, and D the third and fourth subscriptions.
This came not out till the close of the year 1720, when every one too late saw the general deception:
but we remember many who were then of opinion, that had it been published before the two shameful
subscriptions at each one thousand pounds per cent had been resolved on, it might have prevented so
wild a measure.”
i. Dismissal of Petitions for Patents and Charters; List of Bubbles (12 July 1720)50
“The whole nation was become stock-jobbers. The South Sea was like an infectious distemper,
which spread itself in an astonishing manner. Every evening produced new projects, which were justly
called Bubbles, new Companies appeared every day. These were countenanced by the greatest of the
nobility. The prince of Wales was governor of the Welsh Copper; the duke of Chandois, of York
Buildings; the duke of Bridgewater formed a company for building houses in London and
Westminster. There were near a hundred different kinds of projects or bubbles; and it was computed,
that above a million and a half was won and lost by these unwarrantable practices, by which, many
unwary persons were defrauded and impoverished, and a few crafty men enriched, to the great
detriment of domestic trade. The king had, the same day the parliament rose, published a
Proclamation, declaring all these unlawful projects should be deemed as common nuisances, and
prosecuted as such; with the penalty of 500l. for any broker to buy or sell any shares in them.
Notwithstanding this [655] Proclamation, several of the illegal projects were still carried on; upon
which the Lords Justices, on the 12th of July, to put a stop to all farther proceedings, ordered all the
Petitions, that had been presented for Patents and Charters, to be dismissed.
The following is a Copy of the said Order:
At the Council Chamber, Whitehall, the 12th of July 1720. Present, their Excellencies the Lords
Justices in Council.
Their excellencies the lords justices in council taking into consideration the many inconveniences
arising to the public, from several projects set on foot for raising of joint stocks for various purposes,
and that a great many of his majesty’s subjects have been drawn in to part with their money, on
pretence of assurances that their Petitions for patents and charters, to enable them to carry on the
same, would be granted: to prevent such impositions, their excellencies, this day, ordered the said
several Petitions, together with such reports from the Board of Trade, and from his majesty's Attorney
and Solicitor-general, as had been obtained thereon, to be laid before them, and after mature
consideration thereof, were pleased, by advice of his majesty's privy-council, to order, That the said
Petitions be dismissed. Which are as followeth:
50 7 Cobb. Parl. Hist., pp. 654-9. URL: http://goo.gl/xk1Yc.
87
Petition of several persons, praying letters patents for carrying on a fishing trade, by the name of
the Grand Fishery of Great-Britain.
Petition of the company of the Royal Fishery of England, praying letters patents for such farther
powers as will effectually contribute to carry on the said fishery.
Petition of George James, in behalf of himself, and divers persons of distinction, concerned in a
national Fishery, praying letters patents of incorporation to enable them to carry on the same.
Petition of several merchants, traders, and others, whose names are thereunto subscribed, praying
to be incorporated for reviving and carrying on a Whale fishery to Greenland and elsewhere.
Petition of sir John Lambert, and others thereto subscribing, on behalf of themselves, and a great
number of merchants, praying to be incorporated for carrying on a Greenland Trade, and particularly
a Whale fishery in Davis's Streights.
Another petition for a Greenland trade.
Petition of several merchants, gentlemen, and citizens thereto subscribing, praying to be
incorporated for buying or building of ships to let or freight.
Petition of Samuel Antrim, and others, praying letters patents for sowing hemp and flax.
Petition of several merchants, masters of ships, sail-makers, and manufacturers of sail-cloth,
praying a charter for an incorporation, to enable them to carry on and promote the manufactory by a
joint stock.
Petition of Thomas Boyd, and several hundred merchants, owners and masters of ships, sail-
makers, weavers, and other traders, praying a charter of incorporation, impowering them to borrow
money for purchasing lands, in order to the manufacturing sail-cloth, and fine Holland.
Petition on behalf of several persons intrusted, in a patent granted by the late king William and
queen Mary, for the making of linen and sail-cloth, praying, that no charter may be granted to any
persons whatsoever for making sail-cloth, but that the privilege now enjoyed by them may be
confirmed, and likewise an additional power to carry on the cotton and cotton-silk manufactures.
Petition of several citizens, merchants, and traders, in London, and other subscribers to a British
stock, for a general insurance from fire in any part of England, praying to be incorporated for carrying
on the said undertaking.
Petition of several of his majesty's loyal subjects of the city of London, and other parts of Great-
Britain thereto subscribing, praying to be incorporated for carrying on a general insurance from losses
by fire within the kingdom of England.
Petition of Thomas Burges, and others, his majesty's subjects thereto subscribing in behalf of
themselves and others, subscribers to a fund of 1,200,000l. for carrying on a trade to his majesty's
German dominions, praying to be incorporated by the name of the Harbourg company.
88
Petition of Edward Jones, a dealer in timber, on behalf of himself and others, praying to be
incorporated for the importation of timber from Germany.
Petition of several merchants of London, and others, praying a charter of incorporation for
carrying on a salt work.
Petition of captain Macpheadris, of London, merchant, on behalf of himself and several
merchants, clothiers, batters, dyers, and other traders, praying a charter of incorporation, impowering
them to raise a sufficient sum of money, to purchase lands for planting and rearing a wood called
Mader, for the use of the, dyers.
Petition of Joseph Galendo, of London, snuff-maker, praying a patent for his invention to prepare
and cure Virginia tobacco for snuff, in Virginia, and making it into the same within all his majesty's
dominions.
LIST OF BUBBLES.
Besides the Projects and Undertakings, above-mentioned many others had been set up and carried
on, under the names of Bubbles, viz.
For the importation of Swedish iron
[657] For supplying London with sea-coal, a subscription of three millions.
For building and rebuilding houses throughout all England, three millions.
For making of muslin.
For carrying on and improving the British allum-works.
For effectually settling the island of Blanco and Sal-Tartugas.
For an engine to supply fresh water for the inhabitants of the town of Deal.
For buying and importing of Holland, Flanders-Lace, &c.
For improvement of lands in Great-Britain, four millions subscription.
For encouraging the breed of horses in England, and improving of glebe and church-lands, and
repairing and rebuilding parsonage and vicarage houses.
For making of iron and steel in Great Britain.
For improving land in Flintshire, one million.
For purchasing lands, &c. to build on, two millions.
For trading in hair.
For erecting salt-pans in Holy-Island, two millions.
For buying and selling estates, lending money on mortgages, &c.
89
For carrying on an undertaking of great advantage, but nobody to know what it is.
For paving the streets of London, two millions.
For furnishings funerals to any part of Great Britain.
Another for buying and selling lands, and lending money at interest, five millions.
For carrying on the royal fishery of Great Britain, ten millions.
For assuring of seamen's wages.
For erecting loan-offices for the assistance and encouragement of the industrious, two millions.
For purchasing and leasing improveable lands, four millions.
For importing pitch and tar, and other naval stores, from North-Britain and America.
For the cloathing, felt, and pantile trade.
For purchasing and improving a manor and royalty in Essex, &c.
For insuring of horses, two millions.
For exporting the woollen manufacture, and importing copper, brass, and iron, four millions.
For a grand dispensary, three millions.
For erecting mills for milling of lead, and purchasing of lead mines, &c. two millions.
For improving the art of making soap.
For a settlement on the island of Santa Cruz.
For sinking pits, and melting lead-ore in Derbyshire.
For making glass bottles, and glass.
For a wheel for perpetual motion, one million.
For improving of gardens
For insuring and increasing children's fortunes.
For entering and loading goods at the Custom-house, and for negotiating business fur merchants.
For carrying on a woollen manufacture in the North of England.
For importing walnut-tree from Virginia, two millions.
For making Manchester stuffs of thread and cotton.
For making Joppa and Castile soap.
90
For the wrought iron and steel manufactures in this kingdom, four millions.
For dealing in lace, Hollands, cambricks, lawns, &c. two millions.
For trading in, and improving certain commodities of the product of this kingdom, &c. three
millions.
For supplying the London markets with cattle.
For making looking glasses, coach-glasses, &c. two millions.
For the tin and lead mines in Cornwall and Derbyshire.
For making rape oil.
For importing beaver-fur, two millions.
For making pasteboard, packing-paper, &c.
For importing of oils and other materials used in the woollen manufactures.
For improving and increase of the silk manufacture.
For lending money on stocks, annuities, tallies, &c.
For paying pensions to widows, &c. at small discount, two millions.
For improving malt-liquors, four millions.
For a grand American fishery.
For purchasing and improving fenny lands in Lincolnshire, two millions.
For improving the paper manufacture in Great Britain.
The bottomry society.
For drying malt by hot air.
For carrying on a trade in the river Oronoko in America.
For the more effectual making of baize in Colchester and other parts of Great Britain.
For buying of naval stores, supplying the victualling, and paying wages of the workmen.
For imploying poor artificers, and furnishing merchants and others with watches.
Fur improvement of tillage, and the breed of cattle.
Another for the improvement of our breed of horses.
Another for insuring of horses.
For carrying on the corn trade of Great Britain.
91
For insuring to all masters and mistresses the losses they shall sustain by servants, three millions.
For erecting houses, or hospitals, for taking [659] in and maintaining bastard children, two
millions.
For bleaching of course sugars, without the use of fire, or loss of substance.
For turn pikes and wharfs.
For insuring from thefts and robberies.
For extracting silver from lead.
For making China and Delft ware, one million.
For importing of tobacco, and exporting it again to Sweden, &c. four millions.
For making iron with pit coal.
For furnishing the cities of London and Westminster, and the suburbs, with hay and straw.
For a sail and packing-cloth manufactory in Ireland.
For taking up ballast.
For buying and fitting out ships to suppress pirates.
For importing timber from Wales, two millions.
For rock-salt.
For the transmutation of quick-silver into a malleable fine metal.”
j. An Unsuccessful Proposal to Address Excessive Speculation in the Stock Market 51

“I shall also transcribe the latter Part of the 26th Page of my said last-mentioned Treatise, for
which, I think, the Reasons are now much stronger than at the Time I wrote it, viz.
“And, above all Things, whether care should not be taken to incourage those Trades most,
from which we have a Ballance in Bullion; and also, to make such Sumptuary Laws as shall appear
necessary, to refrain such Extravagancies as are destructive, not only to particular Persons, but to
the Kingdom in general ? I shall mention but one Thing more, which, I think, will tend very much
to turn Mens Thoughts to the Improvement of those Trades which are really beneficial to the
Kingdom; viz. If their Thoughts could be effectually turned from the pernicious Trade, or rather
Gaming, of Exchange -Alley, where the Brokers, like other Box-Keepers, are the chief Gainers. In
this new sort of Trade, or Gaming, the Nobility, the Gentry, the Merchants, and almost all sorts
51Hutcheson, Archibald, Collection of Treatises relating to the National Debts & Funds, London, 1721, p. 67. URL:
http://goo.gl/ukWRj.
92
of People, are universally concerned; and, I believe, where one Bargain is made for the real Sale
of Stocks, with Intention to keep the same, there are Hundreds made in the Way of Stock-Jobbing,
only for a few Days: And it is well known, that the Bear-Skin, the Putts, the Refusals, and paying
the Difference, are some of the most considerable Branches in this new Way of Commerce. And,
for a Redress of this, I would propose a short Law, whereby all Persons, making any Purchase of
Lands or Tenements, Rent-Charges, or Annuities, issuing out of any Lands, or the Publick
Revenues, either for Ever, or for Terms of Years, should be disabled to sell the same for one Year
after such Purchase made; and that all Agreements or Contracts for any Sale, till after the
Expiration of the said Year, should be Null and Void. It is evident, this will be no Inconveniency
to those who intend to become real Purchasers; and it would give some Check to this unprofitable
Trade of Stock- Jobbing.”
I had prepared a Clause to this Effect, to, to have been added to the Bill for Establishing the Two
Companies for Insuring of Ships, and for Suppressing of all the other Bubbles, but I had not an
Opportunity to offer it and it follows in these Words, viz.
“And for the more effectual obtaining the good Purposes intended by this Act, and preventing
the Ruin of many weak and unwary People, and for the better Encouragement of the Trade and
Commerce of this Kingdom; Be it further Enacted, by the Authority aforesaid, That any Stock, Share
or Interest in any of the Companies, which now are, or hereafter shall be established by any Act
or Acts of Parliament, or by Grant or Charter from the Crown, shall be, and are hereby declared
to be absolutely null and void, unless the Person or Persons contracting to assign or transfer such
Stock or Interest, shall have been actually possessed thereof, for the space of before such
Contract so entered into, and such Assignment or Transfer shall have been actually made and
entered in the Book or Books of such Company, whereto such Stock, Share or Interest shall
belong, within the space of after such Contract made for the same”
And I am fully persuaded, that a Clause to this or the like Purport, would have done much good,
and have suppressed all Bubbles effectually, without the help or nay Penalties whatever; and it would
also have prevented the turning the Stocks of Companies, established by Acts of Parliament and
Charters for better Purposes, into real Bubbles, destructive to the Publick.”
k. Sentencing of a Defendant Convicted under the Bubble Act (1722)52

Dominus Rex v. Caywood
THE defendant being convicted upon the late act of Parliament of being the projector of an
unlawful undertaking to carry act leaves a on a trade to the North Seas, whereby many of his majesty's
subjects had been defrauded of great sums of money, came now to receive the judgment court, which
was prayed by Mr. Attorney General upon the statute of praemunire; whereupon the counsel the
defendant argued, that the late statute had not tied up the hands the court from pronouncing any
52 Rex v. Caywood, 1 Stranger 472 (1722), URL: http://goo.gl/mNOPl.
93
milder sentence, if any favourable circumstances could be laid before them, but had left a discretionary
power in the court to punish, as (the words are) for a common nusance; and if they thought fit, that
then the party should likewise incur any of the pains and penalties ordained by the statute of praemunire.
And if it should be taken otherwise, it could be to no purpose, that the first clause of fining for a
common nusance was inserted, when the judgment of praemunire alone would reach every thing that
the party could have, to answer any fine.
To this it was answered by Mr. Attorney and Solicitor, that the whole judgment in a praemunire
might stand, and yet there might still be some use for the clause about nusances, where part of the
judgment might be to abate the nusance, and the party convicted may be likewise set on the pillory or
whipped, which is no part of the judgment against one convicted upon the statute of praemunire. And
they said the word any in the statute was the same as all; if he is to incur any of the pains and penalties,
that is every one.
Adjornatur. And the last day of the term the Chief Justice declared the opinion of the court, that
they had a discretionary power to inflict all, or only some, of the penalties of a praemunire.
UPON exhibiting articles of the peace against the defendant, it was objected by Mr. Wearg, that
the fact whereon the prosecutor grounds his apprehensions or danger appeared to be committed
before the act of grace, and pardoned thereby; and the crime by that being gone, it must be considered
as never done; and the court never demands security of the peace barely on a man's swearing he goes
in danger of his life, without laying some fact before the court, that it may appear to be such a metus,
qui cadere possit in constantem virum.
Sed per curiam: Suppose it was threats only, would not they be a ground for articles, tho’ they are
not punishable? Though the fact is pardoned, yet it may be instanced for an inducement to us to
believe the defendant a dangerous person. The defendant entered into a recognizance to keep the
peace.
l. Extension of the Bubble Act to the American Colonies (1741)53

“An act for restraining and preventing several unwarrantable schemes and undertakings in His Majesty's Colonies
and Plantations in America
WHEREAS in and by an Act made in the sixth Year of the Reign of his late Majesty King George
the First, intituled, An Act for the better securing certain Powers and Privileges intended to be granted
by his Majesty by two Charters, for Assurance of Ships and Merchandizes at Sea, and for lending
Money upon Bottomry, and for restraining several extravagant and unwarrantable Practices therein
mentioned, for suppressing the mischievous and dangerous Undertakings and Attempts therein
mentioned and described, and preventing the like for the future; it was enacted…
53 14 Geo. II c. 37. URL: http://goo.gl/6XHpF.
94
And whereas Persons have presumed to publish in America a Scheme for supplying a pretended
Want of a Medium in Trade, by setting up a Bank on Land Security, the Stock of such Bank to be
raised by publick Subscriptions for large Sums of Money, whereof small Sums were from time to time
to be paid in and by the particular Subscribers, and to be managed by Directors, Treasurer and other
Officers, and Dividends to be made as therein mentioned; and the said Company of Subscribers were
to promise to receive the Bills which they should issue for and as so much lawful Money as should be
therein respectively mentioned in all Payments, Trade and Business; and after the Expiration of twenty
Years, to pay the Possessor the Value thereof in Manufactures; and sundry other Schemes, Societies,
Partnerships or Companies, have been and may be set on Foot in America, for the Purpose of raising
publick Stocks or Banks, and unlawfully issuing large Quantities of Notes or Bills there, contrary to
the true Intent and Meaning of the said recited Act:
And whereas Doubts have arisen, whether the said recited Act doth extend to, or can be executed
in, his Majesty's Dominions, Colonies and Plantations in America, in Regard that the Information or
Indictment against the Offenders therein mentioned, and likewise the Actions to be grounded upon
that Act, and thereby given to the Merchant or Trader who should suffer any particular Damage, were
appointed to be heard and determined in some of his Majesty's Courts of Record at Westminster, or
in Edinburgh, or in Dublin, so that the said Act without further Explanation and Amendment may
not be sufficient to suppress and prevent in America the mischievous and dangerous Undertakings
and Attempts therein mentioned, and thereby designed to be prevented and suppressed:
For Remedy whereof, may it please Your most Excellent Majesty, that it may be declared and
enacted; and be it declared and enacted by the King's most Excellent Majesty, by and with the Advice
and Consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament
assembled, and by the Authority of the same, That the said recited Act, and all and singular the
Paragraphs, Clauses, Sentences and Expressions therein contained, for suppressing, restraining or
punishing the extravagant or unwarrantable Practices therein mentioned, did, do and shall extend to
all and every the publick, extravagant and unwarrantable Practices herein before mentioned or
described, and did, do and shall extend to, and are and shall be in Force, and carried into Execution,
in all and every his Majesty's Dominions, Colonies and Plantations in America; and that all and every
the Undertakings, Attempts, Matters and Things in the said recited Act mentioned or described, and
prohibited to be acted, done, attempted, endeavoured or proceeded upon, within the City of London,
and other Parts of this Kingdom, as also in Ireland, and other his Majesty's Dominions; and all other
the Undertakings, Attempts, Matters and Things herein before mentioned or described, are and shall
be deemed to be illegal and void in his Majesty's Dominions, Colonies and Plantations in America
also, and shall not there be practised, or in any wise put in Execution; and that all Offenders against
the said recited or this present Act, being thereof lawfully convicted upon Information or Indictment
in any of his Majesty's Courts of Record in any of his Majesty's Dominions, Colonies or Plantations
in America, shall be liable to such and the like Fines, Penalties and Punishments, whereunto Persons
convicted in Great Britain for common and publick Nuisances are by any of the Laws or Statutes of
this Realm subject or liable; and moreover shall incur and sustain any further Pains, Penalties and
Forfeitures, as ordained and provided by the said Statute of Provision and Premunire, made in the
95
sixteenth Year of the Reign of the said King Richard the Second; and that if any Merchant, Trader or
other Person hath suffered or shall suffer any particular Damage in his, her or their Trade, Commerce,
Exchange or other lawful Affairs, by Occasion or Means of any Undertaking, or Attempt, Matter or
Thing carried on, attempted or done in America, and by this Act, or the said recited Act, declared to
be illegal, and will sue to be relieved therein; then and in every such Case such Merchant, Trader or
other Person, shall and may have his, her and their Remedy for the same, by any Action or Suit
grounded, upon this Act, against the respective Persons, Societies or Partnerships, or against any one
or more of the Persons, who contrary to this Act have or hath been or shall be engaged or interested
in any such unlawful Undertaking or Attempt; and every such Action and Suit (for what hath been or
shall be so undertaken, carried on, attempted or done in America) shall be heard and determined in
any of his Majesty's Courts of Record within any of his Majesty's Dominions, Colonies or Plantations
in America; and in every such Action and Suit the Plaintiff (in case he or she recover) may and shall
recover Treble Damages, with Full Costs of Suit.
II. And be it further enacted by the Authority aforesaid, That all and every Person and Persons
whatsoever, who shall be possessed or of or intitled to any Promissory Note or Notes, Bill or Bills,
which have been or shall be issued by any such Societies, Partnerships or Companies of Persons in
America, shall and are hereby impowered to commence or bring at any Time hereafter, his, her or
their Action or suit, in any Court of Record in any of his Majesty's Dominions, Colonies or Plantations
in America, against the respective Persons, Societies, Partnerships and Companies, who have or shall
issue such Notes or Bills, or against any one or more of the Persons who have been within the Space
of six Years last past, or shall be hereafter engaged or interested in any such unlawful Undertaking or
Attempt, or who mall have signed such Note or Notes, Bill or Bills, in order to recover present
Payment in lawful Money of the full Sum mentioned or expressed in such Note or Bill, to which
Payment every such Person is hereby declared to be personally liable; and in such Actions or Suits, the
Plaintiff or Plaintiffs shall recover and have Judgment for immediate Payment by the Defendant or
Defendants in lawful Money, of the full Sum mentioned in such Note or Bill, with lawful Interest for
the same from the Day of the Date of such Note or Bill, with Full Costs of Suit, although the Time
limited for Payment according to the Tenor of such Note or Bill shall not then be come or past.
III. Provided always, That nothing herein contained shall extend, or be construed to extend, to
inflict any of the Fines, Pains, Penalties, Forfeitures, Punishments or Treble Damages aforesaid, upon
any Person or Persons whatsoever, who have or hath attempted, promoted, undertaken, assisted or
carried on in America any of the Matters or Things declared to be illegal and void by this or the said
recited Act, if such Person or Persons does or do within ten Days after Demand made, pay and
discharge such Sum or Sums of Money respectively, as shall be secured or made payable by such Note
or Notes, Bill or Bills; and desist from, give up, relinquish and wholly forbear to act further in any
Sort, directly or indirectly, in any such Matter or Thing, on or before the twenty-ninth Day of
September one thousand seven hundred and forty-one; any thing herein contained to the contrary
notwithstanding.”
96
Chapter 3. Regulation of Securities Intermediaries after the Bubble Period
a. Debates in the Lords on a Bill to Prevent the Infamous Practice of Stock Jobbing (1734)
The bill had previously been vigorously debated by the House during April 1733, passed on third
reading, but subsequently dropped by the Lords54.
“Debate in the Lords on the Bill to prevent Stock Jobbing. March 2855. The Lords went into a committee
upon a bill from the Commons, “To prevent the infamous Practice of stock-jobbing”; and the said
bill being read a second time, the earls of Warwick and Cholmondeley, and lord Hervey, spoke against
the bill: their lordships urged,
That the grandeur and strength of a nation depended upon public credit, which was a thing of a
very ticklish nature, and did not always depend upon reason, but upon the opinions of men; and
therefore it was very dangerous to make any innovations with respect to our public funds; for though
one man might have a good opinion of the innovation proposed, yet he could not tell what opinion
others might have of it.
That all human regulations, all human affairs, were subject to imperfections and inconveniences,
and therefore legislators had in all countries been forced to suffer small inconveniences for the sake
of greater conveniences, which was really the case then before them; for though stockjobbing was an
inconvenience, yet considering how much it contributed to the ready circulation of money, and to the
supporting the credit of our funds, it was therefore to be tolerated.
That the credit of our funds depended very much upon the ready access that people had at all
times to their money, and that this ready access was chiefly owing to the practice of stock-jobbing; by
this practice it was, that every man was always sure of finding a purchaser for his stock whenever he
had a mind to sell, and by this only it was, that there was always a certain and fixed market-price upon
every one of our public funds; whereas, should this practice be entirely destroyed, it might soon
become as difficult to find a purchaser for stock, or to ascertain the price of it, as it is now with respect
to land; and the concluding of a bargain might become as tedious in the one case as it is now in the
other.
That at present our people got by commission and brokerage from foreigners at least 80,000l. per
annum, which would be intirely lost to the nation, if that bill should pass into a law; because all
transactions of that nature, even in our own public funds, would then be carried on upon [515] the
exchange of Amsterdam; and it was well known, that when any branch of trade is diverted and turned
out of its old channel, it is no easy matter to bring it back again; and therefore, though the bill was to
continue but for three years, they could not agree to it, because if the trade of buying and selling any
of our public funds should be turned out of this kingdom for three years only, it might not be in our
power to bring it back again.
54 9 Cobb. Parl. Hist., pp. 49-68. URL: http://goo.gl/ol20I.

55 Ibid., pp. 514-9. URL: http://goo.gl/bJlk2.
That if the creditors of the public were not allowed as free and uncontrolled a liberty of disposing
of their properties in the public funds, as of any other part of their property, it would not only prevent
peoples becoming purchasers of any of our present funds, but it would prevent people's lending their
money to the government upon any future emergency, which might be attended with the most fatal
consequences.
That in all other branches of trade, there was a free liberty allowed to every person that had a
mind to insure his stock in trade: that the selling of stock for time56, and the giving of money for the
put of stock (as it was called in Exchange Alley) was nothing else but a way of insuring the principal
money which a man had in the public funds; and the preventing a man from taking that method of
securing his property in the funds, would be a very great hardship upon all the creditors of the public.
That it was doing an injustice to the persons concerned in the public funds; because it was a
subjecting them to conditions and restraints which they were not subjected to, nor could possibly
dream of, when they lent their money to the public; which was really in effect taking so much of their
property from them: for it was certain, that every sort of property was of the less value, the more
conditions and restrictions it was subjected to: nor could any argument in favour of the Bill be drawn
from that law which had been made against laying wagers about public affairs; because those that
might be concerned in such wagers had never purchased from the public a privilege to lay any such;
whereas the creditors of the public had in some manner purchased a privilege of taking any method
they thought proper for making the most of the property they had in the public funds.
The earl of Strafford, Hay, and Winchelsea, the lords Bathurst and Hardwick, spoke for it: Their
lordships alledged,
That there was really no difference between stock-jobbing and gaming; or if there was any, it
consisted in this, that the former was much more fatal in its consequences, and much more destructive
than the other; for if any man frequented hazard-tables, horse-racing, cock-fighting, or any other sort
of public gaming, it became soon known in the world, and thereby every man was advertised to draw
his effects out of such a man's hand, and not to give him any trust or credit, so that if such men came
to be ruined, they generally could lose nothing but their own estates, and none suffered by their folly
or ill conduct but themselves and their families; whereas in the transactions in Exchange-alley, they
might be, and generally were carried on in the dark; it was not known who were principally concerned,
by which means a man might game for thousands, without its being so much as suspected that he had
ever ventured a farthing in that way; whereby it generally happened that not only the gamester himself
was ruined, but many innocent men, concerned with him in an honest and fair way of trade, found
themselves undone, when they had good reason to think themselves absolutely secure.
That Stock-jobbing was worse than gaming in this other respect, that gaming of any other kind
might be carried on upon a fair and equal footing, but it was impossible that Stock-jobbing ever could;
for there must always be some persons behind the curtain, who must necessarily know a great deal
56In modern financial terminology, “selling a stock for time” means some form of short-selling the stock, or selling of a
stock that the seller doesn't own in the anticipation of a future decline in price.
98
3. Regulation of Securities Intermediaries after the Bubble Period4
more of the game than it was possible for the other adventurers to know, by which means they always
had an opportunity of cheating their fellow gamesters out of what sums of money they had a mind:
and it was but too well known that men had often made an unjust use of the knowledge they had in
this way.
That by the means of this infamous practice of Stock-jobbing, it was always in the power of some
of our foreign neighbours to lay a heavy tax upon this nation, and to draw a great deal of money out
of it, whenever they thought proper; for as the prices of all our public funds must always depend, in
some measure upon the circumstances of foreign affairs, and must vary according as those
circumstances vary, it would always be in the power of the ministers of some of the foreign courts of
Europe, by means of their correspondents here, to raise large sums of money, [517] by giving out a
little for the refusal, or for the put, of some of our public funds.
And in answer to the arguments made use of against the Bill, it was said, That public credit, it was
true, depended upon the opinions of men, but then those opinions were always founded upon reason,
when people were truly informed, and had time to think coolly about the matter, which could not well
happen, as long as the game of Stock-jobbing was allowed, for thousands of lies would be daily
invented to deceive the weak and ignorant; and men would always run headlong into the buying or
selling, or dealing in puts and refusals, not according to the real intrinsic value of the thing to be
bought or sold, but according to their opinion of the price's being about to fall or rise.
That the credit of our funds did not depend upon the gaming or Stock-jobbing in them, but rather
suffered by it, as appeared evidently from this, that the South-Sea annuities, in which there was little
or no gaming, had always bore a higher price than the stock, in proportion to the dividends made
upon both; and it was certain, that every man who was not possessed with something of the spirit of
gaming, would put a greater value upon that security, which he was sure of selling again for what it
cost him, than upon a security by which he run the risk of losing or winning a great deal. And as to
the certainty and invariableness of the price, the price of annuities had always been more certain and
invariable than the price of any other public fund, which shewed that Stockjobbing rather tended
towards unsettling, than towards fixing the price of any of our public funds.
That the readiness of finding a purchaser for any thing, depended upon the people's being certain
as to the value, as to the right, and as to the method of conveying the thing to be sold; and to this
certainty with respect to our public funds, it was owing that the proprietors had then so ready an
access to their money, and not at all to the practice of stock-jobbing; therefore as this certainty could
not be in the least diminished by the Bill then before them, the proprietors of the public funds would,
without doubt, have as ready access to their money after the passing of that Bill, as ever they had
before.
That it could not well be supposed that ever our people had made in any one year 80,000l. by
brokerage and commission from foreigners dealing in our funds; but whatever had been made in that
way could not by the Bill be diminished; for it was certain that buying and selling in the gaming way
could not be carried on by commission, there could be no commission or brokerage paid by foreigners
to our people here but when a transfer was actually made, and when a transfer is to be made, some
99
trustee or correspondent here must still be employed; so that nothing but the game of stock-jobbing
could be carried to the exchange of Amsterdam; and if all our gamesters, as well as the game, were
transported thither, it would be no great loss to the nation.
That it was to be hoped the public credit of this nation depended upon a much more stable
foundation than that of stock-jobbing; and it was not to be presumed that the creditors of the public
had purchased, or that they ever intended by their lending money to the government, to purchase a
privilege of setting up a gaming table in the middle of the city of London; and to pretend that the
prescribing a certain method by which the property of the public funds was transferred from one to
another, was a restraint put upon the liberty of disposing of such funds, or that it would any way
diminish the value of them, was the same thing as to pretend that the statute of the 29th of Charles
2, against fraudulent conveyances of land-estates, was a restraint put upon the liberty of disposing of
such estates; or that the act for registering such conveyances within the county of Middlesex, had
diminished the value of land within that county; whereas it was never yet imagined but that the
proprietors of land estates had as full a liberty of disposing of such estates since the said act of the
29th of Charles 2 had passed, as ever they had before; and it was well known that the act for
establishing a register within the county of Middlesex, had rather increased than diminished the value
of land within that county.
That as bargains for time were still to be allowed, the public creditors might thereby insure their
principal money in the public funds in the same manner as they had done before; but as for the practice
of giving money for the put of stock, if it was to be called an insurance, it was a very odd sort of one;
for by that method a man was to insure not only his own property in the public funds, but in some
manner the whole public funds of England; which was just the same as if a man [519] concerned only
in one ship should give a premium for the insurance of such a sum of money upon the safe return of
all the ships belonging to Great Britain.
Upon reading the last Clause, by which the Bill was made to continue for three years, the lord
Delaware moved,
That it might be made to continue but for one year, and to the end of next session of Parliament.
Lord Bathurst was against this amendment; his lordship said, That such a short term might very
probably encourage the stock-jobbing gamesters to enter into a combination for raising
inconveniences and evil consequences, which they might perhaps be able to support and keep up for
so short a time by some fraudulent and artful management, in order to make people sick of the Bill,
and thereby prevent its being continued; whereas if it was made to continue for three years, things
would in that time take their natural course; the gamesters could not hope to keep up by art and
management any sort of inconveniences, but those which really proceeded from the nature of the
Bill; and therefore in order to know the natural and real consequences of it, it was necessary to give it
a continuance for at least three years.
100
The earl of Hay spoke for this Amendment, and the earl of Strafford and the earl Poulet against
it. At last the question being put, it was carried against the Amendment proposed, by 27 against 16;
and the Bill afterwards passed into a law.”
b. Barnard’s Act (1734)

“An Act to prevent the infamous Practice of Stock Jobbing 57
WHEREAS great inconveniences have arisen and do daily arise by the wicked pernicious and
destructive practice of stock jobbing whereby many of his Majesty's good subjects have been and are
diverted from pursuing and exercising their lawful trades and vocations to the utter ruin of themselves
and families to the great discouragement of industry and to the manifest detriment of trade and
commerce:
For remedy thereof, may it please your most excellent Majesty that it may be enacted, and be it
enacted by the King's most excellent Majesty, by and with the advice and consent of the Lords Spiritual
and Temporal and Commons in this present Parliament assembled, and by the authority of the same,
That all contracts and agreements whatsoever which shall from and after the 1st day of June 1734,
be made or entered into by or between any person or persons whatsoever upon which any premium
or consideration in the nature of a premium shall be given or paid for liberty to put upon or to deliver
receive accept or refuse any publick or joint stock or other publick securities whatsoever or any part
share or interest therein, and also all wagers and contracts in the nature of wagers and all contracts in
the nature of putts and refusals58 relating to the then present or future price or value of any such stock
or securities as aforesaid shall be null and void to all intents and purposes whatsoever and all premiums
sum or sums of money whatsoever which shall be given received paid or delivered upon all such
contracts or agreements or upon any such wagers or contracts in the nature of wagers as aforesaid
shall be restored and repaid to the person or persons who shall give pay or deliver the same, who shall
be at liberty within six months from and after the making such contract or agreement or laying any
such wager to sue for and recover the same from the person or persons to whom the same is or shall
be paid or delivered with double costs of suit by action of debt founded on this Act, to be prosecuted
in any of his Majesty's courts of record, in which action no essoin protection wager of law or more
than one imparlance shall be allowed; and it shall be sufficient therein tor the plaintiff to allege that
the defendant is indebted to the plaintiff or has received to the plaintiff's use the money or premium
so paid or received whereby the plaintiffs action accrued to him according to the form of this statute
without setting forth the special matter.
II. And for the better discovery of the monies or premium which shall be given paid or delivered
and to be sued for and recovered as aforesaid; It is hereby further enacted by the authority aforesaid,
That all and every the person or persons who by virtue of this present Act shall or may be liable to
be sued for the same shall be obliged and compellable to answer upon oath such bill as shall be
57 7 Geo. II. c. 8. URL: http://goo.gl/cbkek. This act was made permanent by 10 Geo II, c. 8 (1737). URL:
http://goo.gl/lGQpy. Both acts were repealed in 1860 by 23 & 24 Vic., c. 28. URL: http://goo.gl/rsALv.
58 A “refusal” is an option to buy at a future date. See n. 49 above.
101
preferred against him or them in any court of equity for discovering any such contract or wager and
the sum of money or premium so given paid or delivered as aforesaid.
III. Provided always, That the plaintiffs relators or informers in such bill shall and do (at the time
of bringing or filing such bill) give good and sufficient security to answer and pay the defendants in
such bill full costs of suit in case such costs shall be adjudged to the defendants and that no person
shall be obliged to appear or to answer such bill until such security is given.
IV. And be it further enacted by the authority aforesaid, That all and every person or persons
whatsoever who shall enter into make or execute any such contract bargain or agreement upon which
any premium or consideration in the nature of a premium shall be given or paid for liberty put upon
or to deliver receive accept or refuse any publick or joint stock or other publick securities whatsoever,
or any part share or interest therein, or any contract or bargain in the nature of putts and refusals as
aforesaid, or shall lay any such wager or make any such contract in the nature of a wager as aforesaid
(except such person or persons who shall actually and bona fide without covin or collusion sue and with
effect prosecute for the recovery of the money or premium given delivered or paid by him her or
them as aforesaid; and also except such person or persons who shall voluntarily before any action or
suit commenced actually and bona fide without covin or collusion repay or tender before one or more
witness or witnesses such monies or premium as he she or they shall have had taken received or been
paid as aforesaid; and also except such persons who shall discover such transactions in any court of
equity) shall forfeit and pay the sum of five hundred pounds; and also all and every brokers agents
scriveners or other persons negotiating transacting or writing any such contract bargain or agreement
as aforesaid shall likewise forfeit and pay the sum of five hundred pounds; which said penalties shall
and may be recovered by action of debt bill plaint or information in any of his Majesty's courts of
record at Westminster, in which no essoin privilege protection or wager of law or more than one
imparlance shall be allowed; one moiety thereof to the use of his Majesty his heirs and successors,
and the other moiety thereof to the use of him her or them who shall sue for the same.
V. And for preventing the evil practice of compounding or making up differences for stocks or
other securities bought sold or at any time hereafter to be agreed so to be, Be it further enacted by the
authority aforesaid, That no money or other consideration whatsoever (except as hereinafter is
provided) shall from and after the said 1st day of Jane 1734, be voluntarily given paid had or received
for the compounding satisfying or making up any difference for the not delivering transferring having
or receiving any publick or joint stock or other public securities, or for the not performing of any
contract or agreement so stipulated and agreed to be performed; but that all and every such contract
and agreement shall be specifically performed and executed on all sides, and the stock or security
thereby agreed to be signed transferred or delivered shall be actually so done and the money or other
consideration thereby agreed to be given and paid for the same shall also be actually and really given
and paid; and all and every person and persons whatsoever who shall from and after the said 1 st day
of Jane 1734, voluntarily compound make up pay satisfy take or receive such difference money or
other consideration whatsoever for the not delivering transferring assigning having or receiving such
stock or other security so to be agreed to be delivered transferred assigned had or received as aforesaid
(except in the manner hereinafter provided) shall forfeit and pay the sum of one hundred pounds to
102
be recovered by action of debt bill plaint or information in any of his Majesty's courts of record at
Westminster in which no essoin privilege protection or wager of law or more than one imparlance shall
be allowed ; one moiety thereof to the use of his Majesty his heirs and successors, and the other
moiety thereof to the use of him her or them who shall sue for the same.
VI. Provided nevertheless, That no person or persons who shall sell any publick or joint stock or
other publick securities to be delivered and paid for on a certain day and which shall be refused or
neglected to be paid for according to such agreement shall be obliged to transfer the same; but it shall
and may be lawful for such person or persons to sell such stock or other securities which shall be so
refused or neglected to be paid for to any other person or persons for the best price which can be
obtained; and after such sale to receive (if the parties can agree) or to recover as aforesaid from the
person or persons who first contracted for the same all the damage which shall be sustained thereby.
VII. And provided also, That it shall and may be lawful to and for any person or persons who shall
buy any publick or joint stock or other publick securities to be accepted and paid for on a future day
and which shall be refused or neglected to be transferred to buy the like quantity of such stock or
other publick securities of any other person or persons at the current market price, and to recover
and receive after such purchase and acceptance (if the parties can agree) from the person or persons
who first contracted to sell or deliver the same the damage which shall be sustained by reason of the
not delivering or not transferring such stock or other securities; any thing in this Act or any law usage
or custom to the contrary notwithstanding.
VIII. And whereas it is a frequent and mischievous practice for persons to sell and dispose of
stocks or other securities of which they are not possessed59; Be it therefore further enacted by the
authority aforesaid, That all contracts and agreements whatsoever which shall from and after the said
1st day of June 1734, be made or entered into, for the buying selling assigning or transferring of any
publick or joint stock or stocks or other publick securities whatsoever or of any part share or interest
therein whereof the person or persons contracting or agreeing or on whose behalf the contract or
agreement shall be made, to sell assign and transfer the same shall not at the time of making such
contract or agreement be actually possessed of or intituled unto in his her or their own right or in his
her or their own name or names, or in the name or names of a trustee or trustees to their use shall be
null and void to all intents and purposes whatsoever; and all and every person and persons whatsoever
contracting or agreeing or on whose behalf and with whose consent any contract or agreement shall
be made, to sell assign or transfer any publick or joint stock or stocks or other publick securities
whereof such person or persons shall not at the time of making such contract or agreement be actually
possessed of or entitled unto in his her or their own name or names or in the name or names of a
trustee or trustees to their use or their own right as aforesaid shall forfeit and pay the sum of five
hundred pounds to be recovered by action of debt bill plaint or information in any of his Majesty's
courts of record at Westminster in which no essoin privilege protection or wager of law or more than
one imparlance shall be allowed ; one moiety thereof to the use of his Majesty his heirs and successors,
and the other moiety thereof to the use of him her or them who shall sue for the same ; and all and
59 Here the Act specifically addresses the practice of selling of stocks for time or, in modern jargon, short-selling.
103
every broker or brokers agent or agents who shall negociate transact or intermeddle in the making or
procuring to be made any such contract or agreement as aforesaid and shall know that the person or
persons by whom or on whose behalf such contract or agreement shall be made is or are not possessed
of or entitled unto the stock or security concerning which such contract or agreement shall be made
in his her or their own name or names or in the name or names of a trustee or trustees for their use
or right shall for every such offence forfeit and pay the sum of one hundred pounds to be recovered
by action of debt bill plaint or information in any of his Majesty's courts of record at Westminster in
which no essoin privilege protection or wager of law or more than one imparlance shall be allowed;
one moiety thereof to the use of his Majesty his heirs and successors, and the other moiety thereof
to the use of him her or them who shall sue for the same.
IX. And be it further enacted by the authority aforesaid, That from and after the said 1st day of
June 1734, all and every broker or brokers or other person or persons who shall negociate or act as a
broker receiving brokerage in the buying selling or otherwise disposing of any of the said publick or
joint stocks or other publick securities, shall respectively keep a book or register which shall be called
The Brokers Book in which said book he and they shall fairly justly and truly enter all contracts
agreements and bargains, that he or they shall from time to time make between any person or persons
whatsoever on the day of the making such contract or agreement, together with the names of the
principal parties as well buyers as sellers and also the day of making such contract or agreement, to
the intent and purpose that such broker or brokers and other person or persons acting or negociating
as such as aforesaid, shall from time to time produce such book or register when thereunto lawfully
required: And in case such broker or brokers or any other who shall negotiate or act as a broker as
aforesaid in relation to any the said matters, shall not keep such book or register or who shall wilfully
omit to enter therein fairly justly and truly any such contract bargain and agreement as aforesaid, he
or they shall for every such offence or omission forfeit and pay the sum of fifty pounds, to be
recovered by action of debt bill plaint or information in any of his Majesty's courts of record at
Westminster, in which no essoin privilege protection or wager of law or more than one imparlance shall
be allowed; one moiety thereof to the use of his Majesty his heirs and successors and other moiety
thereof to the use of him her or them who shall sue for the same.
X. Provided always, That nothing in this Act contained shall extend or be construed to extend to
any contracts or agreements for the purchase or sale of any stock annuities or other publick securities
to be made with the privity of the accountant general of the Court of Chancery, in pursuance of any
decree or order of the said Court; but that all such contracts and agreements may be made and
performed in the same manner as they might have been if this Act had never been made.
XI. Provided also, and be it further enacted by the authority aforesaid, That nothing in this Act
contained shall extend or be construed to extend to hinder or prevent any person or persons from
lending any sum or sums of money on any public or joint stock or other public securities whatsoever
or any part share or interest therein, or to prevent or hinder any defeazance contract or agreement
being made and entered into for the re-delivering assigning or transferring such publick or joint stock
or other publick securities or any part share or interest therein, upon the repayment of the sum or
sums of money which shall have been lent and borrowed thereupon, with interest for the same, so as
104
no premium or other consideration whatsoever be paid to or received by the person or persons lending
such money for or in consideration of such loan than legal interest.
XII. Provided also, and belt further enacted by the authority aforesaid, That this present Act shall
continue and be in force from the said 1st day of June 1734, for the term of three years and from
thence to the end of the then next session of Parliament and no longer.”
c. Consequences of Barnard’s Act on Exchange Alley60

“But two or three years later, in 1733, we find Sir John Barnard calling the attention of the House
of Commons to the vagaries of the Alley; and introducing a Bill, which eventually became law, for the
suppression of most of its business. All the arguments which could be adduced against gambling were
brought forward in support of the Bill, and all the jealousies which could be awakened against the
flourishing profession of stock and share dealing were aroused. A most telling allegation was that
stockbrokers were receiving annually from foreigners alone commissions which amounted in the total
to some £80,000. It was against time bargains, differences, that the Bill was specially directed. They
seem to have had their origin when the transfer of Government Stock was impossible for six weeks
at a time, which was the period deemed necessary by the Bank of England to keep the books closed
in preparation of the dividend distribution. The habit of buying and selling the stock without delivery
— in other words, of transacting time bargains and dealing for differences — had rapidly grown and
extended. Sir John Barnard's Act, passed in 1733, was directed against bargains or “putts” or “refusals”
in “any public or joint stock or other public security whatever,” and the first section declared all such
transactions to be void …
[49] But, as a matter of fact, although Sir John Barnard's Act was in force for more than a century
and [50] a quarter it was at no time seriously operative, and its force was whittled away by judgment
after judgment in the law courts. Nevertheless during its currency it made the position of' the broker
a rather uncertain one. Until its repeal the state of the law was such that if a broker was employed in
one of these transactions which the Act made illegal he could not recover from his principal, although
he had actually done work for him and laid out money for him, because he could not establish his
right except by virtue of having done that which was forbidden by law under a penalty. The fact of
work having actually been done was nothing in the broker's favour. To put it in one way, the Stock
Exchange, as far as its speculative transactions were concerned, was outlawed during the continuance
of the Barnard Act and enjoyed the freedom as well as suffered the disadvantages of the outlaw …
By making the brokers of Change Alley extremely careful as to the people with whom and for whom
60Duguid, Charles, The Story of the Stock Exchange: its History and Position, G. Richards, London, 1901, p. 48. URL:
http://goo.gl/JiEez. See also Keyser, Henry, The law relating to transactions on the Stock Exchange, Butterworth, London,
1850, p. 152: “That this [Barnard’s] Act has utterly failed to effect its object is well known, for it is alike anomalous as
notorious that a numerous and highly-respectable body of men earn their livelihood by the daily and hourly violation of
the clauses of the statute”. URL: http://goo.gl/OLwx5. Cope (1978, p. 9) proposes a more nuanced view. Option
contracts had declined by mid-century due to passage of the Act, whereas time bargains although temporarily curtailed
by the Act but were largely resurgent by the 1770s.
105
they transacted speculative business, the Act caused some temporary cessation in dealing for
differences, but speculation, as distinct from mere investment, was so firmly established in 1733 that
it was not to be up- rooted by Act of Parliament. At first, when the Bill became law, Change Alley was
[51] dumbfounded, terror-stricken. With the cessation of time bargains — and it did not know they
would not cease — its occupation had practically gone…until it was found that the gamble went on
as merrily as ever.”
d. Who is a Broker?
Highmore v. Molloy (1737)61
“LORD Chancellor: I am inclined to think a pawnbroker within the several statutes concerning
bankrupts, and especially within the general words of the 39th clause of the 5th of Geo. 2. the words
of which are, “Whereas persons dealing as bankers, brokers, and factors, are frequently intrusted with
great sums of money, and with goods and effects of very great value belonging to other persons: It is
hereby further enacted that such bankers, brokers, and factors shall be, and hereby are declared to be
subject and liable to this, and other the statutes made concerning bankrupts.”
For though pawnbrokers are not expressly named, yet the general word brokers is the genus, and
all other kind of brokerage the species.
His Lordship said in the same case Though a man be a publick officer, as an exciseman, &c. yet,
if he will trade, he makes himself subject to the statutes of bankrupts.”
__________________________________
Janssen v. Green (1767) 62

“THIS was an action for a forfeiture on 6 Ann. c. 16. § 5. for having acted as a broker, without
being admitted so to do by the court of mayor and aldermen.
That statute enacts “that every such person so offending shall forfeit and pay to the use of the
said mayor and commonalty and citizens, for every such offence, the sum of 25l. to be recovered by
action of debt, in the name of the chamberlain of the said city.”
The declaration charges divers instances of his acting as a broker to which he pleaded the general
issue.
61 1Atk. 205. URL: http://goo.gl/5BwPc.

62 4 Burr. 2103. URL: http://goo.gl/Qv0cl.
106
The point reserved at the trial was, “Whether a person, who for brokerage and hire negotiates and
concludes bargains for stocks, is a broker within 6 Ann. c. 16.”
Mr. Eyre, Recorder of London, for the plaintiff—
The act of 8 & 9 W. 3. c. 32. “for restraining the number and ill practices of brokers and stock-
jobbers,” recites the inconveniences of the number of such brokers and stock-jobbers increasing very
much: and, to prevent such inconvenience and their ill practices, it enacts that no person whatsoever
shall act as a broker, directly or indirectly, within the Bills of Mortality, till he be first admitted, licensed,
approved and allowed of by the Lord Mayor and Court of Aldermen of the City of London, upon
such certificate of their ability, honesty and good fame, as hath been usual; under a penalty of 500l.
That act contains several other regulations: but it was only temporary, for three years. After it's
expiration, the sixth of Ann. was made; which gives them the power and [2104] profit of admitting
brokers. These therefore are the same sort of brokers as are the subject of the former act.
Mr. Wallace, contra, for the defendant, argued, that the defendant has not acted as a broker, within
the sixth of Ann.
The 1 Jac.1. c.21.describes a broker, and defines a broker to be a person acting between merchants
or tradesmen, in making and concluding bargains concerning their wares and merchandizes, and
monies to be taken up by exchange. But this man's act of negotiating contracts for stocks between one
and another, for brokerage and hire, is not within that description.
By the last clause of 8 & 9 W. 3. c. 32. brokers of stock, though admitted according to that act,
were prohibited (for a limited time) from dealing; unless they should have a licence from the treasury.
And it extends to stocks then existing: the words are— “Securities upon any fund or funds granted by
parliament.” Whereas this stock is subsequent both to 8 & 9 W. 3. and 6 Ann.
Lord MANSFIELD—Is not Sir John Barnard's act to prevent stock-jobbing, decisive of this
question? It directs, that “every broker, or other person, who shall negotiate or act as a broker, receiving
brokerage in the buying, selling, or otherwise disposing of any of the said public or joint stocks or
other public securities, shall keep a book, which shall be called The Broker's Book.” Can any words
more strongly express what the parliament meant by a broker?
Mr. Justice YATES—The Court will follow the parliamentary idea of a broker: And Sir John
Barnard's act (“to prevent the infamous practice of stock-jobbing,”) is conclusive as to their idea of a
broker. It also appears, from the statute of 10 Ann. c. 19. sect. 121.
The Two other Judges concurred.
Lord MANSFIELD—The case of a merchant who acts by commission from a correspondent
abroad, may be a different case: but here is nothing in the case before us, to distinguish this
commission from common brokerage.
Per Cur', unanimously—
Postea to be delivered to the Plaintiff.”
107
__________________________________
Wilkes v. Ellis (1795)63

“This was an action of debt brought by the Chamberlain of London, on the stat. 6 Anne, c. 16,
to recover the penalty given by that statute against the Defendant, for acting as a broker within the
city, not having been admitted as such by the Court of the Mayor and Aldermen; the offence being
laid in the declaration to be, that “he took upon himself to act as a broker, and as a broker for a certain
reward to him to be therefore given, sold by auction for one John Bailey, certain goods and chattels,
&c.”
The evidence at the trial was, that the Defendant, who was a freeman and liveryman of London,
and had paid the duty of 20s. required by 17 Geo. 3, c. 50, as a licensed auctioneer, had sold the goods
mentioned in the declaration by public auction for Bailey who was the owner of them, and on a case
reserved, the question was, [700] whether the Plaintiff was entitled to recover, i.e. whether the selling
goods by public auction was acting as a broker, within the meaning of the statute?
This case was twice argued: the first lime by Rose, Serjt., Recorder of London, for the Plaintiff,
and Cockell, Serjt, for the Defendant; the second, by Adair, Serjt,, for the Plaintiff, and Le Blanc, Serjt.,
for the Defendant. On the part of the Plaintiff the arguments were the following:—
The Defendant having sold goods by auction, without being previously admitted as a broker by
the Court of Mayor and Aldermen, has incurred the penalty of 251., given by the statute 6 Anne, c.
16, the words of which are, “That all persons that shall act as brokers within the city of London and
liberties thereof, shall from time to time be admitted so to do by the Court of Mayor and Aldermen
of the said city for the time being, under such restrictions and limitations for their honest and good
behaviour, as that court shall think fit and reasonable.” Now a broker is a person, who for a reward
makes a transfer of property, whether the transfer be by private contract or public sale. There is
nothing in the mode of selling by auction that exempts the auctioneer from the capacity and situation
of a broker, which arises out of the nature of a sale. Thus the word auctio in classical language means
a sale by a broker, and auctionem vendere is used in that sense by Cicero in oratione pro P. Quintio.
Ainsw. Dict. Thus too in legal phraseology the term auxionarii is interpreted to mean “brokers.”
Blount's Law Diet. And in Spelman's Glossary, auctionarii are described to be “qui publicis
subhastationibus praesunt,” "propolae, quos Angliece brokers dicimus."
In Jacob's Law Diet, the word brokers is rendered “brocarii et auctionarii,” and auctionarii "sellers
or retailers, but more properly brokers.”
And in the several acts of parliament lo regulate the business of brokers, they are described to be
persons who make bargains and contracts between other persons, concerning their goods and
63 126 E.R. 699. URL: http://goo.gl/UhBrR.
108
merchandize. 1 Jac. 1, c. 21. 8 & 9 W. 3, c. 20, s. 60. 8 & 9 W. 3, c. 32. 10 Anne, c. 19, s. 121. 6 Geo. 1,
c. 18, s. 21. 3 Geo. 2, c. 31. 7 Geo. 2, c. 8, s. 8. Which description clearly comprehends an auctioneer,
who is an agent both for the buyer and seller. Upon this principle, that broker is a generic term,
including all persons who make bargains for the sale of properly, many cases have been decided. Thus
in Bosworth v. Machado, cor. Lee, Ch. J. (at Guildhall, Sittings after Trinity Term 1745), it was holden
that a person who sold South Sea stock, was a broker within the meaning of the statute 6 Anne, c. 16.
So also was the case of Janson v. Green, 4 Burr. 2103. If it should be said, that the stat. 17 Geo. 3, c. 50,
imposes upon auctioneers in London and Westminster, an annual duty of 20s. for a licence, unless
they are also authorized by the Mayor and Aldermen of London, to act as brokers within the city, in
which case the duty is only 5s., and therefore that the two characters are distinct and independent of
each other, or at least that an auctioneer who has paid the duty of 20s. is not obliged to pay a farther
duty to the City of London, it is to be observed, that this statute is merely a revenue act, the sole
object of which is the raising a tax for Government; that it did not mean to infringe the rights of the
city, nor can it alter, in whatever manner it may be worded, the nature of the business of auctioneer
and broker, and make things different, which are substantially the same. So general indeed has been
the conviction that auctioneers were within the meaning of the stat. 6 Anne, c. 16, that the constant
usage in the city has been, for them to be admitted as brokers by the court of Mayor and Aldermen.
On the part of the Defendant the arguments were the following. The true definition of a broker
is, that of a person who makes a private bargain between other persons, [701] but not a public one,
Cowel's Interpr. In the stat. 1 Jac. 1, c. 21, he is described to be a person who makes bargains between
merchant and merchant. A broker also both buys and sells, but an auctioneer only sells. A broker
therefore is essentially different from an auctioneer. Brokers too are subject to the bankrupt laws by
the provision of the stat. 5 Geo. 2, c. 30, s. 39. But auctioneers are not included in that provision. With
respect to the definitions given in the several dictionaries, as they all differ from each other, perhaps
there is little reliance to be placed on any.
By a charter of Ed. 3, no persons were to be brokers, but such as were chosen by the merchants
belonging to the mysteries in which they were to act, which corresponds with the recital of the stat. 1
Jac. 1, c. 21, but which never could be extended to auctioneers. By a charter also of Hen. 7, confirmed
by Car. 1, the business of selling by auction was confined to an officer called an Outroper, and all
other persons were prohibited from selling goods or merchandize by public claim or outcry. But long
before, and at that time, brokers exercised their trade in the manner described in the stat. 1 Jac. 1, c.
21. The two characters were therefore different at that time, and the difference between them is most
evidently recognized by the stat. 17 Geo. 3, c. 50, which varies the duty to be paid for a licence,
according to the circumstance of the auctioneer being admitted a broker or not, and therefore implies
that it is not necessary for him to be so admitted, unless he acts as a broker, as distinguished from an
auctioneer.
The Court seemed disposed to be of opinion in favour of the Defendant, but they intimated a
wish for some precise information, whether before the passing the stat. 17 Geo. 3, c. 50, auctioneers
were liable to be called upon to be admitted as brokers, and whether in fact the usage was for them to
be so admitted.
109
However, on a subsequent day, before any farther steps were taken, Adair, after stating that he had
consulted his clients on the subject, moved to discontinue the action, evidently from an apprehension
that the judgment of the Court would be against him, and a precedent established unfavourable to the
revenues of the corporation of London.
Leave to discontinue was accordingly granted, upon an undertaking not to bring any fresh action
against the Defendant.”
__________________________________
Clarke v. Powell (1833)64

“DEBT for penalties for acting as a broker within the city of London, in purchasing 50l. 3 per
cents, and procuring the same to be transferred in the books of the governor and company of the
bank of England, the defendant, not being at the time of such purchase and transfer, or either of
them, admitted by the court of mayor and aldermen of the city of London, to be a broker, or to act as
a broker, within the said city.
Plea, the general issue. At the trial before Lord Tenterden C. J., at the London sittings after Trinity
term, 1830, the jury found a special verdict for one penalty of 100l., which stated, in substance, as
follows: — Since the making of the statute 6 Anne, c. 16., and the statute 57 G. 3. c. lx., divers persons
have taken upon themselves to act within the city of London and liberties thereof, in the buying and
selling of the public and joint stock of government annuities, transferable at the bank of England,
and other public securities, for others, for reward in that behalf, such persons so acting not having
been admitted by the court of mayor and aldermen of the said city to be brokers in pursuance of the
said act of the 6 Anne; and since the passing of the said acts, divers other persons have so taken upon
themselves to act within the city of London and liberties thereof, in the buying and selling of the public
and joint stock of government annuities, transferable at the bank of England, and other public
securities, for others, [847] for reward in that behalf, and such last-mentioned persons have been
admitted by the said court of mayor and aldermen to be brokers, and to act as brokers in pursuance
of the said act of the 6 Anne; and have been, and are, from time to time, required to make and execute
upon such admissions, the broker's bond of the city of London. Since the 27th day of June 1817, viz.
on the 8th of July 1829, within the said city of London, the defendant did, for reward to him in that
behalf, purchase for John Johnson, of one Norman Wilkinson, a certain interest or share, amounting
to the sum of 50l., in a certain public joint stock government annuity, transferable at the bank of
England, that is to say, in the capital or joint stock called the reduced 3 per cent, annuities, transferable
at the bank of England; and did then and there procure the said sum of 50l. interest or share in the
said stock, to be transferred by N. W. to J. J., in the books of the governor and company of the bank
of England, and did receive from J. J., as a reward and commission for such purchase and transfer, the
64 4 B.& Ad. 846. URL: http://goo.gl/hKGJD.
110
sum of 1s. 3d., [and did, from time to time, both before and since the said 27th day of June, on various
occasions, buy divers shares in the government securities, transferable at the bank of England, for
divers other persons, for reward in that behalf,] and was not, at the time of the said purchases and
transfers, or of any of them, admitted by the court of mayor and aldermen of the city of London to
be a broker, or to act as a broker, within the said city, nor had he obtained any admission by or from
such court.
[848] The bond before 1818 was in the penalty of 500l, conditioned as follows : — “That the
party whose admission is recited should faithfully execute his office and employment without fraud,
and should, upon every contract, bargain, or agreement made by him, declare and make known to
such person or persons with whom such agreement was made, the name of his principal, if required;
and should keep a book or register, and therein fairly enter all such contracts, &c. within three days,
and should, upon demand made by either of the parties, buyer or seller, produce such entry, and prove
the truth and certainty of such contracts, &c.: and, for satisfaction of all such persons as should doubt
whether he was 3 lawful and sworn broker, should produce a certain medal; and should not, directly
or indirectly, by himself or any other, deal for himself or any other broker in the exchange or
remittance of money, or in buying any tally or tallies, order or orders, bill or bills, share or shares, or
interest in any joint stock to be transferred or assigned to himself or any broker, or to any other in
trust for him or them; or in buying any goods, wares, and merchandises to bargain or sell again upon
his own account, or for his own or for any other broker's benefit or advantage; or to make any gain
or profit in buying or selling any goods over and above the usual brokerage;” and should discover any
person whom he should know to be acting as broker, not being duly authorised, and should not
employ any one under him to act as a broker, not being duly admitted; and should not presume to
meet and assemble in Exchange Alley, or other public passage or passages within the city, and liberties
thereof, other than upon the Royal Exchange, to negociate his business [849] and affairs of brokerage
to the annoyance or obstruction of any of his Majesty's subjects, or any other, in their business or
passage about their occasions.
The form of bond after 1818 was in 1000l., and conditioned as the former bond, except that there
was a condition for giving either to the buyer or seller, within twenty-four hours after demand, a
contract note, containing therein a true copy of the entry to be made in the “broker's book;" and that
the stipulation respecting the assembling in Exchange Alley or other public places, was omitted. This
case was argued in Michaelmas term.
Follett for the plaintiff. The question is, whether a person acting as a stockbroker within the city of
London, or its liberties, is a broker required by the statute of 6 Anne, c. 16., to be admitted to that office
by the court of the mayor and aldermen of the city of London. That statute subjects a party acting as
a broker within those limits, and not having been so admitted, to a penalty of 251. By the 57 G. 3. c.
lx, that penalty is increased to 100l. In Janssen v. Green it was decided, that a stockbroker was a broker
within the meaning of the statute of Anne, and the authority of that case was recognised in Gibbons v.
Rule, where it was decided that a shipbroker was not within the act, because he was not a person who
bought and sold for another. In popular language, a broker is a person who makes contracts for others.
One of the definitions given of the word broker, in Johnson's Dictionary, is “one who does business for
111
another.” In Jacob's Law [850] Dictionary brokers are described, “Those who make bargains in matters
of money or merchandise;” and he enumerates exchange-brokers, corn-brokers, brokers of stock, and
pawnbrokers. In Blunt's Law Dictionary are mentioned “exchange-brokers, mediators in any contract of
buying and selling, or contracts of marriage, and pawnbrokers.” In Cowel there is a similar enumeration.
The stat. l Jac. l. c. 21. gives the city of London the power of admitting brokers, and describes them as
persons who make contracts between merchants and tradesmen. The meaning of the term in the
statute of Anne is to be collected from other acts of legislation passed about the same time. It will be
said that, at the time of the passing of the 6 Anne, c. 16. there were no stocks transferable in the Bank
of England; but there were government securities then transferable. The 8 & 9 W.3. c.20. is entitled
“An Act for making good the Deficiencies of several Funds therein mentioned, and for enlarging the
Capital Stock of the Bank of England, and for raising the Public Credit;” and section 60. imposes a
penalty of 20l. upon every person who shall be employed as a broker on the behalf of any person to
make or drive any bargain or contract for the buying or selling of any orders or tallies (in the act
mentioned), who shall take more than 2s. 6d. per cent. for brokerage.” This shew that, before the statute
of the 6 Anne, the legislature applied the term broker to a person buying and selling public securities.
The 8 & 9 W. 3. c. 32. (which was in force for three years only) provided that no person should act as
a broker in making bargains respecting [851] any bank stock, or any tallies, bills of credit, or tickets
payable at the receipt of the exchequer, or at any of the public offices, who had not been admitted a
broker within the city of London; and in the fifth section, which imposes a penalty of 500l., the word
broker is constantly used in reference to stock. By 10 Anne, c. 19. s. 121., a penalty is imposed on every
person “who shall be employed as a broker, in the behalf of any other person, to make any bargain,
or contract for the buying or selling of any tallies, orders, exchequer bills, exchequer tickets, bank bills,
or any share or interest in any joint stock erected by act of parliament, &c, who shall take or receive,
directly or indirectly, any sum of money, or other reward, exceeding the sum of 2s. 9d. per cent.” The
6 G. 1. c. 18. s. 21. enacts, “that if any broker, or person acting as a broker for himself, or on behalf
of any others, shall bargain, sell, buy, or purchase, or contract or agree for the bargaining, selling,
buying, or purchasing of any share or interest in any of the undertakings by that act declared to be
unlawful, or in any stock, or pretended stock; of such undertakers,” he shall be disabled from
practising as a broker, and also forfeit the sum of 500l. It appears, therefore, from these several acts
(which are nearly contemporaneous with the stat. 6 Anne, c. 16.) that the legislature used the word
broker as descriptive of a person who made contracts for others in merchandise, transferable stock
of private companies, or government securities. The 7 G. 2. c. 8. s. 4. imposes a penalty of 500l. upon
all brokers and agents, negotiating any contract for the buying, selling, assigning, or transferring [852]
of any public or joint stock, or other public securities whatsoever, which the person on whose behalf
the contract shall be made, shall not at the time of making such contract be actually possessed of or
entitled to in his own right, &c. Sect. 4. also imposes a penalty upon brokers negotiating other bargains
respecting stock, prohibited by the act. But Janssen v. Green is an authority expressly in point to shew
that a stockbroker is a broker within the meaning of the statute of 6 Anne 16. (He was then stopped
by the Court.)
Campbell, Solicitor-General, contra. Stockbrokers are regulated by a general act of parliament, and
are not required by 6 Anne, c. 16., to be admitted by the court of the mayor and aldermen of London.
112
That statute ought to be strictly construed; for it is not only penal, but it imposes a tax on one part of
his Majesty's subjects for the benefit of another. The statute 57 G.3. c. lx. is similar in its nature. It is
for increasing the payments to be made by brokers, and it raises the penalty to 100l. As the statute
itself does not give a definition of the word broker, the meaning of that term may be collected from
other acts of parliament. The Court cannot adopt either the popular or mercantile use of the word
broker; for there are various persons called brokers who are not within the meaning of the statute, as
furniture brokers, ship brokers, and, probably, insurance brokers. A broker is a person whose
employment is to buy and sell for others some visible, tangible commodity, capable of delivery. If the
word be not so confined, an insurance [853] broker might be considered within the act, for he buys
and sells for others a contract of indemnity; or an attorney, who buys and sells for others the grant or
again assignment of an annuity. If the latter be not within the act, a stockbroker is not, for he only
buys and sells the assignment of a government annuity. Now it has been frequently held, that the
public securities are not goods and chattels. The true definition is to be found in the 1 Jac. 1. c. 21.: it
recites, that “Of long and ancient time, by divers hundred years, there have been used within the city
to be selected persons meet to be brokers, &c, who take their oath to use and demean themselves
uprightly and faithfully between merchant English and merchant strangers and tradesmen, in the
contriving, making, and concluding bargains to be made between them, concerning their wares and
merchandises to be bought and sold and contracted for within the city of London, and monies to be taken
up by exchange.” The subject-matter of the contracts made by brokers is described as wares and
merchandise, and money taken up by way of exchange. Now the brokers referred to in 6 Anne, c. 16.,
must have been those who had been so denominated by the ancient usage of London, and whose
dealings were in respect of goods and chattels and monies taken up by exchange. The statute 8 & 9
W. 3. c. 32. was not in force when the statute 6 Anne, c. 16. was passed. The penalties imposed by the
latter statute ought not to be extended to brokers and stockjobbers, or pretended brokers, mentioned
in a statute which had expired. Janssen v. Green cannot be [854] supported. Lord Mansfield, in
considering the statute of Anne, adopted the definition of the word broker found in an act of
parliament passed near thirty years afterwards. The very circumstance of that act having been passed
so long after, for the regulation of stockbrokers, raises the inference that those persons were not held
to be included by the legislature in the statute of Anne. It is clear that in the 8 & 9 W. 3. c. 20. s.60, the
legislature contemplated that other persons beside stockbrokers might make purchases and sales of
stock. It speaks of persons employed as brokers, solicitors, or otherwise, to make bargains. One of
the conditions of the bond which brokers were compelled to enter into was, until the year 1818, that
they should carry on their business in the Royal Exchange, and not in 'Change Alley. Now, the stock
exchange was, at the time when the stat. 6 Anne, c. 16. passed, and is now, the place of business for
buying and selling stock. [Littledale J. The question, whether a stockbroker be within the act, cannot
depend on the terms of the condition of the bond.] Stockbrokers are regulated by general law, the 7
& 8 G. 2. c. 8. [Parke J. That act merely obliges them under a penalty to keep books: it contains no
other general regulation for stockbrokers.] To impose a tax on those who deal in the public securities,
would be indirectly laying a tax on the transfer of those securities.
LITTLEDALE J., in this term, delivered the judgment of the Court. This case was argued before my
brother Parke and myself, in the course of last Michaelmas term, [855] and the question upon the
113
record is, whether a person who, on various occasions, buys shares in the government securities,
transferable at the bank of England for other persons, for reward,—in ordinary parlance, a
stockbroker, —be within the provisions of the 6 Anne, c. 16., and the 57 G. 3. c. lx., and liable to
penalties for acting as such, under the latter act, in London, without having been admitted by the mayor
and aldermen of the city of London.
The first of these acts abolishes the office of garbler of spices, by repealing the statute of 1 Jac.
1., and gives an equivalent to the city by the admission of brokers. The fourth section recites, that the
profits of the said office are part of the revenues of the city of London, and were then leased to W.
Stewart, under a rent of 300l. per annum; the profits of which office, and the right of the said W.
Stewart to the same, by repealing the said act, would be very much diminished: it then enacts, that “all
persons that shall act as brokers within the city of London and liberties thereof, shall, from time to
time, be admitted so to do by the court of mayor and aldermen of the said city for the time being,
under such restrictions and limitations, for their honest and good behaviour, as that court shall think
fit and reasonable; and shall, upon such their admission, pay to the chamberlain of the said city for
the time being, for the uses thereinafter mentioned, the sum of 40s.; and shall also yearly pay to the
said uses the sum of 40s. upon the 29th day of September in every year.” The fifth section provides,
that “if any person shall take upon him to act as a broker within the city and liberties, not being
admitted as aforesaid, he shall forfeit and pay the sum of 151., to be recovered by the chamberlain of
the city."
[856] The other of these acts, the 57 G. 3. c. lx, was passed for granting an equivalent for the
diminution of the profits of the office of gauger of the city by the construction of the London Docks,
and for increasing the payment to be made by brokers. It raises the fee upon admission, and the annual
payment from admitted brokers, to 51., and increases the penalty upon a person “for taking upon him
to act as a broker,” to 100l.
The very question now raised by this record, was decided by the Court of King's Bench upon a
special case, in the case of Janssen v. Green; and by that decision we ought to be bound, unless we are
clearly satisfied that it is contrary to law. The question has been fully and elaborately argued before us;
and in the result we see no reason to think that the decision was wrong.
It was very strongly urged by the Solicitor-General, that the clause in the statute of Anne, which
enacts that all persons “who shall act as brokers” in the city of London, shall be admitted, and pay the
sums therein mentioned, ought to be strictly construed, as it imposes a tax, and that upon persons
who derive no advantage from the abolition of the office for which the payments are given as a
compensation. The act, however, appears also to have had in view the regulation of brokers; and to
have secured and enforced the ancient right of the city to admit brokers, which, by the statuta civitatis
Londini, 13 Ed. l., it appears to have possessed in the earliest times. But supposing that such a strict
construction ought to prevail, because the act imposes a tax for the benefit of an individual, and a
corporation, it is clear [857] that that the statute extends to all persons who shall act as brokers; and
the question is, what persons fall within that description? All who do are equally liable to the tax, and
all are alike taxed, without any corresponding benefit; for the abolition of the office of garbler appears
114
to have conferred no more benefit on one class of brokers than another. But as the legislature has
imposed the burthen on all brokers, all, that we are judicially satisfied were intended to be included in
that denomination, must bear it.
In order to ascertain who these are, the statutes, and particularly those which were passed about
the time with the act in question, furnish us with the best means of information.
The 1 Jac. 1. c. 21. recites, that persons have been admitted as brokers, who have taken their oaths
on admission “to use and demean themselves uprightly between merchant English and merchant
strangers, and tradesmen, in contriving, making, and concluding bargains and contracts to be made
between them concerning their wares and merchandizes to be bought and sold and contracted for, within
the city of London, and monies to be taken up by exchange between such merchant and merchants, and
tradesmen, and these kind of persons have had and borne the name of brokers, and been known,
called, and taken for brokers.” The act proceeds to declare that persons who buy and sell, and take
pawn of garments, &c. are not brokers, but frippiers, and to provide a remedy against illegal pledges;
and the last clause provides that nothing in the act contained shall be prejudicial to the ancient trade
of brokers between merchant and merchant or other traders or occupiers within the city, being
selected as therein mentioned. [858] Though this was the occupation of regular brokers at that time,
it is obvious that when a new subject of dealing was created in government securities, those who dealt
in the same way respecting such securities, might fall under the same denomination. The class of men
who dealt either partially or exclusively in this new description of security, might equally fall within
the description of brokers as those who dealt partially or exclusively in some new description of
merchandize.
That this was so, the statutes passed in the reign of King William clearly and decisively prove. The
8 & 9 W. 3. c. 20. s. 60. mentions brokers employed on the behalf of other persons to make bargains
and contracts for the buying and selling of orders of the treasury, and of tallies, which are described
in the fifty-seventh section, and limits their brokage to 2s. 6i per cent.
The 8 & 9 W. 3. c. 32., a temporary act, entitled “An Act to restrain the Numbers and ill Practice
of Brokers and Stock Jobbers,” after reciting that for the conveniency of trade, sworn brokers have
been anciently admitted within the city of London for the making and concluding of bargains and
contracts between merchant and merchant, and other tradesmen, concerning their goods, wares,
merchandizes, and monies taken up by exchange, and for negotiating bills of exchange between
merchant and merchant; and that brokers, stock jobbers, or pretended brokers, have lately carried on
most unjust practices in selling and discounting tallies, bank stock, bank bills, shares and interest in
joint stock, and other matters and things, and have combined to raise and fall from time to time the
value of such tallies, &c. which is a great abuse of the said ancient trade [859] and employment; and
that the number of such brokers and stock jobbers had very much increased within these few years,
by reason that they were not at present under against such regulations as are necessary to prevent the
mischief aforesaid, for remedy, provides that no person or persons whatsoever shall directly use or
exercise the office, trade, mystery, occupation, or employment of a broker, or act or deal as such within
the cities of London or Westminster, borough of Southwark, or the limits of the weekly bills of mortality,
115
in the contriving, making, or concluding bargains between merchant and merchant, or between
merchants and tradesmen or others, concerning their wares and merchandizes to be bought and sold,
and contracted for, monies to be taken up by exchange between such merchant and merchants, and
tradesmen, or concerning any tallies, or orders, bills of credit, or tickets payable at the receipt of the
exchequer, or at any of the public offices, or concerning any bills or notes payable by the governor
and company of the Bank of England, or for or concerning any part of the capital or joint stock
belonging or to belong to the said governor and company, or to any members of the said company,
or for or concerning any share of the capital or joint stock belonging to any company or society that
is or shall be incorporated by act of parliament, or letters patent, until such person shall be first
admitted, licensed, approved, and allowed of by the lord mayor and court of aldermen for the time
being, upon such certificate of their ability, honesty, and good fame as hath been usual.
The act then proceeds to direct the oath, to limit the number of brokers, to regulate the fee on
admittance (not to exceed 40s.), and to impose a penalty of 5001. [860] on those who use the trade,
&c. of broker, or act or deal as brokers, and to provide that if any person, not being a sworn broker,
shall negotiate and deal as a broker in the discounting of tallies, exchequer bills, or bank bills or notes,
or in stock jobbing, or selling of bank stock or any other interest or securities, upon any fund or funds granted
by parliament, such person so offending shall forfeit 500l. and stand in the pillory. The act proceeds to
make further regulation for the keeping of books, the amount of brokerage (10s. per cent.), and other
matters; and also requires brokers of tallies or securities on funds granted by parliament, to be licensed
by the treasury.
This act was limited to three years.
In the 6 G. 1. c. 18. s. 21. (passed twelve years after the statute of Queen Anne) a penalty is imposed
on brokers buying and selling shares in illegal undertakings.
The 7 G. 2. c. 8. s. 8. mentions “brokers” with reference to transactions of buying and selling stock.
Considering the provisions of these statutes, recently before and after the passing of the statute 6
Anne, it appears to us that persons buying and selling government stock and securities for others were
considered as brokers at that time, and must fall under that description in the statute in question. If
brokers dealing in government stock and securities then existing, were so, it does not admit of a doubt
that those who dealt in all subsequently created stock, and securities of the like description, would be
so; just as much as merchant brokers, who bought or sold a new description of merchandize.
It was urged that the statute 7 G. 2. c. 8. was passed [861] for the regulation of stock brokers.
That is not the case. It is for the purpose of preventing stock jobbing; and the only matter of
regulation which it contains is, that brokers are to keep books, in which contracts are to be registered,
under a penalty of 50l.; and unless the statute in question (the 6 Anne) gives the power of admission,
with such restriction for their good behaviour as they think reasonable, to the mayor and court of
aldermen, there is no power of admission and control over this important class of brokers in any
person. Such a power is not absolutely necessary, and the legislature might have omitted to give it; but
certainly it is not given by any other statute than this.
116
For the reasons above mentioned, and particularly from what may be deemed the
contemporaneous exposition of the legislature itself in the statutes of 8 & 9 W. 3. c. 20. & c. 32., we
are of opinion that the case of Janssen v. Green was rightly decided, and that judgment must be for the
plaintiff.
Judgment for the plaintiff.”
e. Nature of City of London Regulation Concerning Brokers (1816)

Ex parte Dyster in the Matter of Moline65
“The petitioner was a broker of the city of London; and, to a debt sought to be proved by him
under the bankrupt's commission, it was objected that, as such broker, he was precluded by his bond
to the city and by the oath taken upon his being admitted a broker, from trading as a principal; and
that, notwithstanding these obligations, he had had joint dealings with the bankrupt, as a principal,
upon the balance of which transactions he claimed to prove as aforesaid. The question now before
the Court, upon this petition, was, whether the policy of the law will allow a debt to arise out of such
transactions.
By statute, 6 Ann. c. 16. s.4.; it is enacted “that, from and after the determination of this present
session of Parliament, all persons that shall act as brokers within the city of London and liberties
thereof, shall from time to time be admitted so to do by the court of Mayor and Aldermen of the said
city, for the time being, under such restrictions and limitations for their honest and good behaviour as
that Court shall think fit and reasonable.”
[156] In 1708, the year after this act passed, the Court of Mayor and Aldermen made certain rules
and regulations for the government of brokers, which have ever since been, and still are in force, and
by virtue of which every person, previous to his being admitted a broker, is required to enter into a
bond to the Mayor, Commonalty and citizens of London, and also to take an oath, the forms of which
are prescribed by the same rules and regulations, and are, in substance, as follows:
Condition of the bond. “That the said A. B., for and during such time as he shall and doth continue
in the said office and employment, shall and do well and faithfully execute and perform the same
without fraud, covin, or deceit; and shall, upon every contract, bargain, or agreement by him made,
declare and make known to such person or persons with whom such agreement is made the name or
names of his principal or principals, either buyer or seller, if thereunto required, and shall keep a book
or register, and therein truly and fairly enter all such contracts, bargains, and agreements, within three
days at the farthest after making thereof, together with the names of all the respective principals for
whom he buys or sells, and shall upon demand made by any, or either of the parties buyer or seller
concerned therein, produce and shew such entry to them or either of them to manifest and prove the
truth and certainty of such contracts and agreements, and for satisfaction of all such persons as shall
65 1 Mer. 156 (1816). URL: http://goo.gl/EZfLc.
117
doubt whether he is a lawful and sworn broker or not, shall, upon request, produce a medal of silver
with his Majesty's arms engraven on one side, and the arms of this city with his name on the other,
and shall not, directly or indirectly, by himself or any other, deal for himself or any other broker in
the exchange or remittance of money, or in buying any tally or tallies, order [157] or orders, bill or
bills, share or shares, or interest in any joint stock to be transferred or assigned to himself, or any
broker, or to any other in trust for him or them, or in buying any goods, wares, or merchandizes, to
barter and sell again upon his own account, or for his own or any other broker's benefit or advantage,
or to make any gain or profit in buying or selling any goods over and above the usual brokerage; and
shall and do discover and make known to the said Court of Mayor and Aldermen, in writing, the
names and places of abode of all and every person and persons, as he shall know to use and exercise
the said office or employment, not being thereunto duly authorized and empowered as aforesaid,
within thirty days after his knowledge thereof, and shall not employ any person under him to act as a
broker within the said city and liberties thereof, not being duly admitted as aforesaid, and shall not
presume to meet and assemble in Exchange-alley, or other public passage or passages within this city
and liberties thereof, other than upon the Royal Exchange, to negotiate his business and affairs of
exchange, to the annoyance or destruction of any of his Majesty's subjects, or any other, in their
business or passage about their occasions.”
Form of oath. “You shall sincerely promise and swear, that you will truly and faithfully execute and
perform the office and employment of a broker between party and party in all things appertaining to
the duty of the said office or employment, without fraud or collusion, to the best of your skill and
knowledge.”
The nature of the transactions in which the petitioner was engaged, after he had entered into the
bond and taken the oath aforesaid, and while he still continued [158] in the office or employment of
a broker within the city of London and liberties thereof, and upon which the prayer of his petition
was founded, appeared upon affidavit to be that, for many years previous to the bankruptcy of Moline,
the petitioner was concerned with the bankrupt and another person, in a secret partnership, in the
purchase and sale of hides and skins; and it was further sworn that, during the whole continuance of
such secret partnership, he bought and sold hides and skins on commission, as broker, and charged
his employers a brokerage or commission on the sale or purchase thereof, although some of such
goods were sold by him to the bankrupt on account of the said secret partnership.
The sums for which the petitioner claimed to be entitled to prove as debts arising out of the
aforesaid transactions, amounted to upwards of 20,000.
Sir Samuel Romilly, Cooke, and Roupell, in support of the petition.
If the present application is opposed at all, it must be, either on the ground that the transactions,
in respect of which relief is sought to be obtained, are positively illegal, or that they are fraudulent
and against conscience, and that, in either case, a Court of Justice will not interpose to give effect to
a contract having such transactions for its foundation.
118
If these transactions are illegal, they must be so in consequence of some direct statutory
prohibition; but no such statute can be produced, nor is there a single judicial decision in support of
the allegation. If it be said that the regulation made by the city of London amounts to a legislative
enactment, as being in pursuance of a power vested in the city by an act of the [159] legislature, it
must be first seen what is the nature and extent of the authority actually given to the city by the statute
of Anne. By attending to the recital of that statute, then, it will be made manifest that it was intended
as a mere revenue law ... It is evident, from the whole tenor of this statute, that its object was to secure
to the city of London certain pecuniary advantages by way of compensation for the office which was
thereby abolished. The city has no power to constitute that an illegal transaction which the legislature
has not declared to be illegal. Such a restriction, it is easy to shew, would be contrary to the whole
course of our commercial policy, considered in any other light than that of a mere contract between
individuals not to do a particular act, except under [160] certain conditions. Then the character of a
city broker is not different from that of a private factor. The factor is bound by certain obligations
entered into with his employer. But the Court will not refuse its interference in transactions between
the factor and a third person, because those transactions are contrary to the obligations so entered
into. The employer has his remedy, secured by the contract, for the breach of those obligations; but
the breach of them does not affect the rights of the parties in any other respect than as between one
another. So, here, a bond is entered into, and the city of London has a right to maintain an action for
the breach of its conditions. Suppose, upon a dissolution of partnership, one of the partners to enter
into a covenant with the others not to exercise the same trade within a given distance of the place
where the partnership has been carried on. Would this covenant deprive him of all right to recover, as
against third parties, in respect of dealings carried on in violation of his covenant? So, the city of
London may make what regulations they please as to the terms of a contract between itself and its own
individual members; but those regulations can never constitute, or form any part of, the law of the
land.
Then, with regard to the objection on the ground of the transactions being unconscientious or
fraudulent, and therefore not relievable. No particular act of dishonesty is charged against this
individual. It is not pretended that, in any instance, he has taken advantage of his situation as broker
to gain an unfair profit in the way of his trade by artifice or misrepresentation. The charge of fraud
stands on the mere ground of its being inconsistent with his duty, as a broker, to carry on business as
a merchant. It is inconsistent with his duty so to do, in consequence of a [161] positive engagement
to the contrary entered into with the city of London, confirmed by an oath truly and faithfully to
execute the office of a broker between party and party, in all things appertaining to his duty as such
broker. In the first place, the city of London has no right to impose such an oath. The statute,
authorizing the city to make regulations, gives no authority for enforcing those regulations by an oath.
The oath is, therefore, merely voluntary, and such as the law cannot judicially notice. But, in the next
place, how has this person acted in violation of his oath? It is not alleged that he has not conducted
himself in his office truly and faithfully as between party and party. Whatever fraud there may be in
this transaction, rests entirely with the bankrupt, seeking to elude a just demand by setting up an unjust
and dishonest objection. If any third person had been defrauded by this broker, the transaction might
have been impeached on the ground of fraud, and that, whether an oath had been taken to the
119
contrary, or not. Suppose, by articles of partnership, a party binds himself not to carry on trade except
for the benefit of the partnership, and the parties take it upon themselves to enforce this obligation
by an oath; can the Court act upon an oath taken under such circumstances?
[162] Hart, Bell, and Montagu, for the assignees.
The objection to this demand is that the debt claimed is not proveable as arising out of an illegal
transaction; [163] and the illegality of the transaction consists in this, that Dyster, being ostensibly a
broker, has really acted as a principal.
First, Could he have been entitled to recover on such a transaction, setting aside the statute of
Anne and the regulations of the city of London?
Secondly, If so, is he deprived of his right to recover by the effect of those prohibitions?
Another point has been raised in argument, that, supposing he could not recover against third
persons, still this constitutes no ground of resistance to a claim as against his partner in respect of
partnership dealings. But the answer to this question depends upon the preceding; for, if the claim
arises out of an illegal transaction, the Court will give no assistance to a contract which tempts to a
transgression of the law…
The question, then, resolves itself into this. Does the present claim arise out of an illegal
transaction?
[164] If a partnership were formed with a view of the parties enriching themselves by deceiving
others, such a partnership would be clearly illegal. I do not say, In the in this case, that a broker cannot
deal as a principal, but that he cannot be permitted to hold himself out to the world as a broker, being
in fact a principal; and that a partnership bottomed on such an understanding must be void. Dealings
of this description cannot be reasonable or fair, regard being had to the expectations under which a
broker is employed. In dealing with a proprietor, the party is aware of the colour which interest is
likely to lend to the subject under discussion; but, in dealing with a broker, he knows he is not only
entitled to impartial advice, but that it is the interest of him whom he consults to advise impartially;
and the practical effect of discovering that, instead of broker, he is in fact a principal, would be to
withdraw his confidence altogether.
The present case, however, does not rest upon abstract principle. The petitioner is a broker of the
city of London, and, as such, is restrained by positive law from acting as a principal.
The statute (a) provides that persons shall be admitted to act as brokers under such restrictions
and limitations for their honest and good behaviour as the Court of Mayor and Aldermen shall think
fit and reasonable. The questions under this act are three. 1st, Can the legislature give, or, 2ndly, has
the legislature given, to the Court of Mayor and Aldermen, a power to prevent such transactions as
these? 3rdly, If the legislature has given, has the Court of Mayor and Aldermen exercised the power?
120
[165] That the Legislature can give such a power is evidenced by a number of instances, as in the
cases of inclosure and turnpike acts, and those enacting discretionary punishments. In many cases it
is absolutely necessary for the Legislature to repose such a discretionary power somewhere.
Then it is impossible to find words more strong than in this case, to shew that the Legislature has
in fact given the power which it is certainly able to give, and which the urgency of the case demands.
It is impossible to maintain that this statute is a mere revenue law. A part of it, indeed, relates to
pecuniary compensation; but what have the words, “Such regulations as the court shall think fit, for
their honest and good behaviour,” to do with pecuniary compensation? How can it be said that this is
analogous to those cases in which a person is merely liable to undergo the penalty of his bond for the
breach of it? As in the supposed case of an outgoing partner who covenants not to exercise the trade
within certain limits? That is a mere private question between the parties themselves; attended with
no deception on the public, no intention to mislead either buyer or seller; and the parties have
accordingly fixed that which they consider to be a sufficient indemnity for the non-performance of
the condition. The present case is wholly different. The broker is a servant of the public. The object
of the Legislature is to prevent double dealing, to generate confidence in the minds of his employer,
and to preserve untainted evidence. The Court of Mayor and Aldermen have executed the power in
the same spirit in which it was given them. The requisites of the bond, which are in themselves very
reasonable and strictly conformable to the objects in view, are, [166] among other things, that the
obligee shall not buy or sell on his own account either directly or indirectly; and the oath which is
faithfully to discharge his duty, is imposed in aid of the bond as an additional obligation. Where is his
duty to be found? In the bond. The bond informs the broker in direct terms what his duty is; and the
oath has, therefore, immediate reference to, and is completely explained by, the bond.
[167] Then, if these regulations are such as the Court of Mayor and Aldermen had the power to
enact, and which they have enacted accordingly, have they, in truth, been violated by this petitioner?
[168] First, it is provided that upon every contract made by him he shall declare the name of his
principal, buyer or seller. So far from doing this; instead of declaring to be the principal, he has come
forward in a character which, prima facie, excludes the notion of his being principal. He has come
forward as broker; and, by so doing, has declared to the world that Moline is the only person interested,
and that he has himself nothing to do with the transaction, except as broker merely. Next, he is
required to keep a book, and therein enter all contracts, with the names of all the respective principals,
within three days respectively after the meeting thereof. Now Dyster's name does not once appear in
his books as a principal. Moline is the buyer, Moline the seller, and Dyster stands forth as broker only.
Lastly, he shall not, either directly or indirectly, buy or sell on his own account. He has done both: and
the question is, shall he be allowed to reap the fruit of so shameful a violation of his positive duty?
This illegal partnership has existed for a long series of years, and would still have existed but for the
bankruptcy which caused a discovery of the [169] whole transaction. It now turns out, in consequence
of this involuntary disclosure, that not one entry in the books is true, and that both bond and oath
have proved an inadequate restraint upon these fraudulent dealings.
Sir Samuel Romilly, in reply.
121
This case has been argued on two distinct grounds; first, on that of a positive law prohibiting these
transactions; secondly, on that of their being contrary to moral principle. It must be observed that this
restriction is considered in the light of a bye-law, having the force of a statutory enactment. If so, it
is merely local; and it would be difficult to shew, if it were meant to put down transactions immoral
in their nature, or if it were declaratory of the common law of the land, how it came to be confined
to the City of London. To put it at the highest, it amounts to no more than this; it declares that no man
shall be admitted to act as a broker except at the will of the City of London, and that, when so
admitted, he shall execute this bond. This is the security which they require to be given. They have
therefore chosen their own remedy, and may resort to it by enforcing the penalty of the bond in every
case of infraction.
Next, with regard to the oath imposed. The easiness with which such oaths are violated is indeed
a matter of serious and painful consideration, and yet the violation of them is of every day's
occurrence. In the instance of this particular oath, there is not a broker in the City of London who is
not perjured, at least according to the construction now put upon it; for, if the oath has reference to
the bond, then every [170] man is perjured, who, being admitted as broker, has made a single bargain
any where but on the Royal Exchange, or who has not made the prescribed entry in his books, within
three days after the bargain concluded. But this is a rigorous and not a necessary construction. In
substance, all that the broker has sworn is not to defraud his employers. If he does this, either by
concealment or by misrepresentation, he really violates his oath; but not otherwise.
The question then is, whether, this being an act which Dyster has singly taken upon himself not
to commit, that constitutes such an illegal contract as the Court will refuse to lend its assistance in
carrying into effect even against a third person, who endeavours to protect himself against a just
demand by raising so dishonest an objection; a third person, who has himself been privy to the illegal
dealing; and an objection, which, if suffered to prevail, must be admitted to the extent that a broker,
bringing an action to recover his brokerage, cannot succeed if it can be shewn that he has in any one
instance infringed the conditions of his bond.
The ground of immorality, independent of positive law, is still more absurd in its consequences
than the former. A man shall not be suffered to hold out false colours; so that, if a tradesman
advertises his shop as the cheapest shop in London, and in a single instance does not sell according
to the strict letter of the advertisement, he shall not be able to recover his debts against any person
with whom he has had any dealings whatever. The question here is not what is the effect of these
dealings as between a broker and his employers, nor even as between partners in the same [171]
business in which one acts as a broker; but it is between partners in other transactions and in different
parts of the kingdom. Besides, a part of the debts which is claimed to be proved, consists not of the
profits of trade, but of mere money balances.
The Lord CHANCELLOR,
The first question is, whether this case is to be decided on general principles, or merely upon the
duty of a broker as prescribed by the City's regulations. If on the former, it is contended that this is
the case of a person holding himself out, in a number of buying and selling transactions, as an
122
impartial, disinterested adviser, when in truth he is a party having a concealed interest in the matters
on which he advises. But if it is to depend merely on the City's regulations, and supposing that there
is no more in the case than, as it is pretended, a mere bond given to the City not to engage in these
dealings, I must hold that there is no ground for saying that he shall not recover from his creditors
because he has forfeited his bond. If it shall turn out, however, that that bond was introduced by
virtue of some legislative enactments, as I suspect to be the case, the true question will be, whether
this species of trading is or is not virtually prohibited by the Legislature; and in this view of the case
it is necessary to look into and examine the City records, and the statutes relative to brokers, passed
previously to the act of Queen Anne, in order to see how far these regulations of the City of London
are mere substantive regulations, or are in pursuance, and according to the known intent, of the
Legislature, in passing that statute.
It is very singular, and hardly to be supposed, that [172] this point was entirely overlooked in the
case which has been referred to on the part of the Petitioner.
The Lord Chancellor.
The objection made to the proof of this debt on the ground that the petitioner is a City of London
broker, has been stated two ways; first, that he is, as such broker, positively prohibited from engaging
in those transactions in respect of which his claim is made; secondly, that, if not positively prohibited,
still the transactions are of such a nature as a Court of Justice will not aid.
If the objection were confined to this latter branch of the argument, it would be necessary to
direct an enquiry into these transactions; for there is nothing on the face of the present proceedings
which imports that he was actually a principal in those very dealings in which he was ostensibly
concerned as a broker. If that fact were distinctly brought before me, I should have no hesitation in
saying that no action could be maintained in respect of those transactions, inasmuch as they clearly
amount to a fraud.
On the other point, if it could be made out that the law of the land has positively prohibited a
broker from trading, there would be no more difficulty than in the first view of the case. It is clear
that the Courts will give no assistance towards enforcing a remedy on an illegal contract.
[173] The true question in this case is, Has the law of the land prohibited these transactions?
In this view of the case, I have thought it necessary to furnish myself with the records of the city
of London for the purpose of ascertaining what are the precise restrictions upon the office in
question, and I have looked into the statutes from the earliest period. Upon [174] the general result
of this examination, I think it was clearly the intention of all these provisions, (call them restrictions,
limitations, regulations, or by whatever name is thought most suitable,) founded upon a most obvious
policy, to prevent the broker from trading on his own account. The object of them, however, is foreign
to the present point, which depends entirely upon what is the consequence, in point of law, of a city
broker so trading.
123
Are these consequences merely confined to the penalty of the bond, and dismissal from his office?
Or do they extend to create a disability to sustain an action in respect of these prohibited dealings?
In general cases there is no doubt that a man may bind himself not to do a particular act, and yet,
if he does that act, is not prevented from maintaining an action in respect of matters arising out of
the act so committed. As, for instance, a trader who covenants not to exercise his trade within five
miles of London, cannot do a more dishonest thing than to trade in violation of that covenant;
nevertheless the law of the land has not prohibited him. He knows he is liable to [175] forfeiture, and
if he chuses to incur the penalty of his covenant, he may legally do so. In like mAnner, a freeman may
be liable to be disfranchised for a particular act, which act may, notwithstanding, be rendered the
foundation of an action.
It appears to me, in the present case, that the city of London has not, totidem verbis, prohibited a
broker from trading. They have said that, if a broker shall trade, he shall incur a penalty by so doing;
but there is an end.
With respect to the oath, the fair construction of that is, between party and party, with reference
to what particular acts, it imposes the obligation to be faithful in performing this office. If he is bold
enough to incur the consequence of a violation of his oath, there is no authority to prevent him from
so doing.
Upon the general view of this question, then, I do not think that the ground now taken will afford
the means of successfully resisting the claims of the petitioner. If a broker of the city of London trades
for himself, openly and in public, he does that which the policy of every legislative enactment meant
to prohibit. If he mixes in a transaction, in which he is ostensibly the broker, but really a buyer or
seller, this is a gross fraud; but this is a case not now before me, and there must be an enquiry to see
whether that allegation can be supported. But, as to the question with the city of London, they have
not said, You shall not trade. They have said only, If you trade, we will dismiss you; and this, 1 think,
they have a right to do. Therefore he is prohibited sub modo only; but he has not done that which the
law will consider as being incapable of being made the ground for supporting an action.
[176] I am, therefore, of opinion that this ground of objection to the debt will not suffice. With
regard to the other, you may have an enquiry whether, in any and what transactions, on which the
petitioner's present demands are founded, he has really been the buyer or seller, while he ostensibly
acted as broker.”
124
Chapter 4. Deeds of Settlement
a. The Deed of Settlement of the Society for Equitable Assurances (1762)66

“TO ALL PERSONS TO WHOM THESE PRESENTS SHALL COME, We, whose names and seals are
hereunto subscribed and affixed, severally send greeting.
WHEREAS from mature consideration it appeareth, that many advantages and great benefits, may
arise, and be secured to great numbers of persons in particular situations of life and circumstances of
fortune, from the establishment of a society, to be composed of such persons as shall be qualified
and willing to become mutually contributors for Equitable assurances on lives and survivorships, upon
premiums proportionate to the chance of death attending the age of the life to be assured, and to the time such assurance
is to continue:
AND WHEREAS such assurances may and will, with safety to the assurers, and equity to the
assured, be made in manner herein after specified (that is to say)
…
14. NOW KNOW YE, that We, whose names and seals are hereunto subscribed and affixed, being
well convinced and satisfied that the terms of assurance above recited are equitable, and being willing
and desirous to procure every of us to ourselves respectively, or to our several and respective
executors, administrators and assigns; and to assure to others who shall unite themselves unto us, the
advantages and benefits that may arise and be had from establishing ourselves into a society for the
assurance of lives and survivorships upon the terms aforesaid, HAVE consented, promised, agreed,
undertaken, and covenanted, and DO hereby consent, promise, agree, undertake, and covenant, every
of us for ourselves respectively, to and with all and every other of us to become, by mutual
contribution, Assurers of Lives and Survivorships, and to become Members of, and to enter and erect
ourselves into a Society, by the name THE SOCIETY FOR EQUITABLE ASSURANCES ON LIVES AND
SURVIVORSHIPS, upon such Terms, Premiums and Conditions, and with and under such
Constitutions, Laws, Rules and Regulations, as are herein before recited, or shall be hereafter in these
presents expressed and declared: and for such time and term to continue Members thereof, as shall
be signified in the Policies of assurance to be made out and delivered to every of us respectively at
the time and in the manner herein after for that purpose mentioned.
15. AND ALSO from the motives and for the considerations afore-mentioned, We, the said
subscribers, DO voluntarily hereby severally mutually and reciprocally consent, promise, agree,
covenant, and undertake, by contributions, in such proportion and upon such terms as are herein after
agreed upon, expressed and declared, to pay and satisfy to each other of us, or to the executors,
administrators or assigns of any of us, who, in manner herein after mentioned, shall be claimants for
any sum or sums of money which shall become due to any of us, or to the executors, administrators
66 Morgan, William, The Deed of Settlement of the Society for Equitable Assurances on Lives and Survivorships with the bye-laws and
orders, R. Taylor, London, 1833: http://goo.gl/4fKmT.
or assigns of any of us, for or in respect of such assurance, all such sum or sums of money as shall
so become due by virtue of such assurance.
16. AND for the better forming, fixing, and establishing our said Society, and governing and
regulating the same, and the proceedings thereof; and the more effectually to make provision for
producing and securing to every of us the several good and beneficial ends and purposes thereby
intended; We, the said Subscribers to these presents and Members of the said Society, DO by these
presents consent, and severally covenant, promise, agree, and undertake, every of us for ourselves
respectively, to and with all and every other of us, to observe, perform, abide by, conform to, fulfil,
and keep, all and singular the Articles, Clauses, Provisos, Powers, Conditions, Laws, Constitutions,
Ordinances, Regulations, and Agreements herein after mentioned and contained (that is to say)
18. THAT every person making assurance with the said Society, shall, at the time of making such
assurance, by him or herself, or by his or her sufficient attorney lawfully authorized, subscribe and seal
this present Settlement, or sign and seal a Declaration or covenant, that he or she doth voluntarily
enter into and become a Member of the said Society; and will so continue during the whole time or
term of such assurance: AND that, during the whole time or term of such assurance, he or she will
bear and pay his or her part or share and proportion of any sum of money, which, during such term,
by virtue of the regulations herein after contained, shall or may be imposed on, or called for from the
Members of the said Society, in proportion to their several interests therein, in manner herein after
mentioned: AND will conform and submit to, observe and keep, all the present herein Constitutions,
Rules, Laws, Ordinances, and Regulations, whereby the said Society is proposed to be governed and
carried on; AND ALSO all such other Constitutions, Rules, Laws, Ordinances, and Regulations, or Bye-
Laws, as shall hereafter be made in manner herein after directed.
19. AND for the more orderly and effectual management of the affairs of the said Society, there
shall, during the continuance of the said Society, be, of those members of the said Society who shall
be assured by and with the said Society in the sum of Three hundred pounds or upwards upon (and
for the whole continuance of) their respective lives, Fifteen persons who shall be called DIRECTORS
of the said Society: and of the said fifteen Directors, One shall be PRESIDENT, or shall exercise the
office of President; and two shall be VICE-PRESIDENTS, or shall exercise the office of Vice-President
of the said Society: which said Directors and Officers, or persons exercising the said offices, shall be
severally and respectively chosen, and shall exercise their said several and respective offices in manner
herein after mentioned.
20. THAT any Five or more of the said Directors, whereof the President, one of the Vice-
Presidents, or one of the Persons exercising the said offices, shall always be One (except in case of
any contagious sickness, which case is herein after particularly provided for) being assembled together
(in the place appropriated to and generally used for that purpose) in consequence of a summons from
the President, or person exercising the office of President of the said Society; or, in his absence, from
one of the Vice-Presidents, or persons exercising the said office of Vice-President; or, in the absence
of the said Vice-Presidents, from Three of the Directors of the said Society (which summons shall
be left at the dwelling-house, or usual place of habitation, of every Director of the said Society for
126
4. Deeds of Settlement
the time being who shall be resident within the bills of mortality of the city of London, at least Three
days before the day appointed for such assembling), shall be called A COURT OF DIRECTORS of the
said Society.
21. THAT such Court of Directors being so assembled, shall have power to order and direct the
affairs of the said Society, according to the Rules, Directions, Ordinances, and Regulations herein after
particularly mentioned; OR according to such Bye-Laws, Regulations, or Ordinances, as shall at any
time or times hereafter be made by a General Court of the said Society : AND before such Court of
Directors shall proof be made, by all those who shall be Claimants upon the said Society, of the death
of those persons under whom they claim: AND after proof so made, such Court of Directors shall
have power to pay, or order the payment of any sum or sums of money, which shall or may be claimed,
and shall be due, by reason of the policies granted by, or entered into by the said Society; or which
shall or may otherwise become due and payable from the said Society.
23. THAT the said Directors shall, by a majority of votes, from time to time nominate and choose
Five persons, who shall be and act as Trustees for the said Society; which said Trustees shall be
continued only during the pleasure of the Court of Directors of the said Society, and shall be
removeable thereby; AND all contracts entered into, and securities taken, or given by the said Society,
shall be entered into, taken, or given, by and in the names of the said Trustees, or by and in the names
of Three of them at the least; AND all policies, contracts, securities, deeds, and writings, touching or
office. concerning the said Society, shall be signed, executed, taken and made, by or to them, and in
their names, or by, or to, and in the names of Three of them at the least; AND the said Court of
Directors shall have power to remove any of the said Trustees from their said trusts: AND in case any
of the said Trustees shall be so removed, they who shall be so removed, shall, upon the resolution of
the said Court for their removal being notified to them in writing, signed by the Actuary of the said
Society, or by the person who shall execute the office of Actuary to the said Society, surrender up and
assign all their estate and interest in any of the said securities, and in the said trust, in such manner,
and to such persons, as the said Court of Directors shall direct and appoint; AND when and so often
as the number of the said Trustees shall by deaths, removal by majority of votes, or otherwise, be
reduced to Three, then new Trustees shall be chosen, in manner before mentioned, in the room or
stead of those so deceased or removed; AND as often as new Trustees shall be chosen, the former
Trustees shall assign all their estate and interest to such new Trustees so chosen, at the appointment
of the said Directors and at the proper cost of the said contributionship; AND all such persons, as
shall be chosen Trustees in manner aforesaid, shall, previously to their acting in such trusts, enter into
such securities, and give and execute such covenants and declarations of trust for the discharge
thereof, as shall be good, valid, and effectual in the law for that purpose.
24. THAT all Directors and Trustees, for the time being, of the said Society, shall be indemnified
the saved harmless by the said Society, from and against all charges, damages and expenses, which they
shall or may be put unto, or sustain, by reason or means of acting in their respective trusts, or of the
due execution thereof; AND that none of them shall be chargeable for any the acts or defaults of each
other, but for their own acts or defaults only.
127
25. THAT all the lawful acts, covenants, contracts, and orders of the said Directors and Trustees,
shall charge and bind all and every the subscribers to this present deed or instrument, and all and every
other person or persons who shall, by any other way or means, become a Member or Members of the
said Society, as their own proper act or acts.
45. THAT there shall be upon, or within the first forty days next after, the last Thursday in the
month of March, in the year of our Lord 1764, and upon, or within forty days next after, the last
Thursday in every succeeding month of March, one General Court or Meeting of the said Society, for
the Election of Directors of the said Society; of the time and place of which Court or Meeting, at
least seven days notice shall be given in the London-Gazette, or in some, or one other of the public
papers, by the Actuary, or person executing the office of Actuary of the said Society; and whereat all
the Members of the said Society, who shall be assured with the said Society in the sum of One hundred
pounds or upwards upon (and for the whole continuance of) their respective lives, or as many of them
as shall think proper, shall be present; which General Court or Meeting (whereof the President, one
of the Vice-Presidents, or one of the persons exercising the said several offices, or one of the
Directors of the said Society, shall always be one) shall elect and choose, during the lifetime of the
said Edward-Rowe Mores herein before appointed a Director of the said Society for the term of his
natural life, Nine of the then Directors of the said Society other than the said Edward-Rowe Mores so
appointed as is aforesaid ; and after the decease of him the said Edward-Rowe Mores, Ten of the then
Directors of the said Society, to be continued of the number of Directors of the said Society for the
year ensuing, and Five other Persons, Members of the said Society, dwelling within the city of London,
or within twenty miles thereof, and who shall be assured by the said Society in a sum not less than
Three hundred pounds upon (and for the whole continuance of) their respective lives, to be admitted
into the number of the Directors of the said Society for the year ensuing; which said Nine persons,
together with the said Edward-Rowe Mores during the term of his natural life, and which said Ten
persons after his decease, so to be continued as is aforesaid, together with the said Five persons so to
be admitted as is aforesaid, shall be Directors of the said Society for the year ensuing, or until other
fit and proper persons shall be duly elected and chosen into the number of Directors in their room.
46. THAT the said Directors, or any Seven of them, being assembled for that purpose in a Court
of Directors in the said Society, shall, within Thirty days from such choice, elect out of their own
number one person to be, and exercise the office of, President of the said Society.
47. THAT the President, or person exercising the office of President, of the said Society, shall have
Power to nominate Two of the Directors of the said Society to be his Vice-Presidents or Deputies;
which Two, so nominated, shall continue to exercise the said office of Vice-President, all the time that
the President, by whom they were nominated, shall himself continue to exercise the office of
President, they not being removed by the said President, or person exercising the said office of
President; or not being rendered incapable of exercising the said office of Vice-President, by ceasing
to be Directors of the said Society.
52. THAT all elections of Directors of, or of persons who are to exercise the office of Directors
in, the said Society, and all matters and things to be transacted or done, in all General Courts or
128
Meetings of the said Society, shall be made, done, and determined, by a majority of votes of those
Members of the said Society, assured with the said Society in the sum of One hundred pounds or
upwards upon (and for the whole continuance of) their respective lives, who shall be present at such
Court or Meeting.
53. THAT no one Member of the said Society, having such right to vote, shall in any matter or
thing have, or give, any more than One vote: except that in case, upon any question put in any Court
or Meeting of the said Society, there shall be an equal number of voices or votes on or for each side
of the question; and then the person, who according to the rules and regulations of the said Society
shall preside at such Court or Meeting, shall have the Casting voice or vote
54. THAT there shall be, in every year, Four General Courts or Meetings of the whole Society, to
be holden Quarterly upon the First Thursday of the several months of March, June, September, and
December; and as many more General Courts or Meetings of the whole Society, as the President,
either of the Vice-Presidents, or any of the persons respectively exercising the said offices, or any Five
of the Directors of the said Society, shall think necessary; and at least Ten days notice of the time
when, and the place where, such General Court is to be holden, shall be given in the London-Gazette,
or in some or one of the public papers, by the Actuary, or person executing the office of Actuary of
the said Society; which General Courts (the first only excepted) shall not consist of less than Twenty
one Members of the said Society, who shall be assured with the said Society in the sum of One
hundred pounds or upwards upon (and for the whole continuance of) their respective lives, whereof
Five shall be Directors of the said Society; of which Five the President, or One of the Vice-Presidents,
of the said Society, or One of the persons respectively exercising the said offices, shall always be One.
55. THAT the said General Courts, being so assembled, shall have power to make Statutes and
Bye-Laws, Rules, Orders, and Ordinances, for the good order of the said Society; AND the same at
their pleasure to annul and alter; AND to determine the requisites and qualifications necessary to be
found in those, whose lives shall be proposed to be assured by the said Society ; AND to direct the
form and manner to be observed in such enquiries as may be necessary to be made concerning the
same; AND to direct the form and manner to be observed in making the proper and necessary advance
of the premiums of assurance above the terms herein before specified, which ought for the security
of the said Society to be taken, when the occupation, or other circumstances attending the person
whose life is to be assured, shall appear to be more hazardous than common; AND upon any just and
reasonable cause to remove any of the Directors or Officers of the said Society, as well those who
shall have been elected by the Court of Directors as those who shall have been elected by the General
Court of the said Society, from the exercise of such their office; AND to impose penalties, or the
payment of certain sums by way of penalties, on any of the Members of the said Society, for any
breach or non-observance of the Statutes or Bye-laws, Rules, Orders, or Ordinances of the said
Society: which penalties, or sums so imposed or laid, shall be paid by the persons on whom they shall
have been so imposed or laid, for the use of the said Society. BUT no such Statutes, or Bye-Laws,
Rules, Orders, or Ordinances, nor any such removal of Officers or Directors from their respective
offices, or from the exercise thereof, shall be binding, until the same shall have received the
129
approbation of Two successive General Courts or Meetings of the said Society, whether Quarterly or
Extraordinary: AND no Repeal of any Statute, Bye-Law, Rule, Order, or Ordinance, shall be binding,
until the same shall have received the approbation of Three successive General Courts or Meetings
of the said Society, whether Quarterly or Extraordinary.
65. THAT there shall be deposited, by every person making assurance with the said Society for a
single year, or for any number of years certain less than Ten years, the sum of Ten shillings for every
One hundred pounds assured, and proportionably for every sum under One hundred pounds; AND
by every person making assurance with the said Society for the term of Ten years certain, or upwards,
or for the whole continuance of a life, the sum of Twenty shillings for every One hundred pounds
assured, and proportionably for every sum under One hundred pounds.
66. THAT the Premiums of assurance paid by the Members of the said Society (except so much
of the said premiums as shall, by a General Court of the said Society, be judged necessary for the
current expenses of the said Society) shall be laid out in Government or other good and sufficient
securities, in the names of the Trustees of the said Society for the time being, or in the names of any
Three of them, according to the directions of the Court of Directors of the said Society; and shall
there remain, the said Premiums to pay and satisfy such claims as shall be lawfully made upon the said
Society: and the said Deposits for such purposes as are herein after mentioned.
68. THAT when and as often as it shall appear to a General Court of the said Society, that the
premiums received, and to be received, for the assurance of those lives and survivorships for which
the policies of the said Society shall have been already granted, will not be sufficient to pay the claims
made, or liable to be made, upon the said Society, in consequence of the decease of those persons
whose lives or survivorships shall have been assured by the said Society, then the said Society shall, in
a General Court, declare a Call, and shall direct to be paid by the Members of then said Society, in
proportion to their several sums assured, such sums of money as shall be necessary to make good the
deficiency; which said sums of money are hereby covenanted and agreed to be paid by each of the
Members of the said Society; AND if any Member or Members of the said Society shall refuse or
neglect to pay the whole, or any part of the sums so called for, at such time or times, and in such
manner, as the said General Courts shall direct and appoint, then the said Society shall or may, in a
General Court, inflict such reasonable penalty on such defaulter or defaulters, for the sum or sums so
by him, her, or them omitted to be paid, as by the said General Court shall be thought fit and proper;
and if the said sums so called for, or any part thereof, together with the penalty so imposed for the
non-payment thereof, shall be behind and unpaid by the space of Twenty days after the infliction of
such penalty, then, as well the said sums remaining unpaid, as the penalty which shall have been
imposed for the non-payment of them, together with lawful interest both for the said sums and
penalty, to be computed from the time of the infliction of the said penalty, shall become a charge on,
and (if not otherwise satisfied) be deducted out of the deposit made by such defaulter or defaulters
at the time when he, she, or they, became a Member or Members of, or made assurance with, the said
Society; or out of any share, claim, or demand, which he, she, or they, his, her, or their executors,
130
administrators, or assigns, shall or may then, or at any time or times thereafter, have upon or against
the said Society, by virtue of any policy of assurance, or otherwise howsoever.
70. THAT when and as often as it shall appear to a General Court of the said society, that the
Stock of the said Society, arising from premiums, is more than sufficient to pay the claims made, or
liable to be made, upon the said Society; then, and so often, the said Society shall, in a General Court,
declare a dividend of the surplus, or of such part thereof as shall, by the said General Court, be
thought and judged convenient, amongst the then Members of the said Society who shall be assured
with the said Society upon (and for the whole continuance of) their respective lives, in manner and
form following (that is to say)
77. THAT if at any time hereafter, application shall be made to the Crown for a charter to
incorporate this society, this present deed or instrument shall be the plan and basis of such charter,
and all and every the clauses, articles, provisoes, conditions and agreements, in this said deed or
instrument contained (those only excepted which by reason of the death or removal of any person
therein mentioned must necessarily be changed) shall be the clauses, articles, provisoes, and conditions,
proposed, presented, and offered to be inserted therein.
79. THAT these presents, and every thing herein contained, whether the same be mentioned by
way of covenant, agreement, or undertaking; or by way of future Constitutions, Laws, Rules, or
Ordinances, of and for the regulation of the said Society, shall be binding and obligatory, in every
respect, to all intents and purposes, as well to all and every person and persons whatsoever, taking
policies, and becoming contributors and Members thereby, as to all and every person and persons
hereunto subscribing: AND we who have executed these presents do each of us, for ourselves,
covenant, promise, and agree, to and with the others of us, and to and with every of them, their and
every of their executors, administrators, and assigns, that we are, and will be, firmly held and bounden
by these presents, and by every thing herein contained in manner above mentioned. In Witness
whereof we have hereunto severally set our hands and seals, the Seventh day of September, in the year
of our Lord 1762.”
b. Prospectuses of Mining Companies (1825)

“ANGLO-CHILIAN MINING ASSOCIATION, for working Gold, Silver, Copper, Tin, and
other Mines in Chili67.
The following are the Regulations under which this Association is established:
1. The Capital is to be One Million Five Hundred Thousand Pounds Sterling; divided into fifteen
thousand shares of One Hundred Pounds each.
67English, Henry, A general guide to the companies formed for working foreign mines, with their Prospectuses, Boosey & Sons,
London, 1825: http://goo.gl/0ynrC.
131
2. The first Instalment of £5 per share is to be paid forthwith into the hands of either of the
Bankers to the Association to the account of the Directors, and the remaining £ 95 per share by such
instalments as may be from time to time required by the Directors, upon their giving twenty-one days
previous notice of each call.
3. a 30 Shares.
Qualification of Director………………………………………
of an 20 Shares.
Auditor…………………………………...
At all Meetings of Shareholders each Proprietor of
10 Shares to One Vote.
have………………………………….
20 and Two Votes.
upwards……………………………………
4. After the first six Calendar Months from the date of the Deed of Association, shares not to be
deemed a qualification for voting, until held for six Calendar Months.
5. The Directors are to appoint three Trustees from among themselves, in whose names all
investments are to be made.
6. The present Directors are to remain in office for the first five years; at the expiration of that
time three are to go out annually, but will be re- eligible.
7. The Capital may be increased by the creation of a further number of shares, if deemed advisable
by the Directors for the time being, and approved by a majority of Votes of the Shareholders present
at a General Meeting convened for that purpose.
8. As soon as the Directors shall consider that the concerns of the Association are sufficiently
advanced to enable them to report thereon, a Meeting of the Shareholders is to be convened, and
subsequently a General Meeting of the Proprietors is to be held annually, and the progress and state
of the concerns are to be reported to them.
9. The first Dividend is to be made as soon as a profit of £ 5 per Cent, has been realized, and
subsequently as circumstances may admit.
10. No shares are to be sold or transferred, nor shall any Proprietor be entitled to vote, until he
shall have paid all the previous calls thereon.
11. No transfer made by a Proprietor shall be valid at law or in equity, unless the Purchaser shall
have been approved by or under the authority of a Board of Directors, and the Purchaser shall have
executed a proper Instrument to bind him to the observance of the regulations of the Association.
12. The Association shall not act, or assume, or pretend to act as a Corporate Body, or in any
manner contrary to existing laws. Provision is to be contained in all engagements to be made by or on
132
behalf of the Association, that no Shareholder shall be subject or liable beyond the unpaid amount
of his share or shares of £ 100 each.
13. A Deed is preparing, and when approved by a majority in number of the Directors, is to be
the Deed for establishing the Association, and is to contain such covenants, provisoes, powers of
reference to arbitrators, regulations for managing the concerns, forfeiture of shares, and dissolution
of the Association, and such other powers, stipulations, conditions, and clauses as the Directors or
the major part in number of them shall deem best adapted to effectuate the objects of the Association.
The Deed is to be executed by each Proprietor within twenty-one days after notice shall have been
given in the London Gazette and two daily Newspapers of its being ready for signature, on penalty
of forfeiture of the Instalments previously made.
14. The Deed is to be subsequently enrolled in the High Court of Chancery.”
___________________________
“UNITED MEXICAN MINING COMPANY68

…
The Capital of £ 240,000 sterling, to be divided into 6000 Shares of £40 each. The first instalment
of £5 per Share to be paid forthwith, into the hands of the Bankers of the Association, to the account
of the Directors.
The second instalment of £5 per Share, to be paid on signing the Deed of Settlement; and the
remaining sum of £30 per Share, to be advanced from time to time, as may be required by the Court
of Directors. The calls to be made by the Directors, at not less than 21 days' notice.
Qualification of a Director, 25 Shares; of an Auditor, 20 Shares.
The Directors to appoint a Secretary and all other officers and servants in England. The Directors
also to appoint the two Managers to be Members of the Board of Management in Mexico, and such
officers and assistants (if any) as they shall deem necessary to be sent from Europe to Mexico.
The Mexican Board to appoint all officers and servants in Mexico, excepting as provided by the
receding article.
At a Meeting of Shareholders, the Proprietor
of 10 Shares, to 1 Vote.
have
of 2 do.
25………………..
68 Ibid., p. 67
133
of 3 do. and no more.

50………………..
After the first six calendar months, from the execution of the Deed of Settlement, Shares not to
be deemed a qualification for voting, unless previously held for at least six calendar months.
The number of Shares to be increased, if deemed necessary or proper by the Directors, and
sanctioned by a majority of votes of the Shareholders present, at two successive General Meetings, at
an interval of one calendar month at the least.
The holders of original Shares in proportion thereto, to have the preference of subscribing for
the new Shares, should any be created.
No Share to be sold or transferred until the payment of all the previous calls thereon shall have
been made. No transfer to be made by a Proprietor, unless the purchaser shall have been approved of
by the Court of Directors. The purchaser to bind himself to the observance of the laws and
regulations of the Association.
One-tenth part of the profits to be reserved, and invested in the public funds, or in other sufficient
securities, in the names of the Trustees, to form a reserved fund, as a provision against contingencies.
This reserve to be continued until its amount be equal to the original Capital of £240,000, and
whenever this fund may be diminished by its application to the above purposes, the reserve of the 10
per cent. on the profits to be repeated, so as to maintain a fund equal to the full amount of the said
original Capital.
Whenever in any year the net profits of the Association shall exceed 10 per cent. on the Capital
advanced, the President for the time being of the Board of Management in Mexico, to be entitled to
one-eighth part of such excess in that year; of this one-eighth part one-fifth to be invested in the
public funds, or other public securities of this country, in the names of the Trustees of the
Association, as a guarantee for his faithful administration; such reserve to be paid or transferred on
his retirement from office, or death, to him or his legal representatives.
The first dividend to be made as soon as a profit of 5 per cent, shall have been realized, and
subsequently as circumstances may admit.
The contributors to be an Association for the purpose above set forth, and not to act or pretend
to act as a Corporate Body, unless authorized by Act of Parliament, nor in any other manner contrary
to existing laws.
The other regulations are similar to those of Mining Companies in general.”
134
c. Form of Provisional Agreement for Joint Stock Company (1842)69

“Form of Provisional Agreement for any Joint Stock Company proposed to be governed by a Deed of Settlement.
THIS INDENTURE made the day of , one thousand eight hundred and forty- ,
between the several persons whose names are subscribed and seals affixed in the schedule hereunder
written of , the one part, and
C. D., of , E. F., of , G. H., of , I. J., of , K. L., of , M. N., of , and O. P., of , of the other part:
Whereas the several persons parties hereto of the first part, and the said A. B., C. D., E. ., G. H.,
l. J., K. L., M. N., and O. P., have associated together under the name, firm, or style of the “
Company,” for the purposes of establishing [here state the object of the company,] and have agreed
to raise amongst themselves a capital of £ such capital to be divided into x shares of y
pounds each ; and whereas the said A. B., C. D., E. F., G. H., I. J., K. L., M. N., and O. P., are the
present directors of the said company ;
And whereas, the said [repeat the names of the parties last mentioned], and the persons, parties
hereto of the first part, are also respectively subscribers for and holders of shares in the said company,
and have respectively paid to the secretary for the use and benefit of the said company a deposit of z
for each share subscribed for and held by them respectively;
and whereas, pursuant to the existing regulations of the said company the directors have power,
from time to time, upon giving twenty-one days’ notice, to call for payment of such parts of the sum
or sums of money subscribed for by the several shareholders and now remaining unpaid as they the
directors in their discretion shall think fit, not exceeding in the whole at any one time the sum of x
per share;
and whereas for the better effecting the objects of the said company, the said several persons
parties hereto of the first part have agreed to enter into the several covenants and agreements
hereinafter contained.
Now THIS INDENTURE witnesseth, that in pursuance of the said agreement each of them, the
said several persons parties hereto of the first part, doth hereby for himself his heirs, executors,
administrators, and assigns, but not the one for the other of them covenant, promise and agree to and
with the said A. B., C. D., E. F., G. H., I. .i)., K. L., M. N., and O. P., their executors, and administrators,
in manner folllowing (that is to say)
That they, the several persons parties hereto of the first part, their heirs, executors, administrators,
or assigns shall and will well and truly pay such part of the sum or sums of money by them respectively
sub scribed for and now remaining unpaid as shall from time to time be called for pursuant to the
regulations hereinbefore recited, or pursuant to the regulations for the time being of the said company
69 Taken from Wordsworth, Charles, The Law of Joint Stock Companies, Saunders and Benning, London, 1842, Appendix 3,
p. 96. URL: http://goo.gl/4PyxD.
135
at such times and places to such person or persons and in such manner as shall be ordered by the said
directors or by the directors for the time being of the said company.
And that they the said several persons parties hereto of the first part shall and will when thereunto
required by advertisement in the public papers or by notice in writing to be left at their respective last
or most usual place of abode execute such deed or deeds of settlement or other instrument or
instruments containing such covenants, clauses, stipulations and agreements as shall be deemed
necessary or expedient by the directors of the said company for the time being, for the management
and carrying on of the affairs of the said company, and as shall be previously executed by the said
directors for the time being, provided always, and it is hereby declared to be the true intent and
meaning of these presents, that they the said several persons parties hereto of the first part, may assign
or transfer their several and respective shares and interest in the said company, but that no such
assignment or transfer shall be deemed valid unless the same shall within months from the date of
these presents be registered in the books of the said company and the sum of 2s. 6d. be paid for the
same for the use and benefit of the said company.
Provided also, and it is hereby further declared and agreed by and between the several parties
hereto, that if any present or future shareholder or shareholders shall not perform and keep the several
covenants hereinbefore contained, it shall and may be lawful to and for the directors of the said
company for the time being, if they shall think fit so to do by writing under their hands or under the
hands of any five of them, to declare the share or shares of such shareholder or shareholders forfeited,
and that then and thenceforth the interest of such shareholder or shareholders in the said company
shall cease and determine, and such shareholder or shareholders shall not have any claim whatever
upon the said company or the members thereof for or in respect of any sum or sums of money which
now has or have or hereafter shall or may have been paid upon his or their respective shares.
Provided also, and it is hereby lastly agreed and declared, that when and so soon as any shareholder
shall have executed the hereinbefore mentioned deed or deeds of settlement or other instrument or
instruments pursuant to the covenant hereinbefore contained, then and thenceforth such shareholder
shall be discharged from the performance of the several covenants and agreements herein contained:
In witness, &c.”
136
Chapter 5. Canal Mania
a. MacPherson on Canal Mania70

“It is worthy observation, that, from the commencement of the session of parliament in the year
1790 to the conclusion of the session in 1794, no fewer than 81 acts were passed for navigable canals
and improvements of inland navigations, whereof 25 were in the year 1793, and 20 in the year 1794.
Mr. Phillips, in his History of inland navigation, observes, that the capital flocks of the canals, for
which acts were passed in these two years, amounted to £5,300,000, all expended at home among the
ingenious, the industrious, and the labouring, members of the community, for the purpose of
improving, and enriching, not only those parts of the country through which the canals pass, but the
whole kingdom, and augmenting the general mass of our commerce. Many of them are additional
branches, or extensions, or amendments, of canals already projected or executed. But it would be
tedious to particularize them; and the principal ones are already noticed, or will be noticed at the time
of completing them. It seems not at all improbable, that canals will in a few years be almost as
numerous as turnpike roads, as their superiority over them is so very obvious for affording a cheap
and easy conveyance for heavy goods, many kinds of which could not be conveyed at all by land
carriage.”
b. Acts for the Creation of Canal Corporations (1793-4)

“An act for making and maintaining a navigable canal from or nearly from a place called The Saltisford, in the
parish of Saint Mary, in the borough of Warwick, unto or near to the parish of Birmingham, in the county of
Warwick, and to terminate at or near to a certain navigable canal in or near to the Town of Birmingham, called The
Digbeth Branch of the Birmingham and Birmingham and Fazeley canal navigations.71
Certain persons incorporated by the Name of “The Company of Proprietors of the Warwick and
Birmingham canal navigation.” Act to commence April 5, 1793.
Canal to begin at a bridge at a place called The Saltisford, in the parish of Saint Mary in Warwick,
through Budbrooke, Hatton, Shrewley, Rowington, Kingfwood, Baddesley, Clinton, Knowle, Solyhull,
Hampton in Arden, Elmdon and Bickenhill, in the county of Warwick; Yardley in the county of
Worcester, and Aston juxta Birmingham, and Birmingham, and to terminate at the Digbeth Branch
of the Birmingham and Fazeley canal.
General powers. Surveys taken. Map and book of reverence authenticated by the speaker of the
house of commons, and allowed as evidence. For making a communication with the Birmingham and
Fazeley canal, and preventing loss of water by the junction. For the tonnage and wharfage of all coals,
coke, iron, iron stone, and goods carried from the Digbeth Branch of the Birmingham and Fazeley
70 MacPherson, David, Annals of Commerce, Manufactures, Fisheries, and Navigation, Nichols & Sons, London, 1805, v. 4, p.
300. URL: http://goo.gl/5QjJC.
71 33 Geo. III c. 38 (1793). URL: http://goo.gl/EIKlz. Paragraphs added.
canal into the intended canal, 6d. per ton, and from the intended canal to the said Digbeth Branch,
3d. to be received by the proprietors of the Birmingham and Fazeley canal. For recovery of the rates
to be paid to the Birmingham and Fazeley canal. Birmingham and Fazeley canal company may reduce
the tonnage rates, and the navigation free, on payment of the said rates. Birmingham and Fazeley canal
to reduce the said rates to 5d. a ton, when they have paid off 3,600l. with interest due to certain
subscribers of an intended canal, and to give an account thereof annually to this company. Power to
deviate one hundred yards from the line laid down in the plan. Land owners omitted in the book of
reference not to obstruct making the canal. Breadth of canal and towing paths to be thirty yards.
Course of canal through Mr. Spooner's and Sir Thomas Gooch’s lands described. Canal to be made
at a certain distance from the houses of Mr. Moland and Mrs. Baldwyn. Water to be taken from the
river Rea, or the stream supplying Olton mill. After the canals &c. set out, the land so set out, may be
sold and conveyed to the company. Commissioners names. In what cases juries to be impanelled. 20l.
penalty on sheriffs making default, and 5l. on jurymen. Expences of commissioners and jury. Persons
requesting juries to enter into a bond to prosecute. Notice of injury to be given to the company of
proprietors before complaint made to the commissioners. Persons giving false evidence, liable to
punishment for perjury. Upon payment or tender of money assessed, the company to enter to make
canal. Verdicts, &c. to be recorded, and lands become vested in the company. The company to be
taxed for lands and buildings in the same proportion as adjoining lands. Purchase monies to be laid
out to the same uses. Commissioners to settle proportion of money to be paid to persons interested.
If costs and damages not paid in four months, the same may be levied by distress and sale.
Commissioners to enter proceedings in a book, and appoint a clerk. To destroy the works felony.
Proprietors may raise 100,000l. to be divided into shares of 100l. each, and no person to have
more than 15 shares. Power to raise 30,0001. more if necessary. Five per cent, interest to be paid to
subscribers, until the canal is finished. Subscribers to have a vote for each share. First meeting of
general assembly on May 27, 1793, for choosing a committee. Committee to be under the control of
the general assembly. General assemblies to consist of 550 shares. Power of general assemblies. Power
of committee. Subscribers forfeiting, shall have personal notice, and the forfeiture must be declared
at a general assembly. General assemblies may remove committee men, make bye laws, &c. On death
of subscribers before shares completed, executors and administrators allowed to contribute. How
shares may be disposed of. After a call, no share to be sold until the money is paid. Officers to be
appointed and to give security. Books to be kept by the committee.
Rates of tonnage; for coal, stone, iron, timber and other things, for less than 6 miles and palling a
lock, 1s. per ton. For 6 miles and less than 12, miles, 2d. per ton a mile. For 12 miles and less than 16,
but not to pass the uppermost lock, at each end of the uppermost summit, 2s. per ton. For 16 miles
and upwards, but not to pass the uppermost lock at both ends of the upper summit, 1d. halfpenny
per ton per mile. For navigating any part of the canal, and passing the locks at both ends of the upper
summit, 2s. 3d. per ton. From Birmingham towards Warwick, and pairing the upper lock below Hatton
Hill, 2s. 9d. per ton. For 1 mile and less than 6 miles, and not passing any lock, 2d. per ton a mile. Two
thirds of the above rates for the tonnage of lime and lime stone. Rates to be free from taxes. If iron,
iron stone, coals, lime, lime stone or other goods, remain upon the company's wharfs above 24 hours,
138
5. Canal Mania
wharfage to be paid. Exemptions. Company of proprietors may alter rates., Masters of boats, &c. to
give an account in writing to the collectors of the rates of goods on board. Weight of the lading of
vessels to be marked on them. Boats to be gauged. One hundred and twenty pounds weight, deemed
an hundred weight. Collectors may weigh goods. Navigation free on payment of rates. No vessel less
than 20 tons or 70 feet long, to pass through locks. Occupiers of lands may use pleasure boats, &c.
Roads to be made through common field lands. Drains to be made for the adjoining lands. Towing
paths to be separated from the adjoining lands, and gates, bridges, &c. to be made, and in case of
failure commissioners to do it. In case the company neglect to repair works, land owners to do it.
Works damaged by floods, to be repaired by the company. Coals, &c. found in digging the canal, may
be taken by the proprietors of land. Method of getting mines, and discovering when they are working
under the canal. Mines to be got by the owners, unless the company make satisfaction. Owners of
lands, &c. may make cuts into the canal, and erect bridges, &c. The company restrained from erecting
or taking down mills, buildings, &c. without the consent of the owners. Land owners, &c. may erect
warehouses, &c. on their own land, and if not done within twelve months after notice, the company
may build. Land owners for six hours to have wharfage; for six days 1d. halfpenny per ton for coals,
stone and brick, and 3d. for other goods. Cranes to be erected on the wharfs and quays.
Boat masters or owners to be answerable for damage done by their crew, and masters to recover
back from their servants any sums paid for their neglect. Proper places to be made for boats to turn
or lie in, or to pass each other. Vessels lying so as to obstruct the navigation, to be removed. Five
pounds penalty for overloading and obstructing the passage of the canal, or throwing ballast into it.
Injuring locks, gates, &c. penalty not less than 20s. nor more than 5l. Regulation for vessels passing
locks.
Canal not to be under commissioners of sewers. Remedy for satisfaction to be made in gross or
by annual rent. For preserving rights of lords of manors and copyholds. Lords of manors and land
owners, may fish in canal. Persons on board boats having nets, &c. not qualified, to forfeit 5l.
Electing new commissioners. Impowering the quarter sessions to nominate commissioners in
certain cases. Qualification of commissioners to be 100l. a year real estate, or 2000l. personal estate.
Commissioners may act as justices. Commissioners to give 14 days notice of their meetings.
Commissioners to hold meetings when requested. Power to hold special meetings for ascertaining
damages. Meetings to be held within 5 miles of the canal. For recovering lands in case the canal shall
not be completed or disused. Compelling subscribers to pay.
Majority of proprietors may make future applications to parliament for power to open other
communications with the canal. Recovery and application of penalties. Proceedings not to be quashed
for want of form, or removed by Certiorari. Damages not provided for, to be settled by the
commissioners. Persons aggrieved by any irregularity in distress, to recover only the special damage.
Appeal to quarter sessions. Limitation of actions. General issue. Treble costs. Publick act.
__________________________________
139
An act for making and maintaining a navigable canal from Wisbeach river, at or near a place called the Old Sluice,
in the town of Wisbeach, in the isle of Ely, and county of Cambridge, to join the river Nene, in the parish of Outwell,
in the said isle of Ely, and in the county of Norfolk, and for improving and maintaining the navigation of the said
river, from Outwell Church to Salter’s Load Sluice.—(May 9, 1794)72
Proprietors names. Incorporated by the name of “The Wisbeach Canal Company.”
Commissioners appointed for settling differences. No proprietor, or person interested in the
navigation, to act as a commissioner. Commissioners to be allowed seven shillings and sixpence apiece
each meeting. Commissioners at their first meeting to appoint a clerk, and their proceedings to be
entered in a book. Meetings to be publick, and all orders to be made by a majority. Five commissioners
to constitute a meeting, and all meetings to be within ten miles of the canal. Commissioners may
summon and examine witnesses on oath. Commissioners’ adjudications to be put into writing, and
signed and sealed by three of them. Map and book of reference to remain with clerks of the peace.
Width of canal and towing paths to be twenty yards. Not to injure any house, garden, &c. For
removing the cottages, &c. on the old river. Power for the bishop of Ely to grant out parcels of the
waste. For enabling disqualified persons to sell or exchange lands, &c. Company obliged to purchase
small parcels of land separated in making canal. Satisfaction to be made in gross sums, or by rents.
Copyhold rights to be preserved. Compensation to be made for tithes. Commissioners to settle
damages. Commissioners to settle the proportions to be paid to persons having only partial interest
in estates sold. If parties are dissatisfied with the determination of the commissioners, the value to be
ascertained by a jury. Verdict for value of lands and damages to be ascertained separately. Verdicts to
be recorded. Persons requesting juries to enter into bonds to prosecute. Notice of injury to be given
to the company before complaint to the commissioners. Damages how to be recovered. Purchase
money belonging to corporations, &c. to be laid out to the same uses. Power to enter and take
possession of lands, &c. on payment or tender of purchase money.
Proprietors may raise fourteen thousand pounds, to be divided into shares of one hundred and
five pounds each. Shares deemed personal property. Company may raise six thousand pounds more,
by contribution or mortgage. Tickets of shares to be delivered to the proprietors. Five per cent interest
to be paid until the canal is finished.
A general assembly to be held the second Friday in May, annually, and the chairman to have the
casting vote. If proprietors of seventy shares not present at general assemblies, no business to be
done. General assembly to choose a committee, and appoint a treasurer and other officers, and power
to make bye laws. For calling special general assemblies. Duty of the clerk. Committee to meet. The
chairman of the committee to have a casting vote. Committee to make calls of money. On the death
of subscribers before shares completed, executors may complete the same. Shares maybe sold. For
compelling payment of subscriptions.
72 34 Geo. III 92 (1794). URL: http://goo.gl/1X2Dn. Paragraphs added.
140
5. Canal Mania
Rates or tonnage and wharfage. For every chaldron of coals, hundred of battens, half hundred of
single deals, quarter of an hundred of double deals, a load of fir timber, fifty cubic feet to the load,
and all other timber, forty cubic feet to the load, every four packs of wool, reckoning ten tod to each
pack, every five quarters of oats, rye, grafs, and hayseeds, barley, big, and malt, a load of turf, reed,
sedge, hay, flax, or hemp, reckoning twenty hundred weight to the load, every five hundred pan tiles,
thousand flat tiles, or five hundred bricks, twenty cubic feet of stone, every pipe, butt, puncheon, or
piece of wine, or spirituous liquors, six sacks of flour, weighing twenty stones each sack, five barrels
of ale, beer, or porter, of thirty-six gallons each, and every chaldron of lime, forty bushels to the
chaldron, one shilling each. For every five quarters of wheat, barley, mustard feed, hemp feed, rape
feed, lind feed, rye, peas, or beans, one shilling and sixpence. And for every ton weight of all other
goods, one shilling. Recovery of rates. Exemptions from rates. Allowing land owners to carry manure
toll free. Power for land owners to use pleasure boats. Company empowered to lease the rates. Masters
of boats to give an account of their lading. Collectors may weigh and measure vessels and goods.
Preventing boats laden with corn going to Lynn or Wisbeach being stopped by the collectors of the
toll. Power to fix the price of small parcels.
Navigation to be free upon payment of rates. Masters of vessels to be accountable for damages
done by boatmen. Places to be made for boats to turn or lie in. Vessels obstructing the navigation to
be removed, and vessels sunk to be weighed up. Five pounds penalty on persons overloading or
obstructing the passage of the canal. Destroying the works, felony. Regulations of vessels passing
locks. Lock keepers not to give undue preference. Vessels passing locks with less than three tons, to
pay for three tons. Boatmen to have tickets delivered on passing locks, which will entitle them to repass
toll free within a certain time. Boats laden with turf may pass the look at Outwell, on payment of
tonnage for turf only. Pleasure and market boats may pass through locks tonnage free, in certain cases.
Bridges and tunnels to be made, and a culvert for draining lands in Oldfield, in Elm. No watering
places for cattle, or tunnels laid in the canal. Owners of land in Oldneld, in Elm, in Emneth, and
Outwell, to lay tunnels for taking in fresh waters. For fencing off towing paths. If the company do
not fence off towing paths, and make bridges, the land owners may, at the company's expence. Lords
of manors and land owners may erect wharfs; if not done in six months, the company may build.
Rates for craneage sixpence a ton. Company not to use private wharfs. &c. Canal not to be under the
power of commissioners of sewers.
Recital of river Nene navigation, act 27 Geo. 2. One hundred pounds per annum to be paid to the
Nene commissioners. Additional toll of three-pence per ton on goods passing from the river Nene
and Well Creek into the Wisbeach canal, if tolls paid at Salterns Load or Standground Sluices to be
exempted from further toll. Application of the tolls. Monies advanced by the Wisbeach canal company
to be repaid out of the tolls, with interest. Fund provided for the future preservation of the river
between Outwell and Salter's Load Sluice, and residue to be applied in improving the river between
Outwell and Standground Sluice. Trustees to be appointed to meet annually. Power of trustees. The
company to make locks, pointing and ebb doors at Outwell, Popham's Eau, and Salter's Load. Gauges
to be fixed thereon by engineers, to be appointed by the Bedford level corporation and the Wisbeach
canal company. The locks and doors to be under the direction of a person, to be appointed by the
141
Bedford level corporation, but to be shut when the water shall fall below the gauge. Authorising
trustees to stop up tunnels in certain cases. If waters in the river Nene are above the high water mark,
then the company to run them through the canal. Power for company to drain lands through the canal,
but not to raise the water in the canal above the soil of the adjacent lands so as to injure them. Rights
of the Bedford level corporation saved.
Recovery of fines and forfeitures. Appeal. False testimony before the commissioners perjury.
Limitation of actions. General issue. Treble costs. Publick act.
142
Chapter 6. Hostility to the Incorporation of Insurance Companies
a. Report on the Petition for a Charter for the Equitable Assurance (1761)73
“To the Right Honourable the Lords of a Committee of His Majesty's most Honourable Privy
Council.
May it please your Lordships,
IN humble Obedience to your Lordship's Order of the 2d Day of April, 1760, referring to us the
annexed Copy of a Petition of the Hon. Coote Molesworth of Chichester, Doctor in Physic, and
Fellow of the Royal Society; Sir Richard Glynn, Knt. and Bart. Alderman of London; Thomas
Pickering, of London, D. D.; John Silvester, of London, M. D. F. R. S.; and 78 others, in Behalf of
themselves and many others His Majesty's dutiful and loyal Subjects, for our Consideration, and to
report our Opinion thereupon to your Lordships, which Petition sets forth,
That great Numbers of His Majesty's Subjects, whose Subsistence principally depends on the
Salaries, Stipends, and other Incomes payable to them, during their natural Lives, or on the Profits
arising from their several Trades, Occupation, Labour, and Industry, are very desirous of entering into
a Society for insuring the Lives of each other, in order to extend [53] after their Decease the Benefit
of their present Incomes to their Families and Relations, who may otherwise be reduced to extreme
Poverty and Distress, by the premature Death of their several Husbands, Fathers, and Friends, which
humane Intention the Petitioners humbly apprehend cannot be effectually carried into Execution
without His Majesty's Royal Authority to incorporate them for that Purpose.
That to effect their said humane Intention, the Petitioners beg Leave to propose the following
Plan, viz:—
That the Petitioners shall form themselves into a Society for the Assurance of Lives, and that they
and their Successors shall have Power to grant Policies for that Purpose.
That on granting such Policies, the Petitioners and their Successors shall receive, and from Time
to Time continue to receive, from the Persons to whom the same are respectively granted, a Premium
or Premiums proportionate to the Chance of Death attending the Age of the Life or Lives assured,
and the Term of Years for which the same shall be respectively assured.
That on granting such Policies, the Petitioners and their Successors shall also receive from the
Persons to whom the same are respectively granted, a Deposit of a further Sum to answer the Ends
of a joint Stock or Fund; which Deposit shall be placed out on Government or other sufficient
Securities, and there remain to make good any Deficiency or Deficiencies that shall or may happen to
be in the Fund arising from Premiums, by Means of an unusual Mortality amongst the Members of
the said Society, or by any other Means whatsoever.
73In Eden, F. M., On the Policy and Expediency of Granting Insurance Charters, Burton, London, 1806, pp.52-59, URL:
http://goo.gl/QFmhR.
That no such Policy or Policies of Assurance shall be granted to any Person or Persons until he
or they shall have signed or executed a Declaration or Covenant, purporting that he or they do
voluntarily enter into and become a Member or Members of the said [54] Society, and will so continue
during the Term or Terms for which the Policy or Policies to be granted to him or them shall
respectively continue in Force, and will bear or pay their Proportion or Proportions of any Loss or
Losses, which, during such Term or Terms, shall or may happen to the said Society, and exceed the
Amount of the Premiums and Deposits to be paid as aforesaid.
That the Petitioners are ready and desirous to ascertain and fix the several Premiums and Deposits
proposed to be by them and their Successors taken as aforesaid, and also to be restrained from acting
contrary to their said Plan.
That Establishment by His Majesty's Royal Charter of a free and open Office of Insurance, upon
the Plan aforesaid, will, as the Petitioners, with great Submission, apprehend, be more equitable than
any hitherto proposed, as being calculated for the sole Benefit of the Persons assured, a Method not
hitherto practised; and will, as the Petitioners humbly hope, in a Variety of Instances, prevent the
before-mentioned Inconveniencies, and be productive of the greatest Advantages to the Public.
That there is at present subsisting but one Corporation for perpetual Assurance on Lives, which,
as the Petitioners humbly apprehend, acts upon so circumscribed and narrow a Plan, that very few of
His Majesty's Subjects do receive any Benefit from it, in Comparison of the great Number to whom
the Benefit of such an Insurance might be extended.
The Petitioners therefore humbly pray that His Majesty, out of his Royal Grace and Favour, will
be pleased to grant His Majesty's Royal Charter for the Purposes aforesaid, unto … [55] and
Gentlemen, by the Name of “The Corporation for Equitable Assurances on Lives,” under such
Restrictions as to His Majesty in his Royal Wisdom shall seem meet.
Upon this Petition your Lordships will be pleased to observe,
1st. The Petitioners propose to insure upon cheaper Terms, and for a longer Time, than is practised
at present in any Offices, to which End they have specified the Rates at which the Assurance is to be
done.
2nd. They propose to raise a Capital, by investing, the Premiums, together with a small additional
Sum of 40s. to be deposited by every Person insured, to answer all Losses; and by way of further
Security, to oblige every Person insured to become a Member of the Corporation, and to declare or
covenant that he will bear his Proportion upon any Call, if the Premiums and Deposits should prove
deficient.
Upon these Proposals we are required to deliver our Opinions, whether it will be proper for His
Majesty to grant the Petitioners a Charter of Incorporation for these Purposes.
We having been attended with Counsel on Behalf of the said Petitioners, and also by Counsel on
Behalf of the Governors and Companies of the London and Royal Exchange Assurance Companies,
and also on the Behalf of the Corporation of the Amicable Society, for a perpetual Assurance on
144
6. Hostility to the Incorporation of Insurance Companies
Lives, in Serjeant's Inn; the said Companies and Corporations having entered Caveats with the
Attorney-General against granting the Prayer of the said Petition, and the said petitioners and their
Opponents having produced the several Affidavits annexed to this our Report, we have proceeded to
examine the same, and after the best [56] Consideration we have been able to give the Subject, We are
humbly of Opinion to advise His Majesty not to comply with the Prayer of this Petition for the
following Reasons:
1st, Because it appears to us altogether uncertain whether this Project will or can succeed in the
Manner in which it is proposed; and if the Success is uncertain, the Fund for supporting it, which is
to arise from the Profits of the Undertaking, will be precarious.
This last Consideration is in our Opinion a fatal Objection to the Scheme, for though an
Undertaking plainly calculated for the Benefit of the Public, may in some Instances deserve
Encouragement, even where the Success is dubious, yet in such Cases, the Projectors alone ought
generally to abide the Peril of the Miscarriage.
In the present Proposal therefore, whatever else may be hazardous, the Capital or Fund to answer
Losses ought to be certain and liable to no Casualty, for which Reason when the Legislature enabled
His Majesty to erect the two Corporations of the Royal Exchange and the London Assurance, they
thought it necessary to oblige these Bodies, in the first Place, to raise a large Capital before they began
to insure.
The Success of this Scheme must depend upon the Truth of certain Calculations taken upon
Tables of Life and Death, whereby the Chance of Mortality is attempted to be reduced to a certain
Standard: this is a mere Speculation, never yet tried in Practice, and consequently subject, like all other
Experiments, to various Chances in the Execution.
The Tables upon which the Calculations are built, are the Bills of Mortality of London, and the
Breslau Tables, and admitting them to be strictly accurate (of which there is strong Reason to believe
the Contrary) they are compounded of diseased as well as healthy Persons, of those who are embarked
in dangerous as well as other Employments, without pointing out the Proportions they bear to each
other, and [57] yet as the Petitioners propose to ensure only such even of the healthy, as are not
employed in dangerous Occupations, the Register of' Life and Death ought to be confined, if possible,
for the Sake of' Exactness, to such Persons only as are the Objects of Insurance; whereas the
Calculations offered embrace the Chance of Life in general, the healthy as well as unhealthy Parts
thereof, which, together with the Nature of such Persons’ Occupations are unknown Numbers.
As the Fund to answer Losses must depend principally upon the Premiums (for we pay but little
Regard to the small Deposits or the personal Covenant), the Project should be sure of Success;
otherwise the Adventurers will be undone, or greatly injured, and the Calamity will fall the heavier,
because it will fall principally upon the poorest Sort, the Rich having no Temptation to insure. Under
these Circumstances, if there was no other Objection to the Scheme proposed, the Uncertainty of
Success would make us fearful of advising the Charter.
145
We are the more apt 'to doubt of the Event, because it has been represented to us by the Affidavit
of Mr. Savage, that all the Profit, which has been received by the Royal Exchange Assurance from the
Time of its Commencement to the present Time, amounts only to a Sum of 2,651 £ 4s. 6d. the
Difference between 10.915 £ 2s. 2d. paid in Premiums, and the Sum of 8.263 £ 17s. 8d. disbursed in
Losses, which small Profit must have been near exhausted in the Charges of Management. If then
this Corporation, who are charged with taking unreasonable Premiums, have reaped no greater Profit,
we can hardly expect a more considerable Capital to arise from lower Premiums; and the hazard of
Loss will be increased in Proportion as the Dealing will be more extensive.
2d. The Crown has very wisely been always cautious of incorporating Traders, because such
Bodies will either grow too great, and by overwhelming [58] Individuals, become Monopolies; or else,
by failing, will involve thousands in the Ruin attendant upon a Corporate Bankruptcy. As Trade seldom
requires the Aid of such Combinations, but thrives better when left open to the free Speculation of
private Men, such Measures are only the Expedient where the Trade is impracticable upon any other
than a joint Stock, as was thought to be the Case in the East India, South Sea, Hudson's Bay, Herring
Fishery, and in some other Companies erected upon that Principle; but there does not appear to be
any such Necessity in the present Case, because the Business of insuring Lives is carried on not only
by the two great Companies already mentioned, but such Policies are duly underwritten by Numbers
of private Men; and we think that, if the Profit was so enormous as the Petitioners have endeavoured
to represent, upon the Terms now, and for many Years practised in the City of London, there would
not have been wanting enterprising Persons to have reduced the Premiums, and drawn this Branch of
Dealing to themselves by underselling the Market. If the Petitioners, then, are so sure of Success,
there is an easy Method of making the Experiment, by entering into a voluntary Partnership, of which
there are several Instances now subsisting in this Business of Insuring; and, if upon such a Trial these
Calculations are found to stand the Test of practical Experiment, the Petitioners will then apply with
a much better Grace for a Charter than they can at present, whilst the Scheme is built, only upon
speculative Calculations.
3d. The Parliament, in erecting the two great Companies already mentioned, have sufficiently
declared their Opinion, that such Charters ought not to be granted without some Benefit accruing to
the Public, and were not sure when they passed the Act whether they were not erecting a Nuisance;
to prevent which a Power was reserved to the Crown to abolish the Corporation at any Time within
the Term of 31 [59] Years, if they should be found upon Trial to be mischievous or inconvenient;
and we cannot help observing, that, except only in the Case of the Amicable Society of Serjeants Inn,
and which is formed upon a very narrow Bottom, the Crown has never of itself, so far as appeared to
us, granted such a Charter as the present, in any Case whatsoever; and, as the two great Companies
paid a very large Sum to the Public for the Privilege of their Charter, we cannot advise the Crown to
entrench upon their Rights on the bare Request of any Set of Men, without a clearer and more certain
Prospect of public Good.
It is for these Reasons principally that we find ourselves under a Necessity of advising His Majesty
not to comply with the Prayer of this Petition, and though we are fully persuaded that those worthy
Gentlemen who have made this Application are really convinced that this Scheme will prove
146
advantageous to the Public, as well as profitable to themselves, yet we have not sufficient Evidence to
satisfy us that either of these Ends will be answered, or that any Necessity of the Times requires the
Trade to be extended under a new Charter of Incorporation.
All which is most humbly submitted to your Lordships Consideration, by
Your Lordships most obedient Servants,
Tuesday, July 14th, 1761.
C. PRATT,
C.YORKE.”
b. Report on the Petition for the Globe Insurance Charter (1802)74

“To the Lords of the Committee of his Majesty's most Honourable Privy Council.
May it please your Lordships,
In obedience to your Lordships’ Order bearing Date the-11th Day of May, 1801, and reciting that
“Whereas his Majesty had been pleased, by his Order in Council of the 15th of January,
1801, to refer unto your Lordships a Letter from his Grace the Duke of Portland, one of his
Majesty's principal Secretaries of State, to the Lord President of the Council, transmitting a
Petition of Sir Frederick Morton Eden, Baronet, Miles Peter Andrews, and William
Wilberforce Bird, Esquires, on Behalf of themselves and others, praying a Charter for
incorporating a Company to be called “The Globe Insurance Company,” with such Powers,
Privileges, and Authorities, and Subject to such Conditions, Restrictions, and Penalties, as his
Majesty's Wisdom might think proper, together with a Report of his Majesty's Attorney and
Solicitor General thereupon ; and also upon the Draft of a Charter [61] prepared on the
Behalf of the Petitioners for the Purposes stated in their Petition, and laid before his Majesty's
Attorney and Solicitor General; and that a further Petition of the said Sir Frederick Morton
Eden, Baronet, and others, had been presented to this Board, stating that they were desirous
of making various Alterations and Amendments in the said Draft of Charter, and praying that
their former Petition, together with the Report of his Majesty's Attorney and Solicitor General
thereupon, and the said Draft of a Charter, might be referred back to his Majesty's Law
Officers; and that the several Parties who had theretofore entered Caveats against the Grant
of a Charter for the said Globe Insurance Company having attended your Lordships, and
signified their Consent to the Reference prayed by the Petitioners, your Lordships were
thereupon pleased to order, that the said Petitions, together with the Report of his Majesty's
Attorney and Solicitor General, and also the Draft of the said Charter, should be referred to
us, to consider of the several Alterations and Amendments proposed by the Petitioners to be
74 Ibid, pp. 60-74. URL: http://goo.gl/UXDU5.
147
inserted in their said Charter, and to Report our Opinion thereupon to your Lordships with
all convenient Speed;”
We have been attended by Counsel as well on Behalf of the said Petitioners as of the several
Parties who had heretofore entered Caveats against the Grant of a Charter for the said Globe
Insurance Company, and have heard the whole of the several Arguments and Allegations which any
of the said Parties were desirous of urging and bringing under our Consideration, as well upon the
Subject of the particular Objections which were stated to the Charter in the Report of our immediate
Predecessors in Office, as upon the Alterations and Amendments which the Petitioners have expressed
themselves willing to introduce for the Purpose of obviating those Objections. And, in the first Place,
we think it necessary to observe that many Arguments [62] of considerable Weight were urged before
us, and particularly one on the Part of the Phoenix Company, against the Policy and Justice of granting
any such Charter of Incorporation to the Petitioners as is prayed for on their Behalf. But as, upon due
Attention to the Terms of your Lordships’ Order, by which the several Matters therein specially
mentioned are referred to our Consideration, we are of Opinion, that no Questions of this general
Nature were intended to be submitted to us on the Part of your Lordships, (your Lordships having
only directed us to consider of the Effect of the several Alterations and Amendments which had been
proposed by the Petitioners for the Purpose of obviating the Objections stated by the late Attorney
and Solicitor General, and to report our Opinion thereupon), we feel it proper to forbear offering any
Opinion to your Lordships upon those Heads. With respect to the Alterations and Amendments
submitted to us, we apprehend that the most distinct and convenient Mode of treating them, will be
to consider them in the Order in which the Objections, they are intended to obviate, respectively stand
in the Report of our Predecessors.
The first Objection is, that
“the Act of Parliament, to which the Petition refers, contains a Clause, requiring that in
the Charter which his Majesty was thereby authorised to grant, it should be provided that the
Corporation thereby to be created and established should be obliged from Time to 'Time
during its Continuance to cause such a Stock of ready Money, or such Share or Shares of the
Parliamentary Stocks or Public Funds of Great Britain, to be provided and reserved, and to
be immediately subject to the Disposition of the said Corporation, as should be sufficient to
answer all the just Demands upon them on Account of the Policies of Assurance, Deeds,
Contracts, or Engagements, to be made or entered into by the said Corporation; but that the
Charter proposed to their Consideration by the Petitioners had no sufficient [63] Provision
for that Purpose; and that it seemed to them that such a Provision was not only necessary in
Compliance with the Terms of the said Act, but for the Protection of the Persons with whom
the proposed Corporation might engage in the variety of Transactions proposed to be
authorised by their Charter, which were much more various, and might lead to more hazardous
Speculation than the authorised Dealings of any Company yet established by Law.”
With Reference to this Objection, we are of Opinion, that the Weight of it is removed by the
Amendments which the Petitioners are willing to have introduced into their Charter; for,
148
independently of their Consent to renounce several Objects of their proposed corporate Dealings,
which justly appeared to the late Attorney and Solicitor General, as much more various and leading to
more hazardous Speculation than the authorised Dealings of any Company yet established by Law,
they have consented that, over and above the Capital agreed to be invested in the Purchase of
300,000£ Land Tax, the additional Capital of 500,000£ shall be invested in the Funds; and that (if
upon any Occasion it should become necessary for the Company to resort to this Capital for the
Payment of their Debts, and any Part thereof should have been so applied) it shall be unlawful for
them to make any Dividends amongst the Proprietors till such Capital of 500,000£ shall have been
reinstated. And we have introduced Provisions into the Draft of the Charter which we now lay before
your Lordships for that Purpose.
The next objection suggested by the late Attorney and Solicitor General is, that:
“the Act has required that the Company shall employ 300,000£ in the Purchase of Land
Tax, but that it contains no Provision to prevent the Re-sale of the Land Tax so purchased;
and that it appeared to them that, if the Company should be permitted to sell at a Discount,
they might greatly injure the Sale of Land Tax, as they were by the Act authorised to purchase
at the [64] same Price as the Land Owners; and that it seemed therefore important that they
should be prohibited to sell any Land Tax for less than the Price paid for it: and that, to inforce
that Provision, it might be necessary to make the Directors of the proposed Company who
should authorise any Sale at a lower Price, personally responsible for the Breach of the
Condition; and to require that the Company should at all Times be possessed of 15,000£ a
Year in Land Tax (which is equal to the Land Tax which they could then purchase with
300,000£) so long as any Land Tax should remain in the Hands of Government unsold; and
that the Petitioners appeared to be willing to submit to the latter Provision, in case such Land
Tax could be taken as Part of the Fund to be reserved to answer Demands upon them, under
the Clause of the Act already referred to; but as that Clause required that a Fund should always
be kept in ready Money or Shares of Parliamentary Stocks or Public Funds of Great Britain,
it might be doubtful whether Land Tax so purchased and reserved by the Company could be
deemed to answer that Description; and that, if the Land Tax to be purchased by the Company
would not answer the proposed Fund to be reserved according to the Terms of the Act, they
conceived it would much embarrass the Company, as in that Case, according to the Provisions
of the Act, a Quantity of 3 per Cent Annuities of equal Value, ought to be provided and kept
in the Name of the Company, at the same Time that the Company could not be permitted to
part with the Land Tax to be purchased by them at a Discount without Injury to the Public:
and that, to enforce these Provisions it seemed necessary to declare by the Charter, that if at
any Time the Company should not have so much Land Tax, or so much three per Cent.
Annuities standing in their Names, the Company shall be ipso facto dissolved, the Charter
should thenceforth be null and [65] void, and the Directors of the Company for the Time
being should be personally responsible to the Creditors of the Company for the Debts of the
Company, and the Damage which might be occasioned by such Misconduct: they doubted
however, whether this Provision could be made effectual without the Aid of Parliament.”
149
This Objection as far as it applies to the Want of an additional Capital beyond the 300,000£ Land
Tax is already obviated by the Proposal of the Company to raise the additional Capital of 500,000£
referred to in our Observations upon the former Objection; and to obviate so much of the present
Objection as relates to the Resale of the Land Tax, it has been proposed on the Part of the Petitioners,
that the Land Tax, to be purchased with the 300,000£ shall be assigned to fit Persons as Trustees for
the Company, and who shall be nominated by the Lords of his Majesty’s Treasury, in Case they should
think fit to take upon them the Trouble of such Nomination, or by such other Persons as your
Lordships should please to name, and which Trustees shall not be empowered to sell any Part of such
Land Tax without the consent of the Lords of the Treasury, and at the Price, and upon the Terms to
be in that Behalf fixed by the Lords of the Treasury. And we think that this Part of the Objection
may be thus effectually obviated in case the Lords of the Treasury shall condescend to take this
Trouble upon them: or if any other of his Majesty’s servants can be properly substituted in their Room
for the above Purposes. But, if the Resale of the Land Tax cannot conveniently be restrained by
Reason of such a Trust-assignment as we have suggested, we concur with the late Attorney and
Solicitor General in thinking that this Part of their Objection cannot be wholly obviated without
further Provisions of Parliament on the Subject, and of such a kind as may render the Directors
personally responsible for the Damages to be eventually [66] occasioned by their Misconduct.
As to the third Objection in which the late Attorney and Solicitor General, after taking Notice that
“the Governors and Company of the Bank of England, and the private Bankers had
objected to the proposed Charter, under an Apprehension, that it would enable the Company
to act as a Bank; and that the Petitioners had stated to them, that they disclaimed all Intention
of so acting; and had declared themselves willing to submit to any Restrictions in that Respect:
and that, to Effect this Purpose, and particularly to prevent the Interference of the proposed
Company with the charter of the Bank, they thought it would be necessary to prohibit their
acting in any Manner whatsoever, as a Bank, except in receiving Deposits according to the
express Words of the Act, and to make their evasively acting as a Bank for all Purposes, which
might be easily done under the Terms of the Act, without some more specific Prohibition, it
seemed to them that Penalties ought to be imposed on the Directors, Cashiers, and Officers
of the Company, who should discount any Bills or answer any Drafts in respect of any
Deposit, before the Expiration of six Months from the Date of the Deposit on any Pretence
whatsoever; but that also appeared to them to require the Sanction of Parliament to give it
effect,”
The Ground of this Objection appears to us to be fully and effectually removed by an Offer on
the Part of the Petitioners, to relinquish all Claim on their Part, to be incorporated for the Purposes
which have excited this Jealousy on the Part of the Bank of England, and the private Bankers: and to
be expressly restrained
“from receiving Deposits of the Funds belonging to, and acting as Trustees thereof for,
Benefit or Friendly Societies, and other charitable and benevolent Institutions; and for making
Provisions for the Widows and Children of the Clergy, and for Clergymen; and for the
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receiving Deposits from, or on Account of the Members of the [67] industrious Classes of
Society, and others;”
and from acting as a Bank in the same, or in any other Respect or Capacity whatsoever, upon Pain
of Dissolution; which Penalty, together with the criminal Responsibility, which the individual Members
would incur, by presuming to act as a Corporation for any Purposes, other than those which are
immediately authorised by their Charter of Incorporation, or at any Rate, for Purposes expressly
forbidden by their Charter, appears to us sufficient to obviate the Objection on this Head.
As to the fourth Objection, which suggests, that
“there should be in the proposed Charter Clauses prohibiting any Species of Trade, or any
Dealings whatsoever, except those to be specifically described in the Charter, being carried on
by the Company, which according to the Terms of the Charter, the proposed Company might
do; although the Petitioners had disclaimed any Intention of engaging in any such Dealings,
and that Forfeiture of the Charter, and the personal Responsibility of the Directors, with
Penalties on the Officers, seemed necessary to give Effect to the Prohibition, and that the
same could not be made effectual without the Aid of Parliament,”
This seems, in our Opinion, adequately obviated already by the Terms of the Charter, as at present
framed, not only by conferring no corporate Being upon the Petitioners for the Purposes which are
supposed most likely to be abused, but also by the express prohibitory Provision above mentioned,
against trading, dealing, or acting as a Corporation, for any but the immediately specified, and
authorised, Purposes; and by the Penalty of a Forfeiture of their Charter, for acting in Defiance of
such Prohibition. And, as to the Necessity of Penalties to be imposed on the Officers, in order to give
Effect to this Prohibition, we venture to submit our Opinion, that any Persons, criminally questioned
upon an Information in quo Warranto, as Individuals, for presuming to act as a Corporation for
Purposes foreign to the Purposes [68] of their Incorporation, and in which they are, by the express
Terms of their Charter, prohibited from acting, (and as to which, therefore, they are no Corporation
at all,) are liable to be punished by Fine and Imprisonment at Common Law, as for the Usurpation of
a Franchise. We think, therefore, there is no absolute Occasion for the Aid of Parliament, on this
Subject, if there still remained, after the Provisions on this Head, which are already introduced into
the Charter, any reasonable Ground for Jealousy and Apprehension, that the Powers of the Charter
would be, in this respect, exceeded and abused.
As to the fifth Objection, which respects the Propriety of imposing
“some Restraint on the Terms of the Company’s Dealings in Annuities, Post-obits, and
other Traffick of the same Description, in which they understood it was the Intention of the
Company to adventure, and in which the Example of a great Company authorised by
Parliament, and by your Majesty’s Charter, might be highly injurious, if their Dealings should
be for the same unconscientious Advantages as were usually extorted by those who deal with
necessitous Persons in such Transactions, which, in general, can only be carried on with
necessitous Persons, and most frequently with young Persons subsisting on Expectancies. In
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this View, it appeared to them that Publicity in such Transactions is highly important: and that
all Post-obits to be granted to the Company, ought to be subject to Provisions, similar to those
respecting Annuities, contained in the Act of Parliament of the 17th Year of your Majesty’s
Reign, for registering Grants of Life Annuities, and for the better protection of Infants against
such Frauds; but they conceived that could not be done without the Aid of Parliament.”
We conceive that this Objection applies principally to Post-obits, and Dealings of that Description:
as far as it so applies, it is wholly removed by an express Renunciation on the Part of the [69] Company
of all Dealings of that Kind, and a Consent to be restrained therefrom by the Terms of their Charter.
As to the mere Dealing in Annuities, if it had stood alone, as it now will do, we do not apprehend that
it would have been objected to on the Part of our Predecessors; and so standing, we do not ourselves
feel it to be fairly objectionable.
As to the sixth Objection, which suggests the Importance of
“preventing the proposed Corporation from becoming Land-jobbers, and from which the
late Attorney and Solicitor General apprehended that the Company could not be restrained by
any Provision in his Majesty’s Charter, without repealing Part of the Act under the Authority
of which it was proposed to be granted, although the Petitioners had proposed to submit to
any Restrictions in this respect; and particularly to a Provision, that all Estates, which, being
originally vested in the Company, by way of Mortgage, might become their absolute Property,
by Foreclosure or otherwise, should be sold by them within twelve Months after such Title
should have become absolute, the Petitioners having declared that they were only desirous of
acquiring Landed Property for their necessary Accommodation, with Buildings, and other
Conveniences for the Transaction of their Business.”
We agree with the late Attorney and Solicitor General, in the Importance of preventing the
proposed Corporation from becoming Land-jobbers. We think, however, that a Restraint introduced
into the Charter upon this Head, would be agreeable to, and in furtherance of, the apparent Intention
of the Legislature, which appears to have been to prohibit them from being Land-owners (except in
the way of Securities for Annuities) beyond 2000£ per Annum. And we are not aware of any
Repugnancy which would exist between the proposed Charter and the Act of Parliament, (so as to
make a Repeal of any part of such Act necessary,) if the Charter should provide for the early Sale of
Lands, which should come to the [70] Hands of the Company charged with, or made Securities for,
such Annuities; and which is offered to be provided for, by a Consent on the part of the Petitioners,
to be bound to sell all such Interest in Land, as may devolve to them in the way of Securities for
Annuities, within a twelve Month from the Time their Title accrues; and to sell likewise within the
same Period, all Lands which may become their Property by Foreclosure of Mortgage or otherwise.
The Seventh Objection states that
“the Clause in the Act exempting the Capital Stock of the Company from all Taxes and
Assessments, (except the Income Tax) may tend to raise considerable doubts with respect to
the Income of individual Members of the Company, which may be subject to that Tax, and
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may particularly affect the Imposition of any other Duty of the same Nature, if that Tax shall
be repealed, or indeed to make any Variation in the Tax as now imposed; and that it therefore
would be improper for his Majesty to grant any Charter to the proposed Company, until the
Legislature shall by some explanatory Act remove all Doubts on this subject.”
This is an Objection which we have not introduced any Provision or Alteration to obviate: and, if
it be considered as of Importance, cannot be obviated without Recourse to Parliament, because the
Benefit given to the Company in this particular is expressly given by the Legislature, and we apprehend
must therefore remain to them, unless, upon reference to Parliament, the Legislature should think
proper to repeal it; but though we feel great Diffidence in any Opinion of ours, which is at Variance
with that of our Predecessors, yet we cannot forbear submitting, that it appears to us that the Evil,
apprehended in the Objection, will not exist, as, with due Deference, we think, that the Income,
derived to the individual Members of the Corporation, from their Shares of Dividends upon [71]
such Capital, will be liable to that and every Tax in the same Manner, as it would be were there no
such Provision in the Charter, or Act of Parliament; and that it is only to the Corporate Fund, in the
Hands of the Corporation before Division, that this Exemption is meant to apply.
As to the Eighth Objection, which considers,
“that the Capital of the proposed Company should be restrained to some certain Sum, but
that there is no Provision for that Purpose, either in the Draft of the proposed Charter, or in
the Act to which it refers;”
we concur in thinking, that the standing Capital, called in the Act the extraordinary Capital Stock
of the Society, ought, unquestionably, to be limited; and it is limited by the Charter, and the Act to
1,000,0001. But, with respect to the floating or trading Capital, if there be any necessity for any
Limitation to be imposed upon that, we think the necessity of such Limitation would be a fundamental
Objection to the existence of the Society itself; for, it seems to us, from the particular Nature of this
Trade, that any Limitation of their trading Capital must be extremely difficult, and hardly possible to
be adopted, without cramping the fair Expectation of the Adventure, and without destroying all that
prospect of Success which must be the adequate Object to the Persons embarking in the Adventure,
and can alone by Possibility afford such Extent of Profit as may enable them to realize that Prospect
of ulterior Advantage to the Public which is the Subject of Consideration in the next Objection. For
this Capital, which we denominate trading and floating Capital, and distinguish from the extraordinary
Capital Stock, must depend upon the Amount of the Premiums received, those Premiums forming at
once the Capital, the Indemnity, and the Profit. In submitting these Observations, we do not consider
ourselves as in any Degree differing from our Predecessors; because at the Time they made the
Objection [72] now under Consideration, it applied to an intended Corporation, with Views and
Speculations of various Trades and Adventures, which the Society has consented to abandon. And we
agree, that, if all those Trades and Adventures had still remained within the Plan of this Society, the
Limitation of their trading Capital, as suggested by the late Attorney and Solicitor General, might have
been necessary for the Security of the Public.
The Ninth Objection is, that
153
“the Proposition for laying out a Moiety of the Profits of the proposed Company, after a
Deduction of 5£ per Cent. on the Capital, to the extent of 700,000£, in the purchase of Land
Tax, had an appearance of Delusion, if the Capital of the Company was not to be carried
beyond 1,000,000£. At any Ordinary Rate of Profit in Money Transactions on such a Capital,
the Application of a Moiety of the Profits, after a Deduction of 5£ per Cent. on the Capital,
must require a vast Series of Years before an Accumulation of 700,000£ could be made; and
no Means were provided, nor did it appear to them that any effectual Means could be provided,
(especially without the Aid of Parliament), to ascertain what might be from Time to Time the
Profits beyond 5£ per Cent. on the Capital and all Charges.”
We entertain no sanguine Expectation of much Benefit to be derived to the Public from the
Proposition above considered; but still we do not apprehend, that though the fixed Capital be limited
to 1,000,000£, that Capital can be the Measure upon which the probable Profits of this Trade are to
be calculated. A great Company, like that in Question, must necessarily require a very large standing
Capital for Buildings, Clerks, and other Expences of Establishment: but the Capital, which is to
furnish the Gains, and also, principally to bear the Losses, of an Insurance Company, to which this
Society is now nearly to be reduced, is that which must arise [73] from the Receipt of the Premiums,
and which must necessarily extend itself as their Responsibility extends. We apprehend that, upon the
Principle On which alone the Business of Insurance can be profitable and usefully carried on, the
Premiums, to be received on each Insurance, must be calculated so as not only to be equal to the
Chance of Loss upon the Article insured, but also to afford a fair Profit beyond it to the Insurer. If,
therefore, they conduct their Insurances wisely, though the standing Capital be only a Million, upon
which, invested as the greater part of it is to be, they will be able to make little more than 5£ per Cent.
Interest, if so much, yet the Sums received as Premiums for Insurance, upon each of which some
Profit must, upon Calculation, be expected to arise, may grow to such an Extent as to afford a Profit
to the Proprietors much greater than 5£ per Cent. upon the standing Capital.
With regard to the Difficulty of ascertaining the Amount of these Profits, we think it will,
undoubtedly, be attended with some Difficulty but the Disclosure of their Accounts before
Parliament, and the Power of the Treasury to appoint Auditors from Time to Time, as may appear to
be necessary, seem to furnish an adequate Security for such reasonable Approach to Certainty as may
answer the Objects of the Public.
As to the Complaint, that
“the several Companies, now established for the Purposes of Insurance by Charter, Who
had appeared before the late Attorney and Solicitor General, complained of the Advantage
over them proposed to be given to the intended Company by the authorised Extent and
Variety of their Dealings in which those chartered Companies were not authorised to engage;
and that, amongst Insurance Companies who have not obtained Charters, one, namely, The
Phoenix Company, having petitioned his Majesty for a Charter of Incorporation, received so
much Discouragement in pursuing their Application, from the Opinion, then expressed by the
then Officers of the Crown, to whom [74] their Petition was referred, of the Impropriety of
154
such Charter, that they were induced to abandon their Petition, under the Persuasion that the
Report of his Majesty’s then Attorney and Solicitor General in obedience to his Majesty’s
Commands would be, that it would not be in their Opinion proper for his Majesty to grant
any such Charter;”
We have, in the beginning of this Report, adverted to the Complaint made on the Part of The
Phoenix Company, and have stated our Reasons for not troubling your Lordships with an Opinion
upon the Facts and Arguments which were urged on their Behalfs against granting any Charter of
Incorporation at all to The Globe Insurance Company, and your Lordships will judge how far we were
warranted in forbearing to notice them upon the Grounds already suggested by us. But, with respect
to the other Companies, we apprehend that the Grounds of Complaint urged on their Behalf, are now
removed by the Modifications introduced into the Draft of Charter, as now submitted to your
Lordships; whereby it will appear that those Dealings, in which other Companies are not authorised
to adventure, are renounced on the Part of the Petitioners for this Charter, and are excluded by the
Terms of the Charter itself.
Upon the whole we are of Opinion, that, supposing the Policy and Expediency of granting any
such Corporation to be admitted, (which Question, as we have said before, we do not consider as
being referred to us) we apprehend the Terms on which the Petitioners are now content to take the
Charter will remove all those Objections, mentioned in the Report of Sir John Mitford and Sir William
Grant, upon which their Opinion of the Necessity of further Application to Parliament seems to have
been founded.
All which is humbly submitted to your Lordships Wisdom.
EDWAD LAW.
SP. PERCEVAL.
8th Feb. 1802”
c. Unincorporated Joint Stock Companies with the Right to Sue and Be Sued (1807)
“An Act to enable The Globe Insurance Company to sue in the Name of their Treasurer, and to inrol Annuities.
(25th. April 1807)75
WHEREAS several Persons have formed themselves into a Society or Partnership, under the
Name of The Globe Insurance Company, and have subscribed very considerable Sums, in order to carry
On the Business of insuring Houses, and other Property, from Loss or Damage by fire; to effect
Insurances on Lives, and to grant and purchase Annuities:
75 47 Geo. III, c. 30. For similar legislative grants to insurance companies, see 47 Geo. III, c. 31, 32, 33 and 34. Available
at http://goo.gl/JQBtL.
155
And Whereas the Public hath been greatly benefited by the Formation of such Society or
Partnership, with a competent Capital to carry on the same, and a considerable Revenue is derived to
His Majesty therefrom:
And Whereas Difficulties have arisen., and may from Time to Time arise, as well in recovering
Debts, which may grow due to the said Society or Partnership, called The Globe Insurance Company, as
in prosecuting Persons who may steal or embezzle the Property of, or who may commit, or be guilty
of any other Offence against, or with Intent to injure or defraud the said Society or Partnership; as by
Law all the several Subscribers or Proprietors to and in such Society or Partnership must, in such
Cases, sue and prosecute by their several and distinct Names and Descriptions:
And whereas an Act was passed in the Seventeenth Year of His Majesty's Reign, intituled, An Act
for registering the Grants of Life Annuities and for the better Protection of Infants against such
Grants; whereby it was and is required, that a Memorial of every Instrument granting any such Annuity
or Rent Charge as is therein mentioned, should, within the Time therein 'mentioned, be inrolled in the
High Court of Chancery and that such Memorial should, among other Particulars, contain the Names
of all the Parties, and for whom any of them were Trustees:
And Whereas the said Society or Partnership, by reason of the Number of Persons who are or
may be interested therein, is unable to comply with the Requisitions of the said Act in the last-
mentioned Respect, and is prevented thereby from rendering the Contracts of the said Society or
Partnership for the Purchase or Sale of Annuities effectual and valid;
Wherefore, for the more easily carrying into Execution the several Undertakings herein-before
mentioned, and for removing the Difficulties aforesaid, may it please Your Majesty that it may be
enacted and be it enacted by the King's most Excellent Majesty, by and with the Advice and Consent
of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and the
Authority of the same, That all Actions and Suits to be commenced or instituted by or on Behalf of
the said Society or Partnership against any Person or Persons, or Body or Bodies Politic or Corporate,
shall or lawfully may be commenced or instituted and prosecuted in the Name or Names of the
Treasurer or Treasurers for the Time being of the said Society or Partnership, as the nominal Plaintiff
or Plaintiffs for and on Behalf of the said Society or Partnership; and that all Prosecutions to be
brought or instituted by or on Behalf of the said Society or Partnership for Fraud upon or against, or
for Embezzlement, Robbery of, or stealing the Property of the said Society or Partnership, or for any
other Offence committed against, or with Intent to injure or defraud the said Society or Partnership,
shall or lawfully may be so brought or instituted, and carried on, in the Name or Names of the
Treasurer or Treasurers for the Time being of the said Society or Partnership; and in all Indictments
and Informations it shall be lawful to state the Property of the said Society or Partnership to be the
Property of the Treasurer or Treasurers for the Time being of the said Society or Partnership; and
any Offence committed with Intent to injure or defraud the said Society or Partnership shall and
lawfully may in such Prosecution be laid to have been committed with Intent to injure or defraud the
said Treasurer or Treasurers for the Time being of the said Society or Partnership; and any Offender
or Offenders may thereupon be lawfully convicted of any such Offence, and the Death, Resignation
156
or Removal, or other Act of such Treasurer or Treasurers, shall not abate any such Action, Suit, or
Prosecution.
II. Provided always, That nothing herein contained shall extend, or be deemed, construed, or taken
to extend, to incorporate the said the Society or Partnership; or to relieve or discharge the said Society
or Partnership, or any of the Members thereof, or Subscribers thereto respectively, from any
Responsibility, Contracts, Duties, or Obligations whatsoever, which by Law they may now, or at any
Time hereafter, be subject or liable to, either as between such Society or Partnership and others, or
between the, or any of the, individual Members of such Society or Partnership and others, or among
themselves, or in any other Manner whatsoever.
III. And be it further enacted, That it shall and may be lawful to and for the said Society or
Partnership to inrol, in the High Court of Chancery, a Memorial of every Deed, Bond, Instrument,
or other Assurance, whereby any Annuity or Rent Charge shall, from and after the passing of this Act,
be granted to or by the said Society or Partnership, for One or more Life or Lives, or for any Term of
Years, or greater Estate determinable on One or more Life or lives, in the Names of the Parties to
such Deed, Bond, Instrument, or other Assurance; and such Inrolment shall (all other Requisites of
the said recited Act being duly complied with,) be as good and effectual to all Intents and Purposes as
if the Names of all the Persons for whom such Parties respectively, or any or either of them, shall be
Trustees or a Trustee, were or was stated therein, any Law, Statute, or Custom to the contrary
notwithstanding.”
__________________________________
“An Act to alter and explain Two Acts to enable the Globe Insurance Company to sue in the Name of their
Treasurer, and to inrol Annuities. (27th. May 1809) 76
And Whereas Doubts have arisen whether the said recited Acts of the Forty-seventh Year of His
present Majesty are in all Respects effectual for the Purposes for which the same were intended;
wherefore, for obviating and removing such Doubts, May it please Your Majesty, That it may be
enacted, and be it enacted, and declared by the King's Most excellent Majesty, by and with the Advice
and Consent of the Lords Spiritual and Temporal, and Commons in this present Parliament
assembled, and by the Authority of the same,
That, from and immediately after the passing of this Act, in all Agreements, Covenants. Contracts,
Bonds, Obligations, Warrants, Judgments, Grants, Charges, Surrenders, Fines, Recoveries,
Conveyances, and other Assurances whatsoever, by which any Annuity or yearly Rent hath been, or
shall be sold, limited, or otherwise assured to, or in trust for, or for the Benefit of the said Society or
Partnership called, “The Globe Insurance Company;” or to any Person or Persons Acting for, or on
the Behalf of the said Society or Partnership, or by which any Annuity or yearly Rent hath been, or
76 49 Geo. III, c. 122. Paragraphs added.
157
shall be granted, sold, limited, or otherwise assured by the said Society or Partnership, called “The
Globe Insurance Company,” or by any Person or Persona acting for, or on the Behalf of the said
Society or Partnership; and in all Memorials of the said Assurances respectively, the Names of the
Members of the said Society or Partnership, and of all the Persons interested in the same, or acting
on the Part or Behalf of the said Members, or other Persons, or any of them, or for whom they or
any of them are Trustees, shall, for all the Purposes of the said Act of the Seventeenth Year of the
Reign of His present Majesty, be considered to be sufficiently mentioned, expressed, and contained
within the Provisions of the said Act of the Seventeenth Year of the Reign of His present Majesty,
and the true Intent and Meaning of the same, if, in the Assurances or any one of the Assurances, by
which such Annuities or Rents respectively shall be sold and secured, and in the Memorials of the
same respectively, it is or shall be expressed, or appears, or shall appear, that the Annuity or yearly
Rent so granted, sold, limited or otherwise assured, is thereby granted, sold, limited, or otherwise
assured by the said Society or Partnership, or to or for the Benefit of the said Society or Partnership
as the Case may be, and that the Consideration for the same is paid, advanced, or given to, or by, or
on the Behalf, or on the Account of the said Society or Partnership, as the Case may be; and thereupon,
(the other Requisites of the said Act of the Seventeenth Year of the Reign of His said Majesty being
complied with), the said Deeds and Assurances, and the Memorials of the same, shall be as valid, and
effectual, to all Intents, Effects, Constructions, and Purposes whatsoever, as if the Names of all the
Members of the said Society or Partnership, and of all the Persons interested in the said Society or
Partnership, or represented by them, or for, or on the Behalf of whom they, or any of them have
acted, or been Trustees, or paid or advanced, or given the Money, or other Consideration for the said
Annuities, or shall act or be Trustees, or pay or advance, or give the Money or other Consideration for
the said Annuities, were stated in the said Assurances and Memorials respectively, in the Manner
prescribed by the said Act.”
158
Chapter 7. Banking Laws and Joint Stock Banking Companies
a. An Act for establishing an Agreement with the Bank of England (1800) 77

“An Act for establishing an Agreement with the Governor and Company of the Bank of England, for Advancing
the Sum of three millions, towards the. Supply for the Service of the Year one thousand eight hundred.—[28th March
1800.]
…
And Whereas the said Governor and Company of the Bank of England are willing and contented
to advance, towards the Supply granted to your Majesty for the Service of the Year 1800, the Sum of
3,000,000, on or before the 5th Day of April 1800, on the Security of Exchequer Bills … and to he
made payable without Interest, and to be charged and chargeable upon and repaid out of the first
Aids or Supplies which shall be granted by Parliament for the Service of the Year 1806; and in case
sufficient Aids or Supplies should not be granted by Parliament for that purpose before the 5th day of
April 1806, the same to be charged and chargeable upon, and to be re-paid out of the consolidated
fund; provided … that in Consideration of the said Advance of 3,000,000 in the Manner, for the
Period, and upon the Terms above mentioned, the said Governor and Company be continued a
Corporation with the sole Power and Privilege of exclusive Banking, and all other the Abilities,
Capacities, Powers, Authorities, Franchises, Immunities, Exemptions, Privileges, Profits, Emoluments,
Benefits, and Advantages, which they now have, possess, or 'enjoy, by virtue or in pursuance of their
Charter, or of any former Actor Acts of Parliament, or of any Employment by or on Behalf of the
Publick, be granted and confirmed to the said Governor and Company, in such Manner as is herein-
after mentioned:
…
XV. And to prevent any Doubts that may arise concerning the Privilege or Power given, by former
Acts of Parliament, to the said Governor and Company, of exclusive Banking, and also in regard to
the erecting any other Bank or Banks by Parliament, or restraining other Persons from Banking during
the Continuance of the said Privilege, granted to the Governor and Company of the Bank of England,
as before recited; it is hereby further enacted and declared, That it is the true Intent and Meaning of
this Act, that no other Bank shall be erected, established, or allowed by Parliament; and that it shall
not be lawful for any Body Politick or Corporate whatsoever erected or to be erected, or for any other
Persons, united or to be united in Covenants or Partnership, exceeding the Number of six Persons, in
that Part of Great Number of Britain called England, to borrow, owe, or take up, any Sum or Sums of
Money on their Bills or Notes, payable on Demand, or at any less Time than six Months from the
borrowing thereof, during the Continuance of the said Privilege to the said Governor and Company;
who are hereby declared to be and remain a Corporation, with the Privilege of exclusive Banking, as
before recited, subject to Redemption on the Terms and Conditions before-mentioned; (that is to say,)
77 39 & 40 Geo. III, c. 28. URL: http://goo.gl/cE0yi.

on One Year's Notice to be given after the 1st Day of August 1833, and Repayment of the laid Sum of
3, 200,000 Pounds, and all Arrears of the said 100,000 Pounds per Annum; and also upon Repayment
of the said Sum of 8,486,800 Pounds, and the Interest or Annuities payable thereon or in respect
thereof, and all the Principal and Interest Money that shall be owing on all such Tallies, Exchequer
Orders, Exchequer Bills, Parliamentary Funds, or other Government Securities, which the said
Governor and Company, or their Successors, shall have remaining in their Hands, or be entitled to, at
the Time of such Notice to be given as aforesaid, and not otherwise; any Thing in this Act, or any
former Act or Acts of Parliament, to the contrary in anywise notwithstanding.”
b. Parliamentary Debates on the Bank Charter Amendment Bill (1826)
Discussions of the Bank Charter Amendment Bill in the Lords78:

“The Earl of Liverpool rose, pursuant to notice, to move the second reading of the bill … He
believed it would be most convenient for the discussion to call their lordships' attention to the different
branches of the subject, in order fully to explain the measures which his majesty's government had
thought it right to adopt under the present circumstances. He was well aware of the difficulties
opposed to any measure of remedy which could be suggested. At the same time he could not help
thinking that, if their lordships were disposed to look the difficulties fairly in the face, they would
become less than they might at first sight appear to be. A noble lord opposite, had, on a former
occasion, referred to what he had thought it right to say in the course of last session, on the subject
of the speculations which were then going on. What he had then said, showed that the causes of the
present evils were not unforeseen. It had been said, however, that he had not pointed out all the
sources of the delusion, and that in particular he had not said any thing of the country banks. Now,
he would refer to the recollection of those who heard him at the time, as well as to those floating
records, which, though loose and hastily made, would be found substantially correct, for an account
of what he had said at that time. It would be found, that upon that occasion he had gone even out of
his way, to give notice to the persons embarked in [451] the wild speculations, of the hazard they were
incurring. He had then observed, that one of the reasons of his mentioning the subject was, that those
speculations were not confined to the metropolis, where people might easily know what they were
worth, but that they were extended through the country by the agency of the country banks.
Government had received intelligence of this, and numerous individuals knew of it as well as
government. When he referred to this declaration, he did it out of no view of laying claim to any
prophetic spirit, beyond that possessed by any other noble lord, who had directed his attention to
questions of that nature. Their lordships must say, when they recollected the numerous speculations
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Parliament Licence v1.0.
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7. Banking Laws and Joint Stock Banking Companies
of the last year, the mining speculations, the loans to foreign countries, the various extravagant projects
which were on foot, that it was impossible but, sooner or later, a powerful reaction must take place.
In discussing the proposed measures, he should first endeavour to ascertain the causes of the
present distress. And he had no difficulty in stating, that he agreed with those who had ascribed the
principal part of the evil to those extraordinary and extravagant speculations which were afloat in this
country during the last year, and which undoubtedly had their origin in the then great prosperity of
the country. Their lordships would recollect the speculations of that period. The foreign loans, the
mining associations, the joint-stock companies, had come to such an extent, that a noble lord, then in
his place, and a noble and learned friend of his, not then on the woolsack, had thought it right to
devise measures to obstruct the passage of these projects through parliament. Their objects were plain
to every man, and made him feel for the dangers to which the unwary were exposed. The spirit of
adventure—the spirit of gambling and speculation—was pushed to an extent never exceeded at any
period of the history of this country since the celebrated South-sea bubble. This spirit of adventure
and speculation was not confined to these new objects of speculation, but extended itself to all the
branches of legitimate and ordinary trade. Their lordships had lately heard a great deal of the danger
of giving freedom to trade, and much of the evils had been ascribed by some persons to those acts
of parliament, by which some branches of trade had been liberated; but, the greatest speculation had
[452] taken place in those articles, the trade in which had always been free…Every branch of trade
had thus been extended to a degree unparalleled in this country. Such had been the spirit of enterprise,
not only [453] with respect to gambling and joint-stock companies, but also to speculations in trade,
that it was beyond possibility, that a great re-action should not follow.
Having stated thus much with regard to over-trading, he would proceed to speak of the currency,
and to shew its connection with the present state of things. He knew there were different theories
upon the subject. Some persons attributed all the evils to speculation, while others attributed them all
to the currency. That they did not flow exclusively from the currency, he thought he had already shewn;
but he did not think that all these speculations and gambling transactions could have been carried to
the degree they had been carried, if they had not been aided by the paper currency. Both causes had
operated. The speculations in trade had been the origin of the evil; the spirit of gambling carried into
every branch of trade had been the beginning, but it could not have been so extensive if it had not
been aided by the state of the currency. Let their lordships see how the question stood with regard to
the currency. That question also divided itself into two branches—the notes of the Bank of England,
and the notes of the country banks…
[455] Thus, the notes stamped for the country banks exceeded, in 1825, by a considerable amount,
the average amount of former years. Whatever reduction of the paper circulation was effected by the
Bank of England, was more than made up by the issues of the country banks…
Having established this fact, he would ask their lordships, if it was too much for him to say, that
the spirit of adventure and speculation, the gambling in joint-Stock companies and mining
associations, in loans, and the other extravagant projects, which he had before alluded to, had been,
fomented and encouraged by the facilities afforded by the over-issues of the country banks; and that
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the failure of these speculations, necessarily involving that of those who had afforded them
accommodation, was one of the main causes of the distress of the country?... Thus, therefore,
although the run was not altogether confined to the Country banks, and it was impossible when once
the panic had diffused itself abroad that it-should be so still it would, he believed, be acknowledged
that the run was mostly upon the country banks, and that when it extended itself to London, it fell
with, the greatest fury upon the establishments most connected with the country-bank circulation.
…
These were the grounds on which he submitted his first measure to the consideration of the
House. It was proposed, as the means of making the evils more equally felt, whenever an unfavourable
state of the exchanges took place, by which the great mass of the people would be protected from its
effects. But then it would be said, “That measure of itself will be inadequate; you ought to go further;
that is doing a good deal, but it is not doing [461] enough.” But, though he preferred a metallic to a
paper-currency in small transactions, still he admitted, that a system of banking, established on sound
principles, was attended with convenience, and even benefit, to a country. The measure, however,
which he had to propose on this subject, he granted, was but a half-measure. And why was it so?
Because their lordships would recollect, they had the chartered rights of the Bank of England to
contend with. This was an obstacle to their going further at present. They ought to go further
whenever they could; but the question now was, were their lordships, although they could not go as
far as they wished at present, to go as far as they could? He was surprised to hear it objected to, on no
other ground than that it was calculated to do too little good. But surely, if it would do some good,
and could do no harm, that was a groundless objection. The present system of law, as to banks in this
country, he considered to be one of the most absurd that ever was invented. It was in the teeth of all
sound policy or common sense. It had grown up gradually, and was not the result of any original plan
or system. He could easily conceive one of two systems founded upon reason and good policy, which
might be adopted by banks. For instance, let them have a system of liberty, permitting any number of
partners; or let them have a system of restriction, founded on conditions of indemnity or security, so
that the public had a chance of being secure. He could understand that in America, one of those
systems was acted upon. For instance, in the state of Massachusetts, they had twelve chartered banks,
and no others were allowed; and, the moment any one of them became unable to pay their notes in
specie, it forfeited its charter. That might be a wise system in the country in which it existed. At all
events, it was a system which he could conceive. It was a limited system, founded upon conditions.
There was, however, another system which was founded upon perfect and entire liberty; and which,
for similar reasons, might be found equally efficacious. Because, where perfect liberty prevailed, each
person having an equal right to invest his capital, the wealthier must in time drive out the weaker and
less solvent, and thus the same end would be obtained by different means. He might illustrate his
argument by a reference to the state of the banking establishments in the [462] metropolis. The private
bankers in London had it in their power to circulate their own notes—a privilege which they ally
however, invariably waived, because the public would not take them, so long as they could get those
of the Bank of England, in the solvency of which they had more confidence. So, if there were
chartered joint-stock banks in other parts of the kingdom, there could be no doubt but that they
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would immediately absorb the whole circulation of the country. Therefore, by either of those systems,
the object of security would be attained. But what was the system in existence at present? Why, the
most rotten, the most insecure, the very worst, in every respect, that could possibly be conceived. Any
petty tradesman, any grocer or cheese-monger, however destitute of property, might set up a bank in
any place; whilst a joint-stock company, however large their capital, or a number of individuals,
exceeding six, however respectable and wealthy they might be, were precluded from so doing by the
present system. One more absurd, therefore, he repeated, could not be conceived. Let them, then,
either continue the system of restriction in point of number, but qualify it by condition; or else allow
full liberty of number so that whichever they adopted, the public might have security for their
property. The beneficial consequences resulting from one of these systems was manifested by its
effects in Scotland. He knew he might be told that it was in vain for him to look to the example of
that country, because they had not the power of granting charters. He admitted they had not, unless
the Bank of England were to give up its charter; and therefore it was, that he had before said that his
was but a half-measure. They had, however, consented to allow the restriction as to the number of
partners in country banks to be removed, and so far one difficulty was removed. In return for this, the
Bank might derive the consolation that they would have an opportunity of gratifying the desire, if
they experienced it, of establishing branch banks throughout the country. Indeed, he believed they
had a right to do so at present; and he confessed 'he was most anxious that they should make the
experiment. But he trusted that, if they did not think it prudent to make the experiment themselves,
they would not suffer the people to wait until [461] the year 1833, exposed to the consequences of
the present system, but set the public free, by allowing the Crown to grant charters to country banks.
He believed it would not in any respect injure them, but, on the contrary, while it would be attended
with the greatest advantages to the country at large, it would be beneficial also, in its consequences, to
the Bank itself.
…
Lord Ellenborough said, he could not give his assent to the measures flow before [496]
parliament, without expressing his opinions freely with regard to them. The measures at present
proposed, as he understood them, were three: one intended to afford immediate relief; and the other
two to prevent a recurrence of the calamities under which the country laboured. His chief objection
to the measure for present relief was, that it would not relieve those who were most deserving of it,
and that, while it would relieve some, it would necessarily injure others. For example, while it relieved
those, who would not convert their Exchequer-bills into cash at a discount, it injured the banks that
had been obliged to sell them during the height of the panic. There was no proof of the want of a
circulating medium. It was more extensive now than at the end of 1824; yet, the object of government
was, to increase it, when its very extent was alleged as one of the causes of the distress. The great
cause of distress was, that people were all called on to pay what they owed, at the same time, and much
sooner than they expected. It pervaded every class and description of persons. He knew not by what
means relief could be administered; but he was sure that the measure of the noble earl would not
reach those who were innocently involved in the calamities that pressed on the country. But, the noble
lords on the Treasury bench were not agreed as to the character of their own measures. The noble
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earl had admitted, that the measure relative to the country banks was only a half measure, and had
expressed his regret that he could not grant charters to the many joint-stock companies at once, while
the noble lord who spoke last regarded the measures as of the greatest importance, and was only
afraid that too great a number of joint-stock banks would be instituted. For his part, the events of the
last two or three years, he confessed did not induce him to look at joint-stock companies with a
favourable eye. He was not, therefore, sorry at the delay which must take place in the full completion
of the measures; and, therefore, he thought no injury would result from the circumstance of these
new companies not being able immediately to obtain charters. When the period fixed by law arrived,
the materials would be provided for establishing them on an extended basis. He trusted no events
would occur to prevent his majesty's ministers from following up the course on which they had
entered. No man [497] evidently thought more deeply on the subject than the noble earl at the head
of the Treasury, nor felt greater apprehensions from the present state of things. As it was impossible
to doubt, that the noble earl was in favour of a system of restriction, it was to be regretted that into
the present bill, out of which joint-stock banking companies might arise, a provision had not been
inserted for the purpose of restricting such companies in their operations. The measure for putting
an end to the circulation of small notes at the end of three years, was a measure only of justice and
humanity to the poorer classes, and therefore he highly approved of it; but, still, approving of it
entirely, as far as its operation went, it was not, he thought, a measure which would reach to the causes
of the existing mischief. For, if the noble earl at the head of government, looked at the papers on the
table, he would find, that of 3,000,000l. of country-bank paper, issued between last year and the year
before, scarcely 1,000,000l. had been issued in notes under 5l. Therefore, the putting an end to the
circulation of 1l. and 2l. notes was not going far enough. To him it appeared idle to talk of the
convertibility of notes into gold, while our system of country banking remained upon its present
footing. If that system was allowed to go on, his firm persuasion was, that the country banks must
ruin the Bank of England itself. In February of the last year, the Bank of England, seeing the foreign
exchanges against us, had taken the just course to correct that mischief, by calling in more than
3,000,000l. of their issues. What was the consequence? Why, that the country banks had immediately
advanced their issues, for every pound which the Bank of England had withdrawn. Under such a
system, it was physically impossible for the Bank to prevent foreign exchanges from being against us.
At present, the Bank was compelled to take the risk, not only of its own trading, but of the trading
of all the country banks. Its situation was one of great difficulty, and he was surprised how it had
acquitted itself so well. It was absolutely necessary to the safety of the country, that the currency
should be placed upon a solid foundation. He was quite sure that the noble earl must feel deep
apprehension on the subject; and he trusted that after the present 498 alarm had passed away—with
seven [498] years of delay for consideration, before the Bank charter would expire—that noble lord
would propose some definitive scheme which should give confidence for the future. The convulsions
which the country had sustained under the old system, did mischief far beyond any actual loss that
was sustained. It was said that, by the recent failures, the country would lose 2,000,000l. in money;
but, the real mischief was in the derangement in the transfers of property which such accidents
produced. He viewed the whole of this subject as of the highest importance to the safety of the
country; and he trusted that the noble earl, with all the authority which belonged to him, as head of
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the government, and in virtue of his great talents and personal integrity, would boldly face the subject,
and come down to parliament, with some comprehensive plan for establishing a firm and solid system
of banking.”
__________________________________
Discussions in the House of the Bank Charter Amendment Bill 79:

“The Chancellor of the Exchequer said, that he could not enter into any of the views of the
hon. member, with respect to the probability of the country being deluged with paper, or to that of
the new banks being managed with improvidence. He could not believe that the country would be
placed in any such jeopardy, because it might be the pleasure of parliament to modify the existing
Bank charter, or hereafter to decline continuing the privileges of the Bank, by putting the law on a
more extended scale than that on which it now stood. It was not necessary to argue either of those
questions; for the passing of the bill through its former stages sufficiently-proved that the House was
desirous that some facilities should be given to the formation of banks upon a more extended scale
than that which the present state of the law allowed. He could not believe, that the only safe system
of banking was [239] identically that system which happened to exist in England at the present
moment. Every person must see the utter incapability of the Bank to carry on all the banking concerns
of the country. They had not the means to help the whole country, as they had done the county of
Lancaster. The question, therefore, to be considered was, whether it was necessary to continue the law
with respect to the number of partners? What peculiar magic there was in the number six, he could
not conceive; nor could he possibly imagine, why that number should be held to be perfectly safe, and
a greater number to be replete with danger. The hon. member for Newton had alluded to an
extravagant project for establishing a bank with a capital of one million, to be subscribed in shares of
two pounds each. That such a project had been entertained, and proposed to the public, was
undoubtedly true; and he had himself received a circular letter, which invited him to become one of
the honorary members. The proposal was, that if he would allow himself to be set down as an
honorary member, he might, if he pleased, dispense with taking any shares, and he might have nothing
to do with the concern. He must confess, that this latter part of the proposal was the only part which
he approved of. It was completely applicable to his views, and he accordingly had had nothing to do
with it. But surely, because there were persons wild enough to entertain most absurd and mischievous
projects, it was not to be argued that such schemes should deter the legislature from endeavouring to
give the wholesome and ordinary facilities of trade to the banking system. Absurd combinations were
not impossible under any system. If the termination of the Bank charter and privileges had left the
government the opportunity of doing as they thought fit, he certainly would not have proposed some
of the limitations which clogged the present bill. The arrangement as to the limited amount for which
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parties were allowed to draw, was certainly a very great defect. But the government had been obliged
to be content with what they could get. He should have been glad if the Bank had been prepared to
waive their exclusive rights, to a greater extent than they had done; but that not being the case, he and
his colleagues could only propose to parliament the utmost he could obtain from the Bank. He thought
it right of the country to avail itself of the facilities as far as they [240] went; for they were calculated
to place the banking system upon a much better footing than that on which it had hitherto stood.
…
Mr. Leycester thought, that the greater the number of partners in banks, the less security there
would be for the respectability of their character, or the solvency of their circumstances. He
considered the present bill objectionable in every point of view.
…
[241] Mr. Spring Rice was surprised to hear the hon. Bank director say, that private banks were
preferable to the Bank of England. One great objection with him to the present measure was, that it
gave a monopoly of local circulation to the Bank of England; as its branch banks would be established
free from the difficulties which the joint-stock banks would have to contend with. He recommended
that publicity should be given to the amount of local issues of paper.
Mr. J. P. Grant contended, that, although government had probably made the best bargain they
could with the Bank of England, yet they had not done enough for the permanent advantage of the
country. There could not be, in his opinion, any danger of over-issues, which were apprehended on
the part of the country banks; because, as long as they were compelled to pay their notes in notes of
the Bank of England, and those were payable in gold, there must be an effectual check upon too great
an extension of credit in that way. In remarking upon the clause which prohibited the chartered banks
from discounting bills or issuing notes in London, he begged to ask, whether it was intended that they
should [242] not have any agent or correspondent in the metropolis? If they were allowed an agent,
he might, in the ordinary performance of his duties, violate the law in that respect, without any
intention of offending against the provisions of the act; and he therefore thought it highly necessary
that the clause should be so worded as to leave no doubt upon the subject. He also objected to the
clause which prevented chartered Banks from issuing notes payable in London, under the sum of 50l.;
and to the clause by which these chartered banks of six persons were at once to be put in possession,
without any act of the legislature, of a power enjoyed by no other corporation or company in the
kingdom, unless under the authority of an act of parliament—he meant the right to sue and be sued,
in the name of their manager or director. That right, thus conferred, seemed to be a little invidious
towards other companies, to whom the same power had been refused. The hon. gentleman concluded,
by expressing his conviction, that the bill, with all its imperfections, would be highly beneficial to the
country; and declared, that while the with drawings of the exclusive privileges of the Bank of England
could not be attended with any loss to that establishment itself, it would be the means of producing
results the most important to the community.
166
The Chancellor of the Exchequer said, that a similar clause was inserted in the Irish Banking
act, and it was only on the insertion of such a clause that the Bank of England consented to waive
the privileges of its charter. He could not undertake to answer for the exact legal effect of the words
of the clause; but if there was any obscurity in the words, or if there was any thing contained in them
which would practically prevent the formation of these co-partnerships, such was not the intention
either of the Bank or the government; and these words might be so altered as to remove the objection
entertained against the clause. As to the attack which the learned gentleman had made upon the bill,
it was directed against the measure generally, and not against this clause. If the learned gentleman had
read the correspondence between the Bank and government he would have seen that the substance
of this clause had been insisted upon by the Bank.”
c. An Act for the better regulating Copartnerships of certain Bankers in England (1826)80
“An Act for the better regulating Copartnerships of certain Bankers in England; and for amending so much of
an Act of the Thirty ninth and Fortieth Years of the Reign of His late Majesty King George the Third, intituled An
Act for establishing an Agreement with the Governor and Company of the Bank of England, for advancing the Sum
of Three Millions towards the Supply for the Service of the Year 1800, as relates to the same.
[26th May 1826.]
…And Whereas the Governor and Company of the Bank of England have consented to relinquish
so much of their exclusive Privilege as prohibits any Body Politic or Corporate, or any Number of
Persons exceeding Six, in England, acting in Copartnership, from borrowing, owing or taking up any
Sum or Sums of Money on their Bills or Notes payable on Demand, or at any less Time than Six
Months from the borrowing thereof; provided that such Body Politic or Corporate, or Persons united
in Covenants or Partnerships, exceeding the Number of Six Persons in each Copartnership, shall have
the whole of their Banking Establishments and carry on their Business as Bankers at any Place or
Places in England exceeding the Distance of Sixty five Miles from London, and that all the Individuals
composing such Corporations or Copartnerships, carrying on such Business, shall be liable to and
responsible for the due Payment of all Bills and Notes issued by such Corporations or Copartnerships
respectively:
Be it therefore enacted by the King's most Excellent Majesty, by and with the Advice and Consent
of the Lord Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the
Authority of the same, That from and after the passing of this Act it shall and may be lawful for any
Bodies Politic or Corporate erected for the Purposes of Banking, or for any Number of Persons
united in Covenants or Copartnership, although such Persons so united or carrying on Business
together shall consist of more than Six in Number, to carry on the Trade or Business of Bankers in
England, in like Manner as Copartnerships of Bankers consisting of not more than Six Persons in
Number may lawfully do; and for such Bodies Politic or Corporate, or such Persons so united as
80 7 Geo. IV, c. 46. URL: http://goo.gl/jeygk. Paragraphs added.
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aforesaid, to make and issue their Bills or Notes at any Place or Places in England exceeding the
Distance of Sixty five Miles from London, payable on Demand, or otherwise at some Place or Places
specified upon such Bills or Notes, exceeding the Distance of Sixty Miles from London and not
elsewhere, and to borrow, owe or take up any Sum or Sums of Money on their Bills or Notes so made
and issued at any such Place or Places as aforesaid: Provided always, that such Corporations or Persons
carrying on such Trade or Business of Bankers in Copartnership shall not have any House of Business
or Establishment as Bankers in London, or at any Place or Places not exceeding the Distance of Sixty
five Miles from London ; and that every Member of any such Corporation or Copartnership shall be
liable to and responsible for the due Payment of all Bills and Notes which shall be issued, and for all
Sums of Money which shall be borrowed, owed or taken up by the Corporation or Copartnership of
which such Person shall be a Member, such Person being a Member at the Period of the Date of the
Bills or Notes, or becoming or being a Member before or at the Time of the Bills or Notes being
payable, or being such Member at the Time of the borrowing, owing or taking up of any Sum or Sums
of Money upon any Bills or Notes by the Corporation or Copartnership, or while any Sum of Money
on any Bills or Notes is owing or unpaid, or at the Time the same became due from the Corporation
or Copartnership; any Agreement, Covenant or Contract to the contrary notwithstanding.
…
IV. And be it further enacted, That before any such Corporation or Copartnership exceeding the
Number of Six Persons, in England, shall begin to issue any Bills or Notes, or borrow, owe or take up
any Money on their Bills or Notes, an Account or Return shall be made out, according to the Form
contained in the Schedule marked (A) to this Act annexed, wherein shall be set forth the true Names,
Title or Firm of such intended or existing Corporation or Copartnership, and also the Names and
Places of Abode of all the Members of such Corporation or of all the Partners concerned or engaged
in such Copartnership, as the same respectively shall appear on the Books of such Corporation or
Copartnership, and the Name or Firm of every Bank or Banks established or to be established by
such Corporation or Copartnerships and also the Names and Places of Abode of Two or more
Persons, being Members of such Corporation or Copartnership, and being resident in England, who
shall have been appointed Public Officers of such Corporation or Copartnership, together with the
Title of Office or other Description of every such Public Officer respectively, in the Name of any
One of whom such Corporation shall sue and be sued as hereinafter provided, and also the Name of
every Town and Place where any of the Bills or Notes of such Corporation or Copartnership shall be
issued by any such Corporation or by their Agent or Agents; and every such Amount or Return shall
be delivered to the Commissioners of Stamps, at the Stamp Office in London, who shall cause the
same to be filed and kept in the said Stamp Office, and an Entry and Registry thereof to be made in
a Book or Books to be there kept for that Purpose by some Person or Persons to be appointed by the
said Commissioners in that Behalf, and which Book or Books any Person or Persons shall from time
to time have liberty to search and inspect on Payment of the Sum of One Shilling for every Search.
V. And be it further enacted, That such Account or Return shall be made out by the Secretary or
other Person, being One of the Public Officers appointed as aforesaid, and shall be verified: by the
Oath of such Secretary or other Public Officer, taken before any Justice of the Peace, and which Oath
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any Justice of the Peace is hereby authorized and empowered to administer; and that such Account or
Return shall, between the 28th Day of February and the 25th Day of March in every Year, after such
Corporation or Copartnership shall be formed, be in like Manner delivered by such Secretary or other
Public Officer as aforesaid, to the Commissioners of Stamps, to be filed and kept in the Manner and
for the Purposes as hereinbefore mentioned.
VI. And be it further enacted, That a Copy of any such Account or Return so filed or kept and
registered at the Stamp Office, as by this Act is directed, and which Copy shall be certified to be a true
Copy under the Hand or Hands of One or more of the Commissioners of Stamps for the Time being,
upon Proof made that such Certificate has been signed with the Handwriting of the Person or Persons
making the same, and whom it shall not be necessary to prove to be a Commissioner or
Commissioners, shall in all Proceedings, Civil or Criminal, and in all Cases whatsoever, be received in
Evidence as Proof of the Appointment and Authority of the Public Officers named in such Account
or Return, and also of the Fact that all Persons named therein as Members of such Corporation or
Copartnership were Members thereof at the Date of such Account or Return.
VII. And be it further enacted, That the said Commissioners of Stamps for the Time being shall
and they are hereby required, upon Application made to them by any Person or Persons requiring a
Copy certified according to this Act, of any such Account or Return as aforesaid, in order that the
same may be produced in Evidence or for any other Purpose, to deliver to the Person or Persons so
applying for the same such certified Copy, he, she or they paying for the same the Sum of Ten Shillings
and no more.
VIII. Provided also, and be it further enacted, That the Secretary or other Officer of every such
Corporation or Copartnership shall and he is hereby required, from time to time, as often as Occasion
shall render it necessary, make out upon Oath, in Manner hereinbefore directed, and cause to be
delivered to the Commissioners of Stamps as aforesaid, a further Account or Return according to the
Form contained in the Schedule marked (B) to this Act annexed, of the Name or Names of any
Person or Persons who shall have been nominated or appointed a new or additional Public Officer or
Public Officers of such Corporation or Copartnership, and also of the Name or Names of any Person
or Persons who shall have ceased to be Members of such Corporation or Copartnership, and also of
the Name or Names of any Person or Persons who shall have become a Member or Members of such
Corporation or Copartnership, either in addition to or in the Place or Stead of any former Member
or Members thereof, and of the Name or Names of any new or additional Town or Towns, Place or
Places, where such Bills or Notes are or are intended to be issued, and where the same are to be made
payable; and such further Accounts or Returns shall from time to time be filed and kept, and entered
and registered at the Stamp Office in London, in like Manner as is hereinbefore required with respect
to the original or annual Account or Return hereinbefore directed to be made.
IX. And be it further enacted, 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 any
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
169
be commenced or instituted 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,
and Proceedings at Law or in Equity, to be commenced or instituted by any Person or Persons, Bodies
Politic or Corporate, or others, whether Members 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; and that all Indictments, Informations
and Prosecutions by or on behalf of such Copartnership, for any Stealing or Embezzlement of any
Money, Goods, Effects, Bills, Notes, Securities or other Property of or belonging to such
Copartnership, or for any Fraud, Forgery, Crime or Offence committed against or with Intent to injure
or defraud such Copartnership, shall and lawfully may be had, preferred and carried on in the Name
of any One of the Public Officers nominated as aforesaid for the Time being of such Copartnership;
and that in all Indictments and Informations to be had or preferred by or on behalf of such
Copartnership against any Person or Persons whomsoever, notwithstanding such Person or Persons
may happen to be a Member or Members of such Copartnership, it shall be lawful and sufficient to
state the Money, Goods, Effects, Bills, Notes, Securities or other Property of such Copartnership, to
be the Money, Goods, Effects, Bills, Notes, Securities or other Property of any One of the Public
Officers nominated as aforesaid for the Time being of How Forgeries, such Copartnership; and that
any Forgery, Fraud, Crime or other Offence committed against or with Intent to injure or defraud any
such Copartnership, shall and lawfully may in such Indictment or Indictments, notwithstanding as
aforesaid, be laid or stated to have been committed against or with Intent to injure or defraud any
One of the Public Officers nominated as aforesaid for the Time being of such Copartnership; and
any Offender or Offenders may thereupon be lawfully convicted for any such Forgery, Fraud, Crime
or Offence; and that in all other Allegations, Indictments, Informations or other Proceedings of any
Kind whatsoever, in which it otherwise might or would have been necessary to state the Names of
the Persons composing such Copartnership, it shall and may be lawful and sufficient to state the Name
of any One of the Public Officers nominated as aforesaid for the Time being of such Copartnership;
and the Death, Resignation, Removal or any Act of such Public Officer, shall not abate or prejudice
any such Action, Suit, Indictment, Information, Prosecution or other Proceeding commenced against
or by or on behalf of such Copartnership, but the same may be continued, prosecuted and carried on
in the Name of any other of the Public Officers of such Copartnership for the Time being.
…
XI. And be it further enacted, That all and every Decree or Decrees, Order or Orders, made or
pronounced in any Suit or Proceeding in any Court of Equity against any Public Officer of any such
Copartnership carrying on Business under the Provisions of this Act, shall have the like Effect and
170
Operation upon and against the Property and Funds of such Copartnership, and upon and against
the Persons and Property of every or any Member or Members thereof, as if every or any such
Members of such Copartnership were Parties Members before the Court to and in any such Suit or
Proceeding; and that it shall and may be lawful for any Court in which such Order or Decree shall
have been made, to cause such Order and Decree to be enforced against every or any Member of
such Copartnership, in like Manner as if every Member of such Copartnership were Parties before
such Court to and in such Suit or Proceeding, and although all such Members are not before the
Court.
XII. And be it further enacted, That all and every Judgment and Judgments, Decree or Decrees,
which shall at any Time after the passing of this Act be had or recovered or entered up as aforesaid,
in any Action, Suit or Proceedings in Law or Equity against any Public Officer of any such
Copartnership, shall have the like Effect and Operation upon and against the Property of such
Copartnership, and upon and against the Property of every such Member thereof as aforesaid, as if
such Judgment or Judgments had been recovered or obtained against such Copartnership; and that
the Bankruptcy, Insolvency or stopping Payment of any such Public Officer for the Time being of
such Copartnership, in his individual Character or Capacity, shall not be nor be construed to be the
Bankruptcy, Insolvency or stopping Payment of such Copartnership; and that such Copartnership and
every Member thereof, and the Capital Stock and Effects of such Copartnership, and the Effects of
every Member of such Copartnership, shall in all Cases, notwithstanding the Bankruptcy, Insolvency
or stopping Payment of any such Public Officer, be attached and attachable, and be in all Respects
liable to the lawful Claims and Demands of the Creditor and Creditors of such Copartnership, or of
any Member or Members thereof, as if no such Bankruptcy, Insolvency or stopping Payment of such
Public Officer of such Copartnership had happened or taken place.
XIII. And be it further enacted, That Execution upon any Judgment in any Action obtained against
any Public Officer for the Time being of any such Corporation or Copartnership carrying on the
Business of Banking under the Provisions of this Act, whether as Plaintiff or Defendant, may be
issued against any Member or Members for the Time being of such Corporation or Copartnership;
and that in case any such Execution against any Member or Members for the Time being of any such
Corporation or Copartnership shall be ineffectual for obtaining Payment and Satisfaction of the
Amount of such Judgment, it shall be lawful for the Party or Parties so having obtained Judgment
against such Public Officer for the Time being to issue Execution against any Person or Persons who
was or were a Member or Members of such Corporation or Copartnership at the Time when the
Contract or Contracts or Engagement or Engagements in which such Judgment may have been
obtained was or were entered into, or became a Member at any Time before such Contracts or
Engagements were executed, or was a Member at the Time of the Judgment obtained: Provided
always, that no such Execution as last mentioned shall be issued without Leave first granted, on Motion
in open Court, by the Court in which such Judgment shall have been obtained, and when Motion shall
be made on Notice to the Person or Persons sought to be charged, nor after the Expiration of Three
Years next after any such Person or Persons shall have ceased to be a Member or Members of such
Corporation or Copartnership.
171
XIV. Provided always, and be it further enacted, That every such Public Officer in whose Name
any such Suit or Action shall have been commenced, prosecuted or defended, and every Person or
Persons against whom Execution upon any Judgment obtained or entered up as aforesaid in any such
Action shall be issued as aforesaid, shall always be reimbursed and fully indemnified for all Loss,
Damages, Costs and Charges, without Deduction, which any such Officer or Person may have
incurred by reason of such Execution, out of the Funds of such Copartnership, or in Failure thereof,
by Contribution from the other Members of such Copartnership, as in the ordinary Cases of
Copartnership.”
172
Chapter 8. The Late and Unexpected Revival of the Bubble Act
a. Rex v. Dodd (1808)81

“THE defendant, some time in the year 1807, published and circulated two different schemes; one
of them, entitled “Prospectus for the London Paper Manufacturing Company;” the other, “A
Prospectus of the intended London Distillery Company for making and rectifying genuine British
Spirits, Cordials, and Compounds.” By the first of these it was proposed, amongst other things, to
raise by subscription 50,000£, by twenty-five hundred transferable shares of 50£ each, payable by
instalments, not exceeding 10£ per cent.; the whole to be under a deed of trust or enrolment in
Chancery; “by which no party (it was said) could be accountable for more than the sum subscribed
under the regulations therein stipulated:” and the persons qualified to be chosen directors by the
amount of their shares were to be taken in the rotation in which they subscribed. The great advantages
of this scheme over other paper manufactories were extolled throughout the prospectus. The other
scheme, for a distillery company, which was also held forth in terms of extravagant praise to attract
popular favour, proposed to raise 100,000£ by two thousand transferable shares at 50£ each, payable
by instalments not exceeding 10£ per cent at twenty days' notice; to be in like manner under a deed
of trust enrolled in Chancery, “by which no party was to be accountable for more than the sum
subscribed under the regulations stipulated therein.” This also was to be under the management of
directors properly qualified, to be nominated in rotation as they subscribed. Annexed to the former
scheme was a supposed report to the directors of the London Distillery Company from the defendant,
stating that he had begun in [517] May or June 1807 taking in 1£ subscriptions; and speaking of the
large sums which would be required for the purchase of premises, &c.; and naming different
individuals, amongst others himself, to be elected to the principal employments in the concern.
[518] The Attorney-General (on the part of a private relator), moved the Court on a former day for
a criminal information against the defendant as the framer and promoter of these schemes, which he
contended to be against the express provisions and plain policy of the stat. 6 Geo. 1. c. 18. s. 18., and
supported the application by an affidavit verifying the issuing of these printed proposals by the
defendant, to whom application was made by the deponent for information respecting the nature of
them, and from whom he received a prospectus as to the paper manufactory. That the deponent
agreed to subscribe to it, and paid the defendant 5£ as for an instalment of 10£ per cent on a
transferable share of 50£. And in answer to an inquiry by the deponent what return would be made
if the scheme did not succeed, the defendant answered 2 ½ £ per cent on each share: and at the same
time mentioned that the subscriptions to the distillery scheme which he had to offer to the public had
been all full three months before, and that the shares bore a premium, but he thought he could get
the deponent one for a premium of 10£ or 20£. Facts of a similar nature were also sworn to, with
respect to the defendant's taking subscriptions for the distillery scheme in a book kept in an office for
that purpose, and for which a clerk in the office delivered receipts purporting to be signed by the
81 9 East 516. URL: http://goo.gl/vAZNw

defendant as surveyor; and that at the same time the defendant came into the office and conversed
with another person present on the nature of the undertaking, who also subscribed.
…
[520] S. 19. [of the Bubble Act] enacts that all such unlawful undertakings and attempts so tending
to the common grievance, &c. shall be deemed public nuisances, and subjects the offenders to the
penalties of praemunire, in addition to the fines, penalties and punishments of persons convicted of
common and public nuisances. And subsequent clauses give other remedies in respect of these
grievances. With a proviso (s. 25.) that the act shall not be construed to prohibit or restrain the carrying
on of partnerships in trade, in such manner as had been before usually and may legally be done.
[521] Garrow, Park, Jervis, Lawes, and Adolphus, shewed cause against the information, and denied
that there was any apparent mischievous tendency or public grievance in these schemes, (the one of
which was to supply better and cheaper paper, and the other to supply better and cheaper British
spirits to the public than they had at present;) without which they were not within the letter, and still
less within the spirit of the law. The relator does not pretend to say that the money was attempted to
be raised, without any real intention to apply it to the purposes in view, in fraud of the subscribers; or
that the schemes themselves are impracticable and fallacious; but the objects which are openly avowed
are such as, if realized, must not only be advantageous to the subscribers, but to the public at large.
They are fair objects of trade, meant to be obtained by fair competition with other traders; but as a
larger capital was required than it is in general practicable for a few private partners to raise, it was
proposed to accomplish it by inviting many subscribers to form a joint stock. Then if the object were
legal, and it would have been legal for any number of persons to have met by appointment and entered
into partnership for this purpose, as they may for any purpose of trade, except in the coal trade, and
in that of bankers, and of insurance, under different acts,) the mere circumstance of inviting others
by advertisement to join them in such an undertaking cannot make it unlawful, nor the defendant's
mistake of the law in supposing that each partner would only be accountable for the joint debts
incurred to the amount of his subscription. Then the circumstance of this association, if legal in its
object and beneficial in its nature and tendency, being to be accomplished by transferable shares, is
not in itself made illegal by the act of Parliament, unless the Court see clearly [522] that it has, in the
words of the act, a manifest tendency to the common grievance, prejudice and inconvenience of the
public. It is only put by way of example amongst other means which may have that tendency: but still
the Court must be satisfied that the scheme itself to be promoted by those means has such
mischievous tendency. They also dwelt on the hardship of instituting a prosecution of this sort upon
a statute, which, except in the instance of a prosecution against Caywood within two years after it
passed, does not appear by any case in print to have been acted upon: and he is there represented to
have been a projector of an unlawful undertaking to carry on a trade to the North Seas, whereby many
of His Majesty's subjects had been defrauded of great sums. And they urged that the Court would
not put in force so penal a law at the instance of a private relator, who had himself voluntarily, without
solicitation from the defendant, or any one connected with him, become a subscriber, with a view, as
it seemed, of preferring this complaint; when, if the evil were of magnitude sufficient to call for public
redress, the Attorney General might file an information ex officio against the offenders.
174
8. The Late and Unexpected Revival of the Bubble Act
The Attorney General, Best, Serj. and Abbott, in support of the rule, premised that the only probable
reason why this branch of the statute had not been acted upon for so long a time was because it had
corrected the evil it was intended to suppress, till now of late when it had shewn itself again, and it
was again necessary, in proportion as schemes of this sort multiplied (and the public had heard of
others on foot besides [523] those in question), to put this wholesome law in force. They then argued
from the wording of the statute that the Legislature meant to prohibit altogether projects of this
nature, described by certain indicia as tending in their nature to the common grievance, prejudice and
inconvenience of the subject. It states that it was notorious that projects of different kinds had been of
late practised or attempted to be practised which manifestly tended to the common grievance, &c.;
that the persons who continued or attempted such dangerous and mischievous projects, under false pretences
of public good (and such are blazoned forth in these schemes), presumed to open books for public subscription;
that they drew in the subscribers or claimants under them to pay small proportions thereof: some of them,
it is said, presumed to act as corporate bodies, and had pretended to make their shares in stocks transferable,
without any legal authority. All these acts, which are to be found in the present case, are declared to
be dangerous and mischievous. But then the legislature go on further to recite more generally, that it
is necessary that all public undertakings and attempts tending to the common grievance, &c. of the
subjects in their trade or lawful affairs should be suppressed: and then it enacts for remedy that all
undertakings and attempts as aforesaid (which must mean all those particularly described in the first part
of the preamble,) and all other public undertakings tending to the common grievance, &c. (which
evidently points to the general words at the conclusion of the preamble,) and all other matters and
things whatsoever for furthering, countenancing, or proceeding in any such undertaking;" and more
particularly (inter alia) the pretending to [524] raise transferable stocks, or to assign shares in such stocks, &c.
without authority of Parliament or of the Crown, are declared to be illegal and void. That the particular
acts described are in themselves unlawful, as being assumed to have a mischievous and dangerous
tendency, is further evident from the 21st section, which subjects to punishment any broker who shall
act as such in contracting for the sale or purchase of any share or interest in any of the undertakings
by the act declared to be unlawful. But unless the particular acts themselves described are to be taken as
expressly prohibited without any reference to what a jury may consider as their tendency, how is a
broker to know whether a jury will consider them as tending to the common grievance, so as to govern his
conduct in exercising his business of a broker. But if the construction of the act were otherwise, it
cannot be doubted that these schemes come within the spirit of it. They hold out a false lure to the
subscribers, that they shall not be answerable for more than the amount of their shares, which is
calculated to ensnare the unwary: while extravagant hopes of gain are proclaimed to allure the greedy;
and adventurous persons of small property are drawn in by the facility held out of paying their
subscriptions by small instalments; which is one of the mischiefs intended to be prevented by the act.
There are also mischiefs of a more general nature affecting others than the subscribers themselves;
for when a multitude of persons are engaged in a commercial adventure with transferable shares, it is
next to impossible for those who deal with them to know to whom they are giving credit, or for the
members themselves to know the extent of their own responsibility. It is impracticable for 500 persons
to sue or be sued with effect. And the individual share-holder does not get rid [525] of the evil by
parting with his share; as he still remains liable not only for the partnership debts contracted during
175
the time he held it, but also for those contracted afterwards with one who may have continued to deal
with the company on his credit, not knowing that he had ceased to be a partner. One of the special
objects of the act therefore was to prevent numbers of persons clubbing together with transferable
shares for the purpose of carrying on trade. It was considered as a crafty expedient to enable the
original projectors, after having possessed themselves of the joint stock and subscription funds, to
withdraw themselves from responsibility : but if the shares are not transferable, then the loss and ruin
will fall as it ought upon the original projectors. One object of the legislature was to secure simple
individuals against the ruinous consequences of such projects, where great hopes are holden out to
the public on false foundations; a large fund to be collected by numerous subscriptions of small sums,
of which the chief projector is to retain a principal share in the management; and the shares to be
transferable in order to facilitate the escape of those who are in the secret, and to make redress more
difficult and fruitless. Another object was to secure the public. Legal corporations are known, and can
be made responsible by their property, and punished by the forfeiture of their charter; but bodies of
this sort, indefinitely numerous, and having only individual existence, can with difficulty be traced, and
cannot afford the same protection to the public who deal with them.
LORD ELLENBOROUGH, C. J., at the conclusion of the argument, [526] observed that it was a
question of considerable novelty upon the construction of the act, which, though of some standing,
could not be considered as obsolete : yet the long period which had intervened since the passing of
the law, and the little use which appeared to have been made of it, might perhaps afford some excuse
for this party, and for others who of late may have been engaged in similar projects, if it should appear
that they had fallen unawares into the commission of an offence. The Court would therefore take into
consideration, first, whether the acts imputed to the defendant were illegal; and next, whether under
the circumstances it might be proper to grant the information prayed for. The first question was of
very extensive consequence, as it might affect other cases; and the Court would wish their decision to
have as much public benefit with as little private inconvenience as possible. Two days afterwards His
Lordship delivered the opinion of the Court to this effect.
The case has been very fully argued, and the application for an information has at least had this
good effect, that it has produced a full discussion of the question, and has given a general notoriety
to the existence of the statute of the 6th of Geo. 1., so that no person can hereafter pretend to say
that it is an obsolete law, and on that account no longer to be enforced against such as offend against
the provisions of it. After a lapse, however, of 87 years since any authenticated proceeding has been
had upon this branch of the act, and when other ways are still open to the party now applying to put
this act in force against offenders, the Court in the exercise of a sound discretion, under all the
circumstances of the case, will forbear to interfere in this extraordinary manner. But at the same time
we wish it to be understood [527] that it is not because we think that the facts brought before us are
not within the penalty of the law: but we choose to express ourselves with the greater reserve, because
the defendant may still be indicted, and the Court may still be called, upon the removal of the
indictment by certiorari, or upon an information filed by the Attorney General to give their opinion
on this very case. But independent of the general tendency of schemes of the nature of the project
now before us, to occasion prejudice to the public, there is besides in this prospectus a prominent
176
feature of mischief; for it therein appears to be held out that no person is to be accountable beyond
the amount of the share for which he shall subscribe, the conditions of which are to be included in a
deed of trust to be enrolled. But this is a mischievous delusion, calculated to ensnare the unwary
public. As to the subscribers, themselves, indeed, they may stipulate with each other for this contracted
responsibility; but as to the rest of the world it is clear that each partner is liable to the whole amount
of the debts contracted by the partnership. I forbear to comment on lesser circumstances: such as the
smallness of the sum to be subscribed in the first instance, which seems to carry an appearance of
holding out a lure to the unwary: and other features in the case. But considering that this is brought
forward after a lapse of so many years since any similar prosecution was instituted, and brought
forward by a party who does not profess to have been himself deluded by the project; and the statute
having been passed principally for the protection of unwary persons from delusions of this kind; the
Court think, in the exercise of their discretion, that they should not now enforce the statute against
this defendant at the relation of a [528] person so circumstanced: leaving the relator to the common
law remedy by indictment, or the defendant to be proceeded against by his Majesty's Attorney-
General, ex officio, if he should deem it adviseable for the protection of the public. But the Court think
it is fit that this rule should be discharged without costs. And they recommend it as a matter of
prudence to the parties concerned, that they should forbear to carry into execution this mischievous
project, or any other speculative project of the like nature, founded on joint stock and transferable
shares: and we hope that this intimation will prevent others from engaging in the like mischievous and
illegal projects.
Rule discharged, without costs.”
b. Rex v. Webb (1811)82

“THIS was an indictment found at the quarter sessions in Warwickshire, and afterwards removed
into this court by certiorari. The indictment contained eight counts: upon the first [407], third, and
fourth, of which the defendants were acquitted at the trial. The second stated that the defendants,
contriving and intending to prejudice and aggrieve divers subjects of the king in their trade and
commerce, under false pretences for the public good, after the 24th June 1720, to wit, on the 1st of
August, 1808, at Aston, near Birmingham, in the county of Warwick, did, according to their own device
and scheme, make subscriptions towards raising a great sum of money for establishing and setting on
foot a certain new and unlawful undertaking tending to the common grievance, prejudice, and
inconvenience of great numbers of the king's subjects in their trade and commerce; that is to say, did
make subscriptions towards raising a sum not exceeding 20,000£, to be divided into more than 20,000
parts or shares, for the purpose of buying corn, grinding the same, making bread, and dealing in or distributing
flour and bread, and for other purposes unknown; which undertaking was a public undertaking, and did
then and there and still doth relate to affairs in which the trade, commerce, and welfare of great
numbers of the king's subjects were and are concerned; to wit, at, &c. to the common nuisance of all
82 14 East 406. URL: http://goo.gl/YURve
177
the king's subjects, against the form of the statute, and against the peace, &c. The 5th count charged
that the defendants subscribed towards collecting and raising by subscription a great sum of money
not exceeding 20,000£ to be divided into not more than 20,000 shares, for the purpose of assisting
and favouring a certain other new and unlawful undertaking tending to the common grievance &c. (as
before) [408] and did then and there pay upon such subscription certain small sums, amounting in the
whole to a large sum, to wit 30£; which last undertaking was a public undertaking, &c. (as before).
The 6th count charged that the defendants presumed to act as if they were a corporate body, and
pretended to raise a transferable and assignable stock, without any legal authority, and without any
charter from the crown for so doing; that is to say, as a corporate body, for the purpose of buying
corn, grinding the same, making bread, and dealing in or distributing of flour and bread, and for other
purposes unknown; and having a number of shares not exceeding 20,000, transferrable and assignable
by and from the holders of such shares to any other person or persons at the pleasure of the holders
thereof; to the common nuisance of all the king's subjects, &c. against the form of the statute, &c.
and against the peace, &c. The 7th count charged that the defendants, without any legal authority, and
without any charter from the crown for so doing, pretended to raise a transferrable stock to a large
amount, to wit, not exceeding 20,000£, to be divided into not more than 20,000 shares, which shares
were to be and are transferrable and assignable from the holders thereof to any other person or
persons at the pleasure of such holders; to the common nuisance &c. and against the statute, &c. The
8th count charged that the defendants, contriving and intending as aforesaid, did, according to their
own device and scheme, further countenance and proceed in a certain other new and unlawful
undertaking, tending to the common grievance prejudice, and inconvenience of great numbers of the
king's subjects in their trade and commerce; that is to say, an undertaking for [409] the purpose of
buying corn, &c. (as before) ; which last was a public undertaking, and did then and there and still
doth relate to affairs in which the trade, commerce, and welfare of great numbers of the king's subjects
were and are concerned ; to wit, at Aston, &c. to the common nuisance, &c. against the form of the
statute, &c. and against the peace, &c.
Upon these several counts the jury found a special verdict, which stated in substance, that
Birmingham in the county of Warwick, is a large and populous town, inhabited by many persons
employed as labourers and workmen in divers manufactories carried on there; and that in the year
1796, the price of bread having risen to a very great and extraordinary height throughout the kingdom,
a deed-poll, dated 22d of September in that year, was executed by the defendants (Barber, Townshend,
Warner, and Goddington,) and divers others to the jurors unknown; the said named defendants and
the said other persons then being inhabitants of Birmingham, or the neighbourhood thereof; whereby
each of the said parties whose names were thereunto subscribed mutually covenanted and agreed with
the others, their executors, &c. and assigns, that the parties thereto should be joint traders and co-
partners in the business of buying corn, grinding the same, making bread, and dealing in and
distributing of flour and bread, in such manner as should be thought most advantageous to the co-
partnership by the committee for the time being, to be appointed in manner therein mentioned; and
that the co-partnership should commence from the 1st of June then last, and be continued until
determined in manner thereinafter mentioned, and should be carried on under the name or firm of
The Birmingham Flour and Bread Company; and also that the said joint trade should be carried on
178
upon a capital or [410] joint stock not exceeding 20,000£, to be divided into not more than 20,000
equal shares. And it was by the said deed-poll, amongst other things, agreed that no partner should
hold more than 20 shares, unless the same should come to him by marriage or other means therein
mentioned. And that if any transfer, sale, or assignment should thereafter be made by any of the said
partners to any person holding or entitled to as many shares as should, with the shares so transferred,
sold, or assigned, exceed 20 in number for each member, (except by marriage, bequest, succession, or
other act of law,) that such share and shares as should exceed 20 for each person, should sink into the
said capital or joint stock for the benefit of the said co-partnership. That ground should be bought or
rented, and proper mills, storerooms, bake-houses, and other conveniences should be erected, and the
business carried on where the committee for the time being should appoint. And that each of the
parties thereto, his executors, &c. and assigns, in respect of each share, should weekly purchase from
the co-partnership, at the prices fixed by the committee, such a quantity of flour and bread, or flour,
or bread, not exceeding in value 1s. a week for each share as the committee should deem expedient.
That in default of the party paying for the same, his share should be forfeited and sold, &c. (The deed
then contained a provision for the appointment of a committee of 21 partners for the management
of the concern.) That the committee should convene a general meeting of the partners when they
should think proper, when a state of the affairs of the said partnership should be laid before them,
and the votes of a majority of the partners in value then present should be final [411] and conclusive
: the votes to be taken by shares, and not by voices. That the said capital or joint stock should be paid
to the bankers for the time being, by such instalments as should be ordered by the committee, so as
no call should exceed 10£ per cent, on each share, or be made at less than a month from the preceding
call; and every person who should neglect or refuse to make good such payments for a month should
forfeit his shares, which should sink into the joint stock. That no partner, should at any time, sell,
assign, or transfer any share or interest in the said joint trade to or in trust for any person, unless the
person to or for whom the same should be sold, assigned or transferred should enter into such
covenant or covenants with the partners for the time being in the said joint trade, or with a trustee by
them or their committee to be appointed, for the performance of all and every the covenants, clauses,
and things therein contained, by virtue of a power thereinafter contained; in the same manner as such
person so selling, assigning, or parting with the same ought to do or have done, and as such person to
or for whom the same should be sold, assigned or transferred would or ought to do or have done, in
respect of such share or shares, in case he had originally been a partner in the said joint trade, and had
been a party to and executed the said deed-poll; as by the said parties for the time being or their
committee or counsel should be lawfully and reasonably required. And that in case of death or
insolvency of any of the partners for the time being, their legal representatives or assignees should be
considered as partners in the said joint trade, and should and might hold and dispose of such share
or shares of such persons so [412] dying or becoming insolvent, subject to the terms in the said deed-
poll contained. And also that it should be lawful for a majority in value of the partners for the time
being present at any public meeting held by notice, &c., from time to time to make such additions to
and alterations in all or any of the said articles or deeds of partnership, and all such lawful bye-laws
respecting the said joint trade, and for the government and advantages thereof as to them should seem
proper and convenient. That it should be lawful for 3-4ths in value of the whole of the partners, at
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any general meeting pursuant to a month's notice, &c. to dissolve the said joint trade or co-partnership.
And, lastly, each of the parties to the deed promised and agreed with the others, and also with the
treasurer of the said joint trade for the time being, from time to time to pay to the banker of the said
joint trade 1£ for each share, when called for by the committee; and also all other sums which he
should from time to time become indebted to them for or on account of the said joint trade, &c. That
at the time of executing the said deed-poll, the defendants, Barber, Townsliend, Goddington, and 1300
other persons executing the same, subscribed divers sums according to the amount of their several
shares in the said co-partnership. And that after the same had been so executed, 1200 other persons,
amongst whom were the defendants Webb, Parkes, Ledsam, and Pritchet, became subscribers to and
members of the co-partnership, and subscribed divers sums for the purpose of carrying on the same:
and that the shares taken by the several subscribers and members thereof amounted, at the time of
taking the inquisition, to 8300, many of which shares have been, from time to time, since the
establishment of the co-partnership, sold and transferred, according to the terms of the deed-poll, to
divers persons not originally [413] members of the co-partnership, and the transfer of such shares
made by the chief clerk to the committee for the time being appointed by virtue of the deed-poll, and
under the direction of the committee. That after making the deed-poll, and when a sufficient sum had
been subscribed for that purpose, certain freehold premises in the parish of Aston, near Birmingham,
were purchased, and a steam-engine, storehouse, bakehouses, and other buildings erected thereon,
under the directions of the committee, according to the provisions of the deed: and that the co-
partnership trade has, from the time of the erection of the engine and buildings, been carried on
under the direction of such committee, of which all the defendants have been for the greatest part of
the said time and still are members. The jurors further found that the company was originally instituted
from laudable motives, and for the purpose of more regularly supplying the town of Birmingham and
the neighbourhood with flour and bread, and that the same was in its original institution and still is
beneficial to the inhabitants at large of Birmingham and its neighbourhood, but is prejudicial to the
bakers and millers of the said town and neighbourhood, in their respective trades. But whether the
co-partnership is an unlawful undertaking and public nuisance, within the meaning of the stat. 6 Geo.
1. (c, 18.) and whether the defendants have, in becoming members thereof and subscribing thereto,
and acting therein as aforesaid, offended against the statute, the jurors pray the advice of the court ;
and find a verdict of guilty on the 2d, 5th, 6th, 7th, and 8th counts, or not guilty thereon accordingly.
This case was argued in last Easter term by Reader for the [414] prosecution, and Bramston for
the defendants; the arguments turning upon the application of the stat. 6 G.l.c 18. s. 18 & 19 to the
facts stated in the special verdict. The cases referred to in the course of the argument were Dodd’s
case (a), Buck v. Buck, and Rex v. Stratton and Others (c). And after time taken by the court for further
consideration of the case;
LORD ELLENBOROUGH, C. J. now delivered judgment. This was an indictment founded on the
stat. 6 Geo. 1.c. 18. s. 18 and 19., by which certain mischievous and dangerous undertakings therein
specified are declared to be public nuisances. After stating the indictment and the substance of the
special verdict, his Lordship continued. The special verdict in this case has not found that the acts
imputed to the defendants were in fact grievous, prejudicial, or inconvenient to any of his majesty's
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subjects during the time to "which the indictment relates: on the contrary, it is found, that the
undertaking was originally set on foot from laudable motives, and that the same was, in its original
institution, and still is beneficial to the inhabitants at large of the town of Birmingham and its
neighbourhood. But it was urged that the facts found to have been done on the part of the defendants
are such as the statute assumes and concludes to be grievous, prejudicial, and inconvenient to great
numbers of his majesty's subjects, and that they must accordingly be deemed so to be in point of law,
though they are not found to be so in fact. The acts supposed to be made out against the defendants
are these: [415] 1st, that they have raised a large capital by small subscriptions: 2dly, that this has been
done to enable them to buy and grind corn, to make bread, and to deal in and distribute flour and
bread: 3dly, that the shares in this capital are transferrable: and 4thly, that the subscribers have
presumed to act as if they were a body corporate. The first and second of these points are certainly
established: the third is made out to a certain extent; but to a certain extent only: and the fourth is not
made out. That the shares are not transferrable, unless under the restriction that the vendee shall enter
into covenants to demean himself as though he had been an original subscriber, is quite clear; because
there is an express clause to this effect in the deed-poll of September 1796. The nature of the thing,
too, imposes this additional restriction upon the transfer of shares, that the vendee must either be
resident at or near Birmingham, or must have an agent there; because the possession of each share
imposes upon the holder the obligation of taking weekly so much bread and flour, not exceeding one
shilling's-worth per share, as the committee should fix. The shares in the stock, therefore, are not
generally transferrable, but are virtually restricted to persons in the neighbourhood only: they are
transferrable to no one who will not enter into covenants, and take his weekly portions; no one can
become a purchaser of more than twenty shares; and for anything which appears in the deed, it may
be essential that, upon each transfer, the consent of the other members or of the committee should
be obtained. It is to this extent only, and in this manner, that shares are transferrable. As to the fourth
point, that the subscribers have presumed to act as if they were a body corporate; how is this made
out? It was urged that they assumed a common name, (which, however, does not appear to have been
the case ;) that they have a committee, general meetings, and power [416] to make bye-laws; but are
these unequivocal indicia and characteristics of a corporation? How many unincorporated insurance
companies and other descriptions of persons are there that use a common name, and have their
committees, general meetings, and bye-laws? Are these all illegal? or which of these particulars can be
stated as being, of itself, the distinctive and peculiar criterion of a corporation ? Taking it, then, that
these subscribers have not acted peculiarly as a body corporate, but that they have raised a large capital
by small subscriptions for the purposes stated, and that the shares in such capital are, to the extent
already pointed out, transferrable; it remains to be considered how far this is necessarily per se, without
any prejudice to any individual, constituted an offence by the stat. 6 Geo. 1.e. 18. s. 18, 19. The title
of that act, as far as it has reference to this subject, is for restraining several extravagant and
unwarrantable practices therein mentioned. The occasion of passing it is well known. Subscriptions
had about that period been opened to an enormous extent, (to as much, it is said, as 300 millions,)
upon the wildest schemes imaginable (a) the shares in such adventures were transferrable: they were
as common an article of sale at market as the stock in the public funds, and had been sold at immense
premiums. The first clause in the act applicable to this subject begins by reciting "that it was notorious
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that several undertakings or projects of different kinds had been publicly contrived and practised, or
attempted to be practised, which manifestly tended to the common grievance, prejudice, and
inconvenience of great numbers of his majesty's subjects in their trade or commerce and other their
affairs; and that the persons who contrived or attempted such dangerous and mischievous
undertakings or projects, under false pretences of public good, did [417] presume, according to their
own devices and schemes, to open books for public subscriptions, and to draw in many unwary
persons to subscribe therein towards raising great sums of money, whereupon the subscribers did pay
small proportions; which dangerous and mischievous undertakings or projects related to several
fisheries and other affairs, wherein the trade, commerce, and welfare of his majesty's subjects, or great
numbers of them, were concerned or interested." This is the substance of the first recital, and it seems
to refer to such undertakings and projects as tended to the common grievance, &c. of many of the
king's subjects, and to subscriptions upon such undertakings and projects only. The next recital is "that
in many cases the said undertakers and subscribers (that is, as it should seem by the first recital, the
undertakers and subscribers upon projects of such a tendency,) had presumed to act as if they were
corporate bodies, and had pretended to make their shares in stocks transferrable, without any legal
authority, by act of parliament or charter; and in some cases the undertakers or subscribers had acted
or pretended to act under some charter granted for special purposes therein expressed, and had used
such charters for raising joint stocks and making transfers for their own private lucre; which were
never intended by the charter: and in some cases the undertakers or subscribers had acted under some
obsolete charter. That many other unwarrantable practices, stated to be too many to enumerate, had
been, were, and might be contrived, [418] &c. to the ruin and destruction of many of the king's
subjects, if a timely remedy were not provided; and that it was become absolutely necessary, that all
public undertakings and attempts, tending to the common grievance prejudice and inconvenience of
the king's subjects in general, or great numbers of them, in their trade, commerce, or other lawful
affairs, should be effectually restrained and suppressed by suitable and adequate punishments. It then,
for suppressing such mischievous and dangerous undertakings and attempts, and preventing the like
in future, proceeds to enact that all and every the undertakings and attempts described as aforesaid,
and all other public undertakings and attempts tending to the common grievance &c. of the king's subjects,
or great numbers of them, in their trade commerce, or other lawful affairs, and all public subscriptions
receipts, payments, assignments, transfers, &c. and all other matters and things whatsoever for
furthering, countenancing, or proceeding in any such undertaking or attempt; and more particularly
the acting or presuming to act as a body corporate, the raising or pretending to raise transferable stock,
the transferring or pretending to transfer any share in such stock, without legal authority by act of
parliament or charter, and all acting or pretending to act under any charter granted for special
purposes, by persons using such charter for raising a capital stock or making transfer of such stock,
where such charter did not design the raising or transferring such stock, and all acting or pretending
to act under any obsolete charter, become void or voidable by non-user or abuser, or for want of
elections, shall be deemed illegal and void." What is, therefore, thus described as illegal may be divided
into two classes; first, the undertakings described in the preamble, especially those in which the parties
pretend to act as a body corporate, or to have [419] transferrable stock; and secondly, all other
undertakings tending to the common grievance, &c. of the king's subjects, or great numbers of them,
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in their trade, commerce, or other lawful affairs; raising transferrable stock, &c. &c. The 19th section
provides, that all such unlawful undertakings and attempts so tending to the common grievance, &c. as before,
and the making or taking any subscription for that purpose, the receiving or paying any money on
such subscriptions, the making or accepting any transfer or pretended transfer of any share or shares
upon such subscription, and all and every other matter and thing for furthering, countenancing, or
proceeding in any such unlawful undertaking or attempt; and more particularly the several acts more
particularly prohibited in the preceding clause, of acting as a corporate body, raising transferrable
stock, or assigning any share therein, without legal authority, and acting under charters, &c. shall he
deemed public nuisances, and shall be tried as such ; and all offenders therein shall be liable to the
punishment to which persons convicted of public nuisances are subject, and moreover shall incur and
sustain any further pains, &c. as were ordained by the statute of provision and premunire made 16
Ric. 2; that is, forfeiture of all lands, goods, and chattels, and imprisonment for life. By s. 20. Any
merchant or trader suffering particular damage in his trade, &c. by occasion or means of any
undertaking or attempt, matter or thing, by that act declared unlawful, is entitled to remedy by action:
and by s. 21. any broker bargaining for, buying, selling, &c. any share or interest in any of the
undertakings by that act declared to be unlawful, or in any stock or pretended [420] stock of such
undertakers, shall be rendered incapable of acting as a broker, and forfeit 500£. The act then contains
provisoes, that it shall not extend to undertakings settled before the 24th of June 1718, nor to the two
companies established under that act, viz. the Royal Exchange and London Assurance Companies, nor
to the South Sea company, nor to the carrying on home or foreign trade in partnership in such manner
as had usually been done, and before that act might legally be done, nor to corporations before created
for carrying on trade, nor to subscriptions for enlarging the stock of the South Sea Company, nor to
the East India Company.
Upon this view of the statute we think it impossible to say, that it makes a substantive offence to
raise a large capital by small subscriptions, without any regard to the nature and quality of the objects for which
the capital is raised or whatever might be the purposes to which it was to be applied. The recital in the act, as far as
it refers to subscriptions, is this, that the persons who contrive such dangerous and mischievous
undertakings or projects, (i.e. such as manifestly tend to the common grievance, &c.) under false
pretences of public good, do presume, according to their own devices and schemes, to open books
for public subscriptions, and draw in many unwary persons to subscribe, &c. The subscription,
therefore, which the preamble contemplated, were subscriptions upon dangerous and mischievous
projects, where the pretences of public good were false, and where the [421] unwary were the persons
who were drawn in to subscribe. The enacting part in s. 18, where it refers to subscriptions, makes
illegal all public subscriptions, &c. for furthering, countenancing, or proceeding in any such
undertaking or attempt ; that is, such undertakings or attempts as are specially pointed out in the
preamble, or any other public undertaking or attempt tending to the common grievance, &c. The
enacting part in s. 19. relates to all such unlawful undertakings and attempts, so tending to the common
grievance, &c. and the making or taking of any subscriptions for that purpose, &c. It is only, therefore,
where the subscription is with reference to undertakings, &c. which the act prohibits, that it is illegal:
the act does not apply indiscriminately to all subscriptions. The purpose for which this capital was
raised, viz. the buying corn, &c. not manifestly tending to the common grievance, and being in this
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case expressly found to have been beneficial; the only remaining question is this, whether, as the shares
in this institution are, to the extent which has been pointed out, transferrable, the defendants have
offended against this act in respect of having raised such a description of transferrable stock.
It may admit of doubt, whether the mere raising transferrable stock is in any case, per se, an
offence against the act, unless it has relation to some undertaking or project which has a tendency to
the common grievance, prejudice, or inconvenience of his majesty's subjects, or of great numbers of
them. The mischief intended to be remedied arose from such undertakings and projects; and the
suppression of such undertakings and projects seems to be the great object of the act. But, without
entering particularly into that point, it may be sufficient to say here, that in the qualified extent to
which these shares are transferrable, it cannot [422] be said that there has been such a raising of
transferrable stock as to fall clearly within the scope of the act. It was not the object of the undertaking
to raise stock for the purposes of transfer, nor to make such stock a subject of commercial speculation
or adventure: it is made expressly transferrable to no one individual to a greater amount than 20£, and
the purchaser is obliged in every case to enter into covenants, and to comply with the condition of
taking from the institution a weekly supply of bread and flour.
For these reasons we think that the facts stated on this special verdict do not bring the defendants
within the prohibition of this act of parliament, so as to make them, according to the fair sense and
meaning of it, liable to be found guilty on any of the counts in this indictment; and that the judgment
must therefore be entered for the defendants.”
c. Pratt v. Hutchinson (1812)83

“In debt on bond, dated the 7th of December 1809 whereby the defendant bound himself in the
penal sum of 420£. to the plaintiff, as treasurer of the society called the Greenwich Union Building Society,
the declaration stated the condition of the bond; reciting that by a certain deed of rules and
regulations, dated 7th January [512] 1809, one T. M. and I. K. with divers others, had founded a society
called the Greenwich Union Building Society, to raise by monthly subscriptions a fund or capital to be
laid out in building houses, and to divide the same between them, under and subject to the rules and
regulations thereinafter expressed ; and that is was by the first article in the said deed declared that the
society should consist of no more than 50 members, holding in the whole not more than 200 shares
of 210l. each; and that by the 5th article the members should draw lots from time to time, as often as
the funds of the society amounted to 100l. clear; and by the 8th, 9th, 10th, and 11th articles every share
should consist of a dwelling-house of the best materials, to be completed in a workmanlike manner,
and should be begun by the bricklayer and carpenter thereinafter named within one week after every
notice for that purpose, and should be roofed in within three weeks, and completed within six months
after such notice; in default of which the bricklayer, carpenter, or any other tradesman, should forfeit
for his neglect 5l. percent, upon their respective bills. Then followed clauses, that no money should be
advanced to any tradesman till the house ordered should be completed to the satisfaction of the
83 15 East 511. URL: http://goo.gl/o1unA
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society's surveyor, and then the treasurer should have an order from the society to pay the several bills:
and that from the time such house should be finished, the member owning the same should pay to
the society 5l. per cent, per annum on the 210l. share so drawn and advanced, until the final close of the
society by each member having paid his 210l. on each share held by him. And that every member who should
have built his house previous to his having a prize or share, which he should be permitted to do,
should, whenever he should be the successful [513] drawer, be paid 210l. for every share he should
hold, provided he employed the tradesmen to build the same appointed by the society, and not
otherwise: and in case the said tradesmen should not have been paid by such member, they should be
paid by the treasurer, &c. in the first place, and the surplus only, if any, of the said 210l. paid to such
member. By article 13, each person, on having the 210l. advanced on each share, should deposit his
titledeeds or other good security, to the satisfaction of the society, in the treasurer's hands till the final
close of the society. And further reciting that T. Mumford and J. Sheen had become entitled to one share,
and entitled as such to the advance from the society of 210l. on depositing their title deeds or giving
good security as aforesaid, and that the society had agreed to accept the joint and several bond of
them, and of the defendant and one H. Caslin as their sureties, for the money advanced to them, and
for all future payments to them by the rules of the society, and also for the due performance by them
of the said rules; and that the plaintiff, as treasurer, had paid to Mumford and Caslin 210l. on one share;
the condition of the bond was that if Mumford and Skeen should pay to the treasurer, for the use of
the society, interest on the said 210l. so advanced to them, at the rate of 5l. per cent., and also the
monthly subscription of two guineas upon their said share, until the final close and determination of
the said society; and also keep all the rules, &c.; then the bond to be void. The declaration then alleged
several breaches in non-payment of the interest and monthly subscriptions for a certain time.
[514] The defendant pleaded that after making of the act of the 6 Geo. 1. (c. 18.), the said society
was founded for raising a joint stock by small monthly subscriptions, and making transferrable shares
of the same. And that by the 3d article of the deed of rules, &c. it was declared that the members
should meet on the first Thursday in every month, &c., when the books should continue open for two
hours, and each member should pay two guineas on every share held by him until 210l. should be paid
for each share; such payments to be made to the treasurer, &c.: and by the 4th article, any member
neglecting to make his payment at such meeting should forfeit 2s. 6d.; and if such arrears and forfeiture
were not paid at the next meeting then he should forfeit 5s., and for a third like default 10s. 6d.; and if
after notice he should still neglect to comply with the articles, he should be excluded, and the money
advanced by him forfeited, unless he should provide a person within three month from his last default,
who should be voted eligible to become a member by the society; in which case the member selling
his share should forfeit 10l. per cent, upon his subscription for the benefit of the society, unless the
default appeared to happen from the misfortune of the person so selling his share. And by the 30th
article, every member should have full power at all times to sell his shares privately whenever and at
what price he should think proper, and that the secretary should transfer the same in the transfer-
book of the society, and that every transfer should be signed and witnessed by the secretary: provided
that every purchaser becoming a member should on his admission become a party to the articles, and
duly execute and [515] observe the same; and that no person should be permitted to purchase any
share until he should have been first proposed and approved at a meeting of the said society, by at
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least three-fourths of the members present. That by the 28th article it was declared, that certain
tradesmen (named) should be employed by the society in their several capacities, and no others. And
then the defendant averred that the society was not established either by act of parliament or charter,
or other legal authority; and that the obligation declared on was void in law by force of the statute. To
this there was a general demurrer.
Marryatt was to have argued in support of the demurrer, but the Court thought it unnecessary to
hear him.
Lord Ellenborough, C. J. called on the defendant’s counsel to state upon what grounds it could
be contended that the shares created by this agreement were transferrable stock within the meaning
of the stat. 6 G. 1. c. 18. (s. 18.) when the holder had not the power of transferring his share except
upon certain conditions, namely, upon the purchaser being approved by the society, and becoming a
party to the original articles?
Comyn, for the defendant, said that the plea had been put in before the decision of the Court in
the case of The King v. Webb and Others was known; and upon the opinions intimated in the former
cases, which he submitted were not impugned in this respect by Webb’s case, in which the nuisance of
that particular undertaking was expressly negatived by the special finding of the jury, [516] which
stated that the company was originally instituted from laudable motives, and that it then was and still
continued to be beneficial to the inhabitants at large of Birmingham, where it had been set on foot.
(Bayley, J. The plea does not allege generally as a question for the jury that this society was prejudicial
to the public at large; and, therefore, unless it be brought within the statute, it is no answer.) Taking it
then not to be within the statute so far as the right of transfer of the shares is of a limited nature, it
is still within it as a project for raising a large sum for building houses by small subscriptions; which is
one of the very speculations mentioned in Anderson’s History of Commerce, as one of the bubbles of the
day which gave rise to the act of parliament. Then the stipulation in the articles, that certain persons
only shall be employed in the building and not others, is in restraint of trade, and against the general
policy of the law. (Lord Ellenborough, C.J. How can it be said to be in restraint in trade, to contract for
the employment of particular tradesmen in whom the parties have a confidence?) It would not be
illegal in individuals exercising their own judgment upon it; but persons cannot indiscriminately
combine not to employ any other than certain persons. (Lord Ellenborough, C. J. The combination must
be for some illegal object; but there is nothing illegal in stipulating to employ particular persons only
in the building.) The clubbing together of numbers of persons with transferrable shares, even though
limited, for the purpose of carrying on trade, was one of the very mischiefs intended to be prevented
by the act: it is calculated to put down individual industry and competition, which is most advantageous
for the public. If fifty persons may do this, why may not a [517] thousand? (Bayley, J. That would bring
it to a question of fact for the consideration of the jury, whether the extent of the numbers engaged
in such undertakings was not prejudicial in fact to the public. Le Blanc, J. When every member has paid
his 210l. as I read it, the engagement is to close.)
ELLENBOROUGH, C.J. said that the Court were all clearly of opinion that there was no pretence
for the objection made upon the statute by the defendant, and gave
186
Judgment for the Plaintiff.”
d. Josephs v. Pebrer (1825)84

“ABBOTT, C. J. — I am clearly of opinion, that in this case a nonsuit must be entered. From the
evidence it appears, that a number of persons associated themselves together to form a large company,
called "The Equitable Loan Bank Company." On the evidence, the object of this company did not
very distinctly appear; but it was admitted, on both sides, to be a company for the lending of money
at a rate of interest higher than is allowed by law to be taken by any, except persons subject to the
regulations respecting pawnbrokers. There is, in point of law, no objection to a company being formed
prospectively, for the purpose of obtaining the authority of an act of Parliament, or of the King's
charter, provided, that before they act as a company, they obtain one of those two sanctions: but if,
as in this case, they issue certificates for a great number of small transferable shares, and provide, that
the members of the company shall submit themselves to the regulations or by-laws made, or to be
made, by certain directors, before any authority has been obtained by act of Parliament, or a charter
from the Crown for that purpose [511], then I am of opinion that they are an illegal company within
the meaning' of the statute 6 Geo. 1, c. 18: first, by pretending and assuming to act as a corporate
body without legal authority; and, secondly, by issuing out a great number of small shares, generally
transferable, to any person who chooses to buy them. I have, therefore, no doubt that this company
is an illegal one; and that, being so, the dealing in these shares is unlawful, and that, therefore, all
contracts respecting them are null and void. The traffic in shares of this kind must be highly injurious,
as what is gained by one person must be lost by another; whereas, in commerce, every party may be a
gainer.
BAYLEY, J. — It is clear, that this association was within the meaning of the statute 6 Geo. 1, c.
18. The wording of that statute is certainly not clear; but after reciting (§ 18) that persons had contrived
dangerous and mischievous undertakings or projects, under false pretences of public good, and had
presumed to open books for public subscriptions, and drawn in many unwary persons to subscribe
therein, towards raising great sums of money; and that the undertakers or subscribers had presumed
to act as if they were corporate bodies, and pretended to make their shares in stocks transferable or
assignable, without any legal authority, either by act of Parliament or charter from the Crown; provides,
that all such undertakings and attempts, and all other public undertakings or attempts, tending to the
common grievance, prejudice, and inconvenience of his Majesty's subjects, or great numbers of them,
shall be deemed illegal and void. Now, in this case, it appears, that the individuals forming this
company acted as a public company, and that they had small transferable shares; and though Mr.
Marryatt appears to consider, that it has been decided that a company having transferable shares is not
illegal, yet I take the distinction to be, whether the shares are generally transferable or not: for if the
shares are generally transferable, [512] without restriction, to any one who is able to purchase them,
then the company becomes illegal. And in the case of Rex v. Webb and Others, 14 East, 406, LORD
84 1 C.& P. 507. URL: http://goo.gl/cHzk6
187
ELLENBOROUGH considers, that if the Birmingham Flour Company had presumed to act as a body
corporate, or if their shares had been generally transferable without restriction, that would have been
an illegal company. But, in that case, the transfer of shares was much limited. No one person could
have more than twenty shares of one pound each; and they could not transfer their shares to any
person without the consent of the committee. There is also the case of Pratt v. Hutchinson, 15 East,
511, which was the case of a subscription for the building of houses near Greenwich, by means of
which each of the subscribers was successively to have a house built for him at the society's expense,
in an order to be determined by lot; but in that case, the subscribers were, of necessity, restricted to
persons who were either living, or about to live in that neighbourhood; and further, the shares could
only be transferred to persons who consented to become parties to the original articles, and persons
who were approved of at a meeting of the society. Now contrast these cases with the present. In this
case, for some purpose that does not distinctly appear, forty thousand shares are created, and all of
them are to be generally transferable to every body. The Legislature, by an act of Parliament, or the
King, by his charter, might make this legal; but in this case, there has been neither act of Parliament
nor charter. I am therefore of opinion, that this is contrary to the act of Parliament, and that the
plaintiff, having lent himself to contravene the act of Parliament, cannot recover in this case.
HOLROYD, J. — I am of the same opinion. As these shares were to be generally transferable, I
think the plaintiff cannot recover in this case. [513]
LITTLEDALE, J. — In my opinion, this case clearly falls within the statute 6 Geo. 1, c. 18. To bring
a case within the operation of that statute, it must appear that the pretended company tends to the
common grievance of a great number of the King's subjects; and the question is— Does not this
company tend to that effect? In my opinion it certainly does; for all undertakings, having small
transferable shares, especially if they assume to be by a corporation, are declared by the Legislature to
be to the common grievance, and to be illegal. In the present case, this company do pretend to be a
body corporate; for, before they obtain the authority of an act of Parliament, or the King's charter,
the shareholders are to be governed by the regulations made by a committee; which is saying, in effect,
that the forty thousand shareholders are to be a great corporation, this committee being the select
body. In the next place, these shares are generally transferable, without any kind of limit or restriction;
and, prima facie, this is an undertaking to the grievance of great numbers of the King's subjects. In
all the cases, the transfer of shares had been limited in such a way as to make them not generally
transferable: perhaps if it had been shewn that the objects of this society were perfectly legal and
good, the society might not have been illegal; but so far from that, the object of it, as far as the Court
are informed, is to lend money at a rate of interest greater than is allowed by law to be taken by any
persons who do not subject themselves to the regulations respecting pawnbrokers: so that this is, in
fact, a company to lend money at usurious interest: and without every one of the forty thousand
shareholders was to become a pawnbroker, and conform himself to the regulations established
concerning persons so trading, this company is most clearly an illegal one. But, even if that were not
so, as it is not shewn that this company was established for a legal purpose, the plaintiff is certainly
not entitled to recover in this action.
188
ABBOTT, C. J.— Though that point has not been argued at the bar, I am of opinion, (as at present
advised), that at common law the sale of these shares would be illegal and void; as it is, in effect, a
wagering whether an act of Parliament will pass to legalize them or not.
Rule absolute for entering a nonsuit.”
e. Nockels v. Crosby (1825)85

“ASSUMPSIT for money had and received. Defendant pleaded the general issue, and paid 252l.
11s. into court. At the trial before Abbott C. J. at the London sittings after Hilary term 1824, a verdict
was found for the plaintiff for 47l. 15s., subject to the opinion of the Court upon the following case:
The defendants were the directors of a scheme called the "British Metropolitan Tontine." A printed
paper was circulated with their authority, stating (amongst other things) that to effect the objects of
the scheme it was proposed to receive subscriptions of ten shillings a week from each member for the
period of one year, viz. from the 1st of January 1821, to the 1st of January 1822, and that the total
amount of such year’s subscription should be deemed a share, and all such shares form one capital or
joint stock of the company, with benefit of survivorship; that the amount of the subscriptions would
be vested in the names of the trustees, and from time to time laid out in government or other
securities, the net proceeds and interest of which would be equally divided among all surviving
shareholders twice in every year; that members were to subscribe their names to the company’s rules
and regulations at the time of opening their subscriptions, or at any subsequent convenient [815] time,
and to abide thereby, that the management of the company was vested in eight directors; and that at
the expiration of the year every subscriber would receive a shareholder's ticket, which would be
saleable or transferrable. The above was the paper referred to in the following agreement, which was
signed by the plaintiff and several other persons: “We whose names are hereunder subscribed do
hereby consent and agree to, and with the present and any future directors of the British Metropolitan
Tontine as follows: first, we do each of us agree to become subscribers thereto, and to take such
numbers of shares upon such life or lives as is or are set forth against our respective names; secondly,
we do acknowledge the plan or prospectus hereto annexed to contain the nature and intent of the said
Tontine, so far as the same is therein expressed, and do ratify the same in every respect, and agree to
abide thereby; thirdly, we do agree to ratify and confirm all rules, laws, and regulations passed, or which
shall at any time hereafter pass, for the further promotion, direction, management, and carrying into
effect the said Tontine, and to sign any deed or deeds to that effect; fourthly, we do agree to pay our
subscriptions for one year.” An account was opened with Glyn and Co., bankers in London, entitled
“British Metropolitan Tontine.” The plaintiff paid two sums of money, amounting together, to 308l.
6s., to the aforesaid account at Messrs. Glyn and Co's. Various other subscribers to the Tontine paid
sums of money to the said account, amounting in the whole, with the plaintiff's payments, to 737l.
10s. 6d. In the books of the Metropolitan Tontine the following resolutions are entered:
85 3 Barn. & Cres. 814. URL: http://goo.gl/gY3vx
189
[816] “General resolutions of the 19th January 1821.

“First, that the books of the Tontine be opened to receive subscriptions, and that no less than 2l.
per share shall be received in the first instance, being for the first monthly subscription.
“Secondly, that the affairs and entire management of the concerns of the Tontine be vested in
eight directors, any three of whom to be a sufficient quorum for the purpose of transacting business.
“Thirdly, that James Pope be appointed secretary and solicitor to the directors of the Tontine, and
that for such secretaryship he be paid such yearly salary as the present or any future directors may
think fit.
“Fourthly, that all monies to be received under or in virtue of the Tontine be paid into the hands
of the treasurer or treasurers thereof, and that no monies be drawn for or paid by the treasurer or
treasurers unless by draft, to be signed by not less than three of the directors.
“Fifthly, that the directors do, as often as occasion may require, place out at interest, in the names
of the trustees, in government or other securities all sums of money remaining in the hands of the
treasurer.”
“30th August 1822.
“Resolved by a quorum of the directors present that, there not being a sufficient sum subscribed
to warrant the further prosecution of the scheme, the subscribers have returned to them the amount
of the subscriptions less the expenses attending the same, and that such expenses be ascertained at
another meeting of the directors to be held at the secretary's house the 6th of September next."
[817] "Old Bethlem, 6th September 1822.
“Resolved by a quorum of the directors present that the expences attending the prosecuting the
scheme of against the Tontine do amount to the sum of 3l. 19s. 7d. per share, and that each subscriber
do have the amount of his subscription returned, less the said 3l. 19s. 7d. per share.”
On the 27th of May 1822, the plaintiff wrote to the directors, requesting to have his money
returned immediately, and said, he understood it was to be returned subject to some small charge, and
he did not then make any objection to the charge.
On the 25th of July 1822, he again wrote and complained of the delay in returning his money; and
that he had “been put off from time to time in consequence of charges attending the concern.”
In September 1822 several checques signed by the defendants were drawn on Glyn and Co. for
different sums, amounting in the whole to the said sum of 737l. 10s. 6d. which checques were paid by
them from the money paid into the aforesaid account. One of such checques for 252l. 11s. was made
payable to the plaintiff or bearer, and placed by the defendants in the hands of Mr. Pope, the secretary,
with instructions to deliver it to the plaintiff; but the plaintiff refused to accept the same in satisfaction
of his claim, and the said Mr. Pope, without the knowledge or authority of the said defendants, paid
the said checque into his own private account at the bank of England, through which the same was
190
presented to and paid by Glyn and Co. Previous to the commencement of the present action the
plaintiff had sued G. C. Glyn, one of the partners in the banking-house of Glyn and Co., for the money
sought to be recovered in this action, [818] but had afterwards discontinued that suit. On the trial, Mr.
Pope, the secretary of the Metropolitan Tontine, being called as a witness for the defendants, stated, that
the expences of the institution amounted to 3l. 19s. 7d. a share making 47l. 15s. on the plaintiff's twelve
shares; that the expences consisted in stationery, printing, advertisements, postages, and 751. paid to
the witness for his trouble; that he explained this to the plaintiff, and offered him the balance, 252l.
11s., which he refused; that none of the money was appropriated to their own use by any of the
defendants. He further stated, that the money paid by the subscribers was not laid out at interest, but
remained in the hands of the bankers with whom the account was opened, and that the defendant,
George Mitchell, and the witness alone caused the prospectus to be put forth, and prosecuted the
scheme themselves. That the defendant, Crosby, was not a subscriber, and that he attended one
meeting only when the checques were signed.
Campbell, for the plaintiff. The plaintiff is entitled to recover back the whole sum advanced. The
consideration upon which it was paid failed; the money was, therefore, in the hands of the defendants
money had and received to the plaintiff's use. It will, perhaps, be urged as a defence, that the scheme
was within the bubble act, 6 G.1. c. 18.: but first it was not so; and even if the Court should think it
was, still the scheme was abandoned, and never carried in any degree into effect. The illegality of it,
therefore, cannot alter the present plaintiff's rights. This was not within the bubble act, it was not to
carry on any wild trading speculation, which manifestly tended to the prejudice of the [819]
subscribers, but was a mere association to contribute money with a benefit of survivorship. But even
if this were otherwise, the plaintiff would be entitled to recover. When a person sues to recover back
money paid on a consideration that has failed, then it is money had and received to his use, and the
nature of the consideration is out of the question: Farmer v. Russell. If money paid to a stakeholder on
an illegal wager is paid over, it cannot be recovered back; but the rule is otherwise if the money has
not been paid over, Cotton v. Thurland, Smith v. Bickmore. Here, the defendants took no steps towards
the performance of the contract upon which the money was paid in. It remained wholly unproductive
from January 1821 till August 1822, when the scheme was abandoned; the plaintiff is therefore entitled
to recover back the whole sum advanced. (Holroyd J. Suppose five persons enter into partnership, and
contribute 1000l. each, they afterwards find the concern a losing one, and put an end to it, can any
one maintain an action against the others for his share?) Perhaps not; but this is a different case; at
most it was only a proposed partnership, and nothing was done towards carrying it into effect; and it
is most fit that those persons who proposed the scheme should bear the expences. Besides, the
directors had no power to make a resolution to deduct the expences out of the monies contributed;
they had power to make resolutions for carrying on the concern, but not for the abandonment of it;
the plaintiff, therefore, was not bound by the resolution in question.
[820] E. Lawes contra. The defendants are clearly entitled to deduct the money in dispute from
the amount paid in by the plaintiff. They did not warrant that the concern would answer, but only
proposed that it should be tried, and the abandonment of the scheme was with the plaintiff's assent.
That appears from his letters, which were written before the resolution to put an end to the concern
191
was made. They also shew that he agreed to pay his proportion of the expences, for he alludes to the
proposed deduction of part of his money to pay those expences, and does not object to it. But it does
not appear that the defendants ever received any of the plaintiff's money; they only gave an order to
Pope, and he received, and now has the money. If that were not so, still this action could not be
maintained. All the shareholders were jointly interested in the funds of the concern, and the
defendants have never stated any account, or bound themselves to pay over any sum to the plaintiff.
(Bayley J. Crosby was not interested in the money.) Then the action was improperly commenced against
him. In the next place, this scheme falls within the 6 G. 1. c. 18. s. 18. That act is not confined to
trading speculations; and here books were opened for public subscriptions; small sums were collected,
amounting in the whole to a large sum, the shareholders acted as a corporation, having agreed to be
bound by the resolutions and bye-laws of the directors, and the shares were to be transferrable. It is
therefore precisely similar to that which was determined to be illegal in Josephs v. Pebrer. (Bayley J. It
might be intended to make the shares transferrable, [821] but in fact no shares were ever issued.) The
intent to make them so was, together with the other circumstances, in itself illegal, and the whole
transaction being illegal, no right of action can arise out of it. (Littledale J. It seems to be nothing more
than an agreement by the subscribers to be joint tenants of the money subscribed.)
BAYLEY J. I am of opinion that the plaintiff is entitled to recover the whole sum which he
advanced. There is no difficulty in some of the points urged, viz. that the money was not received by
the defendants, or that it was drawn out and applied with the concurrence of the plaintiff. The money
was originally paid by the plaintiff into the hands of certain persons, who, for the purposes of this
concern, were the bankers of the defendants, and it was paid upon a prospect that it should be in the
bankers' hands in furtherance of a continuing scheme. It was afterwards drawn out by the defendants,
and it was their duty to see to the proper application of it. If they had paid the whole to the plaintiff,
or according to his directions, of course he could not complain; but if they applied a part of it without
his assent, and in a mode which the law did not warrant, the plaintiff clearly has a right to recover,
unless it can be shewn that he was party to a scheme within the 6 G. 1. c. 18. The scheme was not
within that statute, unless it was formed for the purpose of carrying on some mischievous project or
undertaking, and unless we can predicate of it that it was likely to tend to the common grievance,
prejudice, and inconvenience of his majesty's subjects, or great numbers of them in their trade,
commerce, or other lawful affairs. The cases of Rex v. Webb [822] and Pratt v. Hutchinson were decided
on that principle. I think that we cannot assume, as a matter of law, that this scheme was within the
description before given. It is true that a large sum, made up of many small payments, was to be
collected; but that was not to be invested in any general speculation, but merely to enure to the benefit
of the survivors. Prima facie the principal effect of the scheme would be to encourage the saving of
money. But this action might be maintained even if the scheme were within the act, for it proved
abortive, and no transferrable shares were ever created, and the period had not arrived at which it
would have been within the operation of the statute. The defendants then having possession of the
plaintiff's money, applied it without his express assent. Do they shew any matter of law sufficient to
justify that application of it? The scheme was set on foot by Pope and the defendants, and the
prospectus was circulated with their assent. On all projects some expence must be incurred before
many members join the concern. Upon whom should that fall? Undoubtedly, if the scheme proves
192
abortive, it should fall upon the original projectors, and not upon those who advance their money on
the faith of its going on. The plaintiff did nothing to render himself liable to the expences, and it was
the duty of the defendants within a reasonable time to lay out in securities the money received. They
never did so, but kept it for eighteen months in their bankers' hands, and appear to have acted
throughout as if they thought the undertaking must fail. For these reasons, I think that the plaintiff is
entitled to the whole of the money [823] which he advanced; and it is also observable that, by 1825,
the third resolution of the directors, Pope was to have such annual salary as the defendants should fix;
they never fixed any; it is therefore questionable whether that would not of itself be sufficient to
prevent them from deducting that part of the money sought to be retained which was paid to Mr.
Pope.
HOLROYD J. At the commencement of the argument I entertained great doubts upon this
question, but am now satisfied that the plaintiff is entitled to recover. There is not sufficient in the
case to warrant the payment of any part of the money detained to Pope; for even supposing the
concern to have gone so far as to authorise the appointment of a salary to him, still in point of fact
none was appointed. It appeared to me at first that this was very like the case of a partnership, which
I put during the argument, but here the concern was never really set agoing; and I think that the
expences incurred in setting a scheme on foot are not to be paid out of the concern unless they are
adopted when it is actually in operation. In the present case a very small sum was collected, and that
was not invested in government or other securities, which, by the prospectus, were to be the only
source of profit. No tontine could exist until the money was laid out. All the steps taken were therefore
only preparatory to carrying the project into effect, and as it never was carried into effect, I think that
the plaintiff is entitled to have back the whole of the money that he advanced.
LITTLEDALE J. I also am of opinion that the plaintiff is entitled to recover upon this general
principle, that [824] if persons set a scheme afoot, and assume to be the directors or managers, all the
expences incurred before the scheme is in actual operation must, in the first instance, be borne by
them. When it is in operation, the expences and charge of management should be borne by the
concern, and then it may be fair that the preliminary expences should be paid in the same way; for
then the subscribers have the benefit of them. The prospectus put forth by these defendants stated
that the money subscribed was to be placed out at interest. The plaintiff's sole object in paying the
money must have been to have it so placed out, but during eighteen months it remained idle at the
bankers. Suppose there had been no subscribers, then the projectors must have paid all the expences.
If, then, one person only subscribes, are all those expences to be cast upon him? The hardship and
injustice would be monstrous; yet that would be the consequence in such a case were we now to hold
that the plaintiff was liable to a proportion of the expences incurred by these defendants. With respect
to the supposed partnership, it is plain that there could be none until the money was laid out in
execution of the proposed scheme. I am therefore clearly of opinion that the plaintiff was entitled to
recover.
Postea to the plaintiff.”
193
f. Kinder v Taylor (1825)86

“The bill was filed by Thomas Kinder. The following were the material allegations contained in
it:—
That, in or about the early part of the year 1823, the plaintiff became acquainted with Don Juan
Garcia and General Paroissien, who came over to this country in the capacity of Envoys and Ministers
Plenipotentiary of the Government of Peru; and that, in consequence of some communications
which took place between him and them, and other circumstances, he was induced to direct his
attention to the practicability of working the Silver Mines in the provinces of Mexico, and of forming
a company in this country for that purpose:
That, with a view of obtaining the requisite powers and authorities for working the mines, and of
acquiring the necessary information, he wrote to Robert Ponsonby Staples, who was his partner, and
carried on the partnership business in the city of Mexico, upon the subject, and mentioned, amongst
others, the mines of Count Regla, situated [69] in Real del Monte, in Mexico, as being desirable, if a
grant or lease of them could be obtained :—that in the month of August, 1823, the plaintiff received
advices from his partner, Mr. Staples, stating that he had obtained for, and transmitted to the plaintiff
full powers from the Count de Regla, to work his mines [69] in Real del Monte, in Mexico, by means
of a company or association to be established in this country:—that having heard that John Taylor
had great success and experience in mining concerns, he communicated with him upon the subject of
the proposed plan, in which Taylor, having approved of it exceedingly, expressed his willingness to
join, provided a majority of the shares was distributed among his friends; and accordingly, that the
plaintiff and Taylor agreed, that a company should be formed for working the mines of the Count de
Regla, and other mines in Mexico; that the capital of it should consist of 200,000l. divided into five
hundred shares of 400l. each; that of these, three hundred should be distributed amongst Taylor and
his friends, and two hundred amongst the plaintiff and his friends; and that, as the plaintiff was
desirous of distributing some of the shares among his friends in Mexico, he should not, until he had
an opportunity of communicating with them, be called upon to pay the instalments upon fifty of the
shares retained by him:
That, on the 16th of January 1824, a meeting of some of the parties, who proposed to be
interested in the aforesaid undertaking, was held for the purpose of taking the subject into
consideration, and it was then resolved, that Mr. Taylor should be authorized, on behalf of the persons
assembled at the meeting, to treat with the plaintiff for a grant of the Regla Mines, and that he should
be instructed to convene an early meeting, of the gentlemen then present, to consider and approve a
proper mode of management:
That at the same meeting, Taylor made a communication respecting the mines of Moran, also
situate in Real del Monte, concerning which, the following minute was made: “Mr. Taylor reported an
offer made to him of the mine of Moran, also situate in Real del Monte, by Col. Murphy, on the part
86 Law Journal Reports, old series 3, Cases in Chancery 68. URL: http://goo.gl/cdpq7
194
of James Murphy, Esq., the proprietor, and his intention of treating for it on behalf of the company
then to be formed:”
That a general meeting of the persons, who proposed to be interested in the aforesaid undertaking,
was held on the 4th of February, 1824, when a committee of management was appointed, and several
resolutions, of which the following are the most important, were passed:
“That the Company be now formed; that the terms proposed by Thomas Kinder, on the part of
Count Regla, upon which certain mines, in the Real del Monte, the property of that nobleman, will be
given up to the management of the Company, be agreed to; that John Taylor be authorized to conclude
a contract with Thomas Kinder, for the grant of the mines upon the proposed terms, in the name and
on the behalf of the Company; that John Taylor be empowered to enter into a contract with Col.
Murphy, for the grant of the mines of Moran, upon terms similar to those proposed by Thomas
Kinder; that the company shall bear the title of the Company of Adventurers in the Mines of Real
del Monte, or such other title as the committee may think fit; that the capital to be raised for the
purpose of working the mines, shall be 200,000l., and shall be divided into five hundred shares of
400l. each; that the shares shall be immediately subscribed for, and the sum of 5l. per cent, paid upon
the amount of such subscriptions; that the affairs of the Company shall be conducted by a committee
of management; that the committee of management be authorized to instruct Messrs. Martineau and
Malton to prepare a deed of settlement, or to apply for an act of parliament, with as little delay as
possible, for the regulation of the company; and that as soon as such deed shall be prepared, it shall
be submitted by the committee of management, for approval and adoption to a general meeting of
the proprietors, to be convened by the committee for that purpose.”
That in pursuance of these resolutions, articles of agreement in writing, bearing date on the 6th
of March, 1824, were entered into, and made between the plaintiff, on behalf of the Count de Regla,
of the one part; and John Taylor, on behalf of the above-mentioned Company of Adventurers, of
the other part; whereby it was agreed, that the mines of Count Regla, situated in Real del Monte, in
the district of Zacherea, in the province of Mexico, should be confided and intrusted to the
management of the Company, for the purpose of being effectually worked by means of steam engines,
and other machinery, for the term of twenty years, upon the terms and conditions therein mentioned:
and that on the 6th of March, 1824, other articles of agreement [70] in writing, were also entered into
and made by and between Col. Murphy and John Taylor, for and on behalf of the Company, whereby
the mine of Moran, situate in Real del Monte, was to be confided to the management of the Company,
for the term of twenty-one years, upon certain terms and conditions therein mentioned:
That the plaintiff originally retained seventy-seven shares in the undertaking, out of the two
hundred shares, which it was agreed should be distributed by him; and that the committee having
called for the payment of the first instalment, of 20l. per share, the plaintiff duly paid the same on
twenty-seven shares, being all the shares retained by him, except the fifty shares, the instalments on
which were not to be required until he had communicated with his friends in Mexico; and that the
plaintiff afterwards parted with six more of the shares, reducing the total number of shares held by
him in the said undertaking, to seventy-one:
195
That the committee of management caused an indenture or deed of settlement to be prepared,

pursuant to the aforesaid resolutions, which bears date on or about the 16th of August, 1824, and is
made between Philip Taylor, John Martineau, Thomas Whitehead Reed, Charles Malton, Richard
Martineau, and Samuel Thomas Rawlett, of the one part; and the several other persons, whose names
and seals are thereunto subscribed and affixed, of the other part; whereby—after reciting the
resolutions of the meeting held on the 4th of February, 1824, and the appointment of the committee
of management; and also reciting, as the fact was, that the affairs of the company had been conducted
by the committee of management up to that time; that contracts had been entered into by the plaintiff
and Col. Murphy, with John Taylor, for and on behalf of the Company; that the committee of
management, in the exercise of their discretion, and in order to carry the intention of the general
meeting into effect, had engaged and sent out to Mexico, officers, agents, and workmen, with certain
salaries and allowances; and that three of the principal officers and agents, so sent out to Mexico, had
also been appointed to act as commissioners on behalf of the company, for which purpose the
committee of management had delegated to them full and complete powers for that purpose; that all
contracts and engagements entered into with the several officers, agents, and workmen, sent out to
Mexico by the committee of management, had been entered into, on behalf of the Company, by John
Taylor, who had thereby become responsible for the payment of large sums of money; and that the
committee of management had caused credits to be opened under their guarantee with certain foreign
houses, and had entered into other pecuniary transactions for the Company:—It was witnessed, that
for the purpose of more effectually establishing the Company, each of the several persons, parties
thereto of the second part, so far as related to the acts and deed of himself and herself respectively,
and his and her respective heirs, executors, administrators, but not further, or otherwise, did thereby
for himself and herself respectively, and his and her respective heirs, executors, administrators,
covenant, promise and agree with and to the said Philip Taylor, John Martineau, Thomas Whitehead
Reed, Chas. Malton, Richard Martineau, and Samuel Thomas Rawlett, and with and to each and every
of them severally and respectively, and with and to their, and each and every of their respective
executors, administrators, and assigns to the effect following, namely:
That the several parties thereto, of the second part, thereinafter distinguished by the title of
proprietors, and the several other persons, who shall become proprietors, shall remain and continue a
company under the name of the Company of Adventurers in the Mines of Real del Monte, until such
time as the Company shall be dissolved, in pursuance of the provisions for that purpose thereinafter
contained:
That the capital of the Company shall consist of the sum of 200,000l., divided into five hundred
shares of 400l. each, and of such further sum or sums as may be raised by contribution amongst the
proprietors for the time being, or by the sale of new shares under the powers for those purposes
thereinafter contained:
That the object and business of the Company shall be to work such mines in Mexico, as the
company of directors, conformably with their powers, and with the interests of the Company, shall
think [71] proper, and to carry on the operations connected with, or incident to mining:
196
That the affairs of the Company shall be confided to the management of a body of directors,
consisting of twelve members, to be chosen from among the proprietors:
That certain persons, who were specified by name, shall be the first directors of the Company;
and that John Taylor shall be the manager of the Company:
That all contracts and engagements entered into by the committee of management, or by John
Taylor, under their direction, with the several officers, agents, and workmen, sent out to Mexico, or
with any other officer, agent, or servant of the Company, or with any other person or persons; and all
other contracts, purchases, and engagements, entered into by the committee of management,' or by
John Taylor, under their direction; and all powers and authorities given or delegated by the committee
of management, to the commissioners of the Company, shall continue in full force, and shall be as
valid, and binding and conclusive upon the proprietors of the Company, as if the same had been
entered into, given, or delegated by the court of directors, in pursuance of the authority thereinafter
vested in them, for that purpose:
That the committee of management, and John Taylor respectively, shall be indemnified out of the
funds of the Company, from all liability in respect of the before-mentioned transactions; and that all
appointments made, and all deeds done by the committee of management, since the formation of the
Company, shall be, and the same are thereby ratified and confirmed:
That the proprietors of the Company shall assemble together at the house or office of the
Company, or at such other convenient place, as the directors shall appoint once in every year at least,
and specially at such other times as they shall be duly convened; and that a majority of three fourths
of the number of votes given by the qualified proprietors present at any special general court, shall
be requisite to decide any question relating to the increase of the company, to the making new laws,
regulations, and provisions, or to the amending, altering, or repealing any of the existing laws and
regulations, or to the dissolution of the Company; but that as to all questions relating to any other
business, a majority of the number of votes, given by the qualified proprietors present, shall be
sufficient to decide:
That, if, at any time after all the five hundred shares shall have been taken up, and all sums required
to be paid in respect of them, shall have been paid, it shall be thought advisable to raise more money
for the purposes of the company, it shall be lawful for a special general court, called for that purpose,
to enter into a resolution to increase the capital of the company to any amount, to be specified in such
resolution, either by a contribution amongst the proprietors, or by the sale of new shares; such
increased capital, if to be raised by a contribution among the proprietors, not exceeding the sum of
50,000l.:
That, at the special general court, where any such resolutions shall have been entered into, the
number and price of new shares, and the payment of such price, either at one time, or by instalments,
at intervals not less than one calendar month from each other, and the times of paying such price shall
be fixed and determined upon; and such resolution, if confirmed by a subsequent general court, to be
convened for that purpose, at a distance of not less than two weeks, nor more than four weeks from
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such first general court, shall, in such case, and not till then, be binding upon the proprietors; and the
capital of the company shall be increased in the manner and to the amount specified in such resolution:
That in case the capital of the company should at any time be increased by the sale of new shares,
the proprietors for the time being, shall be entitled to the preemption of such new shares in proportion
to the amount of their respective shares in the then capital of the company:
That, subject and without prejudice to the powers vested in the general courts, the court of
directors shall have the entire management of, and superintendence over the affairs and concerns of
the company; and for that purpose it shall be lawful for the court of directors to work the mines which
have already, or shall at any time thereafter be granted to the company, in such manner as the court
of directors shall think proper, and to enter into such [72] contracts and engagements, and to make
all such purchases or sales on behalf of the company as they shall think expedient.
Regulations also were prescribed as to the mode in which shares were to be transferred; and it was
especially provided, that persons purchasing shares, should, from the time of the purchase, be liable
to all the obligations of proprietors, but should not be entitled to any profits or advantages till they
had executed a deed of covenant, binding themselves to observe all the provisions of the above-
mentioned deed of regulation.—
The bill then went on to make the following allegations:
That the plaintiff had executed the deed of settlement as the proprietor of seventy-one shares;
that he was called upon to pay, and obliged to pay the instalments that became due on these seventy-
one shares:
That the commissioners who were sent out to Mexico received instructions from John Taylor and
the committee of management, for taking any other mines in Mexico, besides those of Count Regla
and the Moran mine, which might be likely to forward the interests of the company; and particularly
to endeavour to obtain a grant of the Bolanos mine:
That, accordingly, Captain Vetch, shortly after his arrival in Mexico, entered into a treaty for a
grant or lease of the Bolanos mine, making, in pursuance of that object, a journey to that part of
Mexico where the mine is situate, and ultimately concluded a contract or agreement on behalf of the
proprietors of the Real del Monte Company, for a grant or lease of the mine for a term of years, with
the necessary powers and authorities for effectually working the same; that such contract or agreement
was duly reduced into writing, and executed as required by the laws of Mexico for the proprietors of
the mine, and also by Captain Vetch on behalf of the company; and that the mine had since been
worked on behalf of the company:
That, about the time when information -was received in this country, that the contract or
agreement for the Bolanos mine had been completed, John Taylor and his friends, being jealous of
the number of shares which the plaintiff continued to hold, formed a scheme for withholding from
the plaintiff his fair proportion of shares in the Bolanos mine, and for appropriating to their own use
fifty of the shares to which the plaintiff was justly entitled therein, under the pretence that he had not
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distributed fifty of his shares in the Real del Monte Company, according to his original intention,
among persons in Mexico:
That circular letters were sent by Taylor to the different proprietors of shares, offering to their
acceptance certain shares of the Bolanos mine: that one of these circulars was sent to the plaintiff,
but accompanied with an intimation from Taylor, that the shares of the Bolanos mine, which would
be allotted to him, would be less by fifty than those which he held in the Real del Monte; but that the
plaintiff insisted steadily on his right, as the holder of seventy-one shares in that company, to seventy-
one shares of the Bolanos mine:
That John Taylor and his friends then arranged amongst themselves, that a general meeting of the
proprietors, of the Real del Monte Company should be called, at which the proprietors should resign
all claim to the Bolanos mine in favour of John Taylor, with a view of enabling him to make that
unjust distribution of the shares thereof which they had previously attempted; and that in furtherance
of the same purpose a new company should be formed by John Taylor, for working the Bolanos mine,
the shares of which should be distributed amongst the proprietors of the Real del Monte Company,
with the exception of the plaintiff, in proportion to their shares in the capital of the same company.
That a special general court of the proprietors of the Real del Monte Company, was accordingly
called, and held on the 11th February, 1825, when the following resolutions were passed: “1st, That
the Bolanos mine is the property of Mr. Taylor, and that the company divests itself of any claim to
shares: 2dly, that the servants and agents of the Real del Monte Company do give any assistance in
their power, to the persons interested in the Bolanos mine.”
That shortly after the general court had been held, John Taylor and his friends, in pursuance of
their scheme, proceeded to form a new company for working the Bolanos mine, and appointed John
Taylor manager, and the other defendants, (being the [73] directors of the Real del Monte Company,)
with one exception only, directors and auditors thereof; that they also caused printed prospectuses to
be issued for working the mine, and for raising a capital of 200,000l. for that purpose, to be divided
into five hundred shares of 400l. each; that, in pursuance of the understanding which had previously
existed, they offered to the proprietors of the Real del Monte Company, with the exception of the
plaintiff, the same number of shares, in the capital to be raised for working the Bolanos mine, as such
proprietors possessed respectively in the Real del Monte Company; and that, although no assignment
or distribution of shares in the Bolanos mine had, at the time of filing the bill, actually taken place ;
John Taylor and the other defendants intended to distribute them amongst themselves, and such of
the other proprietors of the Real del Monte Company as should accept the offer, but refused to assign
any shares to the plaintiff.
The bill further charged,
That the resolutions passed on the 11th of February, were not passed bona fide, or with the
intention, on the part of the proprietors who agreed to them, of giving up their shares in the Bolanos
mine;—that it was understood they were to be entitled to, and that, in truth, they are to have, the same
number of shares at least, in the capital of the new mining company, or association formed for the
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Bolanos mine, as they held in the capital of the Real del Monte Company ; and that some of the
proprietors, who voted at the general court, were personally interested in passing such resolutions, as
it was understood that the shares of the plaintiff, in the Bolanos mine, were to be distributed amongst
them:
That the formation of the company for working the Bolanos mine was, in fact, a scheme for
excluding the plaintiff from his fair proportion of shares therein ;— that the capital is to be divided
in the same number of shares as the capital of the Real del Monte Company; and that the persons
interested therein are, with few exceptions, proprietors of the Real del Monte Company:
That the directors, auditors, manager, and other servants and agents of the Bolanos Company, are
'the same persons as fill the like situations in the Real del Monte Company; that the business of the
Bolanos Company is carried on at the office of the Real del Monte Company; and that the principal,
if not the only, object of forming the Bolanos Company, was for the purpose of depriving and
defrauding the plaintiff of his just share and proportion in that mine, and in the contract which had
been entered into for working it.
There was also a charge, that the other proprietors of the Real del Monte Company, besides the
defendants, were so numerous, that it would be almost impracticable to make them parties to the suit;
that their number was such as to render it unnecessary, by the rules and practice of the court, to make
them parties; that their names, moreover, were unknown to the plaintiff; and that the defendant, to
whom they were known, refused to inform him of the names, so that he was unable to make them
defendants.
The prayer of the bill was,
That it may be declared, that the proprietors of the Real del Monte Company, were entitled to the
contract for the Bolanos mine, and to the benefit thereof: and that the plaintiff was entitled to the
same share and interest therein as he held and was entitled to in the capital of the Real del Monte
Company; and that John Taylor and the other defendants, if necessary, may be decreed to assign and
make over to the plaintiff such shares, rights, and interests therein, as he may be entitled to, or
otherwise to make good the same to him ;—and that it may be declared that the aforesaid attempt to
deprive the plaintiff of his just share therein, was fraudulent and contrary to good faith ;— that an
account also may be taken of all the dealings and transactions of the Real del Monte Company; and
that the defendants may be decreed to account for the produce and profits of the Bolanos mine since
the aforesaid contract was made for working the same, and of all remittances come to the hands of
the defendants or any of them, on account thereof, and that what may be due to the plaintiff on
taking the accounts may be paid to him; that, if necessary, the Real del Monte Company may be
dissolved, and the estate and effects belonging thereto converted into money, and the affairs of the
company wound up, and that [74] the respective shares of the plaintiff and the other partners therein
may be paid to them respectively:—And that the defendants may, in the mean time, be restrained from
appropriating, assigning, selling, disposing of, or otherwise parting or agreeing to part with, and from
doing any act which may give or appear to give to any person or persona whomsoever any title or
claim to any share, right, or interest whatsoever in the Bolanos mine, or the said contract or agreement
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which has been made for working the same; and also from employing the agents, officers, servants, or
workmen of the Real del Monte Company, or any of them, and from permitting them or any of them
to give any assistance whatsoever in or about the Bolanos mine, or the affairs thereof, or in any
business, matters, or things whatsoever relating thereto, either in this country, Mexico, or elsewhere,
and from employing the officers of the Real del Monte Company, and using or applying any of the
funds, stock, or property of the same company, for the use or on account of, or for any purpose
connected with the said Bolanos mine or the company which has been formed for the same :—And,
if necessary, that one or more proper person or persons may be appointed to manage the Bolanos
mine, and the other mines of the Real del Monte Company, and to receive the produce and remittances
on account of the mines, and to conduct the concerns of the company until the affairs thereof can
be wound up.
The defendants were John Taylor and the persons who were the directors of the Real del Monte
Company.
Upon the certificate of the bill filed, and the affidavit of the plaintiff verifying its allegations, an
injunction was moved for ex parte. .
The Lord Chancellor directed the motion to stand over; and notice of it to be served on the
defendants.
In opposition to the motion an affidavit was filed by several of the defendants, and particularly by
Taylor. It set out with representing the origin of the Real del Monte Company, in a manner somewhat
different from the statement contained in the bill; ascribing a greater degree of importance to the
exertions and influence of Taylor and his friends, and less to those of Kinder. It averred also, that
Kinder had acted fraudulently and contrary to good faith in retaining the fifty shares, which he had
been permitted to hold for the purpose of being distributed among persons in Mexico; and, that it
was only from considerations of expediency, that the company had allowed him to continue to be the
proprietor of those shares. With respect to the Bolanos mine, Taylor denied that the contract relating
to it had been obtained in the manner represented in the bill; or that the commissioners, sent out by
the committee of management of the Real del Monte Company, were instructed by such committee,
to obtain a contract for the mines of Bolanos, for the use of the Real del Monte Company. On the
contrary he stated that, at the time when these commissioners were about to depart from this country
for Mexico, it occurred to him (Taylor), that, in case the contracts with the Count de Regla, and the
contract for the mine of Moran, should not be ratified, it would then become desirable that the
commissioners should look out for other mines, in order that the expense of sending them out might
not be wholly thrown away:—That, accordingly with this view, he instructed the commissioners, that,
in case the contract should not be confirmed, they should; in that event, and that event only, look out
for other mines to be worked by the company, amongst which the mines of Bolanos were mentioned,
and in such case, he was willing to abandon the intention he had previously formed of working the
Bolanos mine, by a company consisting of his own particular friends exclusively:—That, about the
latter end of April, 1824, one William Dollar applied to him, and stated that he (Dollar) was the agent
of certain persons who had acquired a right to the mines of Bolanos, and offered to treat with him
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for a grant thereof:—That, conceiving Mr. Dollar to have authority tt> contract for a grant of the
mines, he (Taylor) did, by a memorandum of agreement, bearing date on the 4th of May, 1824, agree
to take the mines of Bolanos, and work the same upon certain' terms; in which memorandum it was
expressly stated, that the contract was made and entered into by a company then forming:
[75] That, immediately after making the contract, he transmitted the same to Captain Vetch, with
instructions to get the same ratified, and to send a competent person to inspect and report upon the
mines:
That, after the contract was so transmitted to Captain Vetch, it was determined by him (Taylor)
and his friends, whom he consulted thereon, that, in case of a ratification of the contract, the same
should be offered to the several persons, who should, at the time of the receipt of intelligence of such
ratification, be proprietors of the Real del Monte Company, with the exception, nevertheless, of fifty
shares, which, instead of being allotted to Thomas Kinder for his own use, were to be kept in reserve
for such persons as might be useful in working the Bolanos mines:
That it afterwards turned out, that neither William Dollar, nor those for whom he acted, had any
title to the mine of Bolanos; but Captain Vetch did, notwithstanding, on the receipt of the instructions,
proceed to obtain a grant of that mine from the proprietors thereof, for and on account of Taylor:
That all expenses relative to the Bolanos mine, and the contract for it had been kept distinct from
the accounts of the Real del Monte Company; that the Bolanos mine had not yet been worked; and
that it was as a matter of favour, and not of right, that he (Taylor) had offered the shares of the
Bolanos mine to those who were proprietors in the Real del Monte Company.
With respect to what passed at the meeting of proprietors of the Real del Monte Company, held
on the 11th of February, 1825, the affidavit stated that the following were the resolutions then
adopted:
“That it appears to this court that Captain Vetch has lately entered into a contract for
working the mine of Bolanos, in the province of Guadalaxara.
It appearing to this court, that an opinion has been entertained by some of the proprietors
of this company, that the contract so entered into by Captain Vetch, has been made on behalf
of the Real del Monte Company, Resolved, that there is no foundation for such an opinion,
and that the mine of Bolanos does not belong to the Real del Monte Company.
That, at all events, it will be highly inexpedient that the mine of Bolanos should be
undertaken by the Real del Monte Company; and the proprietors of that company do
accordingly reject the offer now made by Mr. Taylor, and do abandon all right and title to such
mine.
That it will be expedient that the mine of Bolanos should be worked by another and
distinct company, to be regulated by separate and distinct rules and regulations, and to be in
all respects independent of this company.
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That, should a majority of shares in the Bolanos mine be offered to, and accepted by
persons who are proprietors of this company, then, and in such case, the directors be and are
hereby authorized to allow their commissioners, and other agents and servants of the company
in Mexico, to give such aid and assistance to the management and affairs of the Bolanos
Company, and upon such terms and conditions, as the directors of this company shall from
time to time think proper, any additional salaries thereby incurred, being defrayed by the
proprietors of the Bolanos Company.”
A demurrer to the bill was also put in, which proceeded upon two grounds; 1st, that, even upon
the facts stated, as alleged upon the record, there was not enough to show, that, in construction of
law, the contract for the Bolanos mine was a trust for the Real del Monte Company; the other, that all
the proprietors of that company ought to have been made parties.
The Solicitor General, Mr. Heald, and Mr. Walker, appeared for the plaintiff;
Mr. Shadmell and Mr. Sugden, contra.
The argument, upon the motion for the injunction, turned chiefly, as between the parties, upon
the point, whether, looking at the constitution and the objects of the Real del Monte Company, and
at the circumstances appearing on the affidavits, the plaintiff had shown such a probability of title to
the shares which he claimed in the Bolanos mine, as would give him a right to the intermediate
summary protection of the court. But the Lord Chancellor, early in the argument, expressed strong
doubts with respect to the legality of such an association as the Real del Monte Company, and [76]
the right of any persons, claiming as proprietors in such a company, to have the aid of a court of
justice. This led to much argument on these points; both the counsel for the plaintiff, and the counsel
for the defendants, contending, that the company was legal, and that the King's Courts were bound
to adjudicate upon rights arising out of its transactions.
March 26.—The LORD CHANCELLOR.
This is a case distinguishable undoubtedly from many of the speculations now in vogue. I may,
however, say, that rumours are abroad, that persons have formed companies, and have given
descriptions, and held out a prospect, of vast benefits to arise from them, never intending themselves
to continue members; but raising large sums of money upon the credulity and avarice of individuals
with whom they deal. It may be well for such men to be aware, that it is said by those who understand
the law better than I do, that it is a question, whether, if persons so engaging should happen to be
indicted for a conspiracy to form a company not meaning to form it, but meaning to withdraw
themselves from their engagements by selling their shares to other persons, such conduct would not
amount to a deceit and fraud, upon which the indictment might be sustained.
It must be observed, that, in this case there was a company existing from February 1824, to August
1824, before the deed forming the company or partnership was executed by any one. Now there may
be a very great difference in point of law, between the transactions of a body whose transactions are
regulated by a deed actually executed, and the transactions of a company formed long before the deed
is executed. Some things may be legal after the deed is executed, which are not legal until the deed is
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executed; and some things may be legal before the deed is executed, which will not be legal after its
execution. The speculation being for working the mines of Real del Monte and the Moran, there is a
committee of management formed, consisting of gentlemen whose names are mentioned in the
prospectuses, and who had certain powers given them. Mr. Taylor was to treat for the Real del Monte
and the Moran mines; but I do not find in the instrument in writing, which first formed the company
in February, 1824, the last reference to engagements in any other mines except those two. It will remain
for me, to consider, by a careful investigation of that document and of the deed, whether I can reach
the opinion, that either Mr. Taylor or the committee of management could authorize any person, so
as to bind that company, to deal for any other mines for the company.
Supposing even, that there were other circumstances in the case than now appear, it would be very
extraordinary if the construction of the written instruments should be so large as the plaintiff
contends for. The capital being to consist of 200,000l., to be divided into so many shares of 500l.
each, and the company being formed with a view of working the Real del Monte mines and Moran
mine by means of that capital:—it would be a most extraordinary thing to suppose, that either Mr.
Taylor or the committee of management, have had authority given to them before the deed was
executed, to have made contracts which were to bind the company to the amount of 200,000l. capital
more. If they had such authority, then they had just as good authority to bind the company to the
extent of two hundred millions more: for if it can be thought that they could bind the company with
respect to other mines besides the Real del Monte and Moran, their authority could be limited only by
the impossibility of making contracts with respect to other mines.
In order to see how this point of the case stands, we must look at the engagement to indemnify
contained in the deed of August, 1824. Now I think it will be found exceedingly difficult to say, that
the engagement of indemnity, either to Mr. Taylor or to any other person who was employed in
Mexico in the mean time, was an engagement of indemnity that would reach this transaction
concerning the Bolanos mine.
If what was done before the execution of the deed of August, 1824, did not make what Vetch
contracted for a mine belonging to this company, then the mine could be claimed only upon the
ground of its being a mining estate in trust: and if a trust in respect of the mine be raised, either in
writing or in fact, upon any circumstances which are [77] stated and admitted to have taken place, and
if the company choose to have the benefit of that trust, there was no option on the part of Mr. Taylor.
The company, however, could not be bound, till the court of directors approved of what had been so
done. And if it is rejected on the part of the company, if they do not choose to make it a part of the
property, I have not the least notion that it can belong to the company. The Real del Monte Company,
if called upon to sanction a new engagement, might very well say, “We will not take the Bolanos mine,
and thereby incur the liability of paying instalments to the amount perhaps of 2,000l. when all that we
agreed to pay was 400l.”
Now, if the Bolanos mine could not become the property of the Real del Monte Company, unless
it was approved and taken to by the company, by the effect either of conduct or of express adoption,
it becomes important to see, whether the bill and affidavit contain sufficient allegations that the
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contract for it has been approved by the court of directors, or any statement of such circumstances
as would induce me to say, that, though there has been no express approbation, a trust has nevertheless
been raised, and exists. I believe it will be difficult to show, that such allegations or statements of
circumstances are contained in the bill and affidavit of the plaintiff; and the affidavit of Mr. Taylor
makes a strong case the other way.
It is remarkable, that we are left completely in the dark with respect to the contract which is the
subject of dispute. This contract for the Bolanos mine is not set forth; the terms of it are not disclosed:
nobody says, that he has seen it; we are not told with whom it is made. That may raise a difficulty with
respect to the jurisdiction of that court.
March 29.—The Lord Chancellor delivered his final judgment upon the motion for an injunction. It
was to the following effect:—
The bill begins by stating, that, in or about the early part of the year 1823, the plaintiff became
acquainted with Signor Don Juan Garcia, and General Paroissien, who came over to this country in
the capacity of envoys and ministers plenipotentiary of the government of Peru. And if the plaintiff's
case were to depend upon the truth of those facts, I should dismiss the bill directly; because His
Majesty's courts of justice cannot recognize the fact, that there was any such thing as a government
of Peru in the year 1823. Nor am I aware at present, whatever matters may be in progress, that any of
the King's courts can acknowledge or admit, that there is such a government at this moment.
The bill then proceeds to state the origin and formation of the Real del Monte Company; the
material clauses of the deed which regulates it; and the circumstances on which the plaintiff contends,
that the Bolanos mine is a part of its property.
It appears, that the company was first formed on the 4th day of February, 1824; for the first of
the resolutions passed on that day declared, that the company was then formed. It must, therefore, be
taken as a fact, for and against all parties engaged in this undertaking, that this is a company which
existed from the 4th of February, 1824, but was regulated by no deed till the following August. It
appears, also, that, during that interval, shares in it were, in fact, transferred. Upon that 4th of February
also, certain authorities were given to Mr. Taylor; but these authorities were limited expressly to the
mines of Count Regla and the Moran mine.
As to what passed between the 4th of February and the execution of the deed, I may observe,
that if it becomes absolutely necessary to decide upon the legality or the illegality of the existing body,
it would be necessary to know, who were the original subscribers; to know what the contract was, what
changes there had been in the subscribers between the month of February and the month of August,
who were the persons that executed this deed, who were engaged in the undertaking at the time the
deed was executed, what the transactions of the company had been previous to the execution of that
deed, how far the individuals composing the company had changed between the formation of the
company and the regulation of it under this deed, and what had been done, either of a nature which
any body could suggest to be [78] perfectly legal, or of a nature, the legality of which might be subject
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of argument, between the date of the formation of the company and the date of the execution of
the deed.
The Lord Chancellor then went through the details and provisions of the deed of August, 1824.
That deed, said his Lordship, expressly states, that the object of the company was to “work such
mines in Mexico as the court of directors, conformably with the interest of the company and the
powers thereinafter contained, should think proper.” These are the first words, in which powers of
contracting for other mines are mentioned, (for, at the foundation of the company in February, 1824,
its object was to take the benefit of the contracts with Count Regla and Murphy, and of these alone);
and they, in unequivocal terms, confine the business of the company to working, not such mines in
Mexico as the committee of management or any person authorized by them should select, but such
mines in Mexico as the court of directors, conformably with their powers and the interests of the
company, should think proper.
Another material clause is that which provides, that all contracts or engagements made by the
committee of management, or by John Taylor under their direction, with their several officers, agents,
&c. “or with any other person or persons whomsoever,” and all contracts entered into for the purchase
of quicksilver, &c. “and all other contracts, purchases, and engagements whatsoever, entered into by
the committee of management, or by the said John Taylor under their direction, and all powers and
authorities given or delegated by the said committee of management, to the commissioners of the
company shall continue in full force and effect, and shall be as valid, binding, and conclusive upon the
proprietors, as if the same had been entered into or given or delegated by the court of directors,” in
pursuance of the authority vested in them by the deed. Now, I desire to know, whether it is possible
to put such a construction upon this clause, that it shall mean more than this—that what Taylor and
the committee of management had done under the powers given to them, should be of as much force
as if it had been done by the court of directors. But the powers given to Taylor and the committee,
related only to the first contracts for Count Regla's mines and the Moran mine. It was only the court
of directors, that could enter into contracts for other mines; and the extent of authority even of the
directors went no farther than to the calling on the original subscribers to raise an additional capital
of 50,000l.
The Lord Chancellor then went through the clauses of the deed, which related to the holding of
courts of proprietors, the appointment of directors, officers, &c., the passing laws, &c. All these
arrangements, he observed, were very like the constitution of some companies, who were acting, not
as a corporation, but being a corporation: and if the Bank of England, the East India Company, or
the South Sea Company, wanted a new charter, they could not do better than copy the deed of
regulation of the Real del Monte Company.
In the cases which have been determined, continued his Lordship, no attempt was made to state
what constitutes acting as a corporation. It is, undoubtedly, a very easy thing to say, that a great number
of other bodies have acted like the body whose acts are under consideration: but I cannot find that
any case ever has, either in argument or decision, defined, what it is to act as a corporate body. That
that point may be most material, it is clear; because, if the acting as a corporate body can be taken to
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be a thing per se prohibited by the act of the 6th of Geo. 1. surely it is extremely material, that the
first opportunity should be taken, in which a matter of this kind comes before a court of law, to
determine the question. It is in a court of law that the question is most properly brought to a decision;
for it is a pure question of law: and it is only incidentally, that the Court of Chancery may determine
it, for the purpose of giving or refusing the relief, which, if the law be the one way, the plaintiff may
be entitled to have; and if the law be the other way, he ought not to have.
Supposing, on the other hand, that the acting as a corporate body is not within the 6th of George
1. as of itself, a distinctly [79] prohibited act, I wish to know, if it can be considered by any lawyer as
clear, that, if persons take upon themselves to act as a corporate body, assuming that character with
respect to all others His Majesty's subjects, though they have not gotten the authority of His Majesty,
or of an Act of Parliament for so doing - is it clear that that is not an offence at common law? That
is a point, which, at least, ought to be very well considered; for it has ever occurred to me, upon
looking at this case, as one of the most difficult things in the world, to hold, and give a reason for
holding, that bodies, like the Real del Monte Company, are not acting as corporate bodies.
Suppose this instrument had been what it is not, (although it is in a great part of it) a copy of the
East India Company's charter: suppose also that the East India Company, not being a corporation,
had been creating stock before the grant of their charter, and had been acting according to all the
terms, conditions, and powers contained in the charter, or acting as a corporate body, (and let it be
remembered, that it is not being a corporation that is prohibited, but it is assuming to act as a corporate
body); would it not be a most singular and a most difficult thing to maintain, that, if the East India
Company are acting, or can only act as a corporate body under the King's charter, or under an Act of
Parliament; yet, if there be another body acting under terms and conditions precisely and exactly the
same as those contained in the charter of incorporation, that other body is not to be said to be
assuming to act as a corporate body? To carry this a little further, suppose that there is a corporate
body existing for a particular purpose, which corporate body chooses, with respect to other purposes
not within the scope of its corporate purposes, to apply all its corporate means, and, in fact, its
corporate character, as far as its dealings with the public go, to purposes that are not described in their
charter. It would be a most extraordinary thing to say, “you are not assuming to act as a corporate
body, with respect to purposes for which you are not a corporation; and because you are not a
corporation, it must be argued that therefore you are not assuming to act as a corporate body, when
every act you do, is acting as if the purposes, not within the charter, were, with reference to what you
are doing, purposes within the charter, and when the world, who does not see your charter, must
suppose that you are acting in a corporate character with respect to purposes, which in truth are not
corporate purposes; since you are acting exactly in the same way with reference to purposes net
corporate, as you do with reference to purposes that are corporate.”
This is no new-fangled idea; for if we look at what passed in this court, not long after the Act of
1720, in the case of Child v. The Hudson's Bay Company, when this question arose, namely: the
Hudson's Bay Company having powers for making bye-laws for their regulation and management,
whether the bye-laws which were made, were good bye-laws within the charter;—we find that my
Lord Chancellor decided, that they could not make bye-laws and regulations not for corporate
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purposes; and he concludes his judgment by saying, that they could not make bye-laws in relation to
projects prohibited by the 6th Geo. 1. c. 18. So that he seems to introduce the necessity of considering
what it is that constitutes the acting as a corporate body.
Then that is a consideration which may divide itself into two heads: first, what are the acts which
a body, being actually a corporate body, can be said to do as a corporate body; and, secondly, what are
the acts for purposes not corporate, in respect of which, if they affect to do them in the face of the
world, in the same manner as if they act for corporate purposes, they can still be said to be acting as
a corporate body. These points are the more material; because, in the act of the 6th Geo. 1., when we
look at the clauses of exception, we find, that, even with respect to corporate bodies, the legislature
thought itself obliged to except, by express provisions, legal existing bodies and acknowledged
corporate bodies, out of the operation of the clause relative to raising transferable stocks.
Upon the clause relative to the increase of the capital of the company, his Lordship asked, whether
it was possible according to the fair construction of the deed, for any person to insist, that, before the
execution of that deed, the committee of management, [80] or their officers in Mexico, could have
contracted on behalf of the company for the Bolanos mine, and thereby obliged them to advance an
additional capital of 200,000l. If the committee of management, or Mr. Taylor, could do that, what
was there to hinder them or him from pledging the company to the extent of two hundred millions,
as well as to the extent of two hundred thousand pounds? To whom is the power of increasing the
capital of the company given? Not to the court of directors, not to the ordinary general court, not to
the committee of management, not to Mr. Taylor, under the authority of the committee; but “to a
special general court called for the purpose,” and acting in the manner and under the restrictions
provided by the clause on this subject. The capital therefore can be increased only by the means here
provided; and if the increase should exceed 50,000l., it is compulsory on the company to take 50,000l.;
but it is not compulsory on the company to take more than that sum; and they are to raise the rest, if
they can, by taking in new subscribers, giving, however, a preference to the old subscribers.
By another clause of the deed, the members of the company do what, as among themselves, they
have a right to do, namely, they confine their responsibility to the amount of their respective shares,—
an obligation which they may certainly enter into, if it is an obligation affecting merely their own
interests. But it may not be unfit to add, that persons should be aware, that, however they can limit
the responsibility of shareholders in such undertakings as between themselves, yet, as to third persons,
they cannot do it; and that every man who subscribes becomes, as to the third persons, liable to the
extent of every shilling he has or will have in the world, every acre of land which he has or may have
in the world.
In addition to what I have remarked on the liability of every shareholder, with respect to third
persons, for the special engagements of the company, I may further say, that it may be well for those,
who may hereafter form such companies, to take care, that the prospectus, held out to the public, may
not make them liable, not only for the special engagements of the company, but to the full extent of
the capital stated in the prospectus to be subscribed for.
208
Another important clause in this deed, is the clause providing for a dissolution of the company;
and upon it the question would be, whether it could apply in every case in which a dissolution is fit.
If persons think proper to limit the powers of dissolving a partnership, when it is a partnership not
for a given time, but a partnership which, upon the ordinary principle, would be capable of dissolution,
because an individual insisted that it should be dissolved—if in such case, the partnership is so formed,
as to subsist until a dissolution is worked by the consent of particular individuals, or of any special
number of individuals, whose consent is thereby made necessary to the dissolution: a very
considerable question, (although it is not one that I should have any great difficulty in dealing with,)
would be this: Is such a clause to be taken as a clause regulating a dissolution, which is to be brought
about by the mere will and pleasure of a person seeking dissolution; or is the clause to be considered
at all applicable to a dissolution, which is sought for upon the ground that a party is acting in a way in
which he is not authorized to act under the deed forming the company or body? For instance, if men
misconduct themselves, I apprehend they would have a great difficulty in applying such a clause as
this to that case. If there was any flagrant misconduct, I should have very little difficulty in saying, that
this clause was not meant to regulate that state of circumstances; because, under such circumstances,
the Court would not keep persons together for better or worse. I should think that a clause of that
kind could mean, not that it should be applied in cases in which there is misconduct, but that it is to
be applied only in cases in which the question of dissolution arises upon a fair view of what is for the
interest of the company; and that in relation to the question of interest, the company is not to be
dissolved by an individual arbitrarily saying, “I will put an end to the partnership;” but that it be
dissolved or not dissolved, according to the determination of a body of persons selected for that
purpose, in whose discretion the instrument has vested the decision of that particular question; at the
same time not taking out of the reach of a court of equity, [81] to decree a dissolution in cases where
misconduct or misappropriation of property would be a ground for such a proceeding.
The deed contains likewise a general clause concerning reference to arbitration; which, however,
is not so constructed as to throw out the jurisdiction of this Court.
With respect to the question, whether this is a company within the intent and meaning of the 6th
of Geo. 1., this Court has undoubtedly a jurisdiction to decide upon the legality or illegality of an act,
even if its illegality should be attended with highly penal consequences, where the civil effects of that
act are before the Court, and in order to determine, whether, that civil relief ought to be given or
withheld, which ought not to be given, unless the act, out of which the demand of relief arises, is
legal. And though in some cases it would not be too bold to say at once, that no relief will be given,
because the whole claim is founded on a contract which the law does not countenance; yet a judge in
equity ought to be very sure that he is right, before he proceeds upon such a ground. And I admit,
that this is not a case which I ought to decide upon that single consideration.
With respect to the cases at law upon the subject, and particularly the case of the King v. Webb,
the Lord Chancellor said, that the doctrine would require to be considered in many points of view,
which had not in those cases been attended to sufficiently. In particular, the Courts had not explained
or defined, what it was that constituted acting as a corporation. Now, the statute supposes, and he
himself confidently believed, that to act as a corporation, not being a corporation, was an offence at
209
common law. Indeed, in dealing with transactions of this kind, it should never be forgotten, that we
have a common law as well as a statute law; and that what may not be within the comprehension of
the statute, may, nevertheless, be within the prohibition of the common law.
The act of the 6th Geo. 1. (continued [82] his Lordship,) is very ill drawn. The recital clause mixes
and jumbles together a variety of things in such a manner, that it is very difficult to say what is or is
not included in it. This is a penal law; and in such statutes the enactment clauses should always describe
most accurately what is to be made to amount to an offence. Now, instead of the enacting clauses of
this act being expressed with minuteness and distinctness as to what is described to be matter of
offence, it leaves us to make out, by any reasoning which we can apply to the clauses of recital, what
is to be understood, by implication, to be the matter of offence created by the enacting clauses. This,
to say the least, is a very inconvenient mode of legislating in penal matters. But whenever the act of
parliament comes again to be considered, I should wish, that the question of construction should be
argued upon the effect of the recital, as a recital, as a recital which takes it for granted, that there are
some things so prejudicial to the subjects of the country, as to be manifestly of the tendency described
in the act, and to have it considered whether, if within the words that are used, the thing complained
of is manifestly to the injury of his Majesty's subjects, cases of this kind are to be left to the decision
of a jury; or whether, on the other hand, those kinds of cases are not cases pronounced already by
the law, to be manifestly a grievance to his Majesty's subjects.
I should wish it also to be considered, with reference to the recital clauses, whether the assuming
to act as a corporation is not an offence, meant to be created by the act, independently of the
circumstance of opening books and subscriptions; and I cannot quit the topic without saying, that I
can find nothing in this act, which is to confine it to opening books and subscriptions ;—to the
opening of books to-day— getting out of the concern to-morrow, and shutting the books the next
day; and it is impossible, in my judgment, that so limited a construction can be put upon the act,
particularly when we look at the clauses of exception. There are acknowledged companies and
chartered companies, the cases of which are contemplated by this act; and in that contemplation, the
legislature exempts them from the penalties of the former clauses. Will any one tell me, that the
companies named in the clauses of exception were contemplated by the legislature as companies that
were to open a book today and shut it up the next day, or were to engage in extremely fraudulent acts?
I have not the least doubt, that, if you could give me a case of parties holding together, and being
about to form a company, and it could be made out to the satisfaction of a jury, that they meant to do
no more than to bring forward the scheme, which might be the most futile thing in the world, make
it the means of raising a price, and getting great premiums, taking care to get themselves out of the
scrape before the company is formed:—I have no difficulty to say that this is an indictable offence.
With respect to the application of the statute, and of the common law to this particular case, if my
opinion should ever be called for upon the legality or illegality of the Real del Monte scheme, I must
have a great deal more information concerning their proceedings than is at present before the Court.
In deciding upon the particular grievance complained of by this bill, the Court is placed in some
difficulty from the circumstance, that it nowhere appears what the contract is, which is the subject of
dispute. Supposing, however, that there is a contract for the Bolanos mine; and that the contract is a
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beneficial one, let us see how the law will stand. If the members of the Bolanos Company (supposing
that there is such a company, and it is very material with reference to this suit, whether there be or be
not such a company, because, although the Real del Monte directors are before the Court, yet as to
the directors of the Bolanos Company, unless they are the same individuals, I have nobody before me
to represent the Bolanos Company,) have acquired the interest in the Bolanos mine, under such
circumstances as would make that mine a subject of trust for the Real del Monte Company; I am ready
to admit that the latter company has a right to have the management of that subject of trust. But, on
the other hand, we must recollect, that it is one thing to say, where an acquisition has been obtained
under such circumstances, that the old company might insist upon taking the benefit of it; and quite
a different thing to say that they are obliged to insist upon it. For instance, if it should turn [83] out
in this case, that Mr. Vetch has been dealing under the authority of Mr. Taylor; and that Mr. Taylor
has been acting under the authority of the directors; and yet, on the other hand, the instrument for
the regulation of the company requires, that there shall be a special authority for the adoption of any
new contract, which adoption again will depend upon the question, whether it is a benefit to adopt
the new contract or not; and further, if those who are intrusted with that special authority do not
choose, acting on behalf of the body, to take the Bolanos mine; then, I say, that the members of the
old company cannot be called upon by Mr. Kinder, or any body else, to take a benefit which they
might take. Suppose, for instance, in the circumstances of this contract, which took place here and in
Mexico, put together, that such a case had been established as would have authorized the directors, at
a special general court, to say, that they would have the Bolanos mine; does it at all follow, either in
point of law, or in equity, that, if the court of directors, at a special general court, choose to say, that
they will not have the mine, any individual member can set up a claim to it?
Nay, I go further; for I say, that, according to law, an old company, with the exception of an
individual, may form a new company for new purposes: that was laid down in the case of the Life and
Fire Insurance Company. That company set up also a Marine Insurance; but one gentleman was
obstinate, and filed a bill, insisting that the Fire and Life Insurance Company, of which he was a
member, could not compel him to be a member of any other company; on the other hand it was
insisted that his copartners could compel him: I was clearly of opinion that they could not; and that,
if persons entered into a partnership for a particular purpose, they could not engage any person
belonging to that partnership in any other pursuit, in which that person had never agreed to be
engaged. But if all the other members of that Fire and Life Insurance Company thought proper to
form a Marine Insurance Company, he not being one of them, then, unless it could be shown that
there *was some clause in the original deed or instrument, to prevent them from doing so, I thought
that the Court had no authority to take away from them the power of doing that, if they were desirous
so to do. In like manner, if this company thought proper to say, “Well, Mr. Kinder, we are not bound
to take the Bolanos mine, and we will not take it;” I cannot undertake to say, that, (as soon as they had
divested the Real del Monte Company of the right to the Bolanos mine, by the refusal to accept it),
the very individuals, who refused to accept it for the Real del Monte Company, might not form another
company, and take it for themselves.
211
That being the general law, has Mr. Kinder a right to say to these persons “I do insist, that this
shall belong to the Real del Monte Company; I do insist that there shall be 200,000l. more subscribed
in the same shares as in the Real del Monte Company.” A person might be quite right in saying, “If I
am entitled to fifty shares in the Real del Monte Company, I am entitled to call upon you to make all
the other terms agree in that respect;” but would not all the other partners have a right to say “We will
not undertake upon those terms with you?” And what right have I to interdict them from so saying?
The directors of the Real del Monte Company, however, have got quite wrong; and the same error
was committed in the Fire and Life Assurance Company, who thought that they could carry on the
Marine Assurance Company, by the officers and servants of the Fire and Life Assurance Company.
But the Court said, that they had no right to do so. In the same way, there is here a resolution, which
directs the employment of the officers and servants belonging to the Real del Monte Company, for
the benefit of the Bolanos Company: that cannot be, and therefore must be prohibited, unless this
company turns out to be an illegal body.
Upon the whole, even looking at the plaintiff's representation of the circumstances, I do not think
that his affidavits .are sufficient to raise the trust under which he claims: but I am sure that they are
not sufficient to raise such a trust, when I look at the affidavits on both sides. Neither do I see any
thing which would authorize me to say, that Mr. Taylor was not at liberty to enter into any other mining
concern, or to contract for any other mine, with such .persons as he might think fit to engage [84]
with. Therefore the ultimate opinion which I have formed, putting all the matter of the legality of the
company out of question, is this—that there has not been, what (to sustain Mr. Kinder's claim) there
must have been, such an adoption, not by Mr. Kinder, but by the Real del Monte Company, of this
Bolanos mine concern, as authorizes Mr. Kinder to demand, or rather compels me, upon his call, to
grant the injunction which is now sought: on that ground, I refuse the injunction, with the exception
of so much of it as relates to the resolution for employing the agents, servants, &c. of the Real del
Monte Company in the management of the Bolanos mine, a resolution, as I have already said, which
the directors were not competent to make
The Lord Chancellor did not think it necessary to pronounce any judgment on the demurrer: but he
made the following observations with respect to the alleged defect of the suit, in not having all the
parties before the Court:
“I have granted injunctions,” said his Lordship, “as my predecessors have done, even where all the
parties were not before the Court: but in all those cases I must have been satisfied, that all the parties,
who could be brought before the Court either individually, or by those representing their interest, were
brought before the Court— which would be quite sufficient for the purpose of enabling the Court to
do justice. With respect to those cases in which some individuals sue on behalf of themselves and all
others interested, and they bring before the Court all the individuals who are to do the act which must
be done in order to give relief, I apprehend there is no difficulty. The difficulty is, how to deal with
cases where the plaintiff does not represent all. With respect to the demurrer it will perhaps be found,
that, although there are cases in which the Court has gone very far in binding a great many absent
persons, by what was done with respect to persons present, yet it will be quite a different question
212
what is to be done in a case where the persons, who are to be bound, are bodies of persons who are
called upon to make such new subscriptions and advances as this Bolanos Mine Company must
require. When pecuniary advances are to be made by each and every individual according to the ratio
of contribution, I think it may be difficult to deal with this case, without having more parties before
the Court.”
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Chapter 9. Repeal of the Bubble Act
a. A comprehensive proposal for reform (1825) 87

“THE questions I propose in the following pages briefly to investigate, are
First—What may be the cause of the present great increase of Joint Stock Companies.
Secondly-—What are the probable consequences of such increase ; and whether, by a
consideration of the nature of their several objects, some principle may not be found,-to indicate the
degree in which such Associations are beneficial or injurious in their effects upon society; and,
Finally—Whether the law, as it at present stands, relating to Joint Stock Companies, be not
susceptible of improvement.
In considering the increase of these projects, our attention is first arrested, by the vast amount
and prodigious rapidity of that increase; whilst the avidity with which each project in succession is
devoured by the public, unexampled [2] entirely in the memory of any living man, has only been
equalled at the period of the South Sea and Mississippi Schemes. Each day brings forth its brood; they
spring up around us on every side; from Ores in the earth to Pearl Oysters in the sea; from Mexico to
New Holland; from Wet Docks and Rail-roads to Washing and Alderney Cows; every element in turn
is invaded; each quarter of the globe is explored, and all trades and professions are scrutinized, to
discern if peradventure they may not afford some basis whereupon to build the goodly edifice of a
Joint Stock Company. To a scrutiny conducted with such animating motives for diligence, success is
rarely wanting; the fittest of opportunities is speedily discovered for the formation of a Company,
whose operations, whilst they will be of incalculable advantage to the community, will yield an ample
remuneration to the subscribers. Anon appears, in beautiful proportion, pyramidically shaped, an
advertisement, setting forth in glowing terms, yet with a certain air of graceful reserve, the unrivalled
advantages of the scheme; aloft sublime upon the apex shines some name illustrious either at the
eastern or western end of this happy and money-getting metropolis, the president; below his awful
dignity, but yet of scarcely inferior rank, may be discerned the vice-presidents, who commonly are
twain dividing their greatness; and to them [3] succeeds, arranged in. double file, the array of the
directors, twelve or twenty-four in number. These gentlemen might not, at first sight, appear to an
ordinary man, to be of a sort or condition greatly differing from his own; but no, they too, by their
incessant appearance before the public eye, have become the heirs of fame; their names, “Familiar in
our months as household words,” seem essential to the very idea of a Joint Stock Company ;—its
existence would be incomplete without them. Below them follow, in orderly arrangement, auditors,
treasurers, trustees, (I am not sure that I marshal them aright,) bankers, solicitors, engineers, and lastly,
in the corner, (and often the real corner-stone of the project,) appears the secretary.
87Clay, W., Remarks on Joint Stock Companies, John Murray, London, 1825. Published anonymously under the pseudonym
“By An Old Merchant.” URL: http://books.google.ca/books?id=Txw0AQAAMAAJ.
9. Repeal of the Bubble Act
Appended to the advertisement is a notice, where the public (it is all for the good of the public)
may apply for admission to the benefits of this unexampled scheme; but short is the auspicious
moment of admission, and vain the headlong eagerness with which we seek to avail ourselves of it;
the golden vision gleams but for a moment, and then is shut from our desiring eyes. The “public” is
informed that the lists of subscription are full; no matter of how many millions they consisted, nor
across what oceans, [4] into what deserts, those millions are to be sent; the lists are full, overflowing;
but the disappointed applicant has the consolation of hearing that he has many companions in
affliction, and that fifteen millions have been turned away. Let him, however, be comforted; the same
paper that informs him, that the shares he has missed are at five per cent. and “looking up,”…
This mania comprehends all classes in its influence; it is epidemic, and afflicts alike the rich and
poor, the titled and the humble, the leisurely gentlemen of St. James’s-street, and the scuttlers through
Change-alley.
…
[90] There are evidently two distinct aspects under which these associations may be considered,
with a view to legislative regulation—requiring respectively exertions distinct in their nature of the
authority of the legislature; they are
The mode of constituting these Joint Stock Companies, in the first place. .
Their objects when constituted in the second.
With regard to the latter, it is clear that no general legislative provision can be made. In every fresh
case of an application to parliament to incorporate a Joint Stock Company, such application must be
tried by its own merits, and the expediency of the proposed undertaking be decided by examination
of evidence. All that can be done is to establish some principles which may serve as guides in the
investigation, and assist in determining the degree of encouragement which each undertaking may, by
its nature and tendency, be entitled to…The constitution of these companies may, with more case, be
made the subject of previous [91] regulation; and I am inclined to think, that legislative interference
on this head alone, would go further towards furnishing a test of the expediency of the objects
proposed by new companies than might at first sight be supposed; for as regulations judiciously
framed, would, in a great measure, put a stop to the getting up such associations with a mere view to-
jobbing in the shares, such projects only would be brought forward as promised well for permanent
investment, and such persons alone would become subscribers as had the requisite means to carry
them into effect. At present, it is certain that the mere fact of the existence of such projects cannot
be assumed in the smallest degree as evidence of their necessity or expediency.
I am not aware of any legislative enactment on the subject of Joint Stock Companies generally,
since the act of 1720, already cited, and it is to the provisions of that act that reference is always had
in framing the laws and regulations of these associations…
I am not, however, inclined to think that the law, as it now [92] stands, is either well directed in its
object, or would be convenient in its effect. If the projectors of these associations are right in
215
supposing that the precautions they take will secure them from the pains and penalties provided by
the act, it is a dead letter; if, on the contrary, the act could be put in force, it would be too severe and
undistinguishing in its operation. It was certainly the intention of the legislature, by the act of 1720,
to suppress entirely all Joint Stock Companies not incorporated by act of parliament or royal charter.
It may be doubted whether this would be expedient; the many useful institutions which have grown
up in contravention of it, seem to prove the contrary. It would, perhaps, be better to repeal this act,
and place beyond a doubt the legality of Joint Stock Companies established by deed; rendering them
legal, however, only upon certain conditions. I would by no means propose that they should enjoy the
same immunities as Joint Stock Companies incorporated by act of Parliament, or possess the privilege
of securing their shareholders from individual responsibility; a freedom from liability beyond the
amount of the respective shares should still remain, a privilege only to be acquired by an express grant
of the legislature: it would be preposterous that an association of individuals should, by subscribing a
deed, or by [93] any other act or contrivance of their own, have it in their power to exempt themselves
from the operation of the laws. This exemption, should only be granted -after ample investigation,
and upon clear proof that it would be of advantage to the public… [94] It is probable that if the
mode of forming Joint Stock Companies by deed were clearly defined and sanctioned by law, that
applications to Parliament for acts of incorporation would only be made by associations for the
construction of public works which require for their operations peculiar powers, such as enforcing
the sale of private property, .altering roads, &c. It is well that such undertakings should always stand
in need of the sanction of Parliament…
It should seem, therefore, that if it be true that there are certain defects inherent in the present
mode of forming Joint Stock Companies, and which, as common to all, require a common remedy, it
would be necessary to devise the means of applying this remedy equally to those associations which
are constituted by deed, as to those incorporated by act of parliament. This might perhaps be effected,
by making it a standing order of either house of parliament, that the [95] same provisions Which may
be embodied in a law for regulating the constitution of Joint Stock Companies by deed, should also
form a part of all special acts of incorporation…
It is evident, I think, that almost all the evil attendant upon these associations arises from two
sources,—the entire want of restraint upon the proceedings of the projectors, directors, &c. &c.; and
the practice of selling shares on which a deposit of two, or three, or five per cent. has been paid by
the original subscribers.
Towards remedying this latter evil, we have already a standing order of the House of Lords to
serve as our guide, and the substance of that order I would propose to blend with restraints upon the
functionaries of such associations as follows, viz. .
lst. It shall not be lawful for any persons proposing to establish a Joint Stock Company to take any
premium for admission into such company.
2dly. No transfer of shares shall be legal or valid until the lists of subscription are full, and until
the signature of the deed of partnership, or the passing of the act of incorporation, as may be.
216
[96] 3dly. It shall not be lawful for such deed to be signed, or such act- shall not be obtained,
before a certain portion of the capital proposed to be raised (three-fourths, perhaps) shall have been
deposited in the hands of Trustees, to be retransferred to the company when it shall be legally
constituted.
4-thly. That the names of the Presidents, Vicepresidents, Directors, Auditors, Treasurers, and
Secretary, together with the number of shares held by such individuals in the stock of the [97]
company, shall be inserted in the deed or act as may be; and that it shall not be lawful for those
individuals to increase or diminish the amount of their shares, whether they do or do not retain their
several offices, in any case whatsoever; (death or insolvency must of course be understood to be
excepted,) until a period to be named.
5thly. That in the cases of associations for the investment of reclaimable capital—such as Banks,
Insurance Companies, &c. &c., such period shall not be less than three years from the date of the
constitution of the company, and in respect to associations for the investment of irreclaimable
capital,—such as the construction of public works, working mines, &c. &c. either at home or abroad,
the period shall be fixed to be at the completion or failure of the original design, to be determined by
the resolution and vote of a general assembly of proprietors.
The above regulations are intended to apply equally to the associations which shall be incorporated
by act of parliament, and to those which shall be constituted merely by deed. With respect to the latter,
the following additional regulations might be advisable.
1st. The deed of partnership of any association or society consisting of more than six persons,
shall be enrolled in the High Court of Chancery, with the names and descriptions of the several
members affixed thereto, and the shares they hold respectively in the stock of the company.
[97] 2d. Every transfer of shares to be valid must be enrolled in like manner.'
3dly. That such companies may sue or be sued by their secretary, or other officer, and that all the
members be responsible for the issue of the suit.
4thly. That persons obtaining judgment against such company, shall, in default of their demand
being satisfied by the Company through its functionaries, be at liberty to issue execution against any
person or persons who were members of the Company at the period when the claim arose, which was
the subject of the action, or suit; but such recourse shall not be legal, unless in the case of the
insufficiency of the funds of the Company at the time of the verdict being obtained.
5thly. That they may make bye-laws binding on their own members in their general assemblies;
elect directors, and act in such other respects; as is usual and convenient for Joint Stock Companies,
excepting that no contrivance or contract shall be valid or legal that purports to limit the individual
responsibility or the members.
…
217
[100] That some legislative interference is necessary I am firmly convinced, and I trust that the
approaching session will not pass away without the enactment of laws that may effectually put a stop
to the most disgraceful scene of gambling, delusion, and credulity, that has occurred for a century to
lower the respectability of the exchange of London, that may confine Joint Stock Companies to their
proper province, viz., to be the organs of applying a superfluity of national wealth to useful objects,
and, finally, restrain their being made mere engines, in the hands of a few individuals, to enrich
themselves at the expense of the community.
b. Parliamentary debates on the repeal of the Bubble Act (1825)

“REPEAL OF THE BUBBLE ACT88.
The Attorney-General rose, for the purpose of moving for leave to bring in a bill to repeal so
much of the act of the 6th Geo. 1st cap. 18., commonly called the Bubble Act, as related to Joint-
stock companies. He would shortly state to the House his object in introducing this bill. The act to
which it related had of late excited considerable discussion in the courts of law and equity, and it
appeared to be [1019] agreed on all hands, that its meaning and effect were altogether unintelligible.
It was, in fact, impossible to ascertain what had been the intention of the legislature in passing that
act. When, coupled with this fact, it was recollected, that the penalty imposed by the act, was, among
others, that persons offending should be guilty of a præmunire,—that was to say, that they should
incur the heaviest penalty for committing an offence against an unintelligible act of parliament—he
thought he need state no more to induce the House to agree with him as to the necessity of repealing
this act. But, there were other grounds which manifested that necessity still more strongly. From the
year 1720, the year in which it was passed, down to the present time, Joint-stock companies had been
formed for the most useful and laudable purposes, and many of them still existed. Some of them had
been the means of acquiring great wealth to the individuals connected with them, and also
advantageous to the public. Among them, the companies for the insurance of lives and property were
the most eminent; and all of those, under the interpretation which was sometimes put upon this act,
were said to be illegal. For the protection, then, of these individuals, it was highly expedient to repeal
part of the existing law. He might be asked, whether it was his intention to propose any provision
instead of it? And to this he must reply, that he had at first intended to do so, but that, after having
very attentively considered the subject, he had been convinced that to do so would be at once difficult,
unwise, and impolitic. The reasons which had induced him to believe that it would be inexpedient to
legislate on this subject at all were, that up to the period of passing the Bubble act, although the
commerce of the country had been extended to a very important degree, no legal enactments had
been considered necessary. After the events which gave rise to this act in 1720, with the exception of
a criminal prosecution, the nature of which was not very clearly understood, and which took place
two years afterwards, no legal proceedings had been had under it, until ten or twelve years ago. It had,
in fact, become a dead letter; and he had therefore a right to conclude that no such law was necessary.
88HC Deb 02 June 1825 vol 13 cc1018-23. URL: http://hansard.millbanksystems.com/commons/1825/jun/02/repeal-

of-the-bubble-act. Contains Parliamentary information licensed under the Open Parliament Licence v1.0.
218
It could not be objected, in answer to this view of the subject, that it had not been exercised because
it had [1020] accomplished the objects for which it was passed, because this had been done before,
and companies were established shortly afterwards which had continued ever since. If any other hon.
gentleman took a different view of the matter, it would be competent to him to bring in a bill for
regulating companies in such a manner as he might think fit; but, he must be permitted to say, for his
own part, that he did not think any such measure necessary. He would add, that he meant to insert in
the bill he should bring in, a provision that it was not to interfere with any proceedings now depending
in any of the courts, but that they were to be decided according to the law as it stood when those
proceedings were commenced. There was another provision which he meant to add, with a view of
facilitating the granting of charters by the Crown to companies for trading and other purposes. Under
the charters as they were commonly granted, the persons incorporated were not individually liable for
any of the debts of the company, but only so far as the corporate property extended. This
circumstance caused considerable reluctance on the part of those whose duty it was to advise the
Crown to grant charters. Persons wishing to form a company were therefore obliged to apply, in the
first place, to parliament, for an act enabling the Crown to grant a charter, and afterwards for the
charter, thus doubling the expense. To remedy this, he should propose a clause enabling the Crown,
whenever application should be made for a charter, to insert in it a provision rendering any individual
member of a corporation liable for the debts of that corporation, according to the judgment of the
Crown in each particular case. Simple legislation had many advantages; he should not therefore
substitute any act for that which he wished to repeal; for he thought it expedient that the Crown
should have the power of exercising its discretion as to granting charters, and of modifying such
charters according to the nature of the respective cases. He would now move, "That leave be given to
bring in a bill to repeal part of the act of the 6th Geo. 1st, cap.18, and to empower the Crown to grant
Charters of Incorporation."
Colonel Davies approved of the motion, but feared that the learned gentleman's bill might
encounter opposition in another place, from a learned lord who had already [1021] expressed his
opinions on this subject. He regretted that the law, as laid down by lord Ellenborough, in deciding a
case on this act, had not been adhered to; because, in his opinion, that decision sufficiently explained
the act of parliament, and would have rendered the proposed bill unnecessary. A learned person in
another House had uttered a general exclamation against all joint-stock companies. He supposed that
learned person roust be completely acquainted with the laws; but if, in uttering his indiscriminate
denunciation, he had spoken intelligently as a lawyer, it was palpable that he had spoken with the
utmost possible ignorance, both as a statesman and a political economist.
Mr. Huskisson said, that the proposition of his learned friend was one which he concurred in,
because he was satisfied that the interests of commerce required the proper encouragement and.
protection of joint-stock companies. When the gallant member said that if lord Ellenborough's
decision had not been called in question, the proposed bill would not have been necessary, he showed
that by the possibility of that decision being disturbed, it was highly expedient to have the law made
certain. That decision was, that all companies not prejudicial to the public interests were legal. But,
where there were so many companies, was it fit that this question should be left to the consideration
219
of the jury? Where persons had embarked large properties in a speculation, ought they not to be
guaranteed by some secure provision of the law, instead of having their interests left to the eloquence
of a counsel, or to the discretion of a jury? He had no reason to doubt that lord Ellenborough's
interpretation of the law was correct; but the law itself was still left in a state of uncertainty, and the
object of his learned friend was, to remove that uncertainty. The impulse which had recently been
given to commerce, and which would in all probability be extended much further, called for some
further protection than that which existed. The mere provision, that parties should sue and be sued
was not enough, as the inconveniences which were every day experienced, abundantly proved. His
learned friend, in bringing in this bill, had done that for which the commercial world and the whole
community would be infinitely indebted to him. Parties would in future be enabled to enter [1022]
into their speculations, without any other restriction than that which the Crown would exercise in
pronouncing upon the utility and propriety of their designs. He trusted that the House would approve
of the proposition, and he had no reason to believe that it would experience any opposition in another
quarter which had been alluded to, because it was evidently calculated to do away with all the evils of
the present state of things.
Mr. K. Douglas was glad to see this subject engaging the attention of the House. There were
several companies in Scotland, which had subsisted for many years under an impression that they were
legal, and without the least notion that they were incurring the penalties of an act which had become
a dead letter. In some recent cases, however, great inconvenience had been experienced by the parties,
in consequence of the objections arising under this act.
The Attorney-general said, that the bill he proposed to bring in, was for the repeal of the Bubble
act, which applied only to England. He believed it was intended to propose measures in the other
House respecting Scotland.
Mr. Denman could not agree with his gallant friend, as to lord Ellenborough's decision, because
it left the law just in this state—the persons composing a company were liable to be indicted, and
there were two points to be decided; the first by the jury, whether the object of the company was
beneficial or injurious to the public; and the second what interpretation the judge might think fit to
put upon the words of the act. Both these points were, in his opinion, very unfit to be left either to
judge or jury. Since the passing of the act, only two cases had arisen upon it, in which the jury had
found that the objects of the companies were beneficial; but it was nevertheless a subject which, in its
nature, admitted of so much variety of opinion, that it was unfit to be left to the decision of a jury.
The act to be repealed was a specimen of the inexpediency of occasional legislation. It was not passed
until after the evils which, it pretended to remedy were over, and at the end of a century it was the
cause of serious inconveniences, to obviate which another application to the legislature had become
necessary. As to the power proposed to be given to the Crown to grant charters, he questioned the
propriety of it. [1023] Leave was given to bring in the bill.”
220
c. The Act to repeal the Bubble Act (1825) 89

“An Act to repeal so much of an Act passed in the sixth year of his late Majesty King George the First, as relates
to the restraining of several extravagant and unwarrantable Practices in the said Act mentioned; and for conferring
additional Powers upon his Majesty, with respect to the granting of Charters of Incorporation to trading and other
Companies. (5th July, 1825)
WHEREAS As by an Act passed in the sixth year of the reign of his late Majesty King George
the First, intituled, “An Act for better securing certain Powers and Privileges intended to be granted
by his Majesty, by two charters, for Assurance of Ships and Merchandizes at Sea, and for lending
Money upon Bottomry, and for restraining several extravagant and unwarrantable Practices therein
mentioned,” it was enacted [follows a recital of sections XVIII to XXI of the Bubble Act:]
And whereas it is expedient that so much of the said recited act as is above set forth should be
repealed; and that the said several undertakings, attempts, practises, acts, matters, and things aforesaid
should be adjudged and dealt with in like manner as the same might have been adjudged and dealt
with according to the common law, notwithstanding the said act: Be it therefore enacted by the King’s
most excellent Majesty, by and with the advice and consent of the lords spiritual and temporal, and
commons, in this present parliament assembled, and by the authority of the same, That from and after
the passing of this act, so much of the said recited act as is above set forth shall be and the same is
hereby repealed; provided always, that nothing herein contained shall extend or be construed to extend
to affect any action or suit now depending in any court of law or equity; but that every such action or
suit shall and may be proceeded in, prosecuted, defended, and determined, in the same manner as if
this act had not been passed.
II. And be it further enacted, that in any charter hereafter to be granted by his Majesty, his heirs
or successors, for the incorporation of any company or body of persons, it shall and may be lawful,
in and by such charter, to declare and provide, that the members of such corporation shall be
individually liable, in their persons and property, for the debts, contracts, and engagements of such
corporation to such extent, and subject to such restrictions as his Majesty, his heirs or successors, may
deem fit and proper, and as shall be declared and limited in and by such charter; and the members of
such corporation shall thereby be rendered so liable accordingly.”
896 Geo. 4, c. 91. Available in Charles Wordsworth, The Law of Joint Stock Companies, Saunders and Benning, London, 3rd
ed., 1842 - http://goo.gl/M4U45. Paragraphs added.
221
Chapter 10. A Period of Uncertainty in the Courts
a. Van Sandau v Moore (1826)90.

“EARLY in 1824, a Joint Stock Company was set on Foot, called the "British Annuity Company.”
It was to consist of sixty thousand shares of 50l. each, forming a capital of 3,000,000l., which was to
be employed in making loans by way of annuity. Advertisements were published and prospectuses
were circulated, describing the nature of the proposed Company, and the mode in which its business
was to be conducted; and by these the Plaintiff, Mr. Van Sandau, a solicitor by profession, was, as he
represented, induced to apply for some shares. Forty shares were accordingly allotted to him, on each
of which he paid a deposit of 2l. The Company was established; and, in the same year, an Act of
Parliament was obtained, enabling them to sue and be sued in the name of their Chairman or Secretary
for the time being. A deed of settlement was also prepared, containing the regulations by which the
affairs of the Company were to be managed; and it had been signed by many of the shareholders. Mr.
Van Sandau, however, refused to sign it, on the ground that it contained provisions inconsistent with
the advertisement and prospectuses, on the faith of which he had become a partner in the concern:
and, being dissatisfied with the mode in which the affairs of the Company were carried on, he, in
October 1824, filed a bill against the Chairman and the Secretary; praying that the Company, and the
Defendants on behalf of the Company, might be restrained from doing any act to deprive him of his
shares, or from acting on the deed of settlement; and that certain directions might be given as to the
mode in which the business of the concern was to be conducted.
Peter Moore, the Chairman, and James Mitchell, the Secretary, who were the only Defendants,
demurred generally for want of equity; and, upon the argument of the demurrer, they demurred also,
ore tenus, for want of parties.
The LORD CHANCELLOR allowed the demurrer, for want of parties. His Lordship at the same
time expressed an opinion, that, as the dissolution of the Company was not prayed, the Court could
not grant the particular relief which the Plaintiff asked.
In May, 1825, Mr. Van Sandau filed a second bill, to which all the shareholders of the Company,
between two and three hundred in number, were made Defendants.
He stated in it, that the partnership, no term having been prescribed for its duration, was dissoluble
by notice, at the pleasure of any of the partners; and that he had, on the 30th of April, 1825, sent a
notice of dissolution to the Secretary and to the Solicitor of the company. This notice was addressed,
“To all persons being members, shareholders, proprietors, or partners of or in, or composing the said
Company or Partnership using the style or firm of British Annuity Company, to the persons calling
themselves, acting as, or being directors thereof, and to the chairman, deputy-chairman, and secretary
thereof, or whomsoever else it may concern.” He further charged various acts of mismanagement,
which, even if the Company were not dissoluble by notice, gave him, as he contended, a right to have
90 1 Russ. 441. URL: http://goo.gl/ijWqU

10. A Period of Uncertainty in the Courts
it dissolved by the interposition of the Court. The prayer was, that the Company might be declared to
have been dissolved, or might then be dissolved, that its affairs might be wound up, and that the
persons styled directors might be restrained from acting in that capacity; but if the Court should be
of opinion, that the Company was not and ought not to be dissolved, then that the deed of settlement
might be set aside; that a new deed might be prepared and executed, pursuant to the original
advertisement and prospectus; and that the directors, chairman, and deputy-chairman, might be
restrained from doing certain acts.
Mr. John Wilks, jun., the Solicitor of the Company, and himself a Defendant, entered appearances
for fourteen of the directors, and filed for them fourteen separate answers, each of which had long
schedules annexed to it.
These answers, besides denying or palliating the acts of misconduct charged in the bill, stated, that
the deed of settlement, which was complained of, had been produced before the House of Lords,
when the bill was in progress, in order to explain the general outline and scheme of the Company;
that the Plaintiff, by refusing to execute the deed, and to pay the calls which had been made, had
forfeited his shares, and ceased to have any interest in the concern; that the directors, though they
were entitled to have declared his deposits forfeited, had been always willing to repay him his 80l. with
interest; that the most fair and reasonable proposals had been made to him in order to induce him to
desist from harassing the Company, but that all those proposals had been rejected by him.
On the 14th of March, 1826, the Plaintiff moved, before the Vice-Chancellor, that it might be
referred to one of the Masters to inquire, if the fourteen answers were substantially, or, in any and
what respects, different; and whether there was any and what sufficient reason for such fourteen
Defendants, or any and which of them, so answering separately: And if the Master should find that
there was a sufficient reason for the said fourteen Defendants, or any of them, answering separately,
then he was to inquire whether there was any and what sufficient reason for repeating the schedules
annexed to each of the answers; and that, for the purpose of those inquiries, the fourteen Defendants
might be directed to furnish the Master with copies of such answers.
The affidavit of the Plaintiff, sworn in support of the motion, stated, that the fourteen answers
were sworn in London, several of them on the same day, and all of them, except one, in the month of
August; that the fourteen answers and schedules were all of them alike, and nearly verbatim copies of
each other, in no respect materially differing from each other, but appearing to have been prepared
from one draft only; that the same set of schedules, in effect fourteen times repeated, were annexed
to each of the answers; that each of the answers consisted of 627 folios, and the schedules to each
answer, of 423 folios; that the charge for office copies of the fourteen answers would amount to 365l.;
and that Wilks, as well as many of the fourteen Defendants, had declared, that their sole object in
putting in separate answers was to increase the expenses of the suit, so as to deter the Plaintiff from
prosecuting it further. As evidence of this intention, the affidavit stated, that Wilks, on the 24th of
May, 1826, in reply to a letter in which the Plaintiff remonstrated against the vexatious conduct
pursued on behalf of the Defendants, wrote to the Plaintiff a letter, which contained the following
passage:
223
“As your suit is frivolous, absurd, and vexatious; as you have no more to do with the Company
and its concerns than an inhabitant of Ethiopia, and as the Costs must ultimately ruin you, even to
beggary; and therefore, in the end, some of them at least fall upon the Company, I shall oppose, for
myself and for my clients, your ridiculous and contemptible suit, by every legal means.”
The affidavit also stated, that Wilks, without any sufficient or proper reason, and solely for the
purpose of multiplying the costs of the suit, had taken out forty-seven separate orders, for time to
answer, for the said fourteen and two other Defendants. Then, as further evidence that the answers
had been prepared by Wilks for an unfair purpose, and not from the instructions of the Defendants
themselves, it set forth a correspondence between Mr. Wilks and a director, Mr. Peach, in which Wilks
had endeavoured, but without success, to prevail on Mr. Peach to swear an answer similar to those
which had been filed by fourteen of his co-directors. One of the letters, addressed to Mr. Peach by a
clerk of Mr. Wilks, contained the following postscript: “Of course any expense attending upon the
putting in of your answer by the solicitor of the company will be paid by the solicitor of the company.”
The order made by the Vice-Chancellor upon the motion was, “That it be referred to the Master
in rotation to inquire and state to the Court, whether, with a view to the defence in the cause, it was
necessary or expedient, on the part of the said fourteen Defendants, or any and which of them, who
have filed their answers through the intervention of Mr. Wilks as their solicitor, that separate answers
should be filed by each Defendant; and if the said Master should, as to any of the Defendants, find
that it was not necessary or expedient, with a view to their defence, to put in separate answers, then
let the Master inquire how it happened that such separate answers were put in: and, for the better
discovery of the matters aforesaid, the said Defendants are to produce before the said Master, upon
oath, all books, papers, and writings in their custody or power relating thereto, and are to be examined
upon interrogatories, as the said Master shall direct; and the said Master is to be at liberty to state any
matters specially at the request of any party."
A motion was now made, before the Lord Chancellor, to discharge the order made by the Vice-
Chancellor.
There was no affidavit in answer to the affidavit sworn by the Plaintiff.
In the course of the argument before the Lord Chancellor, it appeared that the fourteen answers
were all signed by the same counsel. Two counsel declared, that the course pursued by the Defendants
had been adopted with their approbation: and another stated, that he had advised Mr. Wilks not to
file any affidavit in answer to the Plaintiff's.
The Solicitor-General, Mr. Heald, Mr. Shadwell, and Mr. Wakefield, for the motion to discharge the
order.
We resist this order, on the ground that it interferes with the rights of the suitor. It is the privilege
of Defendants to answer separately, if they please; the Court has no jurisdiction to compel them to
answer jointly; there is no instance of any attempt to exercise such a jurisdiction; and nothing could
be more imprudent than for Defendants, in a suit which may last for many years, to conjoin themselves
for better and for worse with a number of strangers. To what can the inquiry tend, whether it was
224
necessary or expedient for these fourteen Defendants to file separate answers? They are themselves
the judges of that necessity or expediency, which must depend upon a multitude of circumstances
altogether extrinsic to the case.
The Plaintiff complains of the expense to which he will be put: but has any man a right to
complain of the natural consequences of his own act? He has chosen to file a bill against between two
and three hundred Defendants; he persecutes and harasses a multitude; and yet he expects to meet
with no more annoyance, in his turn, than if he had to do with a single opponent. It would have been
much more reasonable to have directed a reference to inquire, whether it was necessary or expedient
that the Plaintiff should have filed such a bill. Had we applied for such an inquiry, we should have
been told, that it was the right of a subject, who thought himself aggrieved, to bring his case before
the Court, and that the signature of counsel was a sufficient warrant that it was brought before the
Court in a proper manner. The right of the assailed is still more sacred than that of the assailant. The
Defendants admit that this is not the proper time for inquiring into the nature of the bill; but they say,
that neither is it the proper time for inquiring into the nature of their defence. They have put in such
a defence as the rules of the Court permit; and that defence has the same sanction of the signature
of counsel which gave credit to the bill. They think it hard that they should be compelled to answer
so absurd and vexatious a bill. They have, however, complied with the obligation which the law
imposes on them, and have complied with that obligation in such a form as is according to law.
THE LORD CHANCELLOR inquired, whether the Vice-Chancellor had been informed with what
ultimate view the motion was made; and, it being stated to him that nothing had been said on that
point, he requested Mr. Heald to inform him, with what view the Plaintiff had applied for such an
inquiry as had been directed.
Mr. Heald stated, that thereby a foundation might be laid for taking some steps against the solicitor
of the Defendants for an abuse of the rules and practice of the court.
THE LORD CHANCELLOR.
I hold an abuse of the rules of the court to be a very great offence, especially in an officer of the
court But if it is meant to make a case, or to lay a foundation for a case, against Wilkes, ought it not
to have been explained to the court, that it was with a view to a subsequent application against the
solicitor that the motion was made? and ought not the solicitor to have been a party to the motion?
Had Mr. Wilkes appeared by his counsel on this motion, he would have been told that he was himself
no party to the proceedings, but was merely the solicitor of the parties concerned. If a solicitor
misconduct himself in a cause, he may be made a party to any motion, which it may be thought his
misconduct makes advisable; and he ought to be made a party to such a motion, if it is made with a
view to any visitation upon him by payment of costs or otherwise.
If I am to direct a reference to the Master, I ought to see beforehand that I can do something
upon the report when made. Now suppose that the report of the master had been, that it was not
necessary or expedient, with a view to the defence of the cause, to file these fourteen separate answers,
what could I then have done? I never heard that the court would compel defendants to answer jointly;
225
and indeed dozens of acts of parliament have been passed with a view to provide a remedy in
particular cases for the acknowledged impossibility of getting on with a suit framed as this is. Another
consideration is this: ought the jurisdiction of the court, which can be administered usefully only
between a limited number of persons, to be employed for a purpose which it cannot by possibility
accomplish? Here is a bill with nearly three hundred defendants. How can such a cause ever be brought
to a hearing? and if the Plaintiff cannot show a probability of getting a decree, with what purpose,
except that of oppression, can the proceeding have been instituted? In such a suit the Plaintiff can do
nothing, except put himself and others to enormous expense.
The Plaintiff in person stated to the court, that he might amend the record by making it a bill ou
behalf of himself and the other shareholders
Mr. Heald, Mr. Pepys, and Mr. Knight, in support of the Vice-Chancellor's order.
The complaint made against the Defendants is substantially this; — that they have conspired to
conduct their defence in such a way as will render the prosecution of the suit impossible. Are
Defendants to be permitted to say, “We shall so act as to prevent the cause from ever coming to a
decision?” It is in vain to suggest, that the proper time for taking into consideration the conduct of
the parties as to the mode of shaping either the suit or the defence is at the hearing. Here our complaint
is, “You have done that which will prevent the suit from coming to a hearing; your conduct is so
improper as to require to be visited with punishment by the court; the impropriety is of such a nature,
that it operates to prevent us from reaching that stage of the cause, in which, according to the ordinary
course of procedure, it would come under the lash of the court; we therefore call on the court to
vindicate its own efficiency, and, for that purpose, to inquire whether you have been guilty of that
misconduct of which we give uncontradicted and prima facie evidence; and if the result of that inquiry
shall be such as we state, we have a right to expect that the court will enable us, in some way or other,
to prosecute our suit, without being subjected to extraordinary disadvantages by reason of the
extraordinary mode of defence adopted by these directors.”
The Plaintiff has made a strong prima facie case of flagrant misconduct, on the part of the fourteen
Defendants. When we look at the nature of the bill, which is a record bringing them before the court,
not on account of their individual acts, but merely in their capacity of shareholders and executors —
when we look further at the perfect similarity of the answers and schedules in substance and in words,
and at the enormous immediate expense which such a proceeding will create to all parties, without the
least tendency to promote any fair or useful purpose — when we take into consideration the language
of the solicitor who filed the answers, and the means he has employed in order to increase the evil, by
adding one more to the number of these answers, all facsimiles of each other; —it is impossible to
doubt that this line of conduct was followed solely for the purpose of stifling the suit. The honour
and dignity of the court require, that it should ascertain whether its rules have been abused for so
unworthy a purpose; and if the result of the inquiry should be, that they have been so abused, it will
easily find means to indemnify the Plaintiff for the oppression he has already suffered, and to protect
him against its effects for the future. Even if no steps should be taken against the solicitor, the court
might order the Defendants to make some satisfaction to the Plaintiff for the costs to which he has
226
been put unnecessarily; or it might require the fourteen Defendants to furnish office copies of their
answers at their own expense; or it might direct that an office copy of one of the answers should be
sufficient, and that the Plaintiff might be at liberty to proceed, as if he had taken office copies of all
the answers.
It is true that the suit is in itself of such a nature, that the prosecution of it must necessarily be
attended with great difficulties. But the greater the difficulties are with which the plaintiff has to
struggle, arising out of the nature of the case; the stronger reason is there that the defendants should
not be permitted wantonly to throw artificial and unnecessary impediments, in his way.
The SOLICITOR-GENERAL, in reply.
There is nothing extraordinary in this case except what arises from the conduct of the Plaintiff
himself. He files a bill against two hundred and fifty defendants; and he complains that fourteen of
them have answered separately. What right has he to require or to expect that they should answer
conjointly? Even if their object were to throw difficulties in the way of the prosecution of his suit, he
has no just ground of complaint; for it is not vexatious in a defendant to protect himself, by all the
means which the rules of the court permit, from the prosecution of a vexatious bill; nor is it
oppression in him to endeavour to escape from the enormous expense which a plaintiff is trying to
heap upon him by involving him in an absurd suit. The bill is filed for the purpose of embarrassing
the company, and of extorting money from them; and it is fortunate for justice, if the rules of the
court enable a defendant to throw many difficulties in the way of a plaintiff aiming at such an object.
There is no case made against the plaintiffs, except that they have acted according to the practice
of the court; and it is new doctrine to say that regularity of procedure is prima facie evidence of an
improper purpose. As to the expressions in the letter of Mr. Wilks, which have been made matter of
blame, they are nothing more than an accurate description of the nature and tendency of a suit like
this; the utmost that can be said against them is, that they display some irritation; but any angry feeling
which may be traced in them, is not more than the occasion called for, and the tenor of the
correspondence set forth in the answer well justified. Even if Mr. Wilks has not been sufficiently
guarded in his words and temperate in his sentiments, it is absurd to make such a circumstance a
ground of imputation against the Defendants. The client is not to be answerable for the angry words
of the solicitor.
In this case, the papers, which I have before me, are, the second bill, which is the one that brings
forward a great number of parties as Defendants: the answer of one of the Defendants, which in
substance is the same, and, I believe, in words is so nearly the same, that it may be represented as the
same, with the other thirteen answers, and which refers to schedules (not before me), the same, I
understand, with the schedules annexed to those other thirteen answers; and also the affidavit made
by the Plaintiff, which, it is contended, establishes such motives on the part of the Defendants, as
make the order of the Vice-Chancellor a proper order, founded on the necessity of the interference
of the Court in matters of intended oppression. That bill, that answer, and that affidavit, I have
227
thought it my duty to read very carefully; because I am clearly of opinion, that, unless the Court had
the substance of the bill and answers, as well as of the affidavit, under its view, it had not the means
of raising the question, whether such a reference, as has been directed, should or should not be made.
That reference, I have not the slightest doubt, was directed from an anxiety to promote an object
to which this Court ought to be very attentive, — namely, the prevention of oppression: but I entertain
very considerable doubt, whether that anxiety can be gratified consistently with perfect safety to those
principles on which every man in a court of justice is entitled to conduct his defence. The inclination
of my understanding to that view of the question may perhaps be deemed a prejudice; and I admit
that it is an opinion fixed in my mind by what I recollect to have passed in this Court during the last
forty or fifty years. For in that long period of time, though there has been over and over again, when
a cause came on to be heard, and all danger of doing prejudice to parties was over, a visitation for
oppressive and for causing unnecessary expense (a visitation, which I deem it a great duty of this
Court to inflict, as often as occasion for it arises);—I do not recollect a single instance, in which the
Court has been called upon, at this early stage of the cause, to say, that the manner in which the
Defendants have shaped their defence is such as to demand a special interference. I do not recollect
one single instance of an application, like that of the present Plaintiff, made at a time when it cannot
be known how the defence is in future to be conducted, or how it may be necessary to conduct it; and
when it is impossible to say what prejudice may arise to individuals, if you link them together, whether
they choose to be so associated or not.
I was also very anxious to know with what object the motion before the Vice-Chancellor was
made. I take it to be extremely clear, that, prima facie, and subject to what the Court might do at the
hearing in matter of costs, these fourteen gentlemen had a right to sever in their defence. Was it then
intended, if the master had reported that it was not necessary or expedient that the Defendants, with
view to their defence, should put in separate answers, to move that the answers should be taken off
the file, and that the Defendants should be ordered to answer jointly? That suggested another
question, which was this. If I were to make such an order, and these parties refused to join themselves
for better and for worse, throughout the whole cause, could I attach them or any of them for not so
joining in putting in their answers and in defending the suit? And my opinion is (if such were the
object of the motion), that I could do no such thing.
If that be not the object of the motion which was made before the Vice-Chancellor, what is its
object? To my inquiry upon this point Mr. Heald very candidly stated, that the object was to bring
before the Court evidence of a conspiracy to ruin the Plaintiff by the expense of the proceedings; for
such is the true amount of the case stated by the Plaintiff. With what view is that to be done? Is it that
something may be insisted upon as against the Defendants? If so, then the displeasure of the Court
must be visited upon the Defendants, by reason of what is proved either against them, or against the
person for whose acts they would be answerable, — the common solicitor of them all. But if we are
now to look, not only at the object of the application, but at the mode in which that object is to be
effected, which, in no way of putting the case, can be otherwise than by making the parties pay the
costs (for in a proceeding to which the solicitor is not personally made a party, I cannot make him pay
the costs nor strike him off the rolls), in what stage of the case is it most advantageous that that
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should be done? Most anxious am I to express my opinion, that, if there has been vexation, that
vexation ought not to be and will not be forgotten. But the question is, — In what stage of the cause
is it most wholesome that the interposition of the Court should take place, to punish proceedings
which have been improperly conducted?
I have already stated that one object of the Plaintiff may be, to make the Defendants pay the costs;
or it may be his object to make their solicitor pay costs, or to have him struck off the rolls; and I do
not say, that, in some stage of the cause, that may not be a proper application. But, in order to
accomplish either of these purposes, what is it that the Court proposes to do now? It does not merely
look at the bill, the answer, and the affidavit; but, in this early stage of the cause, it directs a production
of papers in the custody of the Defendants, and an examination of the Defendants on interrogatories.
That production may happen to furnish what is to be the parties' evidence in the cause: those
interrogatories may produce from the parties matter which may affect their evidence hereafter. What
else is this than by a side-wind to hear the cause upon a collateral motion?
In that point of view I am satisfied that the application of the Plaintiff ought not to be entertained.
When we have the practice of the Court for a long series of years before us, and when we find
ourselves getting beyond what that practice has hitherto sanctioned; we ought not to venture beyond
known limits, except with very great caution and with a clear certainty that we are not introducing
mischiefs much greater than the non-payment of the costs which the Plaintiff aims at recovering by
his present proceeding.
If we look at the answers as well as at the affidavit, we may find a great many reasons, which, on
the score of want of temper, may justify much of what has passed between these parties. Neither is
it to be forgotten that the suit itself may miscarry; and then there may be costs due to the Defendants
to be set off against the costs of these answers, supposing it right that some of the costs incurred in
this stage of the cause should be given to the Plaintiff. It is further manifest, that the demand for the
payment of the costs of these answers is to be founded on evidence which may anticipate every
species of defence which the Defendants may have to make. Therefore, without saying what may be
right to be done hereafter, with respect to the course which the pleadings have taken, further than
that, when the cause comes to be heard, it will be the duty of the Court to consider attentively and
anxiously what was unnecessary expense, and to visit that unnecessary expense upon those who have
created it; I am of opinion, founding myself on the established practice of the Court, that the order
made by the Vice-Chancellor is too hazardous a step, — if the object of the application be what I
suppose it to be, and which indeed is the only practicable object which the Court could at this moment
carry into execution, namely, making some order with respect to the costs of the answers.
I am further of opinion that I ought not, in this stage of the cause, to direct an inquiry which may
be attended with great expense to all parties, and on which the Court may, at last, not be able to do
any thing; or, if it can do any thing, may be able to do no more than what I have already stated.
Again, if this were a motion intended to lay a foundation for an order against the solicitor, and
not merely against the defendants, Mr. Wilks ought to have been made a party to it: and, when I am
told, as I have been told from the bar, that Mr. Wilks was advised not to make an affidavit against the
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application, that advice, I do apprehend, must have proceeded on the old established rule — that,
when the notice was given to Mr. Wilkes, only as solicitor for the parties, he had a right to consider
himself as not personally implicated in the result of the motion.
When a motion of this unprecedented nature is made, we are fully justified in looking at the case
itself. The bill is filed by Mr. Van Sandau, who, upon a prospectus being handed about proposing the
establishment of this company, was willing to become a member of the intended association. That
prospectus represented the company as in the course of being established. Three millions of money
were to be raised; no subscriber was to pay more than 50l. per share; and the first call was to be for
only 40s. on the share.
Now the history of these companies has been such, (and I have travelled a good deal among
them), that a lawyer, as this Plaintiff is, ought to have been not a little alarmed at parting with his
money to a body so formed. It is quite clear, that, in a commercial country like this, there may be many
undertakings and enterprises to which individual powers of mind or purse may be quite unequal; and
for such cases the constitution of the country has provided by giving the means of creating
corporations. It is within my own memory, that, when an application was made to parliament to
incorporate bodies, it was generally met with this short answer: “Why have you not gone to the crown
with your request? Why have you not obtained a charter?” However that mode of thinking has gone
by, and several acts of parliament have been passed, establishing companies similar to this one.
There were not many of those acts passed, before inconveniencies were found to follow. If a man
had occasion to bring an action against one of the bodies so constituted, he did not know how to
proceed, or against whom to bring his suit; and if he brought it, naming the Defendants who were
known to him, he was treated with a plea in abatement, which was a check-mate to his action. To meet
this inconvenience, it became necessary to introduce into those bills a clause, that the company should
sue and be sued by their clerk or secretary.
It was soon found that this provision did not set the matter right. The secretary on behalf of the
company sued a man of opulence; and, if he succeeded, he recovered not only judgment but payment
of the demand. On the other hand, when the secretary was sued, the person suing found, that, though
he had gotten an individual with whom he could go into a court of law or equity in order to enforce
a claim against him as defendant, yet, after he had gone thither, he frequently found that it would have
been better for him not to have stirred; for though the secretary, when he was Plaintiff, got the money
for which he sued, he was often unable, when made Defendant, to pay what the Plaintiff recovered.
That state of things suggested to a learned lord the necessity of making all the members liable, as
well as the secretary, for a demand against the company. Thus there arose a third class of acts of
parliament establishing companies; acts which made all the members, as well as the secretary, liable to
answer demands recovered against the company. Still this was not enough: for, as these acts did not
provide the means of letting the world know who the members were, the consequence was, that,
though all the members were liable, nobody, who had a claim against them, could tell, who the persons
were that were thus liable.
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Another improvement was therefore made. A proviso was introduced, requiring, that, before a
company was formed, or within a given time afterwards, there should be a register or enrolment of
the individuals of whom the company was composed; and it was thought, that thus, at last, the work
had been done completely, and that all was safe. Unfortunately, however, it turned out, in consequence
of sales and transfers of shares, that a person, who was a member of the company to-day, was not a
member of it to-morrow; the constituent members of the body were constantly changing; and a
Plaintiff did not know against whom to proceed, whether against the present or against former
members.
A further alteration was then made; the effect of which was, that those, who had been members,
should continue liable, although they had transferred their interest, and that those, who became
members, should also be liable; an enrolment of the names both of the one and of the other being
required. This had a very considerable operation; and it was wonderful to observe, how much, after it
was adopted, the passion for becoming members of these companies diminished.
One thing was still wanting. If the members of these bodies happened to quarrel among
themselves (which, though they came harmoniously together, was very likely to happen), how were
they to sue one another? And it was not till the latest stage of improvement, that that difficulty was
provided for. I believe it was in the act regulating the new banking establishments in Ireland that
provisions were for the first time made to meet all these difficulties; and similar provisions now form
part of the regulations, which are likely to take place in the banking establishments in England now in
contemplation.
There were some, (and many too, whose opinions were very well deserving of attention), who
declared,—that, if bodies were formed on such principles, that they could not, in the Courts of this
country and according to the laws of the country, effectually demand what they had a right to demand,
or be effectually sued for that for which they were liable —- the very circumstance of the existence
of that inability or incapacity, and the inconvenience or impracticability of dealing with them in a
court of justice, proved bodies of that kind to be illegal at common law. It was to make them legal,
that acts of parliament were passed containing one or more of the series of provisions which I have
mentioned.
In the present case the company was established by an act of parliament to this extent, — that an
act was passed to enable them to sue and be sued by their secretary or public officer; and, parliament
having given them a capacity to sue and be sued, it is too late to say that they exist illegally as a body.
But the capacity of suing and being sued, which the legislature has given them, does not in this case
remove the difficulty of suing; I do not mean, of going through the forms of suing, but of suing to
any rational purpose or with any good effect.
When application was made for the act of parliament, the jealousy of the legislature, with respect
to bodies of this kind being awakened, the committee of the House of Lords inquired, whether it
subsisted by any deed; and, and, if it did, called for proof of its existence and of its nature by the
production or that deed. And it was upon the faith of the deed produced being the deed which was
to constitute the company, that parliament passed the act. Thus it will come to be one great question,
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whether any man, calling himself a member of the company, can get himself out of the provisions
of the deed. The act was obtained by men who were the agents of those who had become or should
become members of the company; and the deed must be taken to have been presented to parliament
by those agents, on behalf of all who were or should become members, as the document which
shewed the constitution of the body. The Plaintiff contends, that a member may get himself out of
the obligations of that deed; and that, if he does not think fit to comply with all its clauses, he may
dissolve the company. That is one question; and it is a question which will depend very much on this
— whether it is possible to apply the common principles of partnership to such a state of
circumstances.
The bill proceeds on two grounds: one, that Mr. Van Sandau could by mere notice put an end to
the company; the other, that if notice alone was not sufficient for that purpose, yet there has been
such conduct on the part of the secretary and other members as to entitle the Plaintiff to call for a
dissolution; and, in either case, he prays that an account maybe taken of the partnership dealings and
transactions. Now, though, according to the law of the country, a company or partnership formed by
parties agreeing to become co-partners may be dissolved at any moment by one of the partners, and
though his co-partners cannot answer his notice of dissolution by saying, “Here is your money, get out
of the concern, and leave us to ourselves,” (because he has a right to have all the accounts of the
partnership dealings and transactions taken, up to that very moment); yet one difficulty which has
often occurred to me as of great weight in cases like the present, with reference to the dissolution of
the company by notice, is this : —what avails it that you give notice to A. B. of putting an end to the
company, if you do not give notice to the three hundred other individuals of whom it is composed?
Has not every one of these individuals the same common law right to notice, before the partnership
can be so dissolved? If, on the other hand, it is said, that it is not necessary to give notice to all the
partners, it must be on the ground that the deed has made some provision declaring that notice not
to be necessary, which, but for particular provisions, would be necessary; and that case must be proved
from the deed itself. But this Plaintiff asserts that the deed is not binding; and the deed, far from
giving any special right to dissolve the company, will, I apprehend, if looked into, be found to withhold
any such right.
I have made these observations on the substance of the case. Now look to the form of the
proceedings. The bill brings before the Court not only the directors but all the individual members, as
far as they are known to the Plaintiff, amounting to between two and three hundred. Now, can the
Plaintiff hope ever to bring to a conclusion a cause which is necessarily incumbered with so many
defendants? The share-holders, I take it, either by original contract or by what is found in the deed,
have or will have the right of selling their shares, subject or not subject, as the case may be, to
interposition by the directors; so that the interests may be changed from day to day. With the certainty
that individuals, who continue in existence, will thus cease to be members of the company, and that
those, who do not by their own acts withdraw from the partnership, will from time to time be removed
out of the world by death,—to say nothing of the other contingencies of human life, which will affect
the interests of individuals in the shares, —and with the necessity which will thus be created for a
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constant succession of bills of revivor and bills of supplement:— is it possible to hope, that a suit so
framed can ever come to a beneficial end?
I have not forgotten, that, in the course of the argument, Mr. Van Sandau stated, that, when he
got the answers of some of the Defendants, he could amend the bill by making it a bill on behalf of
himself and all others of the partners, except such of them as he should retain as Defendants. But in
my judgment that cannot be done.
Now if this suit should happen to appear to the Defendants to be as unmanageable for every
useful purpose as to me it appears to be, it is not surprising that they should be out of humour at
being visited with a suit, by which they and those who succeed them are to be kept in litigation in this
court for an unexampled period of time: and perhaps it is not the necessary conclusion, from any
intemperate words which they may use, that they mean to do gross injustice, when they seek to relieve
themselves from what they conceive to be great oppression. When we are looking at the motives of
the parties, there is a correspondence stated in the answers, which forms a material part of what is to
be considered in reference to those expressions disclosed in the affidavit, which have been represented
as manifesting a purpose of oppression, but which, in a milder way of stating the case, might be
regarded rather as the effect of irritation.
The Plaintiff has undoubtedly a right to come into this court, and may be very properly advised
to do so, though his suit may turn out to be such as cannot be maintained. For it would be a great deal
too much for counsel to take upon themselves to be judges, and telling the individual who applies to
them, that he cannot have relief, to refuse him the option of carrying his case into a court of justice,
or to withhold from him their assistance for that purpose. On the other hand, it is to be remembered,
that every subject has a right to conduct his defence in such manner and by such agents, so far as the
practice of the Court permits, as he may think proper. Whenever the cause comes to be heard, the
Court will not discharge its duty, if it does not take care that full compensation, for all that may have
been improper and oppressive in the conduct of the defence, be made to the party injured. But I dare
not interpose in this stage of the proceedings to punish that on which the imputation of oppression
is thrown, at the hazard of all the consequences that may follow in the future conduct of the suit. I
dare not go the length of directing inquiries, which call on individuals to lay open the whole materials
of their defence. The Court has never hitherto interfered in this stage of a cause by such an order as
the Vice-Chancellor has made here; and I will not make a precedent, not justified by any example or
principle which I know.
On these grounds, having before me fuller information in the cause than was presented to the
Court below, I cannot permit this order to stand.
Order discharged.
[Subsequently, the matter is brought back to the court to decide whether Plaintiff ’s bill against the
above-mentioned defendants may be dismissed without costs, on the application of the Plaintiff.]
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It wanted no authority to satisfy me that this Court has power, in proper cases, to dismiss a bill
without costs, on the application of the Plaintiff. If an authority were wanted on the subject, there
cannot be a clearer authority than the decision of Lord Thurlow in Knox v. Brawn…
Now the question is, —whether this is one of the cases, in which the Plaintiff ought to be
permitted, upon his own motion, to dismiss his bill without costs? As to the suggestion of directing
a reference to the Master, I do not see why the Court should be called upon to make any reference
with a view to modify the costs; for the Master cannot know more of the matter than the Court already
does.
I can well recollect the period when nobody thought of entering into a partnership with a number
of persons acting as a corporate body, unless under the authority of a charter or an Act of Parliament;
and it was always thought a very beneficial thing, that, when particular privileges and benefits were
given to bodies of men, the rest of the King's subjects should know with whom they had to deal
effectually, as often as it became necessary to enforce claims against such bodies, or to resist claims
made by them. This Court has departed in a certain degree from the strict application of its principles
in some of the cases in which it has permitted a few individuals to sue on behalf of themselves and
others; a departure, however, which affords an extremely salutary rule of practice, when a suit can be
so carried on with effect. But I may venture to say, that my predecessors were always of opinion, that,
if bodies of men, whether consisting, or not, of a great number of individuals, took upon themselves
to act as a corporation, no such form of record would do for them. There are, it is true, in this
metropolis, and throughout the country, a great many partnerships, consisting of a vast number of
persons: but they do not come into courts of justice; they act by a mutual understanding and a kind
of moral rule; and I believe that, in that way, they manage their affairs very well.
When these joint stock companies were first thought of, it is wonderful how little attention was
paid to their constitution. At first they were formed by a mere deed, though composed of a number
of persons too great to be brought into any of his Majesty's courts. Afterwards they were in the habit
of applying to the legislature for its sanction; and Lord Redesdale, after some experience of their effects,
took care to prevent any acts from being, passed, giving a legal existence to such bodies, unless there
were contained in them stipulations, that a memorial should be registered of the different individuals
who were partners in the concern. This did some good, but not enough; for though the memorial told
who the persons were with whom one had to deal, it gave you such a legion of names that it was to
no purpose to attempt to sue them all. Another mischief was, that the name, which was in the
memorial to-day, ceased to be in it before six months had expired; and those, who had claims on the
body, had no means of enforcing their remedies as against a person so withdrawing from the
association.
Then came the improvement of permitting the secretary or treasurer of these partnerships to sue
and be sued on behalf of the body. Unfortunately, however, it turned out, that the secretary, who sued
individuals, obtained payment from them; while, on the other hand, individuals, who sued the
secretary, got verdicts and judgments, and nothing more. This led to a further change, which made
every individual liable to execution, in consequence of a judgment recovered against the secretary.
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There was still one thing which had been totally overlooked. Though the secretary could sue and be
sued by an individual not a member of the company, there had not been devised any means by which
an individual, a member of the body, suing as an individual member, the other members, could
proceed. It was only in the course of the last year that this defect was removed.
I must here repeat that I have frequently ventured an opinion, in which I may be wrong (but in
expressing it I meant to do good), that the impossibility of suing with effect was with me a very strong
argument to prove, that such a constitution of a body could not be legal.
In the present case, the company consisting of a great number of persons, the plaintiff, who had
subscribed about 80l. to the speculation, filed his bill against the directors and the other members.
The solicitor of the directors, who, it is said, had previously used desperate threats, put in fourteen
answers, different and yet the same, and with the same schedules annexed to each. A motion was then
made before the Vice-Chancellor, which induced his Honour to direct a certain reference. When the
matter came before me, I was of opinion, that, if the master, upon the inquiries directed, had made a
report stating the result as the plaintiff would have wished him to state it; and if I had been asked,
what, under those circumstances, I was to do with the defendants; I should not have been able to have
said what I would have done. In fact my opinion was, that I should not have been able to have done
any thing upon the report: for the Court had not power to compel the defendants to put in a joint
answer; much less, when fourteen answers had been put in, had it power to take thirteen of them off
the file, or to melt them down into one, and to order the thirteen defendants to concur in and to swear
to that one answer. On the other hand, if the object of the reference were of a different nature, it was
at least expedient, before such inquiries went to the master, that the Court should have settled in its
own mind what it was to do, if the answer to the inquiries were such as he who applied for them
expected. If it were meant to be aimed against the solicitor, Mr. Wilks, that could not be done when
he was not brought personally before the court as solicitor; and I felt the more embarrassed, in
consequence of receiving information which the Vice-Chancellor did not possess. I found that the
fourteen answers were signed by the same counsel; and three or four as respectable counsel as ever
came into the court of chancery stood up in their places; one stating that he had advised the filing of
these fourteen answers, and the others that they had approved of it: how then could I visit the solicitor
for what had been done? If that sort of sanction will not do to let a solicitor go free out of this court,
I know not what sanction will.
It was said that this mode of conducting the defence had been adopted out of passion and
resentment, and that the Solicitor of the Defendant had threatened to have recourse to it, if Mr. Van
Sandau persisted in filing a bill. There was, however, no small degree of provocation that led to the
expressions, which have been so much relied upon as indicating an improper motive.
The point, then, that came to be considered was this: Could Mr. Van Sandau ever expect to
prosecute the suit with success, regard being had to the object with which the bill was filed? That he
had a right to ask the opinion of the Court upon the matter, I most readily admit; but it did appear to
me to be a suit which could have no end whatever; for the parties, who must be brought before the
Court, were so numerous, as to render it next to an impossibility that it could ever be brought to a
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conclusion, or made any use of, except as a means of expenditure in the shape of costs on the one
side or the other, until the parties were tired of it.
If I am right in this view of the suit, why am I to interfere to dismiss the bill, except on the
ordinary terms? If the Plaintiff has a mind to dismiss his bill in the usual way, let him do so; if he
does not, no order can be made upon this motion, except that he pay the costs of it.
__________________________________
Subsequently, the parties agreed to refer it to an arbitrator to settle the terms on which the Plaintiff
should be permitted to dismiss his bill.”
b. Duvergier v. Fellows (1828)91.

“Debt on the joint and several bond of the defendant, Jean Jacques Saint Mare and others, the
condition of which, as set out on oyer, appeared to be as [249] follows:—"Whereas the said Jean
Jacques Saint Mare, some time since, obtained three several letters-patent for the distillation of
potatoes; and whereas the said Jean Jacques Saint Mare, Stamp Brooksbank, and William Dorset
Fellows are now engaged in co-partnership together in carrying on a certain distillery to a very large
extent at Vauxhall, called the Belmont Distillery, according to the system and method of distilling, for
the use and exercise of which the said several letters patent were granted to the said Jean Jacques Saint
Mare, and which said distillery has been erected, set up, and established on certain leasehold premises
belonging to them the said Jean Jacques Saint Mare, Stamp Brooksbank, and William Dorset Fellows;
and whereas the said Jean Jacques Saint Mare, Stamp Brooksbank, and William Dorset Fellows have
it in contemplation to dispose of their shares and interest of, in, and to the said several patents, and
of, in, and to the distillery, premises, plant, and stock in trade in and upon the same, and to part with
the same to a company to be formed for that purpose; and whereas the said Jean Jacques Saint Mare,
Stamp Brooksbank, and William Dorset Fellows have applied to and requested Aime Duvergier to
exert his influence amongst his numerous connexions and friends, so as to form such company,
intended to be called "The Patent Distillery Company," who shall appoint directors and trustees for
the conduct and management of the said concern, which directors shall issue, under their hands and
seals, 10,000 shares of the value of 50l. each share; and whereas the said Aime Duvergier, in
consequence of his connexion with different merchants, brokers, traders and others in the city of
London, hath consented and agreed to form the said company, to be called “The Patent Distillery
Company,” among his own immediate connexions and friends, and to bring such [250] persons
together for the purpose of appointing directors and trustees for the government and management
of such distillery concern, and to procure purchasers for 9000 shares, of the value of 50l. each share;
and whereas the said Jean Jacques Saint Mare, Stamp Brooksbank, and William Dorset Fellows, in
order to induce the said Aime Duvergier to take the trouble of forming such company, and to use his
influence amongst his connexion and friends, and to indemnify him from the charges and expenses
91 5 Bing. 248. URL: http://goo.gl/jlyFS
236
that he may be put to in and about the same, have proposed and agreed, as soon as he or his executors
or administrators shall have effected such object, and procured purchasers for 9000 of such 50l. shares,
and obtained for such company the first call upon such shares of 5l. each, that they the said Jean
Jacques Saint Mare, Stamp Brooksbank, and William Dorset Fellows, their heirs, executors, or
administrators, or some or one of them, shall and will pay to the said Aime Duvergier, his executors,
administrators, or assigns, the full sum of 10,000l. sterling, by three equal payments or instalments of
3333l. 6s. 8d., viz. the sum of 3333l. 6s. 8d. so soon as the first instalment on such 9000 shares shall
have been paid, the sum of 3333l. 6s. 8d. so soon as the second instalment on the same shares shall
have been paid, and the remaining sum of 3333l. 6s. 8d. so soon as the third instalment of the same
shares shall have been paid; now, therefore, the condition of the above-written bond or obligation is
such, that if the above-bounden Jean Jacques Saint Mare, Stamp Brooksbank, and William Dorset
Fellows, their executors or administrators, or any or either of them, do and shall well and truly pay or
cause to be paid unto the above-named Aime Duvergier, his executors, administrators, or assigns, the
full sum of 10,000l. of lawful money of Great Britain, in manner following, that is to say, the sum of
3333l. 6s. 8d., part thereof, on the said Aime [251] Duvergier, his executors or administrators, forming
the said before-mentioned company, and procuring purchasers for such 9000 shares, and payment of
the first instalment or call thereon; the further sum of 3333l. 6s. 8d. on the second instalment on such
shares having been paid; and the remaining sum of 3333l. 6s. 8d. on the third instalment on the same
shares having been paid; then the above-written obligation to be void and of no effect, or else to be
and remain in full force and virtue.
The defendant, after sundry pleas, on which issue in fact was taken, pleaded, fifthly, actio non,
Because certain of the said several letters patent in the said condition of the said supposed writing
obligatory mentioned, were letters patent of our sovereign lord the King, under the great seal of the
United Kingdom of Great Britain and Ireland, bearing date at Westminster on a certain day, to wit,
on the twentieth day of March, in the fifth year of the reign of our lord the King, whereby, after
reciting, amongst other things, that the said Jean Jacques Saint Mare had, by his petition, humbly
represented unto our said lord the King, that he was in possession of an invention of improvements
in the process of an apparatus for distilling, our said lord the King gave and granted unto the said Jean
Jacques Saint Mare, his executors, administrators, and assigns, his especial license, full power, sole
privilege and authority, that he the said Jean Jacques Saint Mare, his executors, administrators, and
assigns, and every of them, by himself and themselves, or by his and their deputy or deputies, servants
or agents, or such others as he the said Jean Jacques Saint Mare, his executors, administrators, or
assigns, should at any time agree with, and no other, from time to time, and at all times thereafter,
during the term of years therein expressed, should, and lawfully might, make, use, exercise, and vend
the said invention within that part of the [252] United Kingdom of Great Britain and Ireland called
England, our said lord the King's dominion of Wales, and town of Berwick-upon-Tweed, in such
manner as to him the said Jean Jacques Saint Mare, his executors, administrators, and assigns, or any
of them, should in his or their discretion seem meet, and that he the said Jean Jacques Saint Mare, his
executors, administrators, and assigns, should, and lawfully might, have and enjoy the whole profit,
benefit, commodity, and advantage from time to time coming, growing, accruing, and arising by reason
of the said invention, for and during the term of years therein mentioned; to have, hold, exercise, and
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enjoy the said license, powers, privileges, and advantages therein-before granted or mentioned to be
granted unto the said Jean Jacques Saint Mare, for and during and unto the full end and term of
fourteen years from- the date of the said last mentioned letters patent next and immediately ensuing,
and fully to be complete and ended according to the statute in such case made and provided: and it
was by the said letters patent provided, and the same were declared to be upon the express condition
that if the said Jean Jacques Saint Mare, his executors or administrators, or any person or persons who
should or might, at any time or times thereafter during the continuance of that grant, have or claim
any right, title, or interest in law or equity of, in, or to the power, privilege, and authority of the sole
use and benefit of the said invention thereby granted, should make any transfer or assignment, or any
pretended transfer or assignment of the said liberty and privilege, or any share or shares of the benefit
or profit thereof, or should declare any trust thereof to or for any number of persons exceeding the
number of five, or should open, or cause to be opened, any book or books for public subscription to
be made by any number of persons exceeding the number of five, in order to the raising any sum or
sums of money under pretence of carrying on the [253] said liberty or privilege thereby granted, or
should by him or themselves, or his or their agents or servants, receive any sum or sums of money
whatsoever, of any number of persons exceeding in the whole the number of five, for such or the
like intents and purposes, or should presume to act as a corporate body, or should divide the benefit
of the said last-mentioned letters patent or the liberties and privileges thereby granted, unto any
number of shares exceeding the number of five, or should commit or do, or procure to be committed
or done any act, matter, or thing whatsoever, during such time as such person or persons should have
any right or title, either in law or equity, in or to the same premises, which would be contrary to the
true intent and meaning of a certain act of parliament made in the sixth year of the reign of the late
King George the First, intituled "An act for better securing certain powers and privileges intended to
be granted by his Majesty by two charters for assurance of ships and merchandizes at sea, and for
lending money upon bottomry, and for restraining several extravagant and unwarrantable practices
therein mentioned," or in case the said power, privilege, or authority should at any time thereafter
become vested in, or in trust for more than the number of five persons or their representatives at any
one time, reckoning executors or administrators as and for the single person whom they represent as
to such interest as they were or should be entitled to in, right of such their testator or intestate, that,
then and in any of the said cases those letters patent, and all liberties and advantages whatsoever
thereby granted, should utterly cease and become void, any thing therein before contained to the
contrary thereof in anywise notwithstanding; 33, by the said letters patent, which said letters patent
the defendant brought into Court, might more fully appear: and the said defendant further said, that
others of the said letters patent, in the [254] said condition of the said writing obligatory mentioned,
were and are certain letters patent of our said lord the King, under the seal of our said lord the King
appointed by the treaty of union to be used instead of the grand seal of Scotland, bearing date on a
certain day, to wit, the 26th day of February, in the 5th year aforesaid; by which last-mentioned letters
patent our said lord the King gave and granted to the said Jean Jacques Saint Mare, his executors,
administrators, and assigns, by themselves or such other person as he or they might appoint or agree
with, and no others, from time to time and at all times thereafter, during the term of years in the said
last-mentioned letters patent expressed, that they might lawfully make, use, exercise, and vend an
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invention therein mentioned, of improvements in the process of, and apparatus for, distilling, within
that part of the United Kingdom of Great Britain and Ireland called Scotland, in such manner as to
the said Jean Jacques Saint Mare, his executors, administrators, and assigns, or any of them, should in
his discretion seem meet:
Then followed the extent and conditions of the Scotch patent, which were the same as in the
patent for England.
And the said defendant further said, that the said several terms of fourteen years each in the said
letters patent mentioned, at the time of the making of the said supposed writing obligatory, were, and
yet are, unexpired, and that the said company, in the said condition of the said supposed writing
obligatory mentioned, was meant and intended by the said Jean Jacques Saint Mare, the said plaintiff,
and defendant, at the time of making of the said supposed writing obligatory, to consist of more than
five persons, to wit, 10,000 persons, and to be formed for the purposes, amongst other things, of
using, exercising, and enjoying the said exclusive liberties and privileges in the said two several letters
patent in the said condition,, and in this plea mentioned, for the use [255] and benefit of the said
persons so exceeding the number of five, in that part of the said United Kingdom called England,
and in that part thereof called Scotland respectively, under colour of the said letters patent respectively,
to wit, at, &c. and so the defendant said, that the said supposed writing obligatory was and is void in
law, and this the said defendant was ready to verify; wherefore, &c.
The defendant pleaded, sixthly, actio non, because certain of the said several letters patent in the
said condition of the said supposed writing obligatory mentioned were letters patent of our sovereign
lord the now King, under the great seal of the United Kingdom of Great Britain and Ireland, bearing
date at Westminster, on a certain day, to wit, the 20th day of March, in the fifth year of the reign of
our sovereign lord the King, containing the like matters and things, and the like proviso and to the
same effect as the said letters patent in the said fifth plea first mentioned, as by the said letters patent
which the said defendant produced to the court might more fully appear; and the defendant further
said, that the said term of fourteen years in the said last mentioned letters patent mentioned, at the
time of the making of the said supposed writing obligatory, was, and yet is, unexpired, and that the
said company in the said condition of the said supposed writing obligatory mentioned was at the time
of the making thereof intended by the said plaintiff and defendant to consist of more than five
persons, to wit, 10,000 persons, and to be formed for the purpose, amongst other things, of using,
exercising, and enjoying the said exclusive liberties and privileges in the said last mentioned letters
patent mentioned, for the use and benefit of the said persons so exceeding the number of five, in that
part of the United Kingdom called England, under colour of the said last mentioned letters patent:
by means of which premises in this plea mentioned the said supposed writing obligatory was and is
wholly void, and this the said defendant was ready to verify, wherefore, &c.
The defendant pleaded, seventhly, and lastly, that certain of the said letters patent in the said
condition of the said supposed writing obligatory mentioned were letters patent of our sovereign lord
the now King, under the great seal of the United Kingdom of Great Britain and Ireland, bearing date
at Westminster, on a certain day, to wit, the 20th day of March, in the fifth year of the reign of our
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said lord the King, containing therein the like matters and things, and the like proviso, and to the same
effect, as the said letters patent in the said fifth plea first mentioned, as by the said last mentioned
letters patent, which the said defendant produced to the court, might more fully appear; and the
defendant further said, that the said term of fourteen years in the said last mentioned letters patent
mentioned at the time of the making of the said supposed writing obligatory, was, and yet is,
unexpired, and that the said company in the said condition of the said supposed writing obligatory
mentioned was by the said Jean Jacques Saint Mare, the said Stamp Brooksbank, the said defendant,
and the said plaintiff intended at the time of the making the said supposed writing obligatory to
consist of more than five persons, and to be formed for the purpose, amongst other things, of using,
exercising, and enjoying the said exclusive liberties and privileges in the said last mentioned letters
patent mentioned, for the use and benefit of the said persons so exceeding the number of five, in that
part of the United Kingdom called England, under colour of the said letters patent, and of the acting
as a corporate body, and dividing the benefit of the said last mentioned letters patent, and the liberties
and privileges thereby granted, into divers shares, exceeding the number of five, to wit, [257] 10,000
shares, to be transferable and assignable, without any charter from our lord the King, and that, before
the time of the making of the said supposed writing obligatory, to wit, on, &c.,at, &c, it was corruptly
and illegally agreed, by and between the said plaintiff and the said Jean Jacques Saint Mare, the said
Stamp Brooksbank and the said defendant, that the said plaintiff should form such company, as in
this plea mentioned, for the purpose in this plea mentioned, and should sell and dispose of divers, to
wit, 9000 of such shares as in this plea mentioned, being the shares in the said condition of the said
supposed writing obligatory mentioned, and should cause divers large sums of money to be subscribed
by public subscription by numbers of persons exceeding five, to wit, 9000 persons, in order to the
raising a large sum of money, to wit, 450,000l., under pretence of carrying on the said liberty or
privilege (amongst other-things) by the said last mentioned letters patent granted; such money to be
in part received by the said Jean Jacques Saint Mare, Stamp Brooksbank, and the said defendant, for
the purpose of carrying on the said liberty and privilege for the benefit of the said last mentioned
persons, so exceeding five; and that the said Jean Jacques Saint Mare, the said Stamp Brooksbank, and
the said defendant, should, in consideration thereof, pay to the said plaintiff the sum of 10,000l. of
lawful money of Great Britain, in the manner in the said condition of the said supposed writing
obligatory mentioned; and that for securing the payment of the sum of 10,000l. the said defendant
should make and seal, and as his act and deed deliver to the said plaintiff a writing obligatory, in the
penal sum of 10,200l., conditioned for the payment of the said sum of 10,000l. in manner aforesaid:
and the defendant further said, that in pursuance of the said corrupt and unlawful agreement, the said
defendant [258] afterwards, to wit, on, &c, at, &c, made and sealed, and as his act and deed delivered
the said supposed , writing obligatory in the said declaration mentioned, and the said plaintiff then
and there accepted and received the same of and from the said defendant, upon the said corrupt and
unlawful agreement: by means of which premises in this plea mentioned the said supposed writing
obligatory was and is wholly void, and this the said defendant was ready to verify, wherefore, &c.
Demurrer inde, and joinder.
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Wilde Serjt. in support of the demurrer. The substance of the seventh plea (which comprehends
also the matters contained in the fifth and sixth) is, that it was intended by the parties to do certain
acts, and, among them, to form a company which should act as a corporate body, and should transfer
and assign shares without charter from the crown.
But a mere allegation of intention is not sufficient to show that the bond was void, for the
intention to commit an illegal act is not necessarily followed by commission. If such an allegation be
sufficient, every existing corporation is open to the same objection, for there is none of which it may
not be predicated that before becoming a corporation it intended to become a corporation. The
intention, however, might be perfectly legal, for the parties might intend to become a corporation by
procuring an act of parliament for the purpose: a mode of becoming so, which is recognized in 6 G.
2. c. 18.; and when the defendant might have obtained such an act himself, it is not for him to object
that the plaintiff did not obtain it: therefore in Haines v. Busk, 5 Taunt. 521, where, in an action for
brokerage, the defence was, that the voyage [259] undertaken was illegal for want of a licence, the
Court held, that as the defendant ought to have procured the licence, he should not take advantage of
the want of it. Nor is it sufficiently shewn that the acts intended were illegal. The defendant should
have specified what the acts were, in order that the Court might judge whether they were acts peculiar
to a corporate body or not. The defendant might have been in error in supposing that certain acts
which he had in view were exclusively acts of a corporate body.
Acting as a corporate body, for instance, in private matters, would not render the parties liable to
a quo warranto; as, in the matter of a warren; Rex v. Cann, Andr. 15. At all events, by making the
allegation in this general way, the defendant offers matters of law to be tried by a jury. He ought to
have afforded the plaintiff an opportunity of taking issue on the acts impugned, and on the means by
which it might be proposed to justify them. The only act specified is, that it was intended the proposed
company should transfer and assign shares without charter from the King. But there is nothing illegal
in that. It might have been intended to transfer them under an act of parliament to be procured for
the purpose; and even without that, the mere transfer would not be in itself illegal, but only a symptom
that the body transferring was an illegal combination: Rex v. Webb and others, 14 East, 406. The transfer
would be legal, if the assignee took it subject to the original covenants: Pratt v. Hutchinson, 15 East,
511. A share in a partnership may be sold under an execution, and the assignees of a bankrupt may
carry on his trade. At all events a partner may assign the whole of his interest, although it may depend
on the terms of the partnership whether the assignee shall carry on business with the others or not.
[260] In Josephs v. Pebrer, 3 B. & C. 639, where a contract for shares in a joint stock company was
held void, the company was formed; and the case was argued on the provisions of 6 G. 1. c. 18., which
has since been repealed.
Taddy Serjt. contra. The demurrer admits that it was intended the company should act as a
corporate body, and should transfer shares without a charter from the crown; and that it was corruptly
and illegally agreed between the plaintiff and the defendant that the plaintiff should form the company
for those purposes. With such an admission, it would have been superfluous to have specified what
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particular acts of a corporate body the company was to perform; for if it was corruptly and illegally
agreed, it could not have been intended that the company should act legally as a corporation.
But the allegation that it was intended the company should act as a corporate body is sufficiently
explicit, without specifying particular acts. The Courts take judicial notice of the functions and
privileges of corporate bodies as enumerated in Com. Dig. Franch. F. 1. 9 Rep. 25 b. 10 Rep. 33 b.
Connecting the seventh plea with the condition in the bond and the patent, it is clear the
transaction was illegal, even at common law.
The patent is declared on the face of it to be void, if, by any contrivance, assigned for the benefit
of more than five persons: by the condition of the bond the plaintiff was to procure purchasers for
10,000 shares in the projected company, who were to conduct the process described in the patent: by
that one act the patent would have become void, and the purchasers would have paid their money for
nothing: upon the face of the plea the agreement appears to have been a manifest fraud on [261] the
public, and the agreement is therefore void, as being inconvenient and contrary to public policy, as the
patent would also be, if attended with ill effects: 3 Inst. 184. But the extensive transfer of shares is of
itself inconvenient and illegal. A chose in action cannot be transferred. That rule was originally
established to prevent maintenance; Co. Lit. 214 a. 266 a.; and though maintenance be less dreaded in
modern times, suitors who have to contend against the joint stock purse of an opulent company are
exposed to the effects of disparity of means not experienced in contests between individuals.
Notwithstanding the stat. 6 G. 1. c. 18. has been repealed, an agreement such as that described in
this plea is illegal at common law, as tending to the prejudice and grievance of the King's subjects.
"The necessary effect of such a practice (the transfer of shares) is to introduce gaming and rash
speculation to a ruinous extent: in such transactions one cannot gain unless another loses; whereas in
fair mercantile transactions each party, in the ordinary course of things, reaps a profit in his turn. In
this case the association appears to be one of which the effect cannot but be mischievous." Per Abbott,
C.J. in Josephs v. Pebrer. In Kinder v. Taylor (a) Lord Eldon threw some doubt upon Rex v. Webb; that case,
he said, “was scanty in argument, and the common law was not considered in it, because it was an
indictment upon the statute. He spoke with all respect of Lord Ellenborough, who had decided the case,
and whose memory he venerated as a lawyer; but he should have been glad if his Lordship had taken
the trouble to state what was assuming to act as a corporation. For many [262] considerations, it would
have been very fortunate, if the Court had then looked at this as a distinct question, and had been
good enough to declare, 'this is not acting as a corporation, because to act as a corporation you must
act so and so.' It now, however, became necessary to declare, either by legal judgment or by a
declaratory act of parliament, what was the meaning of presuming to act as a corporation; and by
whomsoever it was declared, not only what was doing, but what had been done, must be attentively
regarded. It was for this reason, he thought, that the King v. Webb called for further explanation.” “His
opinion might be of use to nobody, but it was as well that the world should know it:” “That opinion
was, and he had taken some trouble to consider the question, that if it could satisfactorily be made
out to a jury that a party was opening books, raising a premium upon the shares, and then took care
to get himself out of the scrape, that was an indictable offence.” Such a company is illegal, even when
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formed for useful purposes; as, for carrying on a private brewery; Buck v. Buck, 1 Camp. 547. And it
cannot be argued that the plaintiff was ignorant of the proviso limiting the assignment of the patent
to five, for the patent is referred to in the condition of the bond on which he sues. If the transaction
between him and the defendant had gone but a little further, it had been an indictable offence: Rex v.
Stratton and Others, 1 Camp. 549.
Wilde. The clear intention of the parties was to find purchasers for the premises where the distillery
was carried on, and for the business. The transfer of the patent was not the object of the transaction,
but the transfer of the business, which could not be transferred without communicating a knowledge
of the process by which it was carried on; and it was necessary that the [263] assignees should by
some means be protected against any charge of infringing the patent-right of the assignor. There is
nothing illegal in transferring shares in a business, subject to the original liabilities, and there was
nothing in this business prejudicial to the public interests. But the transfer of shares, and the raising a
capital by subscriptions, are in effect the only objections made by this plea against the intended
company; and with regard to the latter, even under 6 G. 1. c. IS., Lord Ellenborough says, in Rex v. Webb
and Others, "We think it impossible to say that it makes a substantive offence to raise a large capital by
small subscriptions, without any regard to the nature and quality of the objects for which the capital
is raised."
It nowhere appears in the pleadings that the plaintiff was aware of the proviso which rendered
the patent void upon transfer to more than five, and there is no law which requires that such a proviso
shall be inserted in a patent.
Cur. adv. vult.
BEST C. J. now delivered the judgment of the Court; and after reading the pleadings, and
particularly adverting to the condition of the bond, and the terms of the patent, as set forth ante, p.
438, proceeded as follows:—
It appears from the condition of the bond that the plaintiff was not entitled to any part of the
10,000l., which the obligors had bound themselves to pay him, until he had formed a company, and
procured purchasers for 9000 shares, and payment of the first instalments or calls on those shares.
The forming the company, the selling 9000 shares of what was to be called the stock of such company,
and the prevailing on the purchasers to pay one third of their subscriptions, or 150,000l., is a condition
precedent to the plaintiff 's right of action.
The proviso contained in the patent shews that the [264] plaintiff cannot perform this condition
without committing a fraud on a vast number of persons, and that if he could obtain any subscriptions,
the subscribers would be entitled to recover back the money paid on them, as being obtained by fraud,
or as money paid without consideration. The moment the company was formed, and the patents were
transferred to them, they would cease to exist as legal patents, for they would be destroyed by any
assignment to more than five persons, or to any persons in trust for more than five persons. The
condition of the bond shews, that the patents were to be assigned to a company to be formed by
subscription, and the shares in which were to be transferable. Any one of these circumstances would
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render the patents void. This difficulty was felt by the counsel for the plaintiff, and he attempted to
extricate his client from it by insisting that it was not intended to convey the exclusive right of distilling
spirits from potatoes, secured by the patent, but only to free the intended company from being liable
to the patentee for using his invention. But it is clear from the terms of the bond that the object of
the parties was not to destroy the patents, but that they professed to assign the privilege granted by
them to the company which the plaintiff was to form.
The words of the condition of the bond are, “have it in contemplation to dispose of their interest
of, in, and to the several patents, and of, in, and to the premises and stock in trade, and to part with
the same to a company.” These terms indicate an intention not to destroy, but to transfer unimpaired
the monopoly secured by the patents. But it has been said it does not appear from the pleadings that
the plaintiff knew of this proviso in the patents, and that the insertion of such a proviso in patents is
not required by any law. But we must presume that he knew the contents of the patents referred to by
the bond on which he brings his action; [265] of the patents which, it appears by the same bond, he
undertakes the sale in the manner stated in that bond. Every man who undertakes to do a thing must
be presumed to know what he undertakes, unless he can shew that he has been deceived by the other
party. How could he undertake to negotiate for the sale of the patents, unless he had seen them and
knew their contents?
If the plaintiff knew the terms on which the patents were granted, he must know that what he
undertook to do could not be done. As he cannot legally perform his part of the contract, he never
can be in a condition to recover the compensation stipulated to be paid on its full and complete
performance. There are some old authorities which say, that if a man binds himself by the condition
of his bond to do what at the time he executed the bond it was impossible for him to do, the bond
shall be considered as without condition, and the obligee may recover the penalty. These authorities
are rather opposed to the plaintiff's claim; they apply only to cases where there is nothing to be done
by the obligee; here the plaintiff must do something before the bond can be enforced. If what he is
to do can never be legally done, the instrument must be inoperative. The plaintiff not having
performed the first condition, can never have a right of action on it. The situation of the plaintiff in
this case, is like that of the defendants in the cases alluded to. It is his fault that he has undertaken
what he cannot perform. In Pullerton v.Agnew, 1 Salk. 172, Holt C. J. said, “Where the condition is
underwritten or indorsed, there that only is void, and the obligation is single, but where the condition
is part of the lien itself, and incorporated therewith, if the condition be impossible, the obligation is
void.” In the case before us, the service of the plaintiff, and payment [265] for it by the defendant,
are incorporated together, and if the service cannot be performed, the whole instrument is a nullity.
But it is apparent from the facts disclosed by the condition of this bond and the patents that the
scheme in which the parties to this action were engaged was one of those bubbles by which, to the
disgrace of the present age, a few projectors have obtained the money of a great number of ignorant
and credulous persons, to the ruin of those dupes and their families, and by which a passion for
gambling has been excited, that has been most injurious to commerce and to the morals of the people.
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What any one must discover from reading the instruments, the parties to them must be fully
informed of. It cannot be too well known, that there is no place for persons engaged in such
transactions in courts appointed for the decision of civil causes. Although the statute of 6 G. 1. be
repealed, the common law relating to such schemes is expressly reserved by the repealing statute, and
no one doubts, if it can be shewn, as it easily may, that such schemes are fraud-traps, and injurious to
the public welfare, that the forming of them is an indictable offence at the common law.
The seventh plea states, and the demurrer admits, that the plaintiff and the defendant intended
that the company which the plaintiff undertook to form should act as a corporate body without any
charter from the King, and that the benefit of the letters patent were to be enjoyed by this pretended
corporate body, and that the capital of this body was to be divided into 10,000 shares, which were to
be transferable and assignable.
It has been said at the bar, that the parties might intend to obtain an act of parliament to give this
body a legal existence. Nothing of this intention appears on the record.
[267] It has been further said, that the defendant should have shewn how the parties intended to
act as a corporation. If this is not correctly pleaded, advantage should have been taken of the technical
defect by special demurrer. If what they intended to do would not have been acting as a corporation,
they should have traversed the plea. By demurring, the plaintiff has confessed himself guilty of
intending to form a company that was to act as a corporation.
But the shares were to be transferable. There can be no transferable shares of any stock except
the stock of corporations, or of joint-stock companies created by acts of parliament. When it is said
the shares were to be transferable, that must mean, that the assignee was to be placed in the precise
situation that the assignor stood in before the assignment; that the assignee was to have all the rights
of the assignor, and to take upon him all his liability. Now the assignee can join in no action for a
cause of action that accrued before the assignment. Such rights of action must still remain in the
assignor, who, notwithstanding he has retired from the company, will still remain liable for every debt
contracted by the company before he ceased to be a member. Indeed, the members of corporations
cannot assign their interest, and force their assignees into the corporation, without the authority of an
act of parliament. Such authority is expressly given by the bank acts, the South Sea acts, and by other
statutes creating companies that possessed stock, which it was deemed proper to be rendered
transferable.
The pretending to be possessed of transferable stock is pretending to act as a corporation, and
pretending to possess a privilege which does not belong to many corporations. But this is put only as
one of the proofs of the intention of the projectors of this company that it should act as a
corporation. It is not necessary on these pleadings to decide whether the forming a [268] company
with such shares is of itself, without other circumstances, pretending to act as a corporation; because,
it is by the pleadings distinctly admitted, that the plaintiff and defendant intended that the company
should act as a corporation. Persons who, without the sanction of the legislature, presume to act as a
corporation, are guilty of a contempt of the King, by usurping on his prerogative. By the 9th of Anne,
c. 20, the Court may not only give judgment of ouster, but may fine a defendant convicted on a quo
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warranto. This shews that the usurpation is considered as a criminal act. But it has been insisted, that
the usurpation is only criminal where a party, without authority, acts in a public office, and that the
pretended corporation which these parties were to set up did not affect the public, but was a scheme
with which certain individuals only were connected. Most of the statutes relative to quo warrantos, from
the statute of Gloucester down to the 9th of Anne inclusive, have the words offices and franchises.
Franchises are privileges for the advantage of individuals. In Com. Dig. title Quo Warranto, many things
are mentioned as matters for which quo warranto will lie, which are valuable only to the individuals
who claim them against the crown, and are not connected with any public duty. But it concerns the
public that bodies, composed of a great number of persons with large disposable capitals, should not
be formed without the authority of the crown, and subject to such regulations as the King in his
wisdom may deem necessary for the public security.
The acting as such a corporation, without charter from the crown, is contrary to law, and no man
can maintain an action on a bond given to secure payment of a compensation to the obligee for the
formation of any such pretended corporations. For these reasons, judgment must be for the
defendant.
Judgment for defendant accordingly.”
c. Walburn v. Ingilby (1833)92

“The bill stated that about the close of the year 1824, a joint stock company was formed by certain
individuals in London, who afterwards became directors of the company, for the purpose of working
valuable mines of gold, silver, and other metals, in the province of Potosi la Paz, and elsewhere in Peru:
and it set forth a prospectus issued by the directors in April 1825, announcing to the public the nature
and objects of the association. This prospectus was headed “Potosi la Paz and Peruvian Mining
Association; the capital to be 1,000,000l. sterling; President, Don Juan Garcia del Rio, late Minister
Plenipotentiary for Peru to the Courts of Europe; Vice President, General James Parosien, also late
Minister Plenipotentiary from Peru to the Courts of Europe;” and, after describing in strong terms
the favourable circumstances under which the company was established, and the advantages which it
held out to speculators for a profitable investment of capital, and specifying the names of the persons
in whom, as directors, auditors, bankers, secretaries, and agents, the management of the concern was
vested, it proceeded [62] to explain the proposed constitution and regulations of the association, and
the conditions upon which the public were invited to become shareholders, in the following manner:
“The capital is to be 1,000,000l. sterling, divided into 20,000 shares of 50l. each: the first instalment
of 5l. per share is to be paid on or before the 30th of April instant, into the hands of either of the
bankers of the association, to the account of the directors, and the remaining 45l. per share by such
instalments as may be from time to time required by the directors, upon their giving twenty-one days
previous notice of each call. Qualification of a director thirty shares; of an auditor twenty shares. At
all meetings of shareholders each proprietor of ten shares to have one vote; of twenty and upwards,
92 l Myl. & K. 61. URL: http://goo.gl/B6obT
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two votes: after the first six months from the date of the deed of association, shares shall not be
considered a qualification for voting until held for six calendar months. The directors are to appoint
three trustees from among themselves, in whose names all investments are to be made. The present
directors are to remain in office for the first five years; at the expiration of that time three are to go
out annually, but will be re-eligible. The capital may be increased, if deemed advisable by the directors
for the time being, and approved by a majority of the votes of the shareholders present at a general
meeting convened for that purpose. As soon as the directors shall consider that the concerns of the
association are sufficiently advanced to enable them to report thereon, a special meeting of the
proprietors is to be convened. Subsequently, a general meeting is to be held annually, when the
progress and state of the concerns are to be reported to them. The first dividend is to be made as
soon as a profit of 5l. per cent. has been realized; and subsequently, as circumstances may admit. No
shares are to be sold or transferred, nor shall any proprietor be entitled to vote, until he shall [63] have
paid all the previous calls thereon. No transfer made by a proprietor shall be valid at law or in equity,
unless the purchaser shall have approved by or under the authority of a board of directors, and the
purchaser shall have executed a proper instrument to bind him to the observance of the regulations
of the association. Provision is to be contained in all engagements to be entered into by the directors
in behalf of the association, that no shareholder shall be subject or liable beyond the amount of his
share or shares. A deed is preparing, and, when approved by a majority in number of directors, is to
be the deed for establishing the association; and it is to contain such covenants, resolutions, provisoes,
powers of reference to arbitrators, regulations for managing the concerns, forfeiture of shares, and
dissolution of the association, and such other powers, stipulations, conditions and clauses, as the
directors, or major part in number of them, shall deem best adapted to effectuate the object of the
association. The deed is to be executed by each proprietor within twenty-one days after notice shall
have been given in the London Gazette, and two daily newspapers, of its being ready for signature,
on penalty of the forfeiture of the shares allotted to him, and of the instalment paid thereon. The
deed is to be subsequently enrolled in the High Court of Chancery.”
The bill then stated that the Defendants, together with Hunter, who had since become bankrupt,
and obtained his certificate, were the original directors, and still continued to be directors of the
association, and that in that character they had ever since continued to possess the exclusive
management of the association; that they opened a banking account with Curtis and Co., and Glynn
and Co., in behalf of the association, and that all [64] monies paid in respect of the association were
placed to their account with those banking houses, as such directors. That a great number of persons
were induced by the confidence they had in the directors, who were men of great credit and
respectability in London, and by the favourable accounts given in the prospectus, to make application
for shares in the association, and that the number of shares so applied for and issued, amounted to
11,210. That when any person became a share-holder, he received from the directors a written paper,
stating the number of shares he held, and on taking that paper to the bankers, and paying the first
instalment of 5l. on each share, he received in exchange for it a scrip receipt in the following form:—
“No. Potosi la Paz and Peruvian Mining Association. Received the day of 182 of the Directors
of the Potosi La Paz and Peruvian Mining Association, the sum of l. to account for on demand.”
That the proprietors of the aforesaid 11,210 shares accordingly paid into one or other of the banking
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houses the first instalment of 5l. on their several shares, and received in exchange paper scrip receipts,
and the sums so paid were carried to the account of the directors with such banking houses. That the
plaintiff purchased at various times, for valuable consideration, 2,000 of the 11,210 shares, upon which
2000 shares the said first instalment of 5l. per share had been duly paid, and he had ever since been,
and now was the holder of such shares.
The bill went on to state that the application for shares, before and after they were appropriated
and allotted, became general and urgent, and that the scrip receipt in a short time rose greatly in value,
and before the said shares were appropriated, the same bore a premium of from 4 to 9 per cent., and
after the appropriation [65] was made the scrip receipts bore a premium of 10 per cent.
The bill further stated, that since the Plaintiff became a shareholder, and very lately, he had
discovered, that on finding the rise which had taken place in the value of the stock, the directors, in
pursuance of a private agreement among themselves, kept back and retained the remaining 8,790
shares, with a view to apply to their joint use and benefit the profits to be made upon the shares so
retained, and they appropriated to applicants 11,210 shares only, although the demand on the part of
the public would have exhausted a supply of 50,000 shares and upwards: That subsequently to the
appropriation of those 11,210 shares, various persons applied to the directors for the purpose of
having some of the remaining 8,790 shares allotted to them, and would have paid the requisite
instalments thereupon, but that the directors untruly stated, in answer to such applications, that the
whole of the 20,000 shares, of which the stock of the association consisted, had been already disposed
of.
The bill charged, that it was the duty of the directors to have paid up the instalments of 5l. upon
the retained shares, but that they had never made any payments into the banking houses of the
association on that account, and that the first instalment upon those shares remained wholly unpaid:
that the funds of the association were greatly diminished in consequence of such conduct, and that
the deficiency of the proposed capital was one of the causes of the association not being properly
carried on: that the directors being unwilling to pay the first instalment on the retained shares, and to
bring them into the market while they were at a discount, [66] entered into an arrangement among
themselves, by which they expected to defraud the Plaintiff, and the other bona fide shareholders, with
a view to enhance the value of the 8790 retained shares, and to obtain an opportunity of disposing
of them to their own advantage.
That in pursuance of that arrangement, they determined to reduce the whole number of shares
in the association from 20,000 to 10,000, and the value of each share from 50l. to 15l.; and in order
to give a colour to the reduction, and to deceive the public and the bona fide shareholders, they caused
an advertisement to be inserted in the Times newspaper of the 28th of April 1827, as follows:—
“Potosi La Paz and Peruvian Mining Association.” Notice is hereby given, that it has been resolved by a
great majority of the proprietors of this association to reduce the number of shares from 20,000, of
50l. each, to 10,000 of 15l. each, by which the capital will be limited to 150,000l. instead of 1,000,000l.
This resolution the directors have no hesitation to comply with, as the nature of the contracts of the
mines render the amount of the original capital unnecessary. The holders of the bankers’ receipts are
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therefore requested to apply at the office of the association, No. 1, Great Winchester Street, for the
purpose of exchanging such receipts for consolidated shares, any day between the hours of ten and
four o'clock, on or after the 7th of May next. By order of the board,
John Channon, Secretary.”
The bill further charged that no meeting of the proprietors took place preparatory to the said
change, and that the assertion that the change was resolved on by a great majority of the proprietors
was untrue: that the directors formed the design of selling in the shape [67] of consolidated shares
the 8790 shares which they had retained, and on which no instalments had been paid; and that they
accordingly, in the month of April 1827, signed upwards of 5000 consolidated shares, and left them
with their secretary for the purpose of being disposed of.
That the consolidated shares were in form as follows: “Potosi La Paz and Peruvian Mining
Association, one share, capital limited to 150,000l., consolidated share 15l., London, April 1827. This is
to certify that the bearer is a proprietor of the share No. , in the capital of the Potosi La Paz
and Peruvian Mining Association, in April 1825, upon which 10l. has been paid, which share is
exchanged for receipt No. , signed by three Directors. Entered,
John Channon, Secretary."
That the directors, in furtherance of the aforesaid arrangement, entered into extensive
speculations with respect to consolidated shares, and employed certain agents, whose names were
unknown to the Plaintiff, who were to watch the value of those shares in the market, and to sell them
when the price was at the highest, for the benefit of the directors, and that 4000 and upwards of such
shares were sold accordingly, and the profits arising therefrom received by the directors for their joint
use and benefit.
That each of such consolidated shares represented that the instalments of 10l. had been paid
thereon, and that the same was exchanged for receipts as herein-before set forth, but that such
representations were untrue. That scrip receipts for 2000 shares were sent in by bona fide holders, and
were exchanged for 1000 consolidated shares, and that the [68] Plaintiff at various times became the
holder for valuable consideration of 1000 consolidated shares, for which scrip receipts appeared to
have been duly exchanged by the bona fide holders thereof, and that he had ever since been, and then
was, the holder of such consolidated shares.
The bill also contained a charge that the shareholders were so numerous that they could not be
made parties to the suit, and that their names and places of abode were unknown to the Plaintiff.
The bill prayed a declaration that the directors had been guilty of a fraud upon the Plaintiff and
the other shareholders in not paying up the instalments of 5l. per share upon the 8790 shares retained
by them, and that they were jointly and severally liable to pay and make good to the association, either
the sum of 43,950l., being 5l. per share upon that number of shares, or otherwise, the sum of 40,000l.,
being 10l. per cent upon the 4000 consolidated shares, with interest at 5 per cent., into one of the said
banking-houses, on account of the association.
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To this bill all the directors, with the exception of Hunter, who had subsequently to the formation
of the association become a bankrupt and obtained his certificate, were made Defendants.
Several of the Defendants put in a general demurrer for want of equity; and they further
demurred, on the ground that the rest of the shareholders, and the assignees of the director Hunter,
were not before the Court. A demurrer was also taken ore tenus, on the ground that the original holders
of whom the Plaintiff purchased his derivative shares were not made parties. [69]
Mr. Tinney, Mr. Skirrow, Mr. Wright, Mr. Lloyd, and Mr. Wigram, for the different parties who
demurred.
Although the Bubble Act is now repealed, that act was declaratory only. This association is illegal
at common law; the King v. Dodd, Josephs v. Pebrer, and a court of equity will not recognize or assist it.
The multitude of the parties in a joint stock company of this description, the impossibility, where the
company is not incorporated by act of parliament or royal charter, of doing complete justice between
the different partners, and the open encouragement which it consequently holds out to every species
of fraud and dishonesty, render it nothing better than a public nuisance, which courts of equity instead
of upholding, will be disposed to check and discountenance. That was the view taken by Lord Eldon
in the analogous case of Vansandau v. Moore, as well as in Kinder v. Taylor, and Lord Tenterden's opinion
seems to have been similar, Josephs v. Pebrer. The clause contained, in this prospectus, that no proprietor
should be liable beyond the amount of his shares, is a fraud upon the world, and an attempt to evade
the salutary principle upon which every partner is liable for the whole debts of the concern. The
shares are stated to amount to 20,000, and the number of shareholders must be very great to make it
hopeless ever to bring a cause to which they are all parties, to a hearing. The single exception to the
rule with respect to parties, is where, as in Lloyd v. Loaring one partner who can represent the rights
and interests of all, contests [70] them against a stranger. But here the act of the directors in
consolidating the shares was perfectly valid against such proprietors as consented or did not complain,
though bad against others who refused their consent. There is, therefore, a particular equity among
the several partners, differing it may be, in each individual case; and as it is impossible to do complete
justice, without making all the shareholders parties, so on the other hand it is equally impossible, from
the nature of the company, and the number of its partners, to bring all those shareholders before the
Court much more to bring them to a hearing; and that, of itself, is a sufficient reason why the Court,
finding its powers inadequate to grapple effectually with a subject of such magnitude, should refuse
to entertain the suit at all.
Supposing, however, that difficulty could be got over, still it is manifest that there are in this
concern two classes of persons whose interests are distinct, and very probably opposed, the holders
of original, and the holders of consolidated shares, whose respective situations and equities must be
totally different, and yet the present Plaintiff takes upon himself to represent and sustain the interests
of both classes.
This is a mere partnership for the conduct of a mining speculation, and the case made is one of
fraud against certain of the members. Now, it is settled, that one partner cannot by a bill bring the
management of the partnership transactions before the Court, without at the same time praying a
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dissolution. The doctrine of Lord Eldon, in Forman v. Homfray, has been since followed by his Lordship
in Kinder v. Taylor, and by the Vice-Chancellor in Russell v. Luscombe; [71] and the decision in Harrison
v. Armitage, if properly understood, rather confirms than impeaches the principle. The case of Hichens
v. Congreve which will be relied upon on the other side, is really no exception to the rule; for there every
shareholder stood precisely in the same situation, and the directors were trustees for the whole society,
so that substantially the bill sought nothing but to enforce the contract of the shareholders.
As to certain shares, the Plaintiff states himself to have purchased them from other persons, who
were the original holders, but he does not state (and the fact is known to be directly otherwise) that
the sanction necessary to complete his title, has been given by the directors to the transfer, and till that
has been obtained, the Plaintiff can have no locus standi here, suing as an alleged partner, whatever
remedy he might have against the persons of whom he purchased.
It is not alleged, nor does it appear upon this bill that the Potosi Mining Association is a subsisting
concern. In point of fact, its operations have long since ceased; and it is vain and ridiculous now to
pray, that sums of money may be paid into a banking-house, for the benefit of a partnership which
has been virtually broken up and abandoned.
Besides the general objection already urged for want of parties, there are other objections of
similar kind, though less extensive in their nature. There is a distinct demurrer, on the ground that the
assignees of the bankrupt director, Hunter, are not made defendants; and [72] what is still more
material, the persons from whom the Plaintiff obtained his derivative shares, some of which are stated
to be consolidated, are not before the Court. Now if the case of fraud and breach of trust, made by
the bill, be good against the rest of the directors, it must be equally good against Hunter, and the
defendants are entitled to have the representatives of their co-trustee brought before the Court, that
his estate may be charged with his proportion of the liability. Again, it is a settled rule in pleading, that
whenever the title to equitable rights is in question, the legal owner must be made a party: the equitable
owner alone cannot sustain the interests in contest, because there may be equities affecting the former,
by all of which the assignee will be bound. Redesdale on Pleading. Cathcart v. Lewis. The title of the
Plaintiff to his derivative shares, whether consolidated or not, is merely equitable, Perring v. Hone, the
more so as it is not stated to have been perfected by receiving the sanction of the directors: in equity
he stands precisely in the same situation as his assignors, the legal owners, who, for any thing that
appears, may have been consenting parties to the consolidation, and who ought, in justice to the
directors, to be specified by name, and brought before the Court, that the directors may be able to set
up in their defence whatever equities may exist capable of affecting them.
Sir E. Sugden and Mr. G. Richards, in support of the bill. .
Joint stock companies of this description are now perfectly legal, whatever they may have been
while the [73 ] bubble act was in force.
Lord Eldon, it is well known, had a strong prejudice against them, which he expressed in Vansandau
v. Moore, and Kinder v. Taylor; but even he felt bound to recognize and uphold them when they were
brought judicially before him. Indeed the numerous private acts passed for incorporating similar
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associations (the Arigna Mining Company for example), which if they were a nuisance or a violation
of the common law, never could have obtained the sanction of the Judges and the legislature, prove
that there is nothing unlawful in their character.
The clause attempting to restrict the liability of the shareholders, till confirmed by parliament, was
of course only binding among themselves, and nugatory as to strangers; but it is clear from The King
v. Webb and Pratt v. Hutchinson, that its insertion in the prospectus, or even in the partnership deed,
could not affect the general legality of the company or its acts. It is because such companies are legal,
and are considered beneficial to the community, that parliament invests them with extraordinary
powers and privileges, and enables them to sue and be sued by their secretary, in a manner unknown
to the common law.
If this were a bill seeking to administer the equities between the different partners, the argument
that all the shareholders are not before the Court might have some weight; though even then, where
it is necessary for the purposes of substantial justice, the Court has been frequently induced to relax
the rigour of the rule, and has allowed the interests of a large body of proprietors to be represented
by a few, leaving the rest to come in and prosecute their rights under the decree. Adair v. [74] New
River Company, Cockburn v. Thompson, Good v. Blewitt, Grey v. Chaplin, Bromley v. Smith, Blain v. Agar, and
the late case of Small v. Attwood in the Exchequer, where the same objection was strenuously urged,
but without success. But here the argument had no application; for the object of this suit is not to
administer the equities between the individual partners, or between the various classes of shareholders,
but to restore to the partnership fund, for the benefit of the whole body of proprietors according to
their respective interests, sums which a fraudulent contrivance of the directors has enabled them to
abstract, and appropriate to their own use. Sickens v. Congreve, where this very ground was taken and
over-ruled, is a direct authority for the frame of the present suit, and it furnishes a complete answer
to the objection that the bill contains no prayer for a dissolution. Such a prayer would have been
destructive of the very purpose of the suit, a suit not for a general account, but seeking to charge
persons, in the character of trustees, with a breach of trust for which they are responsible to their
constituents, the partnership at large.
The Plaintiff states himself to be the holder of certain shares, some original, and others derivative,
in the Potosi Mining Association, and upon that general statement, until the contrary is shewn, the
Court is bound to presume that the Plaintiff has done every thing formally and regularly in order to
qualify himself as a partner, and that his title is lawful and complete. If the fact were otherwise, it
could only be taken advantage of by a plea, or established by evidence at the [75] hearing. For a similar
reason it was quite as unnecessary, and would have been improper for the Plaintiff to specify minutely
and in detail, the manner in which he obtained the different shares, and the names of the persons of
whom they were severally purchased; more especially in a bill which has for its object, not to set up
any private claims of the Plaintiffs own against the partnership, but to call upon trustees guilty of a
fraud, to account to the general body of the partners for the profits arising from the breach of trust.
If then the assignment be, as it must be assumed to be, complete, it is a mistake to suppose that any
interest, legal or equitable, still remains in the assignors. By the very act of transfer a change in the
partnership was effected, quoad the rights and liabilities of the original holders, and a new partnership
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created: their interest, legal as well as equitable, was thereby conveyed to their assignee, who thereupon
become to all intents a partner, both at law and in equity, to the extent of the assigned shares. With
respect to the absence of Hunter's assignees, it is perfectly settled that it is competent for a cestui que
trust, suing for a breach of trust committed by several trustees, to proceed against any of them at his
discretion. It will still be open to the Plaintiff, after he has established the amount of the claim in this
suit, to go before the Commissioners in bankruptcy, if he chooses, and prove for it against Hunter's
estate.
Mr. Tinney, in reply.
I am of opinion that this demurrer must be allowed.
[76] If I had only agreed with the Defendants in the point made of the company being illegal at
common law, independently of the 6 G. 1., now repealed, or had thought that question doubtful, I
might have been disposed to let the case proceed, by disallowing the demurrer, and suffering the point
to be afterwards raised and decided. Had the demurrer rested there however, there seems to be no
reason for allowing it.
To hold such a company illegal, would be to say that every joint stock company not incorporated
by charter or act of parliament is unlawful, and, indeed, indictable as a nuisance, and to decide this for
the first time, no authority of a decided case being produced for such a doctrine. The clause intimating
that each subscriber is only to be liable to the extent of his share is not enough to make the association
illegal; such a regulation is wholly nugatory, indeed, as between the company and strangers, and can
serve no purpose whatever, unless to give notice. In that light it is not to be viewed as criminal or as
a means of deception; for the publicity of it may tend to inform such as deal with the company, and
a proof of that publicity in the neighbourhood of parties so dealing might go to fix them with notice.
For any other purpose, for the purpose of restricting the liability of the shareholders, it would plainly
be of no avail; and whosoever became a subscriber upon the faith of the restricting clause, or of the
limited responsibility which that holds out, would have himself to blame, and be the victim of his
ignorance of the known law of the land.
On this ground, then, I do not think the demurrer can be sustained. Nor do I think it can he
sustained upon the other ground, that the bill does not pray for a dissolution of partnership; for this
is no suit for a general account, but only a complaint of a fraud. [77] Neither can it be held demurrable
on account of the nonjoinder of Hunter's assignees as defendants, for the Defendants were severally
liable; nor on account of the other shareholders not being made parties, after the decision by Lord
Lyndhurst, in Hickens v. Congreve acted upon, as I have understood, more recently in Small v. Attwood; to
say nothing of the class of cases where the making all partners parties has been dispensed with, in
companies of which the shareholders are so numerous as to render that impossible, or at least highly
inconvenient.
But there is one ground of demurrer which I cannot get over. The Plaintiff alleges his title to be
as a shareholder by purchase, and he does not set forth how. He does not derive his title. He merely says
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that he purchased for valuable consideration divers shares, upon which the instalment of 5 per cent.
had been paid, and that he ever since has been, and now is, the holder of such shares. Now in another
part of the bill it is alleged, that by the rules of the association, as set forth in the prospectus, no
transfer of shares could be valid in law or equity, unless the purchaser was approved by a board of
directors, and signed an instrument, binding him to observe the regulations. Is this merely directory
or is it a condition precedent? I am of opinion, that it is a condition precedent, and that the
performance of it should have been alleged. A demurrer, it is true, admits all facts that are well pleaded;
and it is contended, that here the allegation of the Plaintiff having purchased shares and being a
shareholder is admitted, and that therefore the rules must be assumed to have been complied with.
Nothing to the contrary appears on the face of the bill, to which of course we are confined. This,
however, depends wholly upon the purchase and holding of the shares being well pleaded. But share-
holding is not sufficiently known in the law to make the mere [78] allegation of it intelligible without
more. Nor are shares, or the purchase of shares, things known in law. The shares may be any thing,
and may be quite different in different companies; the modes of holding them may be divers. The
manner of transferring them may be indefinitely varied, even where the interest is one recognized by
law, and the thing is well known; as in the case of the transfer of a promissory note, which is a transfer
of a chose in action legalized by express enactment, or the case of an assignment of a reversion at
law, the title of the Plaintiff must be set forth specially, and if there be any conditions precedent, the
performance of them must be alleged.
Even if the demurrer on this ground should be overruled upon the argument that it was sufficient
to allege the share-holding, the Defendants would only be driven to raise the same question in a
different shape by pleading. But as I have no doubt that the allegation here is imperfect, and
consequently the share-holding not admitted by the demurrer, I must consider the case on the
omission of the material affirmation that the condition precedent had been performed, and it
therefore stands that the Plaintiff has not alleged any title. The demurrer is perhaps sustainable upon
the other ground,—that those from whom the Plaintiff brought have not been made parties. But into
this there is no occasion for entering, as it was not set down among the special grounds of demurrer.”
d. Blundell v. Winsor (1837)93

From the allegations in the bill, it appeared, that in 1833 a joint-stock company was formed, under
the name of The Anglo-American Gold Mining Association, for the purpose of working gold mines in the
United States of America.
By their deed of settlement, dated the 1st of November 1833, after stating the object of the
company, and appointing John Penman, Esq. superintendent, G. A. Muskett, Esq. trustee and treasurer,
and Muskett and Penman directors, it was agreed, that the capital of the company should consist for the
present of 6,000l., in sixty shares of 100l. each, but power was reserved to the shareholders to create
any additional number of 100l. shares, as the company might from time to time think desirable, which
93 8 Sim. 601, 15 L.J.R. 364. URL: http://goo.gl/YUQxS.
254
new shares were to be offered in the first instance to the holders of the old shares at par, although
they might be at a premium in the market. It was also provided, “that the shares of the company, as
well original as additional, should and might be assigned and disposed of by deed or will, or otherwise,
to any other person or persons, at the discretion of the holders thereof; but no share should be
divisible into any fractional part.” It did not appear that there was any restriction on the right of
transferring the shares. And, it was agreed, that Penman should forthwith go over to America, and
endeavour to discover some eligible situation for carrying on the operations of the company, and he
was authorized to draw bills on the treasurer and trustee. The deed contained the usual clauses for
regulating the affairs of the company, and for winding them up in the event of a dissolution.
At a meeting of the shareholders, held in September 1834, Muskett resigned his offices of trustee,
treasurer, and director, and was discharged by the company from all liabilities, and he soon afterwards
sold his shares, and the plaintiff and two of the defendants were appointed to succeed him. At the
same meeting, 140 new shares of 100l. were created, which were sold to various persons, and the
whole amount paid.
In December 1835 the shareholders discharged Penman, who had expended considerable sums out
of the company's funds. At the latter end of 1836, eleven more new shares were created and sold. On
the 14th of March 1837, at which time the company had, in fact, become insolvent, a resolution was
duly passed by a majority of the shareholders, and in the manner required by the deed of settlement,
that the company should be dissolved, which resolution was confirmed by another meeting, held on
the 29th of the same month; and the plaintiff and two other shareholders were desired to carry the
resolution into effect. There were at that time 211 shares in the company, which were on the 29th of
March, and at the time of filing the bill, in the hands of the plaintiff and the defendants; and the bill
stated, that, “except the plaintiff and the defendants, there was no person who was then in any way
interested in or liable in respect of the affairs of the said company as shareholders or otherwise as
partners in the said company.” The plaintiff stated, that he had applied all the funds of the company,
and some of his own monies, in discharging the liabilities of the company; and that he was totally
unable to carry into effect a proper and complete dissolution of the company.
Winsor, one of the defendants, who was a holder of one share, had brought an action [365] at law
against the plaintiff and two other of the shareholders for a sum of 300l. The bill prayed for a
dissolution of the company—for an account of its debts and liabilities, and of all its transactions from
its formation; that Winsor and the other shareholders might be decreed to contribute their
proportional shares of the losses of the company; and that Winsor might be restrained from
proceeding with his action.
To this bill Winsor put in a general demurrer for want of equity; and also demurred for want of
parties, on the ground, that Muskett and all the parties who had originally been shareholders were
necessary parties to the suit, notwithstanding they had assigned their shares to other persons.
Mr. Knight and Mr. H. W. Cole, in support of the demurrer. —Under the deed of settlement of
this company, the shares were to be transferred without any restriction at the will of the owner. The
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company thereby assumed to act as a corporate body, and thus their constitution was rendered
illegal…
When the Bubble Act, 6 Geo. 1. c. 18. was repealed by the 6 Geo. 4. c. 91, Lord Eldon expressed
a decided opinion, that the common law was sufficient, without that statute, to prevent the formation
of such companies as the present— George on Joint Stock Companies, p. 80. This suit is also defective
for want of parties. Muskett, and all other original shareholders, who have now ceased to hold shares,
are still necessary parties; because, the transfer of their shares did not relieve them from liability to
third persons in respect of debts due from the company; and, if they were called on to discharge any
of those debts, they would be entitled to contribution from the other shareholders, who might thus
be subject to a multiplicity of suits; whereas, the whole matter might be at once determined in a suit
which was properly constituted. It ought also to have been set forth by what means Winsor acquired
his shares—
Mr. Jacob and Mr. W. T. S. Daniel, in support of the bill.—Most of the cases which have been cited
were decided before the repeal of the Bubble Act, and therefore do not apply to this case; for, it can
scarcely be supposed, that when the legislature took the trouble to repeal that statute, it was intended,
that no benefit should arise from the repeal, but that all undertakings which were within its operation,
were still to be illegal at common law. In Walburn v. Ingilby, the capital was to be 1,000,000l., divided
into 20,000 shares, and the company would be a much less manageable body than the present one;
yet, that company was not declared to be illegal, but the demurrer was allowed on other grounds. Here,
the capital was never more than 21,100l, and the number of shareholders was only about twenty-five.
There is no common law by which a partnership of twenty-five persons is illegal; and, if they choose
to agree that one partner may assign without the privity of the others, what objection is there to such
a contract? In partnerships in mines and collieries, such a proviso is frequent. It appears sufficiently
on the face of the bill, that Winsor is a shareholder. With respect to Muskett and the other original
shareholders, there are before the Court all the existing shareholders; and the bill alleges, that there
are no other persons who have any interest in the affairs of the company. Neither is a shareholder
liable for any loss that takes place after he has assigned his shares; and there is nothing on the face of
this bill which shews that the company had sustained any loss before those parties ceased to be
partners. But, supposing a company to have been legally constituted, if all the persons who ever held
shares in it, or their representatives, were necessary parties to a suit, it would be impossible to wind
up the affairs of a [366] company of any magnitude, which had existed forty or fifty years—Vigers v.
Solari.
THE VICE CHANCELLOR.—This appears to me a very plain case. I cannot but think that this
deed of the 1st of November 1833 is, on the face of it, illegal. It proposed that certain persons should
form a company to work gold mines in North America; and it is provided, all persons who should
become shareholders should, so long as they held any shares of the company, be considered as
copartners in the company. Then, although the shares in the first instance were not to exceed sixty, it
appears, that there might exist an unlimited number of shares, because it was provided by the deed,
that the shareholders might increase the number of shares at any time they should think proper, and
it appears, that a great number of additional shares were subsequently created by the company. The
256
deed also contained a clause to the effect, that those persons who were holders of the original shares,
as well as of the additional shares, should be at liberty at any time, and without any restriction whatever,
to assign or transfer their shares to any person they thought fit.
Now, it appears to me, that the fair inference to be drawn from this deed is, that certain persons
were to form a company, which might be increased to an unlimited amount, and that every shareholder
should have the power to transfer his share to whomsoever he pleased without control; and that the
deed necessarily represented that the person who assigned the shares, would thereby get rid of his
liabilities, and that the person to whom the shares were assigned, would take all the liabilities attached
to them. Now, this is a thing which could not, by any means, be done at law. It does, therefore, appear
to me, that the deed, on the face of it, did hold out to the public something fraudulent, to induce
persons, in the hope of getting profit by working gold mines, to take shares in the company, and
thereby become partners, under an impression, that they might continue to be such partners as long
as they pleased, and then get rid of their liabilities by assigning their shares. I conceive the language
of Lord Chief Justice Best in his judgment in Duvergier v. Fellows, is quite correct, in which he says,
“There can be no transferable shares of any stock, except the stock of corporations, or of joint-stock
companies, created by acts of parliament: when it is said, that the shares were to be transferable, that
must mean, that the assignee was to be placed in the precise situation that the assignor stood in before
the assignment: that the assignee was to have all the rights of the assignor, and to take upon him all
his liability.” All this appears to me applicable to this case; and, my notion is, that this deed is illegal,
not only because, to use the language of Mr. Justice Best, it usurps on the prerogative of the Crown,
by attempting to make a body —not a corporate body—not having the protection of the King's
charter—exercise the power of a body corporate, but because by holding out to the public that the
shares could be assigned in the manner before referred to, when no such thing could be done, a
fraudulent representation was practised on the public.
My opinion is, that the more such schemes as this are checked in a court of justice, the better it
will be for her Majesty's subjects; and, I think, that this demurrer ought to be allowed with costs.
Demurrer allowed.
e. Garrard v. Hardey (1843)94

“ASSUMPSIT, for money lent, interest, and money due upon an account stated.
The defendant pleaded—to the whole declaration,— secondly, as to the sum of 500l., parcel &c,
that on the 10th of October 1839, from thence until the 6th of June 1840, the plaintiff, the defendant
and other persons did illegally associate together in a certain illegal undertaking, project, and attempt,
tending to the common grievance, prejudice, and inconvenience of the subjects of our Lady the
Queen, in general, and great numbers of them, in their trade and commerce; that is to say, that the
plaintiff, the defendant and the said other persons did, during the time aforesaid, act as a corporate
94 5 Man.& G. 471. URL: http://goo.gl/zckLG.
257
body, and pretend to be a trading corporation, by and under the name and style of “The Limerick
Marble and Stone Company,” and did then also pretend to raise and transfer stock in the said company,
and that the said stock consisted of 50,000£, divided into five hundred shares of 100l., and did then
also pretend to transfer and assign shares in such stock without legal authority, either by act of
parliament, or by charter from the crown, or by letters patent under the great seal, or by any other
lawful authority whatsoever, to warrant such acting as a corporate body, or the raising of transferable
stock, or the transferring of shares therein; whereof the plaintiff then had notice: that the plaintiff,
well knowing the premises, for the furthering, countenancing, and promoting of such illegal
undertaking and project, to wit, on the 10th of October 1839 aforesaid, lent and advanced to the
defendant a certain sum of money, to wit, 500l., and he the defendant then received the same, for the
purpose aforesaid, and then with the knowledge, privity and assent of the plaintiff, paid, laid out, and
expended the same upon and for the furthering, aiding, and promoting of the said illegal undertaking
and project: and that the last mentioned sum of 500l. so lent and advanced as aforesaid was the same
cause of action in the introductory part of this plea mentioned, and whereof the plaintiff had above
in his said first count complained against the defendant. —Verification.
Thirdly, that the said sum of 500l., parcel &c, was lent by the plaintiff to the defendant for the
purpose of carrying on a certain trading copartnership before then entered into between the defendant
and certain other persons, under the name and style of “The Limerick Marble and Stone Company,”
and the same was then expended by the defendant in and about the said copartnership, and the
carrying on thereof: that, after the last-mentioned sum had been so lent and expended as aforesaid, to
wit, on &c. the plaintiff became and was a member of the said copartnership, and so remained and
continued from thence until &c.: that the plaintiff on divers days and times, whilst he was such
member of the said copartnership as aforesaid, and before the commencement of this suit, received
divers sums of money, in the whole amounting to a large sum of money, to wit, 1000l., on the account
and for the use of the said copartnership, and that divers complicated [473] accounts then arose
between the plaintiff and defendant in respect of and relating to the said copartnership, which
accounts included, amongst others, the said sum of 500l., parcel &c. in the introductory part of this
plea mentioned: and that no settlement or adjustment of the said partnership accounts had been at
the time of the commencement of this suit nor hath yet been made, but that the same were at the
commencement of the suit and still were open, depending, and unliquidated. —Verification.
The fourth and fifth pleas, pleaded to the second count only, were, respectively, similar to the
second and third pleas pleaded to the interdiction.
Replication to the second plea; that the plaintiff, the defendant, and the other persons did not
associate together in the undertaking, project, and attempt in the said plea mentioned, and did not act
or pretend in manner and form as therein mentioned; and that the sum of 500l., in the said second
plea mentioned, was not lent and advanced to the defendant, nor was the same received by the
defendant for the purpose in the said plea mentioned; nor was the same with the knowledge, privity,
and assent of the plaintiff paid, laid out, and expended, in manner and form as the defendant hath in
the said plea in that behalf alleged; conclusion to the country. (There was a similar replication to the
fourth plea.)
258
To the third and fifth pleas, the plaintiff replied de injuria.

Special demurrer to the replication to the second plea, assigning for causes, that the said replication
was multifarious and double, and that the plaintiff had thereby attempted to put in issue several
distinct matters, namely, whether the plaintiff, the defendant, and other persons associated together in
the undertaking, [474] project, and attempt in the plea mentioned, and also —— whether they acted
or pretended in manner and form as therein mentioned; and also whether the said sum of 500l. in the
said plea mentioned was lent and advanced to the defendant, and received by him for the purpose in
the said plea mentioned; and also whether the said sum was, with the knowledge, privity, and assent
of the plaintiff, paid, laid out, and expended, in manner and form as the defendant had in the said
plea alleged: that the replication was an informal mode of pleading the general replication de injuria,
which last-mentioned replication could not, by the rules of law, be pleaded to the said second plea:
that the plaintiff had in and by his said replication attempted to raise certain immaterial, superfluous,
and complex issues, that is to say, he had traversed the allegation that the plaintiff and defendant acted
and pretended as in the said plea mentioned, which fact was involved in, and arose out of, the question
— whether or not the plaintiff and defendant associated together in such undertaking &c, as is in the
said plea mentioned: that the plaintiff had traversed, and attempted to put in issue, the purpose for
which the said sum of 500l. was lent by the plaintiff to the defendant; whereas if the said sum was,
with the knowledge &c. of the plaintiff, paid &c. by the defendant in the said illegal undertaking &c,
the fact of the said sum not having been lent and advanced to the defendant, or received by him, for
the purpose in the said second plea mentioned, was wholly immaterial: that the traverse taken by the
replication was too large, in this, to wit, that it attempted to put in issue the fact — whether or not
other persons were associated with the plaintiff and defendant in the said undertaking &c, which fact
was wholly immaterial to the defence set up: that the replication was uncertain, inasmuch as the
defendant could not thereby know whether the [475] plaintiff meant to deny that he associated with
the defendant, or that he associated with other persons, or that he associated with the defendant and
other persons, in the said undertaking &c.
(There was a demurrer to the replication to the fourth plea, upon which the defendant assigned
the same causes of demurrer as upon the demurrer to the replication to the second plea.)
Special demurrer to the replication to the third plea, assigning for causes, that the third plea did
not consist of matter of excuse, so as to entitle the plaintiff to adopt such general form of replication:
that the defendant by his said plea claimed a title and interest in the said sum of 500l. therein
mentioned, and set up a right to retain the same: that in the same plea authority was alleged to have
been derived from the plaintiff: and that the plea was double and multifarious. (There was a similar
demurrer to the replication to the fifth plea.) Joinder in demurrer.
The case was argued in Hilary term last.
Talfourd Serjt. (with whom was Hurlstone), in support of the demurrers, The replications to the
[476] second and fourth pleas put in issue at least two things which are immaterial, — first, the fact
that the plaintiff and defendant did associate with other persons; and, secondly, not only the purpose
for which the money was lent, but also that for which it was applied. [Cresswell J. Is it open to the
259
defendant to say that these allegations are immaterial, when he himself has put them on the record?]
A plea is not made bad by the introduction of immaterial circumstances; nor can the plaintiff make
such matter material by traversing it; Regil v. Green, Moore v. Boulcott. [Cresswell J. In the last-cited case
the defendant pleaded to an action on an attorney's bill, that the bill was for work at law and in equity,
and was not delivered a month before action brought. The replication, that the bill was not for work
at law and in equity, was held bad, not because it contained two answers to the plea, but because it
contained none.] That case shews it is not enough merely to traverse an allegation in the very terms
of the plea.
As to the replications to the third and fifth pleas, it is now settled that de injuria is admissible in
assumpsit; Isaac v. Farrar, Griffin v. Yates, Purchell v. [477] Salter, but subject to the rule in Crogate's case,
that such general form is only allowable where the plea sets up matter of excuse, and not of discharge.
An excuse must arise before, or at the time, the contract is broken, but a discharge must be afterwards.
The third plea in this case does not consist of matter of excuse; it admits the cause of action,
namely, the loan; and it does not insist on the illegality of the contract. [Tindal C.J. The question is,
whether that plea contains any answer to the action. It admits the loan, and then states a subsequent
'partnership with the plaintiff, and that the money previously lent by the plaintiff was mixed up with
the partnership accounts. That does not appear to be any answer to an action to recover the loan.
Erskine J. At present, I believe, we all think that the plea is bad.] Perhaps it may amount to a special
set-off. [Cresswell J. In what manner? The defendant does not say which way the balance of the account
would be. Tindal C. J. A set-off can only be maintained on an ascertained debt. But here the defendant
expressly says that the debt is not ascertained.] The learned serjeant then admitted he could not
support the third and fifth pleas.
Channell Serjt. for the plaintiff. Assuming that the second and fourth pleas are good, the
replications to them are sufficient, as they put in issue all the facts which those pleas set up as
constituting one defence. If an alleged immaterial fact is so mixed up in a plea with others which are
material that together they form part of the whole defence, the plaintiff has a right to traverse the
plea in its terms. (Upon this branch of the argument he cited Clugas v. Penaluna, Biggs v. [478] Lawrence,
Waymell v. Reed, Benison v. Thelwell, Webb v. Weatherby, Bell v. Tuckett, and Duvergier v. Fellows. [Tindal C.J.
The pleas in question comprise three separate allegations: first, that the plaintiff had entered into an
illegal company; secondly, that the money lent was part of the stock of such company; and thirdly,
that the money was applied to illegal purposes with the privity of the plaintiff. Of these three
allegations two at least contain each a distinct answer to the action. If the illegal company was not
formed, the plea falls to the ground. If the money was not lent for an illegal purpose, the same result
would follow. These are separate and distinct allegations which the plaintiff has included in his
replication; and as at present advised, I should say it would be better to see whether the pleas are
good.]
The pleas cannot be supported. The facts which they set out as constituting the illegality of the
association are, in terms, the same as those mentioned in the bubble act (6 G. 1. c. 18. s. 18.) But that
act was repealed by the 6 G. 4. c. 91. The demurrer admits, not the illegality of the company, but
260
merely the facts from which the court will decide whether or not it was illegal. But the facts stated do
not shew any such illegality. They merely disclose a method of forming and dissolving a joint stock
partnership by transferring stock. It is not stated that the company acted as a corporation in any illegal
way, or that they affected to use a corporate seal. There is nothing to shew the company was illegal at
common law; R. v. Webb. [479] The pleas, in substance, only state that certain persons formed an
association for the purpose of trading in marble, and raised a capital by shares; but this is no offence
at common law.
Talfourd Serjt. in reply. The second and fourth pleas disclose a sufficiently good ground of defence
upon general demurrer. The grounds upon which the judgment of this court proceeded in Duvergier
v. Fellows are in favour of the defendant. It was there held that the pretending to be possessed of
transferable stock was pretending to act as a corporation. In this case the pleas shew that the parties
not only pretended to act, but did in fact act, as a corporation. [Cresswell J. Duvergier v. Fellows was
affirmed by the King's Bench upon error. But it is not quite clear that the judgment of this court was
adopted to the full extent. Channell Serjt. The judgment was indeed also supported in the House of
Lords; but upon quite different grounds.] In R. v. Webb the particular association was held legal; at
least the parties were held not to be liable to an indictment. But that was under peculiar circumstances.
And the authority of R. v. Webb was doubted in Kinder v. Taylor. A question arose in that case as to the
legality of a company calling themselves the Real del Monte Mining Company; and Lord Eldon C. is
reported to have said, “The question as to what was assuming to act as a corporate body, was rendered
still more important to be decided, because it was impossible to read the 6 G. 1., and the clauses of
exceptions contained in it, without seeing that the legislature thought itself bound to except even some
legally chartered companies. The case of R. v. Webb was scanty in argument, [480] and the common
law was not considered in it, because that was an indictment upon the statute. He spoke with all respect
for Lord Ellenborough, who had decided the case, and whose memory he venerated as a law-giver; but
he should have been glad if his lordship had taken the trouble to state what was assuming to act as a
corporation.” [Cresswell J. Here the defendant has not taken the trouble to state what he means by
acting as a corporation.] It is submitted that he has in terms stated sufficient to bring the case within
the principle of Duvergier v. Fellows. Lord Eldon added, in Kinder v. Fellows, "For many considerations it
would have been very fortunate if the court had then looked at this as a distinct question, and had
been good enough to declare, 'this is not acting as a corporation, because, to act as a corporation, you
must act so and so.' It now, however, became necessary to decide, either by legal judgment or by a
declaratory act of parliament, what is the meaning of presuming to act as a corporation; and by
whomsoever it was declared, not only what was doing, but what had been done, must be attentively
regarded. It was for this reason he thought the case of R. v. Webb called for further explanation." And
his lordship, after commenting upon the 6 G. 1., stated, that “he was of opinion, and he had taken
some trouble to consider the question, that if it could satisfactorily be made out to a jury that a party
was opening books, raising a premium upon the shares, and then took care to get himself out of the
scrape, that was an indictable offence.” Josephs v. Pebrer, and Pratt v. Hutchinson, are authorities to shew
that a company which professes to raise and transfer stock is illegal. [Tindal C. J. When those cases
were decided the 6 G. 1. was in full force.]
261
[481] The learned Serjeant then proceeded to argue that the replications to the second and fourth
pleas were bad for multifariousness, and as involving an immaterial issue. It was immaterial whether
other persons were associated with the plaintiff and defendant, as there might be a fraudulent
company consisting of two parties only. [Tindal C. J. It is not very likely. The 6 G. 1. seems to point to
associations formed by great numbers of persons. Erskine J. In order to render a proposition
objectionable, is it sufficient that it is immaterial? Must it not also tend to embarrass the opposite
party? That seems to be the ground upon which Regil v. Green was decided.] If the contract was
unlawful in its origin, the subsequent application of the money would make no difference; Thurman v.
Wild. [Cresswell J. Suppose the money had been originally lent for an unlawful purpose, and the plaintiff
had repented and demanded back the money, but had afterwards sanctioned its improper application.]
If the contract was originally unlawful he could not recover the money. This is an action for money
lent. It is p sufficient answer that it was lent in furtherance of an illegal contract. The subsequent
application of the money is quite immaterial.
TINDAL C. J. now delivered the judgment of the court.

The questions before us in this case arise on the replications put in by the plaintiff to the second,
third, fourth, and last pleas of the defendant. But as the third and last pleas were abandoned by the
defendant upon the argument, and as we think the second and fourth pleas are also bad in point of
law, it will be unnecessary to say any thing as to the replications: and the second [482] and fourth pleas
being pleaded in the same form, the one to the action generally, the other to the second count, it will
be necessary to consider the first only of those pleas.
That plea is framed upon the very words of the statute 6 Geo. 1. c. 18. s. 19.. It states that the
plaintiff, and the defendant, and others, did illegally associate themselves together in an illegal
undertaking, project, and attempt, tending to the common nuisance, prejudice, and inconvenience of
the subjects of our lady the Queen in general, and great numbers of them in their trade and commerce.
It is obvious, that, if the plea had stopped here, such a general allegation of an illegal association
would not have been sufficient, even if the statute above referred to had been still in force and
unrepealed: and consequently the plea proceeds to describe the particular illegal association intended,
and alleges it to consist in this, that the plaintiff, the defendant, and those other persons, did act as a
corporate body, and pretend to be a trading corporation, under the name of "The Limerick Marble
and Stone Company," and did also then pretend to raise and transfer stock in the said company, and
that the said stock consisted of 50,000l. divided into 500 shares of 100l., and did pretend to transfer
and assign shares in such stock, without legal authority by act of parliament, charter from the crown,
or letters patent under the great seal, or by any lawful authority whatever, to warrant such acting as a
corporate body, or the raising of transferable stock, or the transferring shares therein. Now assuming,
for the sake of argument, that this description would have been sufficient to bring the case within the
statute, yet, as that clause of the statute has been expressly repealed by the 6 Geo. i. c. 91., the question
becomes this, whether such an illegal association is described on the face of this plea as to constitute,
at common law, a nuisance, and to [483] be indictable as such. The raising and transferring of stock
in a company cannot be held, in itself, an offence at common law: such species of property was
altogether unknown to the law in ancient times; nor indeed was it in usage and practice until a short
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period antecedent to the passing of the statute; as is evident from the preamble to the 18th section,
which recites that it is notorious that these projects and undertakings, which it is the object of the
clause to put down, had been contrived and practised within the kingdom since the 11th of June,
1718; evidently shewing that the act was looking to some grievance of late introduction. And as that
clause has been repealed, we find no authority for holding that an allegation that the parties raised and
transferred stock is simply, and per se, without any statement of the mode by which it injures or
defrauds the public, an indictable offence at common law. And, laying that allegation out of the way,
the plea really states no more, in substance, than that the plaintiff and the defendant "and other
persons" (which allegation would be satisfied if there were two only in addition to themselves),
pretended to act as a trading corporation, under the name and style of "The Limerick Marble and Stone
Company." The plea states no illegal mode or means by which they pretended to act as a company, as,
by usurping a common seal, or the like; nothing more is stated than their assuming the style and firm
of a company. It is not even alleged that this took place and was carried on in England, or within the
Queen's dominions, which would seem from the preamble to the 18th section of the statute to have
been necessary, at least, to constitute an offence under that statute.
The case of Duvergier v. Fellows has been cited, and relied on as an authority in point that the mere
[484] presuming to act as a corporation is of itself alone an illegal act, and indictable. It should be
observed, however, that the plea in that case did not state simply the fact of formation of a pretended
corporate body, but the formation of it for a purpose confessedly illegal, namely, the purpose of
enjoying the benefit of certain letters patent, by the condition annexed whereto the letters patent were
to become void if assigned to more than five persons. And this is the precise ground upon which the
judgment was affirmed both in the court of King's Bench and in the House of Lords, where the case
was removed by writ of error; not to mention also, that, in the plea of the defendant in that case, so
much of the detail and management of the pretended company was stated as might perhaps be
sufficient to shew a project which would necessarily operate to the fraud and deceit of the subjects of
this kingdom.
It is enough, however, to say, on the present occasion, that there is an absence in this plea of any
statement of facts from which an illegality at common law is necessarily to be inferred; and, unless
such common law offence appear sufficiently stated on the plea itself, we are not to infer it.
We think, therefore, the second and fourth pleas are also bad, and that judgment on the four
special pleas must be given for the plaintiff.
Judgment for the plaintiff.”
f. Harrison v. Heathorn (1843)95

ASSUMPSIT. The declaration contained a special and three indebitatus counts, as already stated.
The defendants Magnus, Cohen, Isaacs, Harris and Neumagen, suffered judgment by nil dicit, Longstaff,
95 6 Man.& G. 81. URL: http://goo.gl/NOHUH.
263
Hart, the Heathorns, Tait, Muskett, and the Blundells, pleaded non assumpsit. Joseph L. Heathorn, besides
his fifth and sixth pleas upon which the plaintiffs obtained judgment on demurrer, pleaded, secondly,
to the first of the making of the agreement and promise in that count mentioned, partners or
shareholders in the company or association called The Anglo-American Gold Mining Association, modo et
forma; concluding to the country; thirdly, to the first count, that the plaintiffs did not take up or
discharge for the honour of the drawer, the bills of exchange in the said first count mentioned, or any
of them, or any amount thereof, or incur the said costs and expenses or any part thereof, as in that
count alleged; concluding to the country; fourthly, to the first count, that the bills of exchange in that
count to have been taken up by the plaintiffs were not, nor were, nor was any of them, drawn by
Penman upon H. Blundell on account or the company; nevertheless, the plaintiffs did not give notice to
the company and the directors, or to any of them, three calendar [82] months before the
commencement of the suit, to pay, and that the plaintiffs required payment of, the sum so alleged to
have been advanced by them on taking up the said bills, and the said interest for the same, and the
amount of the said costs and expenses of the plaintiffs, or any of them or any part thereof, modo et
forma; concluding to the country; eighthly, to the whole declaration, that the company or association
in the said first count mentioned, was and is an illegal company, association or partnership, consisting
of divers persons shareholders therein, formed for the alleged purpose of working gold mines in the
United States of America, and the reduction and sale of the said precious metals and other valuable
products of the said mines, and presuming to act as if they had been and were a corporate body,
without any legal authority or any act of parliament or charter from the Crown for so doing; and also
presuming and pretending, without any legal authority, act of parliament, or charter from the Crown,
for so doing, to raise, and being constituted and formed with a view to raise, and with provisions for
raising, a transferable and assignable stock and capital to a large amount, to wit, 6000l. sterling, to be
considered as divided into sixty shares of 100l. each, with power for the shareholders of the company,
at a special meeting to be called for that purpose, at any time and from time to time to increase the
capital of the company to any amount that might be agreed upon, by creating an additional number
of 100l. shares, and all which several shares, as well original as additional, were to be, and are,
transferable and assignable from the holders thereof by deed or will, or otherwise, to any other person
or persons at the discretion of the holders thereof, to the common grievance, prejudice and
inconvenience of the liege subjects of His late Majesty King William the Fourth, and our Lady the
Queen, in their trade, [83] commerce, property and lawful affairs; that before and at the time of the
making of the agreement and promise in the said first count mentioned, and at the times the plaintiff
lent and paid the respective monies in the second and third counts mentioned, the plaintiffs had notice
of the several premises in this plea mentioned; that the said loans and advances and payments in the
second and third counts mentioned, were respectively made by the plaintiffs for the purpose of taking
up and paying the said bills of exchange under the said agreement in the first count mentioned, and
that the said agreement was made and entered into, and the payments in the first count mentioned,
and the loans, and advances, and payments in the second and third counts mentioned were respectively
made by the plaintiffs, and the said costs and expenses in the first count mentioned attending such
bills were incurred, in order, and for the purpose, and with intent, to support and continue the said
company or association, and for furthering, countenancing, and proceeding in, the said undertaking
264
and attempt; to the common grievance and nuisance of the liege subjects of His said late Majesty and
our Lady the Queen; whereby the said agreement was and is void in law; and that the account in the
said last count mentioned was stated solely of and concerning the payments in the said first count
mentioned to have been made by the plaintiffs of and concerning the said monies in the said second
and third counts alleged to have been lent and paid by them respectively, and not of or concerning
any other monies or matters, and the sum in the last count mentioned to have been found due, was
so found due in respect of, and was and is the amount of the sums so paid as in the first count
mentioned, and so lent and paid as in the second and third counts mentioned respectively; and which
several payments and loans were made upon and for the illegal [84] purpose and consideration in this
plea before mentioned. Verification.
Ninthly, to the whole declaration, that the said company and association was and is an illegal
company, association or partnership, consisting of divers persons, shareholders, therein presuming to
act as if they had been and were a body corporate, without any legal authority, or any act of parliament,
or charter from the Crown, for so doing, and also presuming and pretending, without any legal
authority, act of parliament, or charter from the Crown for so doing, to raise a large transferable and
assignable stock in shares transferable at the will of the holders thereof, for the pretended object or
purpose of working gold-mines in an immense and extensive territory in parts beyond the seas, to wit,
the United States of America, and the reduction and sale of the said precious metals and all valuable
products of the said mines: whereas, in truth and in fact, at the time of the formation of the said
company or association, and for a long time afterwards, no gold-mines in the said United States had
been or were discovered by the persons who projected, formed, or constituted the said company or
association, or by any of them, or by any person or persons on behalf of the said company, nor had
any goldmine in the said United States been purchased or hired by or on behalf of the persons who
projected, formed, and constituted the said company or association, or by or on behalf of the said
company or association, or by or on behalf of the said company, nor were such persons or the said
company possessed of any such gold-mine, nor in negotiation for the purchase or hire thereof; and
the locality or particular nature of the situation for communicating and carrying on the operations of
the company remained to be discovered and selected; and the objects of the said company were and
are fanciful, visionary, and uncertain, and delusive, fraudulent, and [85] deceptive, and the company
or association was and is by reason of the several premises, an undertaking, association, and attempt
tending and calculated to cheat and defraud the subjects of His said late Majesty King William the
Fourth and of our Lady the Queen respectively, of their moneys, tending to the common nuisance,
grievance, prejudice, and inconvenience of the liege subjects of His said late Majesty King William the
Fourth and our Lady the now Queen respectively, in their trade, commerce, and other lawful affairs.
That before and at the time of the making of the agreement and promise in the first count mentioned,
and at the time the plaintiff lent and paid the respective moneys in the second and third counts
mentioned, the plaintiffs had notice of the several premises in this plea mentioned. That the loans and
advances and payments in the second and third counts mentioned were respectively made by the
plaintiffs for the purpose of taking up and paying the said bills of exchange under the agreement in
the first count mentioned, and that the said agreement in the first count mentioned was made, and the
said payment and loans and advances in the first, second, and third counts mentioned were made, by
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the plaintiffs, and the said costs and expenses in the first count mentioned attending such bills were
incurred, in order and for the purpose, and with intent, to support and continue the said company or
association, and for furthering, countenancing, and proceeding in the said undertaking and attempt;
to the common grievance and nuisance of the subjects of His said late Majesty and our Lady the
Queen; whereby the said agreement was and is void in law; and that the said account in the last count
mentioned was stated solely of and concerning the payments in the first count mentioned to have
been made by the plaintiffs, and of and concerning the said moneys in the said second and third
counts alleged to [86] have been lent and paid by them respectively, and not of or concerning any
other moneys or matters; and that the sum in the last count mentioned to have been found due in
respect, and was and is the amount, of the sums so paid as in the first count mentioned, and so lent
and paid as in the second and third counts mentioned respectively; and which several payments and
loans were made upon and for the illegal purposes and consideration in this plea before mentioned.
— Verification.
Tenthly, as to the sum of 2000l., parcel of the said monies in the said fifth and last counts
mentioned, payment and acceptance of that sum in full satisfaction and discharge of the said sum of
2000l., parcel, &c., and the causes of action in respect thereof. Verification.
Tait pleaded, secondly, to the first count, that the defendants were not partners or shareholders in
the company or association called The Anglo-American Gold Mining Association, modo et forma; concluding
to the country.
Thirdly, to the first count, that the plaintiffs did not at the several days and times in that count
mentioned, or at any other days or times, pay, lay out, or expend the said sums of money in the first
count mentioned, or any of them, or any part thereof, in or about taking up and discharging, for the
honour of the drawer, the bills of exchange in the declaration mentioned, or any of them, or incur
such costs and expenses as in that behalf in the first count mentioned, or any part thereof, modo et
forma; concluding to the country.
Fourthly, to the first count, that the plaintiffs did not, nor did any of them, give the said notice to
the company and directors to pay the said sum of 5500l., or the other sums of money in the first
count respectively mentioned, or any other sum or sums of money, or require payment [87] thereof,
or of any part thereof, modo et forma; concluding to the country.
Fifthly, to the first count, that the plaintiffs, on the 10th of March 1836, became, and were, and
thenceforth had been, and still were, shareholders and partners in the company, and that they, on the
said 10th of March 1836, duly elected to take the said sixty shares according to the said agreement,
and gave the company and the directors due notice thereof: without this that the plaintiffs gave due
notice to the company and to the directors, that they, the plaintiffs, declined to take the said sixty
shares in, or to become members of, the company, and then elected not to take, and had not taken,
such shares and become such shareholders as in the first count of the declaration mentioned, modo
et forma; concluding to the country.
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Sixthly, to the first, second, and third counts, that the company in the first count mentioned, before
and at the time of the making of the agreement in the first count mentioned, and before and at the
respective times of the lending and paying in the said second and third counts respectively mentioned,
was, and thence always hitherto had been, and still was, a company and partnership between the
defendants and divers and very many other persons, to wit, during all the time aforesaid, presuming
to act and acting as if they were and are a corporate body, and pretending to raise a transferable and
assignable stock without any act of parliament, or any legal authority, and without any charter from
the Crown, for so doing; of all which several premises in this plea mentioned the plaintiffs, before and
at the time of making the agreement in the first count mentioned, and before and at the respective
times of lending and paying the said sums in the said second and third counts respectively mentioned
had notice, and at those respective times well knew the same, and [88] the plaintiffs, to wit, then
entered into the said agreement in the said first count mentioned, and lent and paid the money in the
said second and third counts respectively mentioned, with such full knowledge as aforesaid; and for
the purpose of furthering, continuing, and proceeding in the said company, partnership and
undertaking, and with a view of assisting and supporting the same; and the said agreement in the first
count mentioned was entered into by all the parties thereto, and the sums in the second and third
counts mentioned were lent and paid, for the furthering, continuing, and proceeding in the said
company, partnership, and undertaking, and with such notice and knowledge as aforesaid.
Seventhly, — to the first, second, and third counts,— that the said company and partnership in
the said first count mentioned, before and at the respective times of making the agreement in the first
count mentioned, and the lending and paying the said sums in the second and third counts respectively
mentioned, was, and from thenceforth had been, and still were, a new and unlawful undertaking,
tending to the common grievance, prejudice, and inconvenience of great numbers of the liege subjects
of this realm in their trade and commerce, that is to say, an undertaking for the purpose and object
of purchasing and working mines, and of raising metal ores, and of smelting, refining, and
manufacturing and selling, and disposing of the said metal to be obtained and raised from such mines;
and which undertaking, before and at the time of making the agreement in the first count mentioned,
and before and at the respective times of lending and paying the respective sums in the second and
third counts respectively mentioned, and thenceforth had been, and still was, a public undertaking
then and during all the time last aforesaid, and still relating to affairs in which the trade, and welfare,
and [89] commerce of great numbers of the liege subjects of this realm had been, during all the time
last aforesaid, and still were concerned; and which undertaking, at the time of making the agreement
in the first count mentioned, and at the times of the lending and paying in the said second and third
counts respectively mentioned, and thenceforth had been, and still was, a common nuisance to the
liege subjects of this realm; of all which several premises in this plea mentioned the plaintiffs, before
and at the time of making the said agreement in the first count mentioned, and before and at the said
respective times of lending and paying the said sums in the second and third counts respectively
mentioned, had notice, and at all times well knew the same; and the plaintiffs then entered into the
said agreement and lent and paid the respective sums with such knowledge as last aforesaid, and for
the purpose of furthering, continuing, and proceeding in the said company, partnership and
undertaking, and with a view of assisting and supporting the same and the illegal objects thereof; and
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the said agreement was entered into by all the said parties thereto, and the sums in the said second
and third counts mentioned were respectively lent and paid by the plaintiffs for the furthering and
proceeding in the said company, partnership, and undertaking in this plea mentioned, and with such
full knowledge of the premises in this plea mentioned as aforesaid. — Verification.
Eighthly, as to so much of the fourth count as related to 2000l. parcel of the sum of money in
the fourth count mentioned, and therein supposed to have been received to the plaintiff's use; that the
said sum of 2000l. was a sum formerly, and before the said supposed receipt thereof, paid, by the
plaintiffs, to the said company in the said first count mentioned, as the consideration for the purchase
of a certain tract of land [90] sold to the company by and under a certain written agreement, which
was afterwards, and before the receipt of the said 2000l., to wit, on the day and year last aforesaid,
rescinded, and that the plaintiffs claimed the same as so much money received to their use on and by
reason of the rescission of the said agreement, and on the implied promise supposed to arise in law
upon such rescission, and in no other way and on no other ground whatsoever; nor was there any
express promise to pay the same, or any part thereof. That the company before and at the time of the
making of the last-mentioned agreement and the payment of the said 2000l., was and from that time
always had been, and still was, a company and partnership between the defendants and divers other
persons, during all the time last aforesaid presuming to act, and acting, as if they had been and were a
corporate body, and pretending to raise a transferable and assignable stock, without any act of
parliament, or any legal authority, and without any charter from the Crown, for so doing; of all which
several premises the plaintiffs before and at the time of the making of the last-mentioned agreement
and the payment of the said 2000l. had notice, and then well knew the same, and the plaintiffs then
entered into the last-mentioned agreement, and paid the said 2000l. with such knowledge as last
aforesaid, and for the purpose of furthering, continuing, and proceeding in the company, partnership
and undertaking in that plea mentioned, and with a view of assisting and supporting the same.
Verification.
Ninthly, as to so much of the fourth count as related to 2000l. parcel, &c. That the said 2000l. was
a sum formerly paid by the plaintiffs to the company, as the consideration for the purchase of a certain
tract of land sold to the company by and under a certain written agreement, which was afterwards,
and before the receipt of the said 2000l., to wit, on &c. rescinded, and [91] that the plaintiffs claimed
the same as money received to their use on and by reason of the rescission of the last mentioned
agreement, and on the implied promise supposed to arise in law upon such rescission, and in no other
way whatsoever, nor was the same or any part thereof due in any other way whatsoever, nor was any
express promise ever made to pay the same, or any part thereof. That the company before and at the
time of the making of the last-mentioned agreement and the payment of the said 2000l., was and
from that time always had been, and still was, a new and unlawful undertaking tending to the common
grievance, prejudice^ and inconvenience of great numbers of the liege subjects of this realm, in their
trade and commerce, that is to say, an undertaking for the purpose and object of purchasing and
working mines, and of raising metal and ores, and smelting, refining, and manufacturing, and selling
and disposing of the metal to be obtained and raised from such mines; and which undertaking before
and at the time of making of the last-mentioned agreement, and the payment of the last mentioned
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2000l., was and thenceforth had been and still was a common nuisance to the liege subjects of this
realm; of all which premises the plaintiffs before and at the time of making the last-mentioned
agreement, and the payment of the said 2000l. as last aforesaid had notice, and then well knew the
same, and the plaintiffs then entered into the last-mentioned agreement, and paid the said 2000l. as
last aforesaid, and for the purpose of furthering, continuing, and proceeding in, the said company
partnership and undertaking, and with a view of assisting and supporting the same and the illegal
object thereof. Verification.
The plaintiffs joined issue on the first, second, third, fourth, and seventh pleas pleaded by Joseph
L. Heathorn, [92] replied de injuria to the eighth and ninth, and traversed the payment alleged in the
tenth.
The plaintiffs also joined issue on the first, second, third, fourth, and fifth pleas of Tait.
To the sixth, the plaintiffs replied that the company in the first count mentioned at the time of
making the agreement in that count mentioned, and at the respective times of the lending and paying
in the second and third counts respectively mentioned, was not, nor had it been, nor was it, a company
and partnership between the said defendants and divers other persons presuming to act and acting as
if they were a corporate body, and pretending to raise a transferable and assignable stock, modo et
forma; concluding to the country.
To the seventh plea the plaintiffs replied, that the company and partnership in the first count
mentioned at the respective times of making the said agreement in the first count mentioned, and the
lending and paying the said sums in the second and third counts respectively mentioned, was not, nor
had it been, at any part of the time in the seventh plea mentioned, nor was it still, a new and unlawful
undertaking, tending to the common grievance, prejudice, and inconvenience of great numbers of the
liege subjects of this realm in their trade and commerce; nor was the same undertaking at the time of
making the said agreement in the first count mentioned, and before and at the respective times of
lending and paying the respective sums in the second and third counts respectively mentioned, an
undertaking for the purpose and object in the plea mentioned; nor was it a public undertaking then or
at any part of the time in the seventh plea mentioned, or still relating to affairs in which the trade and
welfare and commerce of great numbers of the subjects of this realm were concerned; nor was the
same undertaking, at the time of making the agreement in the first count mentioned, and at the [93]
times of the lending and paying in the second and third counts respectively mentioned, nor
thenceforth had it been, nor was it still, a common nuisance to the liege subjects of this realm, modo
et forma, concluding to the country.
To the eighth plea the plaintiffs replied, that the company, at the time of the making of the
agreement in that plea mentioned, and the payment of the said 2000l. therein mentioned, was not, nor
from that time had it been, nor was it still, a company and partnership between the defendant and
divers other persons presuming to act and acting as if they were a corporate body, and pretending to
raise a transferable and assignable stock, modo et forma.; concluding to the country.
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To the ninth plea the plaintiffs replied, that the company, at the time of making the agreement in
that plea mentioned, and of the payment of the said 2000l. in that plea mentioned, was not nor from
that time had it been, nor was it still, a new and unlawful undertaking, tending &c; nor was the same
undertaking, at the time of making the last-mentioned agreement and the payment of the said 2000l.
in that plea mentioned, nor thenceforth had it been, nor was it, a common nuisance to the liege
subjects of this realm, modo et forma; concluding to the country.
At the trial before Tindal C. J. at the London sittings after Michaelmas term, the signatures of the
defendants to the agreement of the 24th of December 1835, were proved, and it was shewn that the
plaintiffs had paid bills drawn by Penman on Henry Blundell to the amount of 5500l.; that they declared
their intention not to take shares in the company; and that they gave notice that they required to be
reimbursed the amount of their advances with interest and costs.
The plaintiffs then put in the deed of settlement of [94] the association, bearing date the 1st of
November 1833, between Penman of the first part, Muskett of the second part, the defendant, Henry
Blundell and six other persons, of the third part, and Bridges of the fourth part, by which, after reciting
that the several parties thereto of the first, second, and third part, had then lately agreed to form a
company for the purpose of working gold mines in the United States of America, and that they were
desirous that such deed of settlement should be made and executed for the purpose of ascertaining,
defining, and settling their respective rights, interests, and liabilities, in the undertaking, it was thereby
declared and agreed by and between the said several parties, inter alia, in manner following:
1. That the several parties hereto of the first, second, and third parts, and all persons who shall
hereafter become subscribers to, or interested in, the capital of the company hereby intended to be
formed under the provisions hereinafter contained (and who are hereby described as shareholders),
shall, so long as they possess any sum or share of the capital of the company, be and continue, until
dissolved under the provisions hereinafter contained, a company or partnership under the name of
“The Anglo-American Gold Mining Association.”
2. That the object of the company shall be the working of gold mines in the United States of
America, and the reduction and sale of the precious metals and all other valuable products of the said
mines.
4. That the present capital of the company shall consist of 6000l. sterling, which shall be
considered as divided into sixty shares of 100l. each, all which shares have been taken and subscribed
for by the parties hereto of the first, second, and third parts in the several numbers and proportions
agreed upon between them.
5. That it shall be lawful for the shareholders of the company, at a special meeting of shareholders
to be [95] called for that purpose, in manner hereinafter mentioned, at any time, and from time to
time, to increase the capital of the company to any amount that may be agreed upon, by creating an
additional number of 100l. shares.
11. That each shareholder (as well the present as all future additional shareholders and all persons
becoming entitled to shares upon any change of ownership as hereinafter provided for) shall, upon
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application to be made by him to the trustee and treasurer of the company, be entitled to receive for
every share to which such shareholder shall appear by the book called the “Share Registrar Book”
hereinafter particularly mentioned to be entitled, a certificate signed by the said trustee and treasurer,
in the words and figures, or to the effect, following:
“Anglo-American Gold-Mining Association.
Shareholder's Certificate.
"This is to certify that A. B. of &c, is the proprietor of the share No. , in the capital of this
association, as established by deed of settlement bearing date the 1st day of November 1833; that the
said share stands in —— name in the 'Share Register Book,' as the proprietor thereof; and that the
sums specified in the margin hereof have been paid on account of the said share.
Given, under my hand, in London, this_____ day of______ .
“Signed, G. A. Muskett,
Trustee and Treasurer.
“N. B. The holder of this certificate will not be entitled to any of the privileges of a shareholder
until the share has been transferred to him in the books of the company.”
12. That a sufficient number of printed forms of shareholders' certificates shall be provided by
the [96] trustee and treasurer, and kept by the solicitor, of the company for the time being; and such
certificate shall be filled up and delivered by the solicitor to the shareholders entitled to the same upon
their application, provided nevertheless that the shareholders' certificate shall be evidence of the title
to the share mentioned therein, of that person only who shall therein be stated to be the proprietor
thereof in the “Share Register Book,” and such certificate shall not entitle any other person who may
be the holder thereof (whether for valuable consideration or otherwise) to any right or interest in, or
lien upon, the share to which the same relates, or in any way give to such holder a right to participate
in the profits or advantages of the company, or to interfere with or be concerned in the management
of the affairs thereof.
15. That the shares in the company, as well original as additional, may be assigned or disposed of
by deed, or will, or otherwise, to any other person or persons, at the discretion of the holder thereof;
but that no share shall be divisible into any fractional part.
16. That upon any change taking place in the ownership of any share in the company, whether
such change be effected by act of the law or by act of the parties, the party or parties claiming to be
entitled to any share or shares in respect of any such change, shall produce his, her or their title to
such share or shares to the solicitor of the company for his examination and approval; and such
solicitor, upon being satisfied of the sufficiency of such title, shall cause the name, place of residence,
and occupation of the party or parties so making out title as aforesaid, together with the number of
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shares to which a title shall be so made out, and the numbers of such shares respectively, to be entered
in the “Share Register Book.”
19. That the entries contained in the “Share Register Book” shall, for all the purposes of the
company, and [97] these presents, be conclusive as to the parties entitled to shares, their places of
residence, and occupation, the number of shares held by them respectively, and the respective numbers
of such shares.
20. That no person shall be entitled to any of the rights or privileges of a shareholder, or be in
any way interested or concerned in the management of the affairs of the company, in respect of any
share or shares, his title to which shall not have been duly examined and entered in the “Share Register
Book.”
21. That any person upon ceasing to be a shareholder and payment and discharge of all money,
and other liabilities charged upon, or due in respect of, the shares possessed by him, shall, if he require
it, receive from the trustee and treasurer of the company a certificate, in the words and figures, or to
the effect, following : —
“Anglo-American Gold-Mining Association.
Certificate of Discharge.
I do hereby certify that A. B. of &c. has ceased to be a shareholder in the above-named company,
and that he is discharged from all liabilities on account of the shares formerly held by him. Witness, my hand
this________ day of________ .”
38. That John Penman shall be the present superintendent of the company, and shall be subject to,
and bound by, the several rules, regulations, and provisions next hereinafter contained; that is to say,
First, as the said parties hereto of the second and third parts have been mainly induced to become
shareholders in the company upon the statements and representations of Penman that there are gold-
mines in various parts of the United States of America, which may be taken, and profitably worked,
by the company, and [98] that he is competent and willing to superintend and conduct the actual
working of the said mines and the general management of the affairs of the company in America, it is
hereby agreed between the parties hereto, and Penman doth hereby for himself, his heirs, executors and
administrators, expressly covenant with the said G. A. Muskett, his executors and assigns, that he
Penman will, as soon as conveniently may be after the execution of these presents, repair to the United
States of America; and upon his arrival there, use his best endeavours to discover, with as little delay
as possible, some situation eligible and advantageous for carrying on the operations of the company.
Secondly. That Penman shall be unfettered in his judgment as to the locality or particular nature of
the situation to be selected by him for commencing and carrying on the operations of the company,
and to that end, shall be at liberty to engage one or more situation or situations containing gold mines,
either opened or unopened, and either to make arrangements for the entire working of the said mines,
or only for the smelting and reduction of the ore, the main object of the company being the obtaining
and sale of gold ore; and it being expressly agreed by the parties hereto of the second and third parts,
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that it shall be left to the discretion and judgment of Penman to advance and effectuate such object in
such manner, and in all respects, as he shall think most advisable. Provided nevertheless, that it shall
be lawful for the shareholders at any half yearly, or special, meeting, to be held in manner hereinafter
directed, to prescribe all such directions and regulations as to the working of any mines to be taken
by Penman, and the management by him of the affairs of the company in America, as they shall, from
time to time, resolve and agree upon; and which directions and [99] regulations, when duly made and
forwarded to Penman, he shall observe, conform to, and be bound by
Thirdly. That Penman shall be at liberty to contract for the occupation of any situation for the
purposes of such company, for such period as, in his judgment, shall be sufficient to try the eligibility
thereof; and the terms of such contract shall be left entirely to his discretion, except that he shall not
be at liberty to make any contract for the absolute purchase of any situation without the express
authority of the shareholders, to be given at a half-yearly meeting to be held for that purpose in manner
hereinafter directed.
Fourthly. That in case any directions or instructions shall at any time be given to Penman as to
making any further contracts for the occupation or purchase of mines in pursuance of the provisions
in that behalf hereinafter contained, Penman shall, in all things, observe such directions and instructions
and immediately use his best endeavours to do, or procure to be done, every act necessary to the
perfect completion of such contracts respectively, according to the laws and municipal regulations of
the particular state or territory in which the subject matter of such contracts respectively shall be
situate.
Fifthly. That in case any lands shall at any time be purchased by Penman on behalf of the company,
in pursuance of directions or instructions for that purpose as aforesaid, and the laws or municipal
regulations of the particular state or territory in which such lands shall be situate, shall prevent or
forbid the conveyance of such lands being taken or held in the name of the company, such conveyance
shall be made to Penman, but nevertheless to be held by him his heirs and assigns in trust for the
company.
Sixthly. That when and so soon as Penman shall have arranged for the occupation of any situation
or [100] situations for commencing the operations of the company, he shall hire all such workmen
and servants, and provide all such implements and stores, and do all such other acts whatsoever, as
may be necessary or proper for commencing such operations as speedily and efficiently as possible.
Seventhly. That when and as soon as Penman shall have entered into such contract for occupation
as aforesaid, he shall draw up a report containing an accurate and detailed description of the premises
to be occupied, and their probable means of profit and advantage to the company, and transmit such
report, together with a copy of such contract, to the trustee and treasurer of the company for the
time being.
Fifteenthly. That for the purpose of enabling Penman to commence the operations of the company,
the trustee and treasurer thereof may forthwith advance to Penman any sum not exceeding 600l.: and,
in order to carry on such operations, Penman may be at liberty to draw upon the trustee and treasurer thereof,
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by bills at not less than sixty days' sight, for such sums as he shall from time to time require; and the
amount of such bills shall be applied by Penman in payment of the expenses of promoting the
operations of the company.
39. That Muskett shall be the present trustee and treasurer of the company, and shall be bound by
the rules, regulations and provisions next hereinafter contained, one of which was, that the said trustee
and treasurer shall apply the moneys from time to time in his hands belonging to the company in
payment of such bills or drafts as the superintendent, in pursuance of the powers and provisions
hereinbefore in that behalf contained, shall draw upon him.
45. The fourteen days' notice of the time and place of holding all meetings of shareholders, as
well half-yearly as special, shall be given by a circular, to be sent to each [101] shareholder of the
company at his place of residence as entered in the “Share Register-Book;” such circular, as to half-
yearly meetings, to be signed and sent by the trustee and treasurer of the company for the time being;
and such circular, as to special meetings, to be signed and sent by the party or parties respectively
calling the same, and to state the particular business to be taken into consideration thereat.
52. That any shareholder may vote by proxy, such proxy to be in writing held by some other shareholder,
except in the case of the superintendent, whose proxy may be held by a stranger.
54. That all questions and resolutions shall be decided at the meetings, as well half-yearly as special,
by the majority of the votes of shareholders appearing in person or by proxy.
55. That at the special meetings of the shareholders no other business shall be discussed and
resolved upon besides the particular matters of business stated in the circulars calling the same.
57. That the shareholders of the company may, at any time, and from time to time as often as they
shall think proper, by resolutions to be passed at special meetings, to be duly held and convened for
that purpose, according to the regulations hereinbefore contained, alter and vary the regulations of
the company and the rights and interests of the shareholders therein, and prescribe and establish any
new or other mode of management of the affairs of the company as they shall from time to time
think proper or expedient; and such new or altered rules, regulations and provisions, shall, so long as
they remain in force, be as binding upon all the shareholders as though all had concurred therein, or
the same had been introduced into, and formed part of, these presents.
59. That an absolute and entire dissolution of the company may take place by a resolution of the
majority [102] of the shareholders present at three successive meetings, to be held for that purpose,
the last of which meetings shall appoint three of the shareholders, of whom the trustee and treasurer
for the time being shall be one, for the purpose of carrying such dissolution into effect, and the affairs
of the company shall be thereupon wound up; and the assets of the company, after satisfying their
debts and liabilities, shall be divided among the shareholders in proportion to their shares, and any
special meeting of the shareholders duly convened for that purpose, may declare the accounts of the
company finally closed, and the assets fully administered, and the superintendent, trustee and treasurer,
and all other parties released and discharged from all future liabilities and engagements, actions, suits,
claims and demands under or by virtue, or in consequence, of the deed, or of any other deed or
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engagement entered into by them in connection with, or reference to, the affairs of the company; and
that the superintendent, trustee and treasurer, and all other parties, shall be released and discharged
according to such resolution, and on the terms and under the modifications thereof.
On the 29th of September, 1834, the defendant Henry Blundell and two others were appointed
trustees and treasurers instead of Muskett.
The several defendants attended several meetings, and otherwise took part in the proceedings of
the company, with the exception of J. L. Heathorn. The only evidence to connect him with the
undertaking was that, on the 17th of December, 1835, he attended a special meeting of the association.
It was not shewn whether a sufficient number of shareholders was present, without reckoning J. L.
Heathorn, to transact the business for which they were convened.
At this meeting, the following resolution was passed: —
[103] 17th of December, 1835.
Anglo-American Gold-Mining Association.
“At a special meeting of this Association, held this day at &c. in London, in pursuance of a circular,
dated 1st of December, 1835.
PRESENT Shares PROXIES Shares
Henry Blundell 26 David Wilson 6
James Magnus 47 Henry Heathorn 5
William Smith 10 Israel Isaacs 5
John Tait 6 Joseph Blundell 12
Solomon Cohen 7 George D. Longstaff 7
Abraham Hort 11
Samuel Magnus 6
Joseph L. Heathorn 1
Leopold Neumagen 1
Abraham Harris 2
Henry Blundell, Esq. in the chair.
The circular convening this meeting, and the correspondence of Mr. Penman, and letters from Dr.
E. S. Blundell, and Messrs. Samuel Hicks and Sons & Co. having been read,
It was unanimously resolved —
That the contract entered into by the directors for the sale of the Henderson mine and saw mill to
Mr. Harrison and others, be confirmed.
That in case the directors shall not be able to effect the sale of the Alexander mine in the course
of the present week, they be authorised to sell any number of new or additional shares, not exceeding
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100, as may be necessary for enabling them to repay their respective advances, and to pay the bills
drawn by Mr. Penman upon Mr. Blundell.
That Mr. Penman having failed to make the monthly reports to the directors, as provided by the
deed of settlement, and having, on the 29th of June last, written [104] to Mr. Magnus, as one of the
directors of the company, that he had then drawn on Mr. Blundell, in favour of Mr. H. W. Olcott, on
account of the company, bills to the amount of 3500l.; whereas he had given to Mr. Olcott such bills
to the amount of 5500l., and having, until they were presented for acceptance, wholly suppressed the
fact that the additional bills of 2000l. had been drawn; and having, by his said letters of the 29th of
June last, and another addressed to Mr. Magnus of the same date, led the directors to believe that 3500l.
would be all he should have occasion to draw on them for on account of the company, and having
since drawn on Mr. Blundell, and given to Mr. Olcott, Messrs. Hick and Sons and Dr. E. S. Blundell, bills
to the extent of 9500l.; and having thereby drawn on Mr. Blundell, on account of the company, bills
of exchange far exceeding the amount of the subscribed capital, and also having expressed his
intention of withholding the company's property unless an exorbitantly large sum of money shall be
paid to him, — the appointment of Mr. Penman as a director, and superintendent, &c are hereby
revoked, &c.”
At a special meeting of the association held on the 9th of April 1836, which was attended by all
the defendants, except J. L. Heathorn, Isaacs and Harris, a report of the directors, dated the same day,
was received, read and entered on the minutes. The report stated that
“At the December meeting 100 new shares were created, the sale of which the directors hoped would
enable them to meet all the exigencies of the company.
Of these shares sixty were offered to S., F., and H. (the plaintiffs); but those gentlemen at that
time refused to make an absolute purchase of them, and they proposed to retire, for the honour of
the drawer, bills then outstanding drawn by Penman on Mr. H. Blundell to an amount not exceeding
6000l., the directors and shareholders being made jointly and individually responsible [105] for their
reimbursement, with interest, and all costs attending such bills, at any time after the 1st of October next,
unless they should make their election to accept of shares at par in lieu of being repaid in money.”
With the sanguine picture before them of the company's prospects which Penman had drawn, and
which would have been destroyed if the bills in question had been returned to America protested, the
directors did not hesitate, on behalf of the company, to give the undertaking required by S., F., and
H., who, accordingly, retired bills to the amount of 5500l.; and the time is now at hand when they are
to exercise their option; and this forms one of the large items of debt which it is necessary to be
prepared to repay.
A verdict was taken for the plaintiffs, subject to the questions, whether J.L. Heathorn was a
shareholder and proprietor at the time the contract was entered into with the plaintiffs—whether it
was made with his authority—and whether the association was illegal; with power to the court to draw
inferences as a jury.
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In the following term, rules were obtained on these points by Sir W. W. Follett S. G., on behalf of
the defendant J. L. Heathorn; and by Kelly, on behalf of the defendant Tail. Against these rules
Sir T. Wilde Serjt. shewed cause in Trinity term, 1842. J. L. Heathorn was properly made a co-
defendant. He was present at the meeting of shareholders at which the liability of the shareholders to
pay the bills in question was distinctly recognised. [Cresswell J. Was there any evidence that the statement
— which appears on the minutes— that J. L. Heathorn was a shareholder, was read at the meeting?]
There was not. But it must be understood that the minutes were taken down in the usual way. This
was a meeting, not for the purpose of [106] considering whether a company should be formed, but
“a special meeting” of an existing company, held “in pursuance of a circular dated” &c. It has been
suggested that the meeting was not regularly called, but whether that be so or not J. L. Heathorn
attended. [Tindal C. J. Was the meeting held at the office of the company in Copthall Court or at the
office of the solicitor?] It was at the office of the solicitor. [Tindal C. J. That makes it stronger.] The
parties met only to discuss the existing state of affairs. No shares were afterwards issued. The question
is, not whether it was not open to J. L. Heathorn to explain all this, but whether, unexplained, it was
not sufficient prima facie evidence of his being an assenting party, and what inference a jury would be
justified in drawing from the evidence. As Penman was the only party allowed to attend by a proxy, not
being a member of the association, J. L. H. could only have attended as a member, a character which
he could not afterwards repudiate. Being present, the presumption is that every thing was done which
would be necessary to render the proceedings of the meeting effectual. J. L. H. claims to be a partner,
he is acknowledged to be a partner, and he acts as a partner. In taking the present objection, J. L. H,
in effect, says, “I will not shew you what, but I ask you to assume that something has been omitted
which ought to have been done to constitute me a partner.”
The next question is, whether the association was illegal. This objection is not very creditable to
the commerce of the country. This was a bona fide investment of actual capital, not a bubble scheme
holding out that only small sums are to be advanced. There can be no objection to sending agents to
look out for mines. There [107] has been no publication for the purpose of creating a delusion. The
object of the association involved nothing injurious to the people of this country. No attempt was
shewn to bring in unwary persons by false and delusive statements. If any delusion had been practised,
the defendant had the full means of shewing it. None of the characteristics of a bubble concern are
to be found. [Tindal C. J. As far as it appears the bills were drawn as a regular mercantile transaction.
Maule J. referred to Ex parte Bolitho. Cresswell J. Is there any allegation in the pleas that the holders of
the bills had notice of any illegality in the transaction?] None. The illegality charged in the plea is, the
presuming to act as a body corporate without legal authority, &c. [Tindal C. J. These are words
introduced by the bubble act. I am not aware that presuming to act as a body corporate was an offence
at common law.] The acting here is in a form which would not bind a corporation. The bills in question
were drawn upon three individual directors by name. There is nothing illegal in dividing a partnership
into shares, or in making the shares transferable. The provisions of the bubble act are out of the
question. To shew illegality there must be a nuisance to the public. The mere power of transferring
shares from A. to B. is not illegal. To make an association illegal it must be accompanied with delusion.
This was a private partnership deed, not a prospectus held out to the public. It is not something
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published to get deposits and lay hold of money. One of the objections is, that it is required that
certain forms should be gone through. But any such impediments to the free transfer of shares would
have excluded this association even [108] from the operation of the bubble act, supposing that statute
not to have been repealed. The certificate is not to discharge from liability. It would only do so after
payment of what was due from the party at the time he retired from the association, and could
therefore occasion no injury to the public. The illegality of these transactions has always consisted in
stating that the party transferring his interest was to be discharged. There is no stipulation that the
transferee shall be in the same position as the transferor. It is not very material to consider whether if
the agreement was illegal the defendant had notice of it. The last stipulation of the deed, the fifty-
ninth article, deserves particular attention. It appears to have been misunderstood. There is no ground
for saying that the effect of this clause is to discharge the partners, as against the public, though, in
the case of Blundell v. Winsor in the Chancery Reports, this clause is printed in italics. Among other
objections which were raised, an objection was taken as to the illegality of the company. In his
judgment Shadwell V. C. says, “I cannot but think that the deed of November 1833, by which the
company was established, is, on the face of it, illegal. It proposes that certain persons should become
partners for the fanciful purpose of working gold mines in North America; and it provides that the
parties to the deed of the first, second, and third parts, and all persons who should become subscribers
to or interested in the capital of the company, should, so long as they possessed any share of the
capital, be and continue a company or partnership under the name of The Anglo-American Gold Mining
Association. It then provides that, in the first instance, the shares should not exceed sixty; but, in the
subsequent part of the instrument, the shareholders are [109] empowered to increase the number of
shares to an unlimited extent; and a great number of additional shares have been, in fact, created. The
deed also provides that the shares, as well original as additional, may be assigned or disposed of by
deed or will, to any person or persons, at the discretion of the holders. The fair inference to be drawn
from the provisions of this deed is, that certain persons were to form a company, which might be
increased to an unlimited extent, and that the shareholders were to have the power of transferring
their shares to whomsoever they pleased, without any sort of control. The deed, therefore, necessarily
represents that the persons who should assign their shares, would get rid of all the liabilities attached
to them; and that the persons who should take their shares, would take them just as the assignors held
them. It is clear, however, that this could not be done. In my opinion, therefore, the deed held out to
the public, as an inducement to them to become partners in the working of these imaginary gold
mines, a false and fraudulent representation that they might continue partners in the undertaking just
as long as they pleased, and then get rid of all the liability that they had incurred, by transferring their
share to some other person.” Was it ever heard that a partnership deed is to be considered as a matter
held out to the public? It was not, as alleged in the judgment, determined that they should sell single
shares. It is difficult to see how the Vice-Chancellor could possibly have arrived at the conclusion to
which he came. There was not a tittle of evidence to shew that the plaintiffs had notice of the
supposed illegality. The judge misapprehended the contents of the deed, and the effect of the facts
stated as to the proceedings of the association. He professes to found his decision [110] upon the
judgment of this court in Duvergier v. Fellowes; which, if properly considered, affords no ground for
such decision. In that case a bond had been given to the plaintiff, conditioned for the payment to the
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plaintiff of 100,000l., upon his forming a company for the carrying on of a distillery according to a
process for which a patent had been taken out, and obtaining purchasers for 9000 shares. The plea
was, that the patent contained a proviso for making it void in case the patentee should transfer the
benefit thereof to more than five persons, and that, at the time of the making of the bond, it was
intended that the company should consist of more than five persons, and that it should be formed for
the purpose of using the privileges of the patent, and of acting as a corporate body, and dividing the
benefit of the patent into 10,000 shares, to be transferable and assignable, without any charter from
the King; and that it was illegally agreed between the plaintiff and the defendant that the plaintiff
should form the company for such purposes. That plea was, on demurrer, held to be good, and an
answer to the action. Best C. J. in delivering the judgment of the court says, “The seventh plea states,
and the demurrer admits, that the plaintiff and defendant intended that the company which the
plaintiff undertook to form, should act as a corporate body without any charter from the King; that
the benefit of the letters patent was to be enjoyed by this pretended corporate body; and that the
capital of their body was to be divided into ten thousand shares, which were to be transferable and
assignable. It has been said at the bar, that the parties may have intended to obtain an act of parliament
in order to give the body a legal existence; but nothing of this intention appears on the record. It has
been [111] further said, that the defendant should have shewn how the parties intended to act as a
corporation. If this is not correctly pleaded, advantage should have been taken of the technical defect
by special demurrer. If what they intended to do would not have been acting as a corporation, the
plaintiff should have traversed the plea;” — which here, the plaintiffs have done. — “By demurring
generally he has confessed himself guilty of intending to form a company that was to act as a
corporation. But the shares were to be transferable. There can be no transferable shares of any stock
except the stock of corporations, or of joint-stock companies created by act of parliament. When it is
said that the shares were to be transferable, that must mean that the assignee was to be placed in the
precise situation that the assignor stood in before the assignment; that the assignee was to have all the
rights of the assignor, and to take upon all his liability. Now the assignee can join in no action for a
cause of action that accrued before the assignment; such rights of action must still remain in the
assignor, who, notwithstanding he has retired from the company, will yet remain liable for every debt
contracted by the company before he ceased to be a member. Indeed, the members of corporations
cannot assign their interest, and force their assignees into the corporation, without the authority of an
act of parliament. Such authority is expressly given by the Bank acts, the South Sea acts, and the other
statutes creating companies that possessed stock which it was deemed proper to render transferable.
The pretending to be possessed of transferable stock, is pretending to act as a corporation, and
pretending to possess a privilege which does not belong to many corporations. But this is put only as
one of the proofs of the intention of the projectors of this company that it should act as a corporation.
It is not necessary on [112] these pleadings to decide whether the forming a company with such shares,
is of itself, without other circumstances, pretending to act as a corporation; because it is, by the
pleadings, distinctly admitted that the plaintiff and defendant intended that the company should act as a
corporation.”
In the King's Bench, and also in the House of Lords, the judgment of this court was affirmed
solely on the ground that the plea shewed, and the demurrer admitted, that the company had been
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formed for the purpose of dividing the benefit of the patent amongst a greater number of persons
than the patent authorised. That case was very different from the present. There, the decision
proceeded upon an admission of those very facts which are here denied and disproved. The decision
in Duvergier v. Fellowes has therefore really nothing to do with the present question. Whether the setting
out of a fact, and alleging that fact to be illegal, is sufficient to stamp such fact with the character of
illegality, where the truth of the plea, if sufficient, is admitted by the demurrer, is quite another
question. Josephs v. Pebrer was decided upon the express provisions of the bubble act, a few months
before that act was repealed; and the only question was, whether that case came within the act. The
argument was very short. The counsel for the defendant were stopped. Abbott C. J. says (6), "If the
projectors, before the association has been sanctioned either by an act of the legislature or by a royal
charter, make shares in the concern transferable without any restriction, at the mere will of the holder,
and provide that the purchasers shall render themselves liable to regulations to be framed by certain
persons styling themselves a committee of management or directors, then the association [113] assume
an unlawful shape. The words of the 6 G. 1. c 18. are large and comprehensive, although not altogether
free from obscurity.” This judgment therefore proceeds solely on that act; and the circumstances
which gave rise to the passing of the act, were particularly referred to. In The King v. Dodd Lord
Ellenborough says, “Independently of the general tendency of schemes of the nature of the project now
before us, to occasion prejudice to the public, there is besides in this prospectus a prominent feature
of mischief; for it therein appears to be held out that no person is to be held accountable beyond the
amount of the share for which he shall subscribe, the conditions of which are to be included in a deed
of trust to be inrolled. But this is a mischievous delusion, calculated to ensnare the unwary public As
to the subscribers themselves, indeed they may stipulate with each other for this contracted
responsibility; but as to the rest of the world, it is clear that each partner is liable to the whole amount
of the debts contracted by the partnership.”
The King v. Webb decided that the mere power of creating transferable shares did not make the
undertaking illegal. That was also a case under the bubble act; and it never occurred to the learned
counsel who appeared for the prosecution, to contend that the defendant had been guilty of an offence
at common law. In that case, where a large capital was to be raised by numerous small subscriptions
in transferable shares, it was held that as the shares were transferable to a limited extent only, and not
at the unrestricted option of the holders, there was not a raising or a pretending to raise a transferable
stock within the meaning of the act. In Walburn v. Ingally Lord Brougham C., speaking of companies
having transferable shares, says, “To hold such a [114] company to be illegal would be—to say that
every joint-stock company, not incorporated by charter or act of parliament, is unlawful, and, indeed,
indictable as a nuisance, — and to decide this for the first time, no authority of a decided case being
produced for such a doctrine.” In The London Grand Junction Railway Company v. Freeman, the court of
error appears to have wished to avoid being thought to adopt the decision in Josephs v. Pebrer, Duvergier
v. Fellowes, and Blundell v. Winsor. In Nockels v. Crosby it was held that a scheme for raising money by
small subscriptions, to be laid out at interest for the benefit of the surviving subscribers, and where
transferable shares were to be issued, was not illegal, even whilst the bubble act was in operation.
Here, there is nothing which is hurtful to the public. There is no seeking to entrap the unwary by
holding out delusive prospects of gain. The capital is to be increased by the creation of additional
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shares only in the event of such capital becoming bona fide required by the real money transactions
of the association.
This association is in the nature of an ordinary trading partnership. The authority which partners
possess to bind one another by their contract, is well expressed in Sandilands v. Marsh. It was there held
that partners are bound by the contract of a co-partner, as to the terms on which any business shall
be transacted, although such business be not in their usual course of dealing, provided the business
be afterwards transacted with the knowledge of the other partners. The public are not bound to see
that each partner is dealing within the terms of his authority: it is sufficient if they see that he is acting
[115] in a partnership matter. Then, does the contract declared upon in this case, relate to a partnership
matter? The arrangement for retiring these bills was strictly connected with the business of the
partnership. The partners possessed the same authority for sanctioning this mode of meeting a
partnership liability as they would possess and exercise in the ordinary case of overdrawing their
banker to pay a partnership debt. The banker might recover from the partnership, the amount of the
money so overdrawn by an individual partner. Here, however, the contract declared upon is one which
the directors were specifically authorised by the shareholders to enter into. It was a contract to pay
money to discharge a debt of the company in pursuance of a unanimous resolution of the
shareholders. It is not material that, at the last meeting, J. L. Heathorn was not present. The public, in
dealing with the partnership, are not bound to know, whether a meeting of the partners has been
properly convened. Here, however, there is nothing to shew that the meeting was not regularly
convened. In Cannan v. Bryce it was held that money lent for the express purpose of paying differences
on illegal stock-jobbing transactions, to which the lender was no party, could not be, after repayment,
recovered back by the borrower, although the money was lent for the very purpose of enabling the
latter to make a payment which he ought not to have made; which is not the character of the present
case. If this company was illegal the plaintiff's right to recover would not be impeached. The object
of the advance was to enable the association to pay an honest debt. Dickinson v. Valpy is inapplicable
to the present case. There, the question was as to the power of one director to accept a bill for himself
and his [116] co-directors, so as to make those co-directors liable upon the bill. Here, the contract is,
for raising money to pay the amount of bills, upon which a joint liability is admitted to have existed.
Wintle v. Crowther. Hawtayne v. Bourne was the case of an agent, not of a partner. This is rather like the
cases of Loyd v. Freshfield, and Rothwell v. Humphreys.
…
[120] Sir W. W. Follett S. G. (with whom were Richards and J. L. Adolphus), in support of the rule
obtained on behalf of J. L. Heathorn. J. L. Heathorn, who was not a party to the agreement, is sought
to be made liable as a partner. This action is, in fact, brought by the other defendants for the purpose
of relieving themselves at the expense of J. L. Heathorn. (This was denied by Sir Thomas Wilde Serjt.)
The illegality of this association has been established by the decision of the Vice-Chancellor of
England, upon a bill filed by one of the present defendants. This is an association for working mines
in America, a foreign country; a circumstance which may be material to be considered with reference
to the cases that have been decided. There are certain modes by which parties may become partners;
one is, by executing a partnership deed. Here, though a partnership deed is shewn to have existed, it
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was not executed by J. L. Heathorn. The question here is, whether J. L. Heathorn was an actual partner;
there being no pretence for saying that he held himself out to the public or to the plaintiffs, as a
partner. [Tindal C. J. There was no holding out except the appearing at the meeting and being registered
as a person attending there as a partner.] It is not shewn that he knew that he was so registered. The
contract with the plaintiffs was entered into on the credit of those who were parties to the deed. (This
statement was denied by Sir T. Wilde Serjt.) This is not an ordinary partnership, but a joint-stock
company, with transferable shares for the introduction of new partners. By the fifth clause of the deed
the shareholders may [121] increase the capital of the company to any amount, by creating an
additional number of 100l. shares. The power of doing this is not even restricted to the directors, but
is left to the decision of a special meeting of the shareholders. [He then called the attention of the
court to the sixth, seventh, eighth, ninth and tenth clauses.] By the eleventh clause those persons only
can take an interest in the association whose names are entered in the share register-book; and the
thirteenth provides that shares shall not be divided into fractional parts. It appeared that the
shareholders had ordered additional shares to be issued. To make J. L. Heathorn a partner he must be
either an original subscriber or the holder of an additional share, or an assignee of shares. The court
will remember that the solicitor of the company was the principal witness for the plaintiffs. The
sixteenth clause requires that every proposal for a transfer shall be laid before the solicitor of the
company. And by the nineteenth section the entries made by the solicitor are to be conclusive. By the
twentieth clause no person is to be entitled to the right and privilege of a shareholder of the company
or be in any way interested or concerned in the management of the affairs thereof in respect of any
share or shares, his title to which shall not have been entered in the share register-book. There was no
proof that the name of J. L. Heathorn was entered in the share register-book. He was bound to produce
his title to the solicitor. There could be no dispensation with the terms of the deed except with the
consent of every individual member of the association. It must be taken that the names of the parties
present at the meeting of the 17th of December were not read over; as if they had, it cannot be doubted
that the question would have been put to the witness by the plaintiff's counsel upon his examination
in chief. Nor was any question put upon [122] re-examination as to the names of the persons who
were there. We should have objected to the reading of the names and the number of shares set
opposite to those names, if it had appeared that the list was meant to be read as evidence to shew that
J. L. Heathorn attended the meeting as a shareholder. [Tindal C. J. In what way would you have objected?
Do you say that he was there by accident?] There are cases to shew that mere presence at such a
meeting will not bind the person attending it as a partner. The witness, who had previously been
examined on behalf of the plaintiffs, was hostile to the defendants. It would have been madness on
their part to cross-examine such a witness with a view to negative that which had not been proved.
The witness was the brother of a party deeply interested. No circular was shewn to have been sent
giving notice of the intended meeting. Numerous meetings of the shareholders appear to have been
held, at only one of which J. L. Heathorn was shewn to be present. This very question has been decided
by the court of Exchequer in the case of The East India Shipping Company v. Lord Charleville, in perfect
conformity with prior decisions. It has been said that some of the cases in which it has been held that
presence of a party at a meeting does not shew him to be a partner, were cases in which the company
had not been yet formed. That undoubtedly must be admitted. Thus, Dickinson v. Valpy is not an
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authority for the defendants, that presence at a meeting of an existing company would not be sufficient
to charge the party. But both that case and Fox v. Clifton shew that the liability of a member of a joint-
stock company cannot be established by evidence which would be sufficient to create a liability as a
member of an ordinary trading [123] partnership. In Fox v. Clifton the evidence against the defendants
was materially strengthened by a variety of acts done by them. It was held, however, that the question
whether the defendants were or were not partners in the particular concern, was not a mere question
of fact for the discretion of the jury, but one depending upon the legal result of the facts found by
them; and it not being shewn that the defendants had held themselves out as partners, the court
decided that the defendants were not liable.
Supposing it to be made out that J. L. Heathorn was a shareholder, he was not bound by this special
contract. No authority was given to pledge the liability of the individual shareholders. The bills were
drawn by Penman upon H. Blundell. [Cresswell J. Then the question would be whether abroad, Penman
was not the company.] The effect of the resolution is this—Penman has deceived the company and has
drawn bills which he was not authorised to draw, and the company authorise the creation of new
shares for the purpose of taking up those bills. But looking at the deed the directors had no power to
bind the shareholders by thus increasing the amount of shares. If the directors had any authority to
enter into this contract on the part of the shareholders, it must have been from some power previously
conferred upon them, or by the recognition supposed to have taken place at the meeting of September
1836, at which J. L. Heathorn was not present. [Coltman J. Would not the directors have had power,
under their general authority, to pay these bills if they had had funds of the company in hand?] It is
submitted that they would clearly have had no such power. Their authority is by deed, and is this, —
to apply the moneys from time to time in their hands belonging to the company, in payment of such
bills as Penman, in pursuance of the powers and provisions therein in that behalf contained, should
draw [124] upon them. The moneys which they are so to apply are to be moneys previously received
from the shareholders. Penman was not to purchase without the assent, not of the directors but of the
shareholders. The duties of the different officers are defined by the deed—those of the trustee and
treasurer by the 8th clause. The company would not be bound by a borrowing of money by the
directors. No power of any kind is given to the directors. These bills were drawn by Penman upon H.
Blundell in his private capacity. [Maule J. The bills would be more negotiable in America by reason of
their being so drawn.] In an ordinary partnership there is an implied authority to draw bills. In Dickenson
v. Valpy the judgment of Bayley J. does not, as has been supposed, proceed upon the nature of the
undertaking. His words are, “The only question which could be submitted to the jury was, whether
companies instituted for similar purposes, had constantly been in the habit of drawing and accepting
bills, or whether it was absolutely necessary, for the purpose of carrying on the concern, that there
should have been such a power.” The directors of such a company ought to take care to have ready
money to answer all demands upon them. In Bramah v. Roberts it was held that one director of a joint-
stock company has no implied authority to bind his co-directors or the shareholders, by accepting bills
of exchange. If that case be law, how can these gentlemen, having no power to contract on the face
of the deed, bind the shareholders by entering into the special contract declared on? That contract is
indeed directly in the teeth of the directions given at the meeting of the 17th December 1835.
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[125] The directors ought to have issued new shares and have raised money in the mode authorised
by the share holders. [Maule J. I rather think that my impression at the trial was that it was a question
of fact; but the court of Exchequer appear to have considered that such a question would be a
question of law. Coltman J. The resolution of the 17th December 1835 may be an adoption of Penman's
act. It points out special modes of raising money to meet the bills, but does not exclude every other
mode of providing for the bills.] In Ducarrey v. Gill it was held that an agent, authorised to draw bills
on behalf of a joint-stock company, cannot bind the shareholders by bills drawn in his own name,
though drawn and negotiated for the purposes of the association. It has been contended that the
recognition of the contract at the meeting of the 9th September 1836 is binding. But J. L. Heathorn was
not present at that meeting. It was objected at the trial, that no circular for convening the meeting of
the 9th September, 1836, had ever been sent to J. L. Heathorn, and that therefore he was not bound by
any proceeding which took place thereat. The deed contained no power to enter into any contract
except by the act of the shareholders themselves.
J. L. Heathorn was not a shareholder. If a shareholder, he was not bound by this contract. The
question of illegality turns upon this particular, whether before the passing of the bubble act this
association would have been illegal. That it would have been illegal under the statute, there can be no
doubt.
J. L. Adolphus on the same side. It must not be assumed that the names of the parties present at
the [126] meeting of the 17th of December 1835 were read over at the same meeting. That is not the
usual course pursued at public meetings. [Wilde Serjt. I will put the whole Heathorn case upon the fact
of J. L. Heathorn being a registered partner. This was declined by Kelly.] In Flemyng v. Hector it was held
that the members of a club were not, as such, liable for work done or goods supplied by order of the
committee for the use of the club, in the absence of any express authority conferred upon the
committee. The creditor is bound to inquire whether those with whom he contracts have power to
bind any others than themselves. Attwood v. Munnings shews that it lies upon the party contracting with
those who assume to possess a power to bind others, to inquire whether the power exists, and whether
it has been properly pursued. In Hawtayne v. Bourne it was held that the resident agent of a mining
company has no implied authority to bind the shareholders by borrowing money on their credit, for
the purpose of meeting any emergency, however pressing —as the payment of wages due to labourers
who had obtained warrants to distrain upon the materials of the mine.
Kelly, in support of the rule obtained by the defendant Tait. The question now for the decision of
the court upon the defence of illegality, which is not pleaded by the other defendants, is, not whether
the eighth plea of the defendant Tait is good or bad, but whether the verdict ought to be entered for
the defendants upon the issue taken upon the replication to that plea. [Tindal C. J. To make out the
truth of this plea there should be some such state of facts as would support an [127] indictment for
a misdemeanor at common law.] (He then adverted to the sixteenth, seventeenth, and eighteenth
clauses of the deed,) The judgment of the court in Duvergier v. Fellowes is strictly applicable to this case.
There, one of the objections taken was, the power of creating new shares. [Maule J. Is not the creation
of new shares by subdividing the part-ownership of a ship legal?] That is by act of parliament, [Maule
J. No, it is at common law.] An interest in a mining speculation is, however, very different from a share
284
in a chattel. The contract in question was entered into without any assent on the part of the
shareholders, either expressed or implied. [Maule J. What difference does it make whether the assent
was before or after the arrangement with the plaintiffs for taking up Penman's bills?] If an unchartered
unincorporated company possesses these powers, where is the necessity for the constant interference
of the legislature on their behalf? [Cresswell J. To enable them, where the members are numerous, to
sue and be sued, without making all the members parties. Coltman J. Does not the plea import that
the company assumed to create transferable shares by which the parties transferring their interest to
others would be discharged from liability?] It imports that it was meant to give rights to the assignees
which the law would not give them. (He then referred to the fifteenth clause of the deed,) There was
a clear misrepresentation as to the means of obtaining a discharge from future liability.
J. L. Heathorn was not liable upon this contract; and if he was not, Tait is entitled to a verdict upon
the plea of non assumpsit, which can be found for the plaintiffs [128] only in the event of all the
defendants being liable as joint-contractors. Four different acts are required by the deed of settlement
to be done in order to constitute a party a shareholder. Each of these acts might have been proved on
the part of the plaintiffs, if J.L. Heathorn was a regularly admitted shareholder. The East India Shipping
Company v. Lord Charleville shews that attendance at a meeting even of an existing company is not
sufficient to fix a person as a shareholder. [Tindal C. J. The present case is very different from one
where there is a large public body. Coltman J. No objection was taken at the trial to the admissibility
in evidence of the fact that J. L. Heathorn was present at the meeting of the 9th of December 1835.]
That objection could not have been taken, as the proceedings at the meeting were evidently against
the other defendants. [Cresswell J. Not more so than as against J. L. Heathorn, unless we are to presume
that the other defendants had due notice of the holding of the meeting.]
TINDAL C. J. We wish to be furnished with copies of the pleadings — of the deed of settlement
— of the resolutions of the 9th of December 1835 —of the agreement of the 24th of December 1835
— of the proceedings at the members of the 17th of September 1836 — and of the short-hand writer's
notes.
Cur. adv. vult.
TINDAL C. J. now delivered the judgment of the court.
This was an action of assumpsit against Henri Heathorn and twelve other defendants; and the
declaration, in the first count, stated that the defendants were partners in a company called the Anglo-
American [129] Gold-Mining Association, and that by an agreement in writing, of the 24th of December
1835, purporting to be made between Henry Blundell, one of the defendants, and certain other persons,
being the agents of the other defendants, for and on behalf of themselves and the said company of
the one part, and the plaintiffs of the other part, after reciting that the members of the company
proposed to the plaintiffs to become shareholders and directors in the said company, and that the
plaintiffs, having found that disputes were pending between the said company and one John Penman,
its late superintendent or agent in North Carolina, who had drawn bills of exchange to a large amount
on the defendant Henry Blundell, on account of the company, declined to become shareholders until
they had had an opportunity of ascertaining the state of the company in reference to the disputes so
285
referred to; but that the directors and members of the said company, being desirous that the bills so
drawn by J. Penman on H. Blundell should be taken up, for the honour of the drawer, under the
guarantee and indemnity of the directors and of the company, the plaintiffs consented to take up the
said bills, to an amount not exceeding 6000l., upon the footing so proposed; and that the sum to be
so advanced by them, together with such further sum, if any, as should be required to make up the
said sum of 6000l. should, in the event of their determining to join the company, go in payment of
shares to that amount to be taken by them accordingly; and after reciting that at a meeting of
shareholders, duly held on the 17th of December 1835, it was resolved that one hundred additional
shares of 100l. each, should be created and disposed of by the directors for the benefit of the
company, and that sixty of such shares had been set apart with a view to, and in compliance with, the
proposal before mentioned, — it was witnessed that it was agreed as follows, that is to say, [130] that
bills not exceeding 6000l. drawn by J. Penman on H. Blundell on account of the company, should be
taken up by the plaintiffs for the honour of the drawer, and that the plaintiffs should follow the
instructions of the company, or of its agent or agents duly authorized, as to proceeding against J.
Penman or against the property of the company, or otherwise, in respect of the bills; and that in the
event of the bills not being paid, and of the plaintiffs not making their election to take the sixty shares,
so reserved and set apart for them, the defendants engaged and agreed for the payment of such bills
or bill, with interest at five per cent on the amount advanced, and all costs and expenses attending
such bills, at any time after the 1st day of October then next, on the company, and the directors having
three calendar months previous notice requiring the same; and that in case the plaintiffs, or any of
them, should, within two months after receiving from the directors a communication of the result of
the said operations or differences between the company and J. Penman, and of the state of the said
company's affairs (and which communication the said directors were to make in as full and explicit a
form, and at as early a period, as should be in their power), or at any earlier period, determine to take
the sixty shares so reserved and set apart, they or he should be at liberty so to do; and that in that case
the money so advanced in taking up the bills, with such further sum, if any, as should be necessary to
make up the sum of 6000l., should go in payment of such sixty shares; but that the plaintiffs should
in that case be entitled only to the costs and expenses of the bills, and not to any interest; and it was
further agreed that, in the event of the plaintiffs, or any of them, taking the said sixty shares, they or
he should, if they or he, at the time of taking such shares, should declare such to be their or his wish,
be elected directors or a director of the company jointly with the [131] then directors. The declaration
then proceeded to allege mutual promises; and that the plaintiffs paid a large sum, to wit, 5500l. in
taking up, for the honour of the drawer, bills drawn by J. Penman on H. Blundell for and on account of
the company; which bills had been dishonoured and not taken up by any of the parties thereto; that
the plaintiffs had always been ready to follow the instructions of the company and their agents; and
that afterwards, and more than three calendar months before the commencement of this suit, they
gave notice to the company and the directors, that they declined to take the said sixty shares, or to
become members of the company, and gave notice to the company and the directors to pay the
advances, interest, and expenses; and they assign, as a breach, the nonpayment thereof. Counts for
money lent, money paid, and money had and received, and upon an account stated, were added to the
special count.
286
Three only of the thirteen defendants, viz. Joseph L. Heathorn, J. Tait, and G. A. Muskett, appear
before the court upon the present rules; which were granted upon the ground that Joseph L. Heathorn
was not a shareholder, and was therefore not a party to the promise stated in the declaration; and also
that the company was an illegal association; and it will therefore be unnecessary to advert to the
pleadings of the other defendants. The only plea pleaded by the defendant Muskett, is non assumpsit.
Joseph L. Heathorn pleaded ten pleas, of which the first, second, eighth and ninth only are material
to the present inquiry. The first is non assumpsit. The second traverses that the defendants, at the time
of making the agreement in the first count mentioned, were partners or shareholders in the supposed
company or association, modo et forma. The eighth plea, which is pleaded to the first, second, third, and
last counts [132] of the declaration, alleges that the company or association in the first count
mentioned, was an illegal company, presuming to act as a corporate body without any authority, and
also presuming to raise, and constituted to raise, transferable and assignable stock and capital to any
amount, transferable at the discretion of the holders, to the common nuisance of the subjects of the
Queen: and the eighth plea then proceeds, by proper allegations, to apply itself to the second, third,
and last counts of the declaration. The ninth plea is pleaded to the same counts, and is similar in
substance to the eighth, except that it adds that, at the time of the formation of the company no gold
mines had been discovered, and alleges that the objects of the company were fanciful, visionary, and
fraudulent, tending to the common nuisance &c. of the Queen's subjects. To each of these last two
pleas the plaintiffs replied de injuria, &c
The defendant Tait pleaded nine pleas. Those which are material to the present purpose are, the
plea of non assumpsit, the traverse of the partnership, the sixth plea, which alleges in substance that
the company was an illegal company, presuming to act as a corporation, and pretending to raise
transferable stock (which is denied in the replication thereto), and the seventh plea charging the
company to be a common nuisance to the liege subjects of the realm; which is also denied in the
replication.
Five of the defendants suffered judgment by default.
Upon this state of the pleadings, and on the evidence given at the trial, three questions arose,
according to the determination of which by the court, it was agreed that they should direct in what
manner the verdict should be entered on the several issues; the court being at liberty to draw such
inferences from the facts proved as a jury might do, viz., first, whether the defendant Joseph L. Heathorn
was a partner or shareholder in [133] the company; secondly, whether admitting him to be such, the
defendant H. Blundell and the other persons parties to the agreement set out in the declaration of the
first part, had any authority, express or implied, to enter into the agreement stated in the declaration
as agents on behalf of the company; and, thirdly, whether the company in question was an illegal
company.
Upon the first question we think the evidence given at the trial was sufficient for the jury to find
the issues which rest upon that question, in favour of the plaintiffs.
287
The objection taken was, that there was no proof that the defendant Joseph L. Heathorn ever signed
the deed, or applied to have his name inserted in the share register book, nor was any transfer, or will,
or any register of shares, produced. And undoubtedly there was no such evidence. But upon the
evidence the question before us is, whether the defendant Joseph L. Heathorn did not, by his conduct,
distinctly admit himself to be a partner and shareholder; for if such admission was proved before the
jury, no proof of a formal title to the shares was necessary for the purpose of making him liable. Now
the evidence as to that point was, that on the 17th of December 1835, he attended a special meeting of
the Anglo-American Gold-Mining Association, — which had been called by a circular, — at the office of
their solicitors. In the minute of that meeting the names of the several shareholders are inserted, with
the number of shares each person held placed opposite to his name; and amongst such names is that
of the defendant Joseph L. Heathorn, with one share opposite thereto. It can scarcely be reconciled with
any other supposition than that of his being a shareholder, that he should have been present at all
upon such an occasion, or that he should have been permitted to remain there by the other
shareholders, the number of shareholders actually present being ten only including himself; so [134]
that he could not have been overlooked; and his right to be present, unless he was a shareholder, must
have been questioned. It is further to be observed that the business transacted at that meeting was of
an important and confidential character: amongst other things, that of confirming the sale of one
mine, and that of empowering the directors to sell another; the sending out of a new agent for the
company, on a very weighty mission; and the providing for the payment of the very bills which form
the subject of the agreement. And, lastly, it was proved that the minute was read to the assembled
shareholders. We think these circumstances might fairly be held, and ought to have been held, by the
jury, to amount to an admission by the defendant J. L. Heathorn, that he was a holder of one of the
shares in the concern; and we think that such admission dispensed with the necessity of any more
formal or additional proof of that fact, by shewing that he had conformed to the requisites of the
deed or otherwise; and the case of The Sheffield and Manchester Railway Company v. Woodcock, appears a
sufficient authority in support of this conclusion.
The second question which has been argued before us is, whether, admitting the defendant J. L.
Heathorn to be a shareholder, the defendant H. Blundell and the other persons parties of the first part
to the agreement set out in the declaration, had any authority, expressed or implied, to enter into the
agreement as agents on behalf of the company.
Upon this point the objection taken on behalf of J. L. Heathorn is, that although he attended the
meeting of the 17th of December 1835, yet no authority was given at the meeting by the shareholders
to H. Blundell, or to any others, to enter into the agreement upon which this [135] action is brought;
that although on the 9th of September 1836 there was another general meeting of the shareholders, at
which the contract or agreement entered into between the directors and the plaintiffs was sanctioned,
yet that the defendant J. L. Heathorn was not present at that meeting, and was therefore not bound by
its proceedings; and that there can be no implied authority for the shareholders present at that meeting
to bind the other shareholders, the powers of part of the shareholders of joint-stock companies to
bind the rest not being analogous to those of partners in ordinary trading concerns.
288
It appeared that, at the time of the agreement entered into between H. Blundell and the other two
directors on behalf of themselves and the company on the one part, and the plaintiffs of the other
part, J. Penman, the agent of the company in North America, had drawn bills on H. Blundell on account
of the company, exceeding the amount of 6000l. which were then in the hands of bona fide holders for
value, and which had been sent to this country for acceptance and payment; and it further appeared
that the directors, at the time of the arrival of the bills, had no funds of the company wherewith to
meet them. It is obvious, that the return of those bills protested to America would have been
destructive of the prospects of the company; and the plaintiffs having offered to retire them to the
extent of 6000l. for the honour of the drawer, upon the directors and shareholders being made jointly
and individually responsible for the reimbursement of the plaintiffs, the agreement was signed by H.
Blundell and two other directors, in order to carry such plan into effect.
Now we hold it to be unnecessary, upon this occasion, to enter into the question, how far
shareholders in a joint-stock company may, without any express regulation in the deed of settlement
or without an express [136] assent to that purpose, bind the others by a contract to reimburse third
parties for advancing money to take up bills which have been drawn on account of the partnership
concern; because we think, that on the present occasion, there was sufficient evidence for the jury to
find that this defendant J. L. Heathorn did, in fact, give his consent that the bills drawn by J. Penman on
account of the company should be paid in the manner in which such payment took place; for he was
actually present, as a shareholder, at the meeting held on the 17th of December 1835; and we cannot
suppose, upon any reasonable construction of the evidence given, that he was an idle or indifferent
observer of that which took place on that occasion, but that he was, like any other shareholder, alive
to his own interests and those of the concern; and at that meeting, after reading the circular convening
the meeting, and the correspondence of J. Penman and other letters, it was unanimously resolved,
amongst other things, “that in case the directors should not be able to effect the sale of the Alexander
Mine in the course of that week, they should be authorized to sell any number of new or additional
shares, not exceeding 100, as might be necessary for enabling them to repay their respective advances,
and to pay the bills drawn by J. Penman upon Blundell.” And we think a jury might, from this resolution,
infer a direct admission on the part of the shareholders present, that the bills in question had been
drawn for and on behalf of the company, and that they were bills for which the company was bound
to provide payment,—in fact, that they adopted the bills; and although a specific mode of payment is
pointed out in that resolution, namely, first by the produce of the sale of the Alexander mine, and next
by the sale of the new shares, yet that such resolution amounts to a direct admission by all the
shareholders who were actually present at the meeting, of their [137] liability upon these bills. And we
think that a jury might, further, well infer, after such an admission, that it must necessarily have
occurred to, and been present to the minds of, all the shareholders who constituted that meeting, that
the mine might not be sold, and the new shares might not find purchasers, and that the shareholders
in such event assented to the payment of the bills by the usual and ordinary means, and the only way
of relieving themselves from their own admitted liability, that is, by borrowing the money from others,
which was, in substance, the transaction with the plaintiffs. And upon this ground, viz. the assent on
the part of the defendant J. L. Heathorn, we think the jury would be warranted in finding those issues
which depend on the second question, in favour of the plaintiffs.
289
Upon the third question we are called upon to decide in which way the jury should have disposed
of the issues upon those pleas that state the company to have been an illegal company and a common
nuisance.
It is to be observed that, at the trial of the cause, no evidence whatever was produced on the part
of the defendants; and as the affirmative of those pleas is to be made out by them, the question will
depend entirely on the evidence called by the plaintiffs, and the inferences which the jury ought to
have drawn, from such evidence of the plaintiffs, in support of the pleas; and as the illegality of the
company is set up by the very persons who constitute that company, in order to avoid the payment of
a demand just in itself, it may be fairly required that the affirmative of the pleas should be established
by satisfactory evidence.
In the case of Duvergier v. Fellowes, upon which great reliance is placed on the part of the
defendants, the question arose upon a demurrer, which admits all [138] the facts that are well pleaded.
Accordingly, it was observed by the Chief Justice in giving the judgment of the court, “that by
demurring, the plaintiff has confessed himself guilty of intending to form a company that was to act
as a corporation.” And again, “It is not necessary on these pleadings to decide whether the forming a
company with such shares (i.e. transferable without limitation or restriction) is, of itself, without other
circumstances, pretending to act as a corporation; because it is by the pleadings distinctly admitted
that the plaintiff and defendant intended that the company should act as a corporation;” whereas, on
the contrary, in the present case, the replication expressly denies this allegation contained in the plea.
Indeed the case of Duvergier v. Fellowes cannot be considered as a decisive authority upon the point of
the illegality of the present company, because, in that case, the plea disclosed the invalidity of the
assignment of the patent granted to the plaintiff, which formed the consideration for the contract,
and such invalidity was, of itself, a sufficient ground for the judgment of the court. And when that
case was removed by writ of error, first to the court of King's Bench and afterwards to the House of
Lords, the judgment of the court below was affirmed expressly on the latter ground, without any
opinion being pronounced upon that of the illegality of the company.
The sixth plea of the defendant J. L. Heathorn, — which does not substantially differ from the
other pleas on the record that set up the illegality of the company, — states that it is an illegal company,
formed for the alleged purpose of working gold-mines, “and presuming to act as if they were and are
a corporate body, without any act of parliament,” &c. The plaintiffs deny this allegation; and the
question is, what is the proof of the allegation? Proof that a certain number of persons in partnership,
called themselves by the name of the Anglo-American [139] Gold-Mining Association, would surely not,
by itself, be sufficient to warrant the jury in finding that those per sons “presumed to act as a
corporation.” Partners in trade who carry on business under the name of an expired firm might, upon
that ground, be subjected to the same charge. The having a common seal has always been held one
incident to a corporation; Co. Litt. 30b.; and the power of doing no act except under such common
seal, another. But in this case there has been no assumption of any seal, nor was any act whatever
done except in the individual names of agents or directors. The plea then goes on to allege another
character of the illegality of the association, viz. “and also by presuming and pretending, without any
act of parliament, &c., to raise, and being constituted and formed with a view of raising, a transferable
290
and assignable stock and capital to be considered as divided into sixty shares of 100l. each, with power
for the shareholders of the company at a special meeting of shareholders to be called for that purpose,
at any time, and from time to time, to increase the capital to any amount that might be agreed on by
creating an additional number of 100l. shares, and all which several shares, as well original as additional,
were to be and are transferable and assignable from the holders thereof, by deed or will, or otherwise,
to any other person or persons, at the discretion of the holders thereof, to the common grievance,”
&c.
The deed by which this company was established does certainly appear to make out the allegation
above set forth; the only restriction being, that the transferee shall have no right to act or receive any
benefit until his title shall be approved of by the solicitor of the company, — a matter of regulation
more properly than of restraint. The plea is framed upon the very words of the 6 Geo. 1. c. 18. s. 18.,
by the nineteenth section of which act the several illegal companies described in the [140] eighteenth
section are declared to be all common nuisances, and are made punishable by indictment. Even if
those clauses had not been repealed, — as they have been in terms by the 6 G. 4. c. 91.— a question
would have arisen whether the facts given in evidence at the trial were sufficient to shew that the
defendants had committed an indictable offence within the statute. And, looking at the doctrine laid
down in the case of The King v. Webb as to the objects and purposes of companies falling within the
meaning of the statute, it would have been a question, whether the facts warranted a finding that the
defendants had been guilty of an offence within that statute. But that statute having been repealed,
the question is now altered; and we have to determine whether such a company as the present has
been shewn to be a nuisance and public grievance at common law. The raising of transferable shares of
the stock of a company can hardly be said to be of itself an offence at common law; no instance of
an indictment at common law for such an offence can be shewn, the raising of stocks with transferable
shares being indeed a modern proceeding; and the very great particularity with which it is described
in the statute seems to shew that it was an offence created by the statute only. If there had been any
evidence in this case that the creation of these assignable shares had been productive of injury or
inconvenience to numbers of the Queen's subjects, so as to make or occasion a common nuisance or
grievance in fact, the jury ought to have found the issues for the defendants. But there was no evidence
of the sort; and in truth the whole number of owners of the shares of this company of whom any
evidence was given, was very limited indeed, and those composed not of low and ignorant persons,
likely to be imposed upon, but, as far as [141] appeared, of men acquainted with the business of the
city. Unless, therefore, the nature of the undertaking was such as imposed upon the judge the necessity
of telling the jury that the defendants had set up and established an undertaking which was a public
and common grievance and nuisance at the common law, there was no evidence to shew that it was
one in fact; and as we consider the former proposition is not maintainable, we think the verdict on
those issues which raise the question of illegality, must be entered for the plaintiffs.
Rule discharged.
291
Chapter 11. Parliamentary Resistance to Granting the Incidents of
Corporateness
a. Incorporation and Exclusive privileges (1810)

MARINE INSURANCE COMPANY96.
Mr. Manning rose to bring forward his motion, in consequence of the petition he had presented
a few days since, praying for a Bill to establish a New Marine Insurance Company. He spoke at
considerable length, but in so low a tone, that it was impossible to collect even the substance of his
speech with any degree of accuracy. We understood, however, that he made a chronological statement
of similar institutions already adopted, from time to time, in this country, and their inadequacy to meet
all the objects of commercial men. With respect to the design of the merchants who had signed this
petition, any man who read the list must be confident they were not men likely to be actuated by mere
views of personal interest; but that they chiefly contemplated the general interests and
accommodation of the mercantile world. He then went into a comparative statement of the amount
of insurances at the different offices annually, and shewed that in the two now in existence, which
offices possessed exclusive privileges, namely, the Royal Exchange and London Assurance, their
amount of risk on vessels was so limited, that neither would exceed 10,000l. upon any one ship; and
that ship-owners, whose vessels greatly exceeded that value, were obliged to run their own risks.
There was another point extremely to be desired by merchants, namely, that they [400] should be
always assured of the ability of those who subscribed to policies, fully to meet the risk; a point not
easily known by the present mode. Merchants were obliged to apply frequently to a number and variety
of underwriters at Lloyd's, upon risks of any large amount; and the consequence often was, a
considerable loss to the party so insured; insomuch, that at the peace of Amiens, he knew one
gentleman insured for 36,000l. who was forced, through the insolvency of several of the underwriters
at Lloyd's, to sit down with a loss of one-third of the whole amount insured. A regular company,
composed by persons of known respectability, carrying on their business in one house, and under the
management of directors, was the kind of establishment most desirable to commercial men. The
subscribers to this petition had already subscribed a sum of five millions, which they could increase
to any extent required; so that instead of being confined, like the two present companies, exclusively
chartered, to a risk of about three millions, or three parts out of one hundred, constituting the total
of the insurances of London in each year, the proposed company might insure to any extent required.
The establishment he proposed would not injure the interests of any other, for the increased
commerce of this country would afford business enough for all; and the establishment might be made
to answer, not only for England, but for every nation of the globe, and thus attract a most lucrative
branch of business to this country. He trusted the House would see the importance of the proposition.
He would not conclude his speech upon the subject in the usual way, by moving for leave to bring in
96HC Deb 14 February 1810 vol 15 cc399-424 399. URL:

http://hansard.millbanksystems.com/commons/1810/feb/14/marine-insurance-company. Contains Parliamentary
information licensed under the Open Parliament Licence v1.0.
11. Parliamentary Resistance to Granting the Incidents of Corporateness
a bill, because he thought it more decorous to consult in the first instance, the deliberative wisdom of
a committee of the House, who should inquire fully into the necessity and expediency of the measure,
and report their opinion. The hon. member concluded by moving "That a select committee be
appointed to take into consideration the act made in the 6th of George the first, for granting exclusive
privileges for marine insurances, to the Royal Exchange and London Assurance companies, and also
to consider the best means of effecting marine insurances, and report their opinion to the House."
Mr. Marryat rose, and spoke as follows: Mr. Speaker; For the better elucidation of the [401]
motion now before the House, it will be necessary to state, more particularly than has hitherto been
done, the nature and object of the petition with which it is connected, and on which it is founded.
This petition is signed by a great number of very respectable individuals in this metropolis, describing
themselves as merchants and others having assurances to make, who are desirous of forming
themselves into a company, with a capital of five millions, for the purpose of effecting assurances;
and praying that they may be enabled so to do, either by the repeal of the exclusive privileges granted
to the two existing companies, by the Act of the 6th Geo. 1, or by being permitted to make such
assurances as a company, notwithstanding the said recited Act. Thus the supporters of this petition
are in a situation of some embarrassment as well as awkwardness; for they must first persuade the
House that insurance companies, possessing exclusive or particular privileges, are prejudicial to the
public interests, in order to induce us to deprive those now existing of their chartered rights; and then,
requesting us to forget all they have said on this subject, they must take up the contrary side of the
argument, and persuade us that such companies are advantageous to the public interests, in order to
induce us to establish their intended new company on the ruins of the old companies. They endeavour,
indeed, to draw a distinction between this new company and the present chartered companies, by
declaring that they renounce all pretensions to a charter—that they require no monopoly; but the
explanation they give of their views and objects, by no means accords with these declarations.—Parties
who apply for an incorporation can have but two objects in view; to obtain either exclusive or
particular privileges, and to obtain an exemption from responsibility beyond the amount which they
engage to invest as a capital in the intended undertaking. The plan of this new company comprises
both these objects; for the petitioners pray that they may have the privilege of doing that, which the
law as it now stands prohibits them from doing, effecting marine insurances as a company; and they
farther pray, that they may be exempted from responsibility beyond the amount of their intended
capital. Whether these advantages [402] are given them by a charter, or by an act of Parliament, the
mode indeed may vary, but the effect will be the same; and therefore, there is nothing to distinguish
this case, from other cases of applications made by individuals for privileges not enjoyed by the
community at large. It is obvious that the grant of any such privileges or immunities to any set of
men, is an injury to all those by whom they are not enjoyed; and therefore it is an established principle
that they ought never to be granted, but in order to procure some advantage for the public, which
cannot be procured by any other means. To use the words of lord Coke, (3rd Inst. 184), "there must
be, urgens necessitas, et “evident utilitas.” These pleas have been justly admitted in the case of several
corporations lately established, not only in this metropolis, but in the out-ports; I mean the Dock
Companies. The urgent necessity and evident utility, of giving adequate security to the public revenue
and to private property, was so strongly felt, that Parliament thought it advisable to encourage these
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undertakings, by the exclusive privilege of warehousing certain commodities, at certain rates, for a
certain, period; but at the same time, with a due regard to the interests of individuals, they indemnified
every description of persons who might be deprived of their accustomed occupations and profits by
this new change of system. If we try the merits of the petition now before the House, by the principles
here laid down, it is impossible that we can accede to it; for no case has been made out, either of
urgent necessity or evident utility. The parties merely propose to do that as a company, for their own
emolument, which is already done by individuals; and this, too, without making any provision to
compensate those who would be deprived of their present means of subsistence, by the intended
innovation.—It has been urged in favour of the present application, that the preamble of the Act of
6th Geo. 1, by which the two Marine Insurance Companies now existing were established, expresses
itself in language favourable to chartered and joint stock companies. If, however, we look into the
history of that Act, we shall find that the application of these companies for a charter, was in the first
instance rejected: but that the civil list being soon afterwards much in arrear, and the proprietors
offering 600,000l to supply this deficiency, the minister of the day, anxious to provide [403] means
for defraying the too lavish expenditure of the court, without imposing new burdens on the people,
exerted all his influence in favour of the measure; and that then this Act was carried through the
House. Thus the existing companies owe their establishment to a job; and this surely is no very great
recommendation to the pretensions of any new companies of a similar description.—Indeed,
although the preamble of this Act justifies the establishment of these two companies, in consequence
of the numerous failures which had then recently taken place among the underwriters (a consideration
by no means applicable to the present times), yet, in the subsequent clauses, it provides that his Majesty
may revoke their charters, if they are found inconvenient of hurtful to the public; enacts, that no other
such corporations shall ever be established; and recognizes the general principle, that all joint stock
companies "manifestly tend to the common grievance, prejudice, and inconvenience of great numbers
of his Majesty's subjects, in their trade or commerce, and their other affairs;"' declares them to be
public nuisances; and parties engaged in joint stock companies without the sanction of the legislature,
are liable to prosecutions under this very Act.—If we refer to other Parliamentary authorities, we shall
find that grants of exclusive or particular privileges, have ever been viewed by our ancestors with great
jealousy, and have frequently excited their just reprehension. In the reign of queen Elizabeth, the
House of Commons voted such grants to be breaches of the privileges of the people; and the Queen,
in consequence, annulled the greater number of them, and subjected the rest to the controul of the
laws. When she received the thanks of the House for so doing, she gave them in return her "hearty
commendations, for having recalled her from an error, proceeding from her ignorance, not her will,
and acknowledged that these things would have turned to her disgrace, had not such harpies and horse
leeches," (as the good Queen termed these monopolizers), "been made known and discovered to her,
by her faithful Commons." (Rapin, A. D. 1600.) James I, confined his grants of monopoly to foreign
trade only; and Mr. Hume tells us, that "by this enormous grievance the trade of England was reduced
to a very low ebb, “being [404] brought into the hands of a few rapacious engrossers.” At length
Parliament interfered again, and an Act was passed in the 21st year of that King's reign, by which all
monopolies were condemned, as contrary to law and the known liberties of the people: an Act, which
sir John Sinclair observes, ought for ever to have put an end to so destructive a grievance. Charles I,
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among other expedients to raise money, resorted to that of granting exclusive and particular privileges;
but as soon as Parliament met, they protested against these grants as one of their greatest grievances,
and passed a resolution, that all members having a share in them, directly or indirectly, should be
incapable of holding a seat in the House. Many in consequence vacated their seats, and those who did
not, were expelled. (Rushworth, 4. page 37. Whitelocke, page 38.) This may be no bad lesson to some
gentlemen concerned in the present undertaking; for certainly the principle of exclusion may be much
more justly applied to those who obtain particular privileges by grants from the crown, than to those
who take contracts by public and open biddings, in the disposal of which the crown has no influence
whatever. I shall not trespass on the patience of the House, by citing more parliamentary or historical
authorities, nor by giving quotations from writers on political economy, all of whom concur in the
injustice and impolicy of establishing companies with exclusive or particular privileges; but conclude
my observations upon them with the just and emphatic sentiment of Dr. Adam Smith, who says, that
"they are nuisances in every respect."—If I am asked why I, who profess myself inimical to all such
companies, object to the appointment of a Select Committee, to consider of the Act of the 6th Geo.
I, by which the exclusive privilege of effecting marine insurances, as companies, was granted to the
two companies now existing, I answer, because the limited extent of the influence and interest of
these companies, renders them much less exceptionable than this intended New Marine Insurance
Company, which, we are told by its advocates, comprises 9-10ths of the whole commercial interest of
this metropolis; because I am not so inveterate a system-monger as to wish to subvert old established
institutions, although I disapprove of the principles on which they were founded, when experience
has shewn that they are not inconvenient nor hurtful in practice; and [405] because I will not lend
myself to the views of those, who, under the specious pretext of redressing existing grievances, would
introduce others infinitely more intolerable in their stead; and who are pursuing their own private
interests, under the pretence of the public good.—If I am asked why I object to the other part of this
motion, the appointment of a Committee to consider of our present means of effecting marine
insurances in Great Britain, I answer, because the subject was completely investigated so lately as July,
1806, by the Committee appointed on the Globe Insurance Company's Bill; before whom it was so
satisfactorily proved, that our means, both in point of extent and solidity, were completely adequate
to every possible occasion, that the parties abandoned their application to Parliament. I am aware that
one of the gentlemen who gave the most decided testimony before that Committee, is a subscriber to
the petition now before the House, and one of the intended directors of the New Company; but this
circumstance does not prove that any change has taken place in his sentiments: it only proves that he
has discernment enough to know, that an establishment which may be a very bad thing for the
community, may be a very good thing for individuals. I am aware too, that the names of many
subscribers to Lloyd's are to be found annexed to this petition; but I know that the greater part of
them joined this new company only because they thought it impossible successfully to oppose the
powerful interests by which it was supported, and considering the ruin of all individual underwriters
as inevitable, were willing to save something out of their own wreck.—In order to put the House in
possession of the real merits of this case, it will be necessary to explain the mode in which marine
insurances are at present effected in this metropolis. Exclusive of the two chartered companies, there
are about 1,500 subscribers to Lloyd's, the greater number of whom daily attend there for the purpose
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of transacting insurance business. The merchant, when he receives an order to effect insurances from
his correspondents abroad, or has occasion to cover property shipped by himself at home, applies to
an insurance broker, who transacts the business either with the public companies, or with individual
underwriters, according as he finds it most to the advantage of his employer. The House will see [406]
the extent to which competition is carried by this mode of effecting marine insurances. The merchant
is aware that his credit with his foreign correspondents depends upon his executing their orders on
the best terms possible. The broker is equally aware that his credit with his employer, the merchant,
depends upon the same circumstance. The underwriter is also aware, that unless he writes at the very
lowest current premium, the brokers, who are in the habit of shewing him their policies, will transfer
their accounts to other underwriters; and from this consideration, he frequently accepts a premium
which in his best judgment, he considers as inadequate to the risk, rather than lose his connections.
Thus competition is carried to the highest possible pitch; and thus has the reputation of this country
for effecting marine insurances on the most reasonable terms been so universally established, that
orders from every part of the globe are sent here, the property annually insured in this kingdom
amounting to nearly two hundred millions, as is proved by the duty paid for stamps upon policies.*—
But, it is contended that greater facility is wanted in effecting insurances, and will be given by the
establishment of this new company. A reference to the evidence given before the committee on the
Globe Insurance Bill, on this particular point, in July, 1806, completely disproves this assertion;
*Amount of cash received for sea policy stamps, delivered to £312,251 311
individuals in the year 1809, from the office
Amount of cash received for sea policy stamps, delivered to the 12,577 00
chartered companies,
324,828 311
Add for the out-ports and Ireland, estimated at one-fourth of the 81,207 10
above,
£.406,035 411
Four-fifths foreign insurance, or £.324,828 duty, at 5s. per cent. £.129,931,200 00

will cover property to amount
One-fifth Irish and coasting trade, or £.81,207 duty, at 2s. 6d. per 64,965,600 00
cent. will cover property to amount of
Total amount of property insured in Great Britain in 1809 £.194,896,800 00
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and, since that period, the number of underwriters has increased in a far greater [407] proportion
than the extent of business. Indeed, it will at once appear evident, that no such facility is wanting, and
that our present means of effecting marine insurances are equal to every possible occasion, from the
following statement. The number of subscribers to Lloyd's is about 1500; supposing them to write
only 300l. each on a policy, the amount would be 450,000l.; but many of them are in the habit of
writing 1,000l. 2,000l. and even 5,000l. on a single risk. There can, therefore, be no difficulty in insuring
with individual underwriters, a much larger sum than ever was embarked in any one bottom, even
without the present public offices, much more without the establishment of any new public offices.—
It has also been contended, that greater competition would be excited by the establishment of this
new company, and thus the general interests of commerce be benefited. This I deny, on irrefragable,
evidence—the experience of the past, by which we are best enabled to form a sound judgment of the
future. The two public offices already in existence, so far from coming into competition with Lloyd's,
in any beneficial way to the general interests of the public, confine themselves to what are called
regular risks, in effecting which to any possible extent there is no difficulty whatever; but in what are
called cross risks, in those new and perilous modes of carrying on commerce, to which the state of
Europe has lately obliged us to resort, the public offices come into no competition with Lloyd's; for
they refuse to write them at any premium. During the whole of the last year, they refused to insure
vessels trading to or from the Baltic, unless warranted free from capture and seizure in the ports of
the enemy, the great risk against which the parties interested wished to be covered: and this branch of
commerce, which extended the export of our manufactures and produce to an unprecedented
amount, and secured us an abundant supply of naval stores, so indispensably necessary to the support
of our maritime greatness, would never have been carried on, (for unless it could have been insured it
could not have been carried on,) but for the spirit and enterprise of the underwriters at Lloyd's. Every
man there ventured a certain sum upon these risks, such as he could afford to pay in case of loss; and
thus the whole property was covered, and these [408] invaluable national benefits were obtained. The
public companies depend upon their regular business, which enables them to pay a very handsome
dividend to their proprietors; and if more of these companies were to be established, and more of
the regular business were monopolized, individual underwriters would be discouraged from pursuing
their avocations, and competition be lessened instead of being increased. It would be absurd to expect
any public office to act on any other system; for it is impossible that the acting director or secretary
of a public office, should possess the same knowledge, as to the nature and extent of every new
description of risk, the same information as to the means by which the decrees of the enemy may be
eluded, as 1,500 underwriters, mostly men of commercial habits, and consequently commercial
knowledge, daily collected together for the purpose of communicating and receiving intelligence;
whose judgments on these subjects are formed and confirmed by constant habits of individual
application and mutual discussion, and who concentrate the scattered rays of information, as it were,
into one focus at Lloyd's. On this conviction the public offices, very wisely, refuse to undertake what
they do not understand; and wholly decline the only species of competition with Lloyd's, which could
in the smallest degree conduce to the public advantage.—Another argument urged in favour of
establishing this new company is, that greater security is offered to the public by them, than can be
given by individual underwriters. It is not necessary for me to undertake to disprove particular
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instances that may be brought forward of the insolvency of underwriters, or to contend that they are
immaculate as a body, either in property or character; but, this I will assert, that a man who suffers by
the insolvency of underwriters at Lloyd's, suffers, generally speaking, strange as it may appear, with
his own concurrence. A broker will tell his merchant, that he cannot complete his insurance with good
men, unless he will give a higher premium. The answer frequently is, you must not give more, for such
a house has effected the same risk at the same premium; therefore, get the best names you can; and
thus the merchant frequently sets the advantage to be gained by the reduction of premium, against
the risk to be run from the want of solidity in the underwriters. No merchant who offers a fair
premium, and [409] whose business is transacted by brokers of respectability, is ever under the
necessity of taking a doubtful name on his policy; and I maintain, that Lloyd's offers better security
to the assured than can be given by any chartered company. I say so, for this plain reason, that every
man at Lloyd's is responsible for his engagements to the last shilling of his fortune, while the members
of an incorporated company are responsible only for the amount of the capital originally invested;
and the capital of the underwriters at Lloyd's infinitely exceeds that of any chartered company
whatever. For instance: the capital of this new company is intended to be five millions, of which only
one million, I understand, is to be actually advanced. In point of fact, then, the one million so
advanced, is the whole extent of the security offered to the public; for though the original subscribers
to this undertaking are men of fortune and able to pay the other four millions in case of need, yet
they, from various motives, may be induced to sell out, and may sell to men of straw, mere speculators,
who would not be able to pay the other four millions. But giving them the whole advantage of this
argument, and taking their capital at five millions, that sum bears no proportion to the aggregate capital
of the underwriters at Lloyd's; for could name fifty out of the 1,500 subscribers to that house, who
could pay down these five millions at any time, without the smallest inconvenience, leaving the capital
of the other 1,450 subscribers wholly untouched. Events have occurred within these few years, that
would have more than swallowed up the capital of this company, and yet have scarcely occasioned the
failure of a single individual at Lloyd's; for every prudent underwriter regularly classes all his risks, and
proportions the amount he hazards on those of each particular description to his means of payment
in case of loss; a precaution which could not possibly be observed in the vast mass of business that
would be undertaken by this new company. The events to which I allude, are the detentions and
subsequent condemnation of the Dutch ships, in consequence of the hostilities that took place
between this country and Holland, in the year 1794; the capture and condemnation of American
vessels by France and Spain, in the year 1797, on the plea of their navigating [410] without the role
d'equipage required by treaty; and the seizure of all the British ships in the ports of Russia, by the
emperor Paul, in the year 1799. Had this intended new company been established previous to either
of those periods, comprehending within itself, as the proprietors themselves declare it does, 9-10ths
of the commercial interest of this metropolis, and of course doing 9-10ths of the business, and
sustaining 9-10ths of the losses, it must have been totally ruined. But, the proprietors, sheltered under
that limited responsibility which is the great object of their present application to parliament, would
still have continued men of opulence: their carriages would still have roiled along the streets, and have
splashed with mire the unfortunate individuals, who had been ruined by their insolvency as a company.
When these disasters happened, some underwriters certainly failed; but the number was comparatively
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small: the blasts that would have torn up this company by the roots, scarcely brought down a leaf
from the tree at Lloyd's. Whether, therefore, we consider the amount of the capital employed at
Lloyd's, or the subdivision of risks attended to by the individual underwriters there, it is obvious that
the public security, so far from being augmented, would be diminished, by 9-10ths of the insurance
business being transferred to this great and chartered company.—It is also asserted, that much
litigation would be prevented, and losses be recovered with greater facility and promptitude from this
new company than from the underwriters at Lloyd's, who are accused of being litigious, and even
unprincipled, in the defences they set up against just demands. That some individuals have at times
availed themselves of points of law, of which underwriters in general have not taken advantage, I
admit; but there are very few men whom interest, if not principle, would not prevent from selling their
good name for any sum they could possibly gain by evading the payment of a loss. Underwriters,
speaking of them collectively, are much more sinned against than sinning; no set of men on earth are
so much the dupes of fraud and villany. They have paid, not only for vessels purposely lost, but on
cargoes of stones and brick bats, packed up as bale goods; nay, even for vessels which it afterwards
appeared never were in existence, though forged invoices, bills of lading, certificates of their having
sailed, and every [411] requisite document, were regularly transmitted; and in order to prevent
suspicion, one of the most respectable houses in the city was made the innocent instrument of this
nefarious transaction. Such impositions practised upon men naturally tend to make them suspicious,
and sometimes they certainly are so without just ground; but the question is not as to the positive
degree of facility with which losses can be recovered at Lloyd's, but as to the comparative degree of
greater facility with which they can be recovered at public offices. It is true that in settling with a public
office, the assured has only to settle with a single person, instead of having to settle with the various
individuals who have underwritten his policy; but this task is one which requires neither much time
nor trouble, for almost all the parties sit under the same roof, and when the first underwriter on a
policy has settled the loss, the others generally follow without any investigation of the papers. On the
other hand, public offices are necessarily governed by certain fixed rules, and will not settle without
regular documents, the production of which is frequently dispensed with at Lloyd's. Public offices will
not pay on missing ships till the period is expired when the loss can be recovered by law; the
underwriters pay without insisting on this delay, on an undertaking from the assured, that if the vessel
should hereafter appear, he will put them in the same situation as if the loss had never been settled.
Claims of liberality, which could not be maintained by law and which could not, perhaps, with
propriety be admitted by the directors of a public company, acting for others, are frequently admitted
at Lloyd's by individuals, each of whom is acting for himself. But, it is said that underwriters frequently
go to law in order to put off the payment of losses, and that in such cases an action must be brought
against each individual; whereas, if the insurance was effected with a public office, a single action
would decide the contest, and thus much money now spent in litigation would be saved. That much
money is now unnecessarily spent in litigation the underwriters know to their cost, for it is spent at
their expence. The solicitor to the assured commences proceedings against every underwriter; the
underwriters apply for a rule to consolidate, which the judge grants on condition of their paying all
the charges hitherto incurred, and these fall so heavy, that an underwriter, [412] where a case is
doubtful, will frequently rather pay than litigate the demand. The public offices are not influenced by
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this consideration in the same degree, for they can contest a loss of 100,000l. at as little expence as an
individual underwriter can contest his subscription of 100l.; and it is not very reasonable to expect
that those parties will be least disposed to be litigious who have the strongest temptation to be so,
unless we believe the directors of this new intended Marine Insurance Company not to be men of
like passions with ourselves.—One of the allegations in the petition of this intended new company is,
"that the trade and commerce of these kingdoms have increased so much since the two existing
companies were incorporated, that these two companies do not at present insure more than three
parts in one hundred of the ships, goods, and merchandize insured in Great Britain." On this it may
be observed, that if the trade and commerce of these kingdoms have increased, the number of
underwriters has increased in a still greater proportion; for the number of subscribers to Lloyd's in
the year 1771 was only 79, and the present number is near 1,500. The small proportion of insurance
business effected by the public companies, shews the general preference given by the commercial
world to individual underwriters; and is the strongest proof that could possibly be adduced, not only
of more moderate rate of premiums at which they transact business, but of the general confidence
placed both in their probity and solidity—The petitioners also state, “that several insurance companies
have been established in the East and West Indies, and America;” and seem to wish to have it inferred,
that these companies have been established for want of more insurance companies in Great Britain.
Insurance is a natural appendage to commerce; and the establishment of insurance companies, or of
individual underwriters, in every commercial country, may be sufficiently accounted for, by the desire
merchants feel to transact their own business, rather than pay a commission for having it transacted
by others; and the satisfaction they derive from holding in their own hands the policies of insurance
by which their property is secured, instead of confiding the important trust of recovering upon them,
in case of loss, to their foreign correspondents. Independent of these general considerations,
circumstances of a local [413] and peculiar nature, will shew the indispensable necessity of such
establishments being formed, in all the countries named by the petitioners. In the East Indies,
opportunities of writing to England for insurance occur so seldom, that many voyages, more
particularly those from one port to another, or country voyages as they are called, must be insured
upon the spot, or not at all. It is also to be considered, that parties resident in India, if they insure
there, recover a loss without delay; but if they insure in Great Britain, they cannot recover, and realize
their funds, in less than eighteen months or two years; and this circumstance, coupled with the high
rate of interest paid for money in India, will account for their preferring to insure there rather than in
Europe: nor would the inducement so to do be at all lessened, by the establishment of this, or any
other new insurance companies. In the West Indies, vessels going from one island to another, or from
any of the islands to America must be insured there unless one of the packets, which sail only once a
month, should happen to be on the eve of her departure when the voyage commences; otherwise the
issue of it may be known in England before the order for insurance arrives there. With respect to
America, it is not to be expected that a country rising so fast into commercial importance, should form
none of those establishments by which alone commerce can be secured; and it is also to be remarked,
that our law-prohibiting the insurance of enemies' property, not only prevents property really
belonging to the enemy, but property liable to be suspected of belonging to the enemy, from being
insured here; for as British underwriters cannot pay in case of British capture, parties whose vessels
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are brought in for adjudication, might, if they insured here, be ruined for want of their funds while
the cause was pending, and therefore they insure in countries where there is no bar to their immediate
recovery. From these observations, it appears that the extension of the insurance business in America
is to be attributed to various causes, but more particularly to this law, which sacrifices commerce to
policy; and that the case would not be altered by the establishment of this new company, unless, which
I cannot suppose, they mean to insure against British capture, in violation of the law of the land.—
The only advantage that I can discern in the establishment of this new company, is an [414] advantage
of which the gentlemen concerned have told us nothing, but which I shall now endeavour to develope;
the advantage that would accrue to themselves. Their plan is to unite a very great proportion of the
leading mercantile houses in this metropolis into a company, for the purpose of effecting their own
marine insurances; and thus to retain, and divide among themselves, the emoluments hitherto made
by the insurance brokers and underwriters at Lloyd's. They would retain the profit of the brokers, by
effecting their own insurances at their own office; and as proprietors of that office, they would also
divide among themselves the profit of the underwriters. They propose, too, acting on a scale hitherto
unprecedented in point of extent and magnitude. Thus, by the boldness of their speculations, their
profits may be increased to an almost incalculable amount; while their losses cannot possibly exceed
the sum they offer to invest as the capital of their undertaking.—Before the House give their sanction
to this measure, I trust they will seriously listen to the objections that offer both on public and private
grounds, to the carrying it into effect.—The first objection that I shall state, is founded on its
interference with the rights of individuals. Every profession, trade, or calling, requires some previous
study and qualifications; and all writers on political economy agree in considering the time thus
bestowed, and the expence thus incurred, by every individual, as a part of the useful productive capital
of the state, as well as the just property of the party, in the enjoyment of the fruits of which he is
entitled to legislative protection. I am aware that the occupations of an insurance broker and
underwriter are generally considered as requiring but very superficial attainments; but a candid
investigation of the subject will prove this idea to be erroneous. An insurance broker can only qualify
himself for his business by considerable study and application: he must learn how to fill up policies
of every description, with all the various clauses adapted to every possible circumstance; he must be
able to make accurate declarations of interest, so as to cover the parties in case of loss, and yet not
expose them to the payment of any unnecessary premium in case of arrival; he must know how to
make up complex statements of [415] average and partial losses on every species of merchandize, and
on the various principles applicable to every different case. He must be informed of the current rates
of premiums on every voyage, in order that he may be enabled to transact the business entrusted to
him to the best advantage; and he must be well acquainted with the character of the different
underwriters, to guide him in the selection of the names he takes upon his policies. The underwriter
must possess every species of knowledge requisite for the broker, (except indeed as to the solidity of
his brother underwriters;) it being his province to examine all his papers and statements; in addition
to which, he must be well versed in geography; must be informed of the safety or danger of every
port and road in every part of the world; of the nature of the navigation to and from every country;
and of the proper season for undertaking different voyages; he should be acquainted, not only with
the state, but the stations of the naval force of his own country, and of the enemy; he should watch
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the appearances of any change in the relations of all foreign powers, by which his interests may be
affected; and in short, constantly devote much time and attention to the pursuit in which he is engaged.
Those who commence underwriters without the necessary qualification, or continue underwriters
without the necessary caution, generally soon find their error, in their own ruin, and the injury of
those with whom they are connected. The gentlemen who have subscribed to this new company, wish
to become brokers and underwriters, without loss of time or hindrance of business; to put themselves
in possession of their emoluments, without that study and labour, or those qualifications, by which
alone they can be fairly acquired. Archimedes told Hiero, who wished to be a great mathematician all
at once, that there was no royal road to geometry; and this observation may be justly applied to the
acquirement of any other species of knowledge, or to the fruits of that knowledge. But the subscribers
to this new company are endeavouring to find out a royal road to the profits of the insurance brokers
and underwriters; and this royal road is an act of parliament, enabling the king to grant them a charter
of incorporation.—The effect of establishing a company possessing such vast influence within itself,
must be that this great leviathan will swallow up all the [416] small fry; that it will deprive the insurance
brokers and underwriters of those avocations to which they hare devoted their time, in which they
have embarked their fortunes, and by which they have maintained themselves and their families. But
it is contended, that these consequences will not ensue; that this New Marine Insurance Company
will, on the contrary, encourage the insurance trade, by the increased facility and advantage it will
afford; and that thus more new business will be brought to Lloyd's than will be taken away. They who
so argue, if they believe what they say, must be weak indeed. The principle of this company is not
competition, but combination; it even precludes all possibility of competition; for the proprietors tell
you, that they possess nine-tenths of the commercial interest of the City of London, and that they
wish to form themselves into a company, for the purpose of effecting their own insurances. Who then
can wrest them out of their hands? Besides, if this company be incorporated, on what grounds can
incorporations be refused to any other set of men? Every out-port will have its Marine Insurance
Company; and if the merchants of this metropolis, who are not interested in this establishment, have
sufficient business among them to form a second company, a second company will be established
here, and thus the whole business of underwriting by individuals will be altogether annihilated.—
Great as I consider the evil of this intended establishment to be in itself, I consider it as greater still,
when I reflect on the ruin that it will inevitably bring on a numerous class of meritorious individuals,
who, I may say, have more than ordinary claims to public consideration. The subscribers to Lloyd's, in
promoting their own interests, have at the same time promoted those of their country; they have
increased her revenue, and raised her commercial character as well as her prosperity. With a liberality
not always found in public bodies, they freely and gratuitously communicate that intelligent e to others,
which they daily procure at a heavy expence to themselves. By a standing regulation of the house,
access is given to their books in the non-subscribers' room, to every individual whose interest, or
whose anxiety for his absent friends, may bring him there. The editors of the public papers constantly
resort there also, and all the information the public receive respecting shipping concerns comes [417]
from Lloyd's. The subscribers to Lloyd's have, at all times, been ready to set an example to their
countrymen of public spirit and liberality. Their hands and hearts have ever been open to relieve the
distress of those who have suffered, and to reward the valour of those who have distinguished
302
themselves in the cause of their country. More particularly at the commencement of the present war,
at a period of great and general public alarm, when every man expected to be obliged to contend for
British liberty on British ground, they stood nobly forward; by a well-timed and spirited effort, they
infused energy and confidence into the public mind, and gave an impulse to patriotism, which was
felt, and most beneficially felt, to the very remotest comer of the British dominions. One unanswerable
objection to this new company arises from the illegality of the principle on which it is founded. As
the law now stands, if a merchant chooses to underwrite those policies of insurance which he is
ordered by his correspondents to effect, he can only do so on the following terms:—if losses happen,
he must pay those losses; but if the vessels arrive he cannot recover his premiums. So justly tenacious
is the law of the great and salutary rule, that no man shall be at the same time agent and principal; that
he shall not have an interest contrary to that of the party for whom he acts. This company is founded
on the direct violation of this rule. Every member is to throw his policies into the common stock of
the company, in which he is a proprietor, and thus to have an interest diametrically opposite to that
of the party for whom he acts. Opposite in a double respect: in the first place, as the higher premium
he pays, the greater will be his own profit; and in the next place, as if losses happen, it is his interest
not to recover them, because they must come, in part, out of his own pocket. Nothing can be so
indefensible, as for men thus to place themselves in a situation, where their interest draws one way,
and their duty another. It is what the law positively forbids, and the whole object of this application
to Parliament, is to enable the petitioners to do that as a company, which the law prohibits them from
doing as individuals.—Let us now examine the consequences of this measure, as it would affect the
general interest of commerce and of the public. Instead of 1,500 individual underwriters, we should
probably have five or six insurance [418] companies, each represented and conducted by a secretary
or managing director, as he may happen to be denominated. The whole race of insurance brokers too
would be at an end; the merchants who now employ them retaining their profits also among
themselves by effecting their own insurances at their own office; and instead of that system of fair
and open competition which now prevails, we should have a system of close and secret combination.
The secretaries of the different offices, by a good understanding with each other, might regulate the
premiums as they pleased; and the merchants, the proprietors of these companies, could not be
expected to be very active in reducing profits, which they would divide among themselves. The result
of these practices would soon be, that foreigners would discover they could effect their insurances
cheaper elsewhere, and would no longer send their orders to Great Britain. Thus even the parties
themselves, though they might for a while reap the advantage of that high reputation which has been
established by others, would not long profit by their own wrong: the revenue would be injured, by the
diminution of the present duty on policy stamps; and the public would be injured, by paying a higher
price for every commodity imported, in consequence of the advance on premiums; it being art axiom
in trade, that all charges fall ultimately upon the consumer.—But, if the prayer of these petitioners be
granted, will the mischief end here? On the same principle that a few companies are permitted to
engross and monopolize all the insurance business, why may not a few other companies be permitted
to monopolize all the other business of this metropolis, and render individual merchants and traders
as useless, as these petitioners seek to render individual underwriters and insurance brokers? Why may
not the hon. member who brought up this petition, follow it up by another petition, praying for leave
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to incorporate at company of merchants trading to the West Indies? And why may not another hon.
member, who has taken a very active part in supporting this petition, bring up another petition, praying
for leave to incorporate a company of merchants trading to the United States of America? These
gentlemen, with a few of their friends, might set on foot companies trading to every part of the globe,
and divide the commerce of the whole world among them. Every argument [419] that can be urged
in favour of the present plan, might be urged with equal force in favour of these new projects.
Instances might be brought forward of the insolvency of some individual merchants, of the
dishonesty or ignorance of others; and the advantages that would result both to the character of the
nation, and the interests of all those connected with it, by placing the whole foreign trade in the hands
of men, possessed of large capital, enjoying an unblemished reputation, and distinguished for high
mercantile knowledge, might be urged as unanswerable reasons in favour of this new system. If any
poor individual who was not taken under the shadow of the wing of one of these great companies,
presumed to complain, he might be told, as the insurance brokers and individual underwriters are now
told, that more commerce than ever would be brought to this country by this wonderful improvement,
and that it was impossible his interests could suffer by a measure so fraught with public good.
Unfortunately for such reasoning, but, happily for us, if we are wise enough to profit by experience,
this experiment has already been tried, and the result stands recorded in history: for Mr. Hume tells
us, that, during the reign of James I. in consequence of similar incorporations, “the trade of this
kingdom was brought into great decay, being put into the hands of a few rapacious engrossers.” Let
us then guard against the beginning of these evils by discountenancing the present project. It is by the
competition of individual exertions, that Great Britain has risen to her present unexampled height of
commercial prosperity; and in proportion as that system is exchanged for a system of monopolizing
combination, that prosperity will again decline.—Not merely the interest, but, the moral character of
the nation, is at stake upon the issue of this measure. The great æra of these incorporated companies
was the year 1720, when the spirit of adventure in speculations of this sort inflamed the minds of the
people to such a degree, that all sober industry and patient application were despised, and every man
was intent upon making his fortune in a moment, by encaging in some of these undertakings. Not
merchants alone, but many of the most ancient and noble families in this kingdom, as we read in the
history of those times, were totally ruined by this epidemical madness. I shall not repeat the history
of the South Sea Company, and [420] twenty other companies, which rose like bubbles and like
bubbles burst, to the great emolument of the first projectors, and the ruin of the infatuated public,
who purchased shares in them at a most enormous advance. More to my purpose is the history of the
marine insurance companies, which were established at that very period. I find, in reading the records
of those days, that in July, 1720, a very few months after the Loudon Assurance Company received its
charter, and before any considerable profits could possibly have been realized, the stock, on which
only ten per cent. was paid, rose to 120, and even to 160—sixteen times the capital. That in the month
of October in the same year, a hurricane, which destroyed part of the home-ward-bound Jamaica
fleet, reduced their stock to sixty per cent.; and that other losses happening soon afterwards, it fell
before the end of the year to 15, and even 12 per cent. The historian adds, that for years afterwards
nothing more was heard of this Company except in the perpetual complaints of the proprietors, that
they were cheated by the directors; and yet, Sir, this Company, like the intended New Marine Insurance
304
Company, was first set on foot, by honourable men, lords and members of parliament. Even our
prudent neighbours, the Dutch, were infected by the same mania; and with precisely the same result.
A marine insurance company was established in 1720, at Rotterdam, and their actions or shares soon
rose to 1,000 percent. The shares of one established at the same time at Gouda, rose in a few months
to the almost incredible premium of 3,000 per cent. on the capital advanced; and before the end of
the same year, fell again to their original value. Another set up at Delft, experienced the same reverses
within the same space of time; and, we read, that the avarice and gambling spirit of the proprietors,
in every one of these companies, was ultimately punished by the entire loss of all their capital. The
present scheme takes a more daring flight than any of its predecessors; it embraces a larger interest,
professes to act on a wider scale, and is therefore more calculated than any plan ever hitherto projected,
to dazzle the ignorant, and entrap the unwary.—That I may not be accused of having exaggerated in
these statements, I refer those who hear me to [421] Postlethwaite's Dictionary of Commerce, under
the articles Actions, Bubbles and Companies; and it is not unworthy of remark, that the able author
of that work, considers the two latter words as synonymous terms; for under the article 'Bubble.' he
says, see 'Companies.'—It is far from my meaning to impute any sinister or unworthy motives to the
gentlemen who have engaged in the present undertaking. On the contrary, I know many of them, with
whom I have the honour of being acquainted, to be incapable of acting, but with the most laudable
intentions. But, I believe they have engaged in it unadvisedly, and without due consideration of the
consequences to which it would lead; and against those consequences it is my duty to guard the House.
If this scheme is carried into effect, and the shares of the company rise, as I believe they will, to a
price far beyond their real value, the present proprietors, as prudent men, will, like their predecessors,
avail themselves of the public credulity, and sell out; the concern will fall into the hands of speculative
adventurers, lose its present commercial influence, be misconducted, and the bubble will shortly burst,
to the ruin of thousands. If this company obtains the sanction of parliament, the rage for these
undertakings will be rekindled; other companies will be formed, and the capital of the country will be
diverted into new channels, to the injury of all regular trade and solid property. No money will be
obtained either on personal or landed security, and all the evils of the memorable year 1720 will be
again renewed—Marine insurances are effected in this country on more reasonable terms, and on
more solid security, than in any other country upon earth. Neither the necessity nor the utility of this
new company has been proved. On the contrary, I flatter myself I have shewn, that it is pregnant,
both with private injury and public danger; and, therefore, that the prayer of these petitioners ought
not to be granted. I am well aware of the inordinate influence possessed by the members of this
intended new company; and, when I reflect, that there is scarcely a commercial member of this House
who has not been offered, and that there are very few who have not accepted, shares in this
undertaking, I almost tremble for the result, and anticipate the calamitous consequences which an
eminent writer says [422] will inevitably ensue, "whenever commercial opulence shall became the
accomplice of political power, for the purpose of obtaining undue advantages." But, I confide in the
wisdom and justice of this House, to avert those consequences. I trust, that a project so exceptionable,
will not receive their countenance in any stage whatever; and, therefore, that they will reject the motion
of the hon. member for the appointment of this select committee.
305
Mr. A. Baring thought, that the arguments urged by the hon. gent. against monopolies, strongly
applied against the matters complained of in the petition. When his hon. friend had stated that three-
fourths of the mercantile body in London were in favour of the petition, it was his opinion that he
might, with equal truth, have asserted, that 99 out of every 100 of that body were friends to it. He
knew of no house in the city that was not strongly interested in the accomplishment of the object of
the petitioners. The only question, then, before the House was, whether the petition should be referred
to a select or to an open committee. For his own part, he was inclined to the select Committee. The
whole course of precedent in the proceedings of that House lay that way. He was equally disposed to
approve of the mode in which it was proposed to compose the Committee, because every disposition
had been manifested in the selection of the members to provide with fairness for the interests of all
the parties concerned. The case of the Globe Insurance Company would not apply, because that
company extended its insurances to fire and lives. The petition before the House complained that the
two chartered companies in existence were not able to afford the necessary facility for effecting marine
insurances, and therefore prayed that further means should be provided, in any way which to the
wisdom of the House might seem meet. If parliament were of opinion that this could be best effected
by incorporated companies, as at the passing of the act of George the First, then he would be disposed
to say, that the new company should be incorporated; not for the purpose of giving any opinion on
the propriety or policy of such exclusive institutions, but with a view to extend the means of effecting
marine insurances. His own opinion was decidedly, that the better mode would be to throw the
business open generally. If, however, it should be thought expedient to establish another company, he
[423] conceived that it should be confined altogether to marine insurances. As the other companies
extended their assurances to fire and for lives, they must be materially prevented from attending
sufficiently to the marine insurance branch. By the existing law, a law enacted for the purpose of giving
an exclusive monopoly to the two chartered companies, no two men could join their capital for the
purpose of insurance; but the vast accumulation of trade rendered it impossible for these companies
to meet the full extent of the exigency. He could not but remark, in this place, the inconsistency into
which the hon. gent. had fallen, by representing the capital of the proposed company as too small
compared with the capital at Lloyd's to add much to the facilities of insurance, and afterwards arguing
against the proposed company on the ground that it would bring ruin upon many of the underwriters
at Lloyd's. It had been fairly stated that, generally speaking, an individual cannot stand against a
company; but he would ask, whether upon the hon. gent.'s own reasoning that could be the case in he
instance adverted to. His impression unquestionably was, that very considerable additional security
would be afforded to merchants, if several individuals combined, and only one was to effect the
insurance. The complaint of the merchants was, that the names of the underwriters had increased to
such an ex tent, as no longer to afford them the same security as before. The great augmentation of
trade, therefore, obliged the merchants often to take names on their lists which presented not the same
assurance of security. In presenting their petition to the House, the merchants meant to be understood
as impressed with a conviction, that, as the reserve had been made in the act, for putting an end to
the charters granted by it, the period had arrived for acting upon that reserve. This they wished to
have an opportunity to prove by evidence before a Committee They also desired to shew that they
wanted some sufficient security in the course of their business in respect to insurances. If the
306
underwriters wanted capital, they were driver to dispute the claims fop fair losses; and this furnished
an interior description of lawyers with opportunities of hunting out materials for vexatious litigation.
All they wanted was to be allowed to prove their case, and upon [424] these grounds he should vote
for the appointment of a Select Committee to examine into the matter.
b. Control of the Affairs of a Partnership and Limited Liability (1819)

PARTNERSHIPS IN IRELAND BILL97.
Mr. Alderman Wood moved for leave to bring in a bill, similar to that which he had introduced
last session. The object of it was, to induce men of large capitals to vest part of them in trade or
manufactures in Ireland, without fear of subjecting themselves to the operation of the bankrupt laws.
By this bill, sleeping partners might invest money in trade without being considered as acting partners,
or being liable for more than the sums invested by them. The worthy alderman concluded with moving
"for leave to bring [125] in a bill to promote the employment of persons in the Fisheries, Trade, and
Manufactures of Ireland, by regulating and encouraging Partnerships in that part of the United
kingdom."
Mr. Plunkett said, that the House were not, perhaps, aware that an act had existed upwards of
forty years in Ireland, which had been acted on, and had become a part of the system of equity in that
country, enabling persons to invest money in trade without becoming liable to the operation of the
bankrupt laws. This was called an anonymous partnership in Ireland. These anonymous partners,
however, did not engage in the trade themselves, and had no control over it, but were mere lenders of
money. But by the bill of the worthy alderman, the persons who advanced money might have the
substantial control of the trade. Now he held this to be a dangerous principle. Persons might appoint
an acting partner entirely under their control, and might, with little or no capital, have the entire benefit
of the trade, with a limited responsibility to the public. This was directly contrary to an established
principle of mercantile law. It was obvious, that under this bill men of straw would be appointed as
acting partners, and the persons who had the entire control and direction of the trade would only be
liable to the extent of the sums advanced by them. If an amendment of the existing law were only
proposed, he should be heartily glad to accede to it; but the bill would go to repeal the existing law on
the subject.
The Chancellor of the Exchequer observed, that the principle of this bill was repugnant to the
general principles of commercial law in this country. Ireland had separate laws on this subject, which
were well understood, and which were not without their advantage in a country deficient in capital. In
most countries on the continent, persons were allowed to vest sums in trade on a similar principle;
but a system of this kind required to be acted on with great caution. Persons might acquire a false
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Business Corporation in England 1800-1867, Cambridge, Harvard University Press, 1936, pp. 33-5.
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credit by a connexion of this nature with capitalists, the extent of whose liability might not be known
to the public. In point of fact, this was an unlimited allowance of small joint stock companies;
companies of such a description were viewed with great jealousy in this country. This jealousy,
however, might be carried too far. He thought the bill might be productive of advantage, but it should
undergo [126] considerable alterations.
Mr. Foster entered into a history of the law in Ireland, respecting anonymous partnerships. It was
drawn up, he said, by one of the ablest men of Ireland, and was passed in the Irish parliament in 1781.
The idea of it was taken from a French law-book. When sent over to England; it was submitted to the
attorney and solicitor-general of that day, and by their advice, rejected as contrary to the practice of
this island. On a remonstrance from Ireland, that the bill was necessary for the encouragement of the
manufactures of Ireland, it came back and was passed into a law, and had been productive of great
benefit. He was sorry however to say, that there was as much necessity now for capital for encouraging
manufactures in Ireland, as there was then. He should recommend to the worthy alderman to bring
in a bill for amending the existing law, rather than to repeal it.
Mr. Leslie Foster said, the bill of the worthy alderman was well deserving of the consideration
of every Irishman. He was not sure that he understood his right hon. friend correctly. It seemed to
him that his principal objection was, to a principle which already existed. By the existing law, dormant
partners might invest money to any amount, derive a share of the profits, and yet not be liable beyond
the sums invested by them.
Mr. Plunkett said, his objection was, to the effective control which this bill would give to sleeping
partners, without subjecting them to any losses.
Mr. Alderman Wood acknowledged, that the principle of the bill would give this control; but
then half the profits would remain to be added to the capital. Thus, if the profits were 10 per cent. 5
per cent could only be drawn by the partners.
Sir J. Newport thought it would be better to repeal the former act, and to consolidate its
provisions in the present, the former being an act of the Irish parliament. It would be better that all
the regulations on the subject should be incorporated into one act of the imperial parliament.
Leave was given to bring in the bill.
c. Parliamentary Resistance to Legislative Incorporations (1824)

CORPORATE COMPANIES98.
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§ Lord Stanley having moved the second reading of the bill for incorporating the Manchester and
Salford Loan Company,
Mr. Huskisson said, that he should certainly object to bills of incorporation, unless where charter
was first regularly obtained from the Crown. This was the old and the regular course of parliamentary
proceeding.—Having obtained their charter from the king in council, the company came to the House
of Commons for [609] further powers; and he saw no reason for deviating from the established
practice. Legislative incorporations involved numberless difficulties, many of which could scarcely be
dealt with. A charter from the Crown might be revoked, if it was abused, or if the company failed to
fulfil their undertakings with the public; but this could not be done in the case of a legislative
enactment. To authorize an unlimited number of trading companies in such a manner, would be to
do a material mischief to the country. He held in his hand the charter of the first company formed
for lighting London with gas. According to the letter of that document, the power was given by the
king and might be revoked in case the company abused it. Here, then, was a means by which that
particular company could be dealt with; but how could government deal with about forty companies
(not royally chartered) which had been since formed for lighting different parts of England by gas?
companies were going on to form themselves into corporations for every purpose—no matter what—
of trade. How was the public to proceed in case they neglected to fulfil their conditions? Parties might
go to law, and get a verdict; but how and where were they to levy? He would not object to giving
bodies who might be about to do business on a large scale, the power of suing and being sued
collectively; but he certainly should oppose the taking every wild and idle speculation that might offer
itself, out of the general operation of the laws of the country.
d. Resistance to Incorporation and the Interests of Creditors (1824)

GENERAL GAS COMPANY'S BILL99
The Earl of Lauderdale, on the order of the day for the second reading, being moved, said, that
he intended to move that this bill be read that day six months. Throughout the whole country, there
was no place which had heard of the bill which had not petitioned against it. He objected to the
general principle of giving such powers to any corporate body as this bill purported to convey. The
granting of a monopoly of this kind would take away all the check which arose from competition.
The most advantageous mode of supplying gas to towns would be, to allow those who had an interest
in their being well lighted to become the contractors.
The Earl of Limerick supported the bill. It had, he said, been brought into the House of
Commons on February, and no opposition was there made to the measure. The bill was, not to destroy
competition, but to enable another company to enter into competition with those already established.
Nor was it meant to injure other companies. An objection had been made to the bill, on the ground
of its enabling the company, as a corporate body, to escape the bankrupt laws. He was authorised by
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those who introduced the bill to say, that they were ready to give up this protection; and were also
willing that the name of any town where gas companies were established should be exempt from its
operation.
The Earl of Rosslyn objected to the principle of the bill, as he must to all bills which went to
establish joint-stock companies, without a very strong case being made out. He saw no necessity for
the present company, and no prudence in establishing it, contravening, as it did, the principles of the
common law, that when any man engaged in trade, he was [791] answerable to his creditors with the
whole of his property.
The Lord Chancellor thought, that if their lordships understood the true state of the case with
respect to this bill, it would be impossible for them to pass it. He was against the powers given to
companies of this description; more especially I when they were not incorporated by charter. There
was a practice, with respect to speculations of this kind, which called loudly for some legislative
prohibition. Persons formed schemes for the establishment of a company, and while they speculated
on obtaining a charter, went into the market with shares which were sold at a given price, though they
might, in the result, prove to be of no value whatever. This was a subject not undeserving of their
lordships' attention: it was worthy of their consideration whether it would not be proper to annul, by
a legislative act, all such contracts. The present bill was for the purpose of lighting all towns with gas,
except London and ten miles round it. This measure, it seemed, had passed the House of Commons
without opposition, which was very extraordinary: but that was no argument in its favour; for, the
moment the public attention was called to it, numerous petitions were presented against it. The learned
lord alluded to the circumstance which he had formerly noticed respecting the capital of the company.
It was provided, that it should not exceed one million sterling; but how much it really was to be did
not appear. In such cases persons subscribed certain sums; there was a name in one column of half a
sheet of paper, and a certain sum in another: but the amount of the subscription did not show the
state of the funds of the company, for their lordships were well aware that subscribing and paying
were now-a-days two very different things. In going over the clauses of the bill, he saw none which
afforded any efficient remedy against the company. There was one by which creditors might proceed
to levy by distress; but the proceeding was one which would probably produce most distress to the
creditor, for he would find nothing to carry away but a gasometer and inflammable air. It was said that
the partners were to be made liable to the full extent of their subscription; but, how was the creditor
to get at the parties? In these incorporating bills a clause was introduced, [792] providing that the
company might sue and be sued by their treasurer. This was very well for the interest of the company;
but of what advantage was it to any body to get a verdict against the treasurer, if he had no funds?
He had, on a former occasion, proposed, with respect to these bills, that a clause should be inserted,
enabling the person who obtained a verdict against the treasurer to levy the amount by distress on any
individual partner, leaving it to that individual to seek his remedy against the company. He repeated
his objection to the incorporation of any company, except by a charter from the Crown. In that case,
if the company acted improperly, the Crown could at once put them down, by withdrawing the charter;
but when they were established by act of parliament, it required the passing of another act to repeal
the former, before any remedy could be applied to the evil. He did not mean to say, that there might
310
not be cases in which it would be proper to pass measures similar to the present bill; but their lordships
ought to be extremely cautious how they established companies, with powers which might prove
seriously injurious to the interests of individuals.
The Earl of Lauderdale's motion was agreed to; and, of course, the bill was thrown out.
e. Shareholders’ Unlimited Liability as a Condition to Incorporation (1824)

ALLIANCE ASSURANCE COMPANY BILL100.
On the report of this bill being brought up,
Mr. Grenfell begged to know what security the public had with respect to these companies? If,
for instance, a Secretary or other public officer of such company were to be proceeded against, and a
verdict obtained, he wished to know how far the company, individually or collectively, were liable?
Mr. Huskisson said, that as he understood it, under these bills of incorporation, in case of
judgments obtained against the treasurer, and their not being made good, the individuals who might
obtain the verdicts would be at liberty to select any one or more of the [843] members of that
incorporation, upon whom he might levy for full satisfaction of his claim. Without such a clause
attached to it, no bill of that nature would be allowed to pass. He would propose, for the public
convenience, another clause, which would require the names of all the parties to be enrolled at the
Stamp-office; and none of the proceedings of the association should be held good in law until such
enrolment had been effected.
f. Except in Scotland, Partnerships Should not be Capable of Suing and Being Sued
(1825)
PARTNERSHIPS SOCIETIES (SCOT- LAND) BILL101.
On the order of the day for the third reading,
Mr. J. P. Grant said, that the bill had been brought in without due consideration. Its preamble
recited that to be true which was manifestly false; and declared that to be law which the decision of
the House of Lords, in a recent case, had declared not to be law. If this bill should pass, it would hold
up this House to absolute ridicule. The bill set forth, that, by the law of Scotland, partnerships, or
commercial associations of individuals, might sue and be sued in respect of debts, bonds, &c.: but, so
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311
far from this being the case, decisions of the courts of session in Scotland had repeatedly held, that
such partnerships could neither sue nor be sued.
The Lord Advocate contended, that, by the law of Scotland, as it had existed for upwards of a
hundred years, partnerships might sue and be sued. Authority, too, was given by the same law to record
bills of exchange, in further extension of the principle that partnerships might sue and be sued. The
records of parliament would show innumerable instances of appeals carried on in the names of such
joint partnerships. He would further observe, that this was not a declaratory but a prospective bill.
The measure was one of the utmost importance to the commercial interests of Scotland; and he might
say, that they would be excessively alarmed if they heard that the question had been made matter of
doubt.
Mr. T. Wilson supported the bill, and was so convinced of its beneficial tendency, that he should
be glad to see a similar measure introduced into our own commercial law.
Mr. Scarlett would be sorry to see any such thing introduced into the law of England. It would
lead in its operation to a great deal of fraud; for if all partners in a partnership were able to sue or to
be sued, what would be the condition of a defendant, who having been proceeded against by all of
them, should have judgment in his favour? What would he do, in very many cases, for his costs? How
would he be able to recover them? It was to be hoped, therefore, that no such measure would be
engrafted upon the law of England. As to the bill itself, it was clearly declaratory.
Mr. Baring said, that the learned lord had intimated, that in Scotland the bill was absolutely
necessary; a learned friend of his had just declared, that he should be sorry to have it [1280] introduced
into the law of England, because it would be productive of fraud; and that observation had been
cheered by the Attorney-general. Now if, as he himself believed, this would be a beneficial measure
for one part of the empire, why would it not be also for another? This was another instance in which
lawyers had shown that they were not the best judges of what laws would be most beneficial for
merchants. In Ireland an old law existed, authorizing individuals to form partnerships with a limited
responsibility; but in England the matter remained in a state of doubt and difficulty, which he had no
doubt the lawyers considered to be the perfection of all law; because hon. and learned gentlemen had
never taken any objection to it. Against the present bill, however, he was disposed to vote, seeing that
it did not apply to all parts of the United Kingdom.
The Attorney General said, it had been considered by those who introduced this bill, that they
were proceeding upon what was law, and had been considered to be law in Scotland for a hundred
years and upwards. At the suggestion of some commercial men, he himself had lately entertained
some thoughts of proposing a similar measure in respect to England; but when he came to look more
carefully at its necessary operation in this country, and to consider how wide a difference the very
existence of such a court as the court of Chancery made between the two kingdoms in respect of the
expediency of such a law (which court Scotland did not possess), he was convinced that it was not
advisable to introduce any such measure into the law of England. The present bill did not establish
any new principle; but was only brought in for the purpose of removing any doubts about that which
was already law in Scotland.
312
The bill was read a third time and passed.
g. Fear of Granting Advantages that will Result in Monopoly (1833)

ST. GEORGE'S STEAM PACKET COMPANY102.
Lord Sandon, in moving the third reading of the St. George's Steam Packet Company's Bill,
stated, that in the original Bill there were some clauses to which objections had been made, as they
gave a power to that Company over several others; but as the Bill stood [994] at present, it was simply
to enable the Company to sue and be sued, and to make some other regulations for the management
of its concerns. The only reasonable objection that could now be made to it was, that it placed the
Company in competition with others; but in his (Lord Sandon's) opinion, so far from its giving the
Company greater powers than others were invested with—it, in fact, contained less provisions to that
purport than other Companies had. It would be a new line of policy if the Legislature were to
discourage the formation of Joint Stock Companies, but he would wait until he heard what objections
were to be offered against the Bill before he presumed to go at any greater length into the subject.
Mr. Wallace said, the object of the Bill throughout was to give the St. George's Steam Packet
Company the power to increase their capital to an immense extent, though it was not yet subscribed.
The Bill had for its chief object to obtain a monopoly of the transmission of goods and passengers
across the Channel. He contended that the preamble, which stated them to be a Joint Stock Company,
was not proved. They claimed to be an Irish Company, but on reference to the list of subscribers, he
found the balance as nearly as possible between England and Ireland, for he found that eighty-seven
of the subscribers belonged to Ireland and seventy-four to England. It could not, therefore, be called
an Irish Company. It could not be said, that his objections were made with the view of protecting
Scotch interests, for he found that the English subscribers belonged chiefly to the western coast,
namely, from Cornwall round to Liverpool—so that it was very natural that the inhabitants on that
coast, including Wales, would not offer any objections to the Bill. The Company claimed the power
of chartering all other vessels that professed to go on the same line as their vessels, and therefore a
monopoly would be established, by which they might charge what prices they pleased. A more
predetermined system of monopoly was never heard of. It was a frequent ground of complaint against
encouraging the accumulation of large masses of wealth by any one Company; but the present Bill
would have the effect of enabling the Company to accumulate very great wealth, as it would enable
them to increase their capital by [995] 30,000l., and to form a sinking fund from various sources, of
80,000l.; and that, too, in the face of the Standing Orders of Parliament, which required a certain sum
to be already subscribed. It would act as an exceedingly hard measure on all the other Companies, if,
indeed, it did not entirely prevent those Companies' vessels from navigating altogether. The St.
George's Steam Packet Company was already a very powerful Company. He had no doubt of the
102HC Deb 19 June 1833 vol 18 cc993-7 993. URL: http://hansard.millbanksystems.com/commons/1833/jun/19/st-

georges-steam-packet-company. Contains Parliamentary information licensed under the Open Parliament Licence v1.0.
313
respectability of the subscribers; but he felt hound to oppose the Bill, conceiving it to be an injurious
monopoly. He concluded by moving that it be read a third time that day six months.
Mr. Fergus O'Connor declared that the Bill came before the Committee originally in the most
exceptionable form, such as must have convinced any man of the motives of the promoters. The hon.
Member stated the advantages derived by competition, since the original establishment of steam-
packets between Liverpool, Bristol, Dublin, Cork, and other places in that Channel. It was stated, he
said, that the Bill was intended to facilitate commerce; but this could not be the case when the effect
of the monopolies already existing was to keep the freight of Irish produce to this country, of pigs in
particular, as high as 30s. per ton. The noble Lord who moved the third reading of the Bill had said,
that it asked for no immunities but such as were possessed by other companies; but this was no
argument, as the House was not bound to follow a bad principle; and that, too, just at she time when
the House was doing away with other corporations. This Bill did, in fact, go to establish a corporation
on the high seas. [Lord Sandon: It is a Joint Stock Company.] Whatever it might be called, it was in
effect a corporation. Although much altered in the Committee, the Bill was still, in its present form,
as likely to be of as much injury as in its original shape; and, he should, therefore, second the
Amendment of the hon. member for Greenock.
Mr. Wilson Patten asked what monopoly the Bill would give which was not enjoyed by the
Company already? As to the bye-laws of the Company, they would not be at all affected by the passing
or rejection of the Bill, the provisions of which merely gave the Company the power of suing and
being sued as a body. He would admit that several petitions had [996] been presented against the Bill;
but the clauses of which these petitions complained, had been expunged; and he could now see no
objection to the Motion of the noble Lord, that the Bill be read a third time.
Mr. Anthony Lefroy objected to the Bill as giving to the Company a much greater capital, and
consequently, reducing the scope for competition, by which alone the public could be benefited. From
Water-ford and other places, petitions had been presented against the Bill, which objected to it as a
whole, as well as to certain clauses which had been expunged.
The Earl of Ormelie considered that, although the Bill only asked for an increase of 30,000l. to
the capital of the Company, it was still most objectionable in principle. As far as the Bill went, it was
pro tanto a monopoly; for the provision for suing and being sued was a privilege beyond the common
law. Not a single public ground had been adduced in support of the Bill, upon which alone it should
be granted. The object and the practice of the Company had been to throw out every competitor, and
the parties now came to Parliament to enable them to perpetuate the system. He drew a marked
distinction between bills for Steam Packet Companies, and those for Railways: in the former, all parties
could plough the ocean without hindrance; in the latter, it was necessary that the sanction of the
Legislature should be given before the grounds of private individuals could be cut through.
Major Beauclerk supported the Amendment. Every one would see, that the consequence of
giving a monopoly to this Company would be, that they would run down all smaller Companies; and
it appeared to him extraordinary, that this Bill should now be pressed forward, at a lime when the
314
House was anxious to do away with all monopolies. He therefore, hoped that hon. Members who were
opposing monopolies would not give their sanction to this Bill.
Mr. Jervis said, the House should protect the public, and take care the public should have as cheap
and expeditious a conveyance from one part of the country to another as possible. It had been said
that what the Company were seeking to do by this Bill they could do without; but their comings to
this House for powers which they could not do without [997] proved quite the reverse. In his opinion,
this Company ought not to be countenanced in keeping up their unnatural coalition, which would
have the power of ruining other Companies, and prevent the public from having a cheap, and what
was more material, a safe conveyance. In his opinion, no sufficient reason had been given why they
should have a privilege which they could not have without the assistance of the House. But it had
been said this Company was composed of different persons who had subscribed their money to keep
up the concern. It was merely in effect this—that certain persons who had been proprietors of vessels,
were willing to contribute their vessels, to keep up the competition, and to that extent, and to that
extent only, they were willing to become shareholders. These individuals wished to have the assistance
of the House to carry on their coalition, and that being the case, he should certainly give his support
to the Amendment.
Mr. Baldwin also felt it his duty to oppose the third reading of this Bill, because it would have
the effect of completely putting down all sailing vessels trading between England and Ireland.
Mr. Barron thought that no man, after reading the Resolutions of the Company itself, could
doubt that their object was monopoly, and that they would, as a matter of course, do away with all
minor companies, by which the public would be exceedingly injured; and not merely the public, but
all the great outports of the United Kingdom; and that this company would charge whatever price
they pleased. He should, therefore, support the Amendment.
Lord Sandon, in reply, hoped the House would not be led away by the vague cry of monopoly,
which in no way whatever had been proved as to this Bill. The Bill had been subjected to the adverse
investigation of a scrutinizing Committee for many days; and the Company did not claim a limited
liability. On the contrary, every proprietor would be liable to the whole amount of his property.
The House divided on the question, that the Bill be now read a third time—Ayes 24; Noes 47:
Majority 23.
315
Chapter 12. First Attempts at Reform of the Law Applicable to Companies
a. Adoption of the First Trading Companies Bill (1834)103

AN ACT to enable His Majesty to invest trading and other Companies with the Powers necessary
for the due Conduct of their Affairs, and for the Security of the Rights and Interests of their Creditors.
(15th August 1834.)
_________________________
ABSTRACT OF THE ENACTMENTS.

1. His Majesty empowered, by letters patent, to grant to trading companies not incorporated
certain privileges for protection of themselves and of the public.— Name of any member may be
joined with principal officer in suits in equity.—-No privilege to be granted until after three months’
notice in Gazette.
2. Entry of grant of letters patent to be made in the office of Clerk of the Patents, and a
memorandum thereof published in the London Gazette and in mic newspaper in the neighborhood
of the association.
3. Decrees, judgements, &c. given against said company to extend to the property of such
company and to the person and effects of every member thereof.
4. List of members’ names, with their places of abode, to be filed with Clerk of Patents, and be
open for inspection.
5. Saving privileges of existing companies.
By this ACT,
After noticing that by an Act, 6 Geo. 4. c. 91, intituled, “An Act to repeal so much of an Act passed
in the Sixth Year of His late Majesty King George the First as relates to the restraining several
extravagant and unwarrantable Practices in the said Act mentioned, and for conferring additional
Powers upon His Majesty with respect to the granting of Charters of Incorporation to trading and
other Companies,” it is amongst other things enacted, that in any charter hereafter to be granted by
His Majesty, his heirs or successors, for the incorporation of an company or body of persons, it shall
and may be lawful in and by such charter to declare and provide that the members of such corporation
shall be individually liable in their persons and property for the debts, contracts, and engagements of
such corporation, to such extent, and subject to such regulations and restrictions, as His Majesty, his
103 4 & 5 Will 4 c. 94. URL: http://goo.gl/42Nwh. Paragraphs added.

12. First Attempts at Reform of the Law Applicable to Companies
heirs or successors, may deem fit and proper, and as shall be declared and limited in and by such
charter, and the member of such corporation shall thereby be rendered so liable accordingly:
And that divers companies and bodies of persons do and may from time to time associate
themselves together for trading. charitable, literary, or other purposes, which associations it would be
inexpedient to incorporate by royal charters, granted either according to the rules of the common law,
or in pursuance of the said recited Act, although it would be expedient to confer upon such
associations, or some of them, some of the privileges of and incident to corporations created by royal
charters, and especially the privilege of maintaining and defending suits, actions, prosecutions, or other
legal proceedings, in the name or names of some one or more of the principal officers for the time
being of such associations respectively :—
It is Enacted,
I. That it shall and may be lawful for His Majesty, his heirs and successors, by letters patent to be
from time to time for that purpose issued under the Great Seal of the United Kingdom of Great
Britain and Ireland, or in Scotland under the seal appointed by the Articles of Union to be used, and
instead of the Great Seal thereof, to grant to any company or body of persons associated together for
any trading, charitable, literary, or other purposes, and to the heirs, executors, administrators, and
assigns of any such persons, although not incorporated by such letters patent, any privilege or
privileges which, according to the rules of the common law, or in pursuance of the said recited Act,
it would be competent to His Majesty, his heirs and successors, to grant to any such company or body
of persons in and by any charter of incorporation, and especially the before-mentioned privilege of
maintaining and defending actions, suits, prosecutions, and other proceedings, both at law and in
equity, in the name or names of any one or more of the principal officers for the time being of any
such associations respectively, which privileges shall be granted in and by such letters patent, in such
manner and form, and upon such conditions for the prevention of abuses in the management of the
affairs of any such associations, and for the security of the rights and interests of their creditors, and
for the protection of the public at large, as His Majesty, his heirs and successors, shall by any such
letters patent as aforesaid see fit from time to time to prescribe and impose; and any letters patent
which shall be so granted and issued as aforesaid shall, to the extent of the privileges thereby granted,
and subject to the conditions to be thereby imposed, be as valid and effectual in the law as if such
privileges were granted and such conditions were imposed by any Act passed for granting and
imposing the same:
Provided always, that in all cases where such letters patent shall be granted to any such company
or body of persons, it shall and may be lawful, in all suits or proceedings in equity commenced or
instituted against the principal officer or officers of such company or body of persons, to join, for
the purpose of discovery, in such suits or proceedings, any member or members of such company as
the nominal defendant or defendants for or on behalf of such company or body of persons, subject
to the payment by the plaintiffs of such costs as the Court in which such proceedings may be had
shall in that behalf order or direct:
317
Provided always, that nothing in this Act contained shall enable His Majesty to grant to any
company or body of persons any privilege under this Act until after notice in the Gazette shall have
been given three months that it is intended to grant such privilege or privileges.
And to the end that the issuing of such letters patent, and the name or names of the principal
officer or officers for the time being of the several associations thereby constituted, may be made
known to the public:——
It is Enacted,
II. That an entry of the grant of such letters patent, and of the name or names of the principal
officer or officers therein designated, or who may from time to time be appointed by virtue of the
powers for that purpose contained in such letters patent, shall be made in a book to be kept for that
purpose in the office of the Clerk of the Patents, and that the same shall be open for inspection at all
reasonable times, by any person requiring the same, on payment of a fee of 1s. only; and further, that
a sufficient notice or memorandum of such letters patent, together with the name or names of such
principal officer or officers, be advertised in the London Gazette within one calendar month from the
date of such letters patent, and also in some one newspaper published or circulating in the county or
place where the meetings of any such association shall he usually held; and also, that upon the death,
or change from any other cause whatever, of any such principal officer or officers, notice thereof, and
of the name or names of the person or persons succeeding him or them, shall in like manner be
recorded in the office of the Clerk of the Patents, and advertised in the London Gazette and in some
one newspaper as aforesaid; and the officer or officers so from time to time recorded and advertised
shall, for all intents and purposes, be held and considered as the party or parties entitled to sue and to
be sued on behalf of his or their respective associations, within the meaning of this Act, and of any
patent or patents to be from time to time granted by virtue thereof.
III. That any decree, judgment, order, or interlocutor made or pronounced in any such action, suit,
or proceeding in any court of law or equity against any officer of any such company, body, or
association named as aforesaid, shall have the like effect and operation upon and against the property,
funds, and effects of such company, body, or association, and upon and against the persons and
property of any and every member thereof, as if such company, body, or association, and such
member or members thereof, had been a party or parties to such action, suit, or proceeding, and as if
such decree, judgment, order, or interlocutor had been pronounced against such company, body, or
association, or against every or any such member or members thereof; provided that no diligence or
execution shall pass or be issued thereon without leave first granted in open court by the Court in
which such decree, judgment, order, or interlocutor was made or pronounced, and which motion shall
be made on notice to the person or persons sought to be charged, nor after the expiration of three
years next after such person or persona shall have ceased to be a member of such company, body, or
association.
IV. That the principal officer or officers for the time being of such company or body of persons
to whom such letters patent shall be granted shall, in the first week of the month of June and in the
first week of the month of December in each year during the continuance of such letters patent,
318
cause a true list of the names of all the then existing members of such company or body of persons,
with their respective places of abode and description, to he filed with the Clerk of the Patents, and
that the same shall be open for inspection at all reasonable times by any person requiring the same.
V. That nothing in this Act contained shall authorize or he construed to authorize the grant to any
company or body of persons of any privilege in derogation of any exclusive privileges now enjoyed
by any company or corporation under any Act or Acts of Parliament.
b. Second Trading Companies Act (1837)104

Chartered Companies Act 1837
1837 CHAPTER 73
An Act for better enabling Her Majesty to confer certain Powers and Immunities on trading and
other Companies.
[17th July 1837]
WHEREAS divers Associations are and may be formed for trading or other Purposes, some of
which Associations- it would be inexpedient to incorporate by Royal Charters, although it would be
expedient to confer on them some of the Privileges of and incident to Corporations created by Royal
Charters, and also to invest such Associations or some of them with certain other Powers and
Privileges: And whereas it would also be expedient to extend the Powers of Her Majesty in reference
to the Creation of Corporations, and to the conferring of Privileges upon Corporations, and upon
other Bodies or Companies enabled to sue and be sued: And whereas by an Act passed in the Sixth
Year of the Reign of His Majesty King George the Fourth, intituled An Act to repeal so much of an
Act passed in the Sixth Year of His late Majesty King George the First as relates to the restraining of
several extravagant and unwarrantable Practices in the said Act mentioned; and for conferring
additional Powers upon His Majesty with respect to the granting of Charters of Incorporation to
trading and other Companies, it was amongst other things enacted, that in any Charter thereafter to
be granted by His Majesty, His Heirs or Successors, for Incorporation of any Company or Body of
Persons, it should and might be lawful in and by such Charter to declare and provide that the Members
of such Corporation should be individually liable in their Persons and Property for the Debts,
Contracts, and 'Engagements 01 such Corporation, to such Extent, and subject to such Regulations
and Restrictions, as His Majesty, His Heirs Or Successors, might deem fit and proper, and as should
be declared and limited in and by such Charter, and the Members of such Corporation should thereby
be rendered so liable accordingly : And whereas by an Act passed in the Session of Parliament held in
the Fourth and Fifth Years of the Reign of His late Majesty, intituled An Act to enable His Majesty
to invest trading and other Companies with the Powers necessary for the due Conduct of their Affairs,
and for the Security of the Rights and Interests of their Creditors, His Majesty, His Heirs and
7 Will 4 & 1 Vict. c. 73. URL: http://www.legislation.gov.uk/ukpga/Will4and1Vict/7/73/contents. Content licensed

104
under the Open Government Licence v1.0.
319
Successors, were empowered to grant to unincorporated Companies and Associations certain

Privileges in such last-mentioned Act set forth : And whereas the aforesaid Provisions of the said
recited Acts have not been found effectual for the Purposes thereby intended, and it is therefore
expedient to repeal the same, and to make such Provisions in reference to the several Matters aforesaid
as are herein-after contained: Now therefore be it enacted by the Queen's most Excellent Majesty, by
and with the Advice and Consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the Authority of the same, That so much of the said Act of the Sixth
Year of the Reign of His Majesty King George the Fourth as is herein-before set forth, and also the
said recited Act of the Session of Parliament held in the Fourth and Fifth Years of the Reign of His
late Majesty King William the Fourth, shall be and they are hereby respectively repealed.
II. Privileges may be granted by Letters Patent to Persons associated for trading or other
Purposes.
And be it enacted, That it shall and may be lawful for Her Majesty, Her Heirs and Successors, by
Letters Patent to be from Time to Time for that Purpose issued under the Great Seal of the United
Kingdom Of Great Britain and Ireland, or in Scotland under the Seal appointed by the Articles of
Union to be used instead of the Great Seal thereof, to grant to any Company or Body of Persons
associated together for any trading or other Purposes whatsoever, and to the Heirs, Executors,
Administrators, and Assigns of any such 'Persons, although not incorporated by such Letters Patent,
any Privilege or Privileges which, according to the Rules of the Common Law, it would be competent
to Her Majesty, Her Heirs and Successors, to grant to any such Company or Body of Persons in and
by any Charter of Incorporation.
III. The Letters Patent so granted may provide that Suits shall be carried on in the Name
of One of the Officers of any Company appointed for that Purpose.
And be it enacted, That in any such Letters. Patent so to be granted as aforesaid by Her Majesty,
Her Heirs or Successors, to any such Company or Body of' Persons so associated together as aforesaid,
but not incorporated, it shall and may be lawful, in and by such Letters Patent, either expressly or by
a general or special Reference to' this Act, to provide and declare that all Suits and Proceedings,
whether at Law, in Equity, or in' Bankruptcy or Sequestration, or otherwise howsoever, as well in Great
Britain and Ireland as in the Colonies and Dependencies thereof by or On behalf of such Company
or Body, or any Person or Persons as Trustee or Trustees for such Company or Body, against any
Person or Persons, whether Bodies Politic or others, and whether Members or not of such Company
or Body, shall be commenced and prosecuted in the Name of one of the Two Officers for the Time
being to be appointed to sue and be sued on behalf of such Company or Body, and registered in
pursuance of the Directions of such Appointment and Registration respectively herein-after
contained; and .that all Suits and Proceedings, whether at Law or in Equity, by or on behalf of any
Person or Persons, whether Bodies Politic or others, and whether or not Members of such Company
or Body, against such Company or Body, shall be commenced and prosecuted against one of such
Officers, or if there shall be no such Officer for the Time being, then against any Member of such
Company or Body : Provided nevertheless, that nothing in this .Act or in such Letters Patent contained
320
or to be contained shall prevent the Plaintiff from joining any Member of such Company or Body
with such Officer as a Defendant in Equity, for the Purpose of , Discovery, or in case of Fraud.
IV. Individual Liability of Members of a Company may be restricted by Letters Patent.
And be it enacted, That it shall and may be lawful, in and by such Letters Patent so to be granted
to any such Body or Company as aforesaid, to declare and provide that the Members of such Company
or Body so associated as aforesaid shall be individually liable in their Persons and Property for the
Debts, Contracts, Engagements, and Liabilities of such Company or Body to such Extent only per
Share as shall be declared and limited in and by such Letters Patent; and the Members of such
Company or Body shall accordingly be individually liable for such Debts, Contracts, Engagements,
and Liabilities respectively to such Extent only per Share as in such Letters Patent shall be declared
and limited; such Liability nevertheless to be enforced in such Manner and subject to such Provisions
as are herein-after contained.
V. Deed of Partnership to be executed.
And be it enacted, That every such Company or Body to which any such Privileges or Powers as
herein-before mentioned shall be granted under the Authority of this Act shall be entered into or
formed by a Deed of Partnership or Association, or an Agreement in Writing of that Nature ; and
the Undertaking shall by such Deed or Agreement be divided into a certain Number of Shares to be
there specified; and in such Deed or Agreement, or in some Schedule thereto, there shall be set forth
the Name or Style of the said Company or Body, the Names or Styles of the Members of the said
Company or Body, the Date of the Commencement thereof, the Business or Purpose for which the
said Company or Body is formed, and the principal or only Place for carrying on, such Business; and
in such Deed or Agreement there shall also be contained the Appointment of Two or more Officers
to sue or be sued on behalf of such Company or Body in manner herein-after mentioned.
VI. Return to be made as herein-after mentioned of the granting of Letters Patent, and
Style of Company.
And be it enacted, That such Company or Body as aforesaid shall, within Three Calendar Months
after the Grant of such Letters Patent as aforesaid, make or cause to be made a Return, to such one
of the Offices for Enrolment herein-after mentioned as shall be required under the Provisions of this
Act, containing the Date of the Grant of such Letters Patent as aforesaid, the Name or Style of the
said Company or Body, the Business or Purpose for which the said Company or Body is formed, the
principal or only Place for carrying on such Business, the total Number of Shares in the said Company
or Body (and each of which Shares is to be distinguished by a separate Number in regular Succession),
the Amount to which each Share shall render the Holder thereof liable, the Names and (except as to
Bodies Politic) the Places of Abode of all the Members thereof, and the distinctive Number or
Numbers of the Share or respective Shares which each Member holds ; and such Company or Body
shall also at the same Time make a Return of the Names and Descriptions of the Officers appointed
by such Company or Body to sue and be sued on behalf thereof in manner aforesaid; such Return to
be made in the Form in the Schedule (A.) to this Act annexed.
321
VII. Name of Company sot to be changed after Registry. If Place of Business changed,
Return to be made.
And be it enacted, That during the Continuance of any such Company or Body after it shall have
been so registered no Change shall be made in the Name or Style thereof; and if the principal or only
Place for carrying on the Business of the said Company or Body shall be changed the said Company
or Body shall within Three Calendar Months after such Change make or cause to be made a Return
to the said Office as aforesaid of such Change in the Form in Schedule (B.) to this Act annexed.
VIII. When Persons cease to be Members of Company or Corporation, except by Transfer
of Shares, or of Change of Name of Member, Company to make Return within Three
Months.
And be it enacted, That in case any Person shall cease to be a Member of such Company or Body
(except by means of the Transfer by Deed or Writing of any Share therein), or in case of the Addition
of any Person thereto (except by means of the-Transfer of any Share as aforesaid), or of the Change
of the Name of any Member thereof by Marriage or otherwise, the said Company or Body shall,
within Three Calendar Months after Information shall be received by the said Company or Body of
any Person so ceasing as aforesaid, or of such Change or Addition as aforesaid, make or cause to be
made a Return to the said Office as aforesaid, containing the Names and Places of Abode of all
Persons having ceased to be Members thereof (except as aforesaid), and the Names and Places of
Abode of all Persons having become Members thereof (except as aforesaid), and specifying any
Change in the Name of any Member thereof by Marriage or otherwise ; such Return to be made in
One of the Forms in the Schedule (C.) to this Act annexed, as the Case may be.
IX. On Transfer of Shares, Notice to be given to the Company or Corporation by
Transferee.
And be it enacted, That on the Transfer by Deed or Writing of any Share in any such Company
or Body as aforesaid, a Notice in Writing, specifying the Date of such Transfer, the distinguishing
Number of the Share transferred, the Name and (except in the Case of a Body Politic) the Place of
Abode of the Person by whom or on whose Behalf and of the Name and (except as aforesaid) the
Place of Abode of the Person to whom such Transfer is made, shall be given to the said Company or
Body, by leaving the Transfer, when executed by both Parties, or some Note or Memorandum thereof
signed by them, at the principal or only Office of the said Company or Body.
X. Company or Corporation to make Return within Three Months after receiving Notice
of Transfer.
And be it enacted, That in case of the Transfer of any Share in such Company or Body, the said
Company or Body shall, within Three Calendar Months after receiving such Notice as aforesaid of
such Transfer, make or cause to be made a Return to the said Office as aforesaid, containing the Date
of such Transfer, the distinguishing Number of the Share transferred, the Name and (except in the
Case of a Body Politic) the Place of Abode of the Person by whom or on whose Behalf such Transfer
is made, and of the Person to whom such Transfer is made, in the Form in Schedule (D.) to this Act
322
annexed; and such Company or Body are hereby required, on the Request in Writing of either of the
Parties, forthwith to make such Return accordingly.
XI. Any Person having made Payment in respect of a Share in a Company under any
Judgment against such Company to make a Return thereof to Court of Chancery.
And be it enacted, That where the Extent per Share of the Liability of the individual Members of
any such Company or Body shall have been limited by Letters Patent as aforesaid, it shall be lawful for
any Person who shall or may from Time to Time have advanced or paid any Sum in consequence or
by virtue of any Execution or Diligence issued against him in respect of any Share in such Company
or Body, under any Judgment, Decree, Interlocutor, or Order to be obtained against any Officer of
the said Company or Body, or any Member thereof, in manner herein-after mentioned, to make a
Return thereof to such Office as aforesaid in the Form in Schedule (E.) to this Act annexed; and every
such Return shall be accompanied with a proper Voucher or Vouchers of the Fact of such Payment,
without which the same shall not be registered as herein after mentioned.
XII. Company to make Return when Repayment is made of Money so advanced by any
Person.
And be it enacted, That if ally Sum or Sums shall at any Time be repaid by any such Company or
Body as last aforesaid in respect of any such Sum which may have been so advanced or paid by virtue
of such Execution or Diligence, the said Company or Body shall forthwith make or cause to be made
a Return to such Office as aforesaid, specifying the Amount of such Repayment, in the Form in
Schedule (F.) to this Act annexed.
XIII. On Death, Resignation, or Removal of Officer appointed to sue and be sued on
behalf of Company or Body, another to be appointed, and Return made.
And be it enacted, That in case of the Death or Resignation or Removal of any Officer appointed
to sue and be sued on behalf of any Company or Body to be formed in pursuance of any of the
Provisions of this Act, the said Company or Body shall forthwith appoint in his Stead another Officer
to sue and be sued on behalf of such Company or Body, and shall, within Three Calendar Months
after the Death, Resignation, or Removal of such Officer as aforesaid, make or cause to be made a
Return to the said Office as aforesaid, containing as well the Name and Description of the Person
who has ceased to be such Officer in manner aforesaid as the Name and Description of the Officer
who has been appointed to sue and be sued on behalf of such Company or Body ; such Return to be
made in the Form in Schedule (G.) to this Act annexed.
XIV. Returns how to be signed and verified.
And be it enacted. That all Returns to be made in manner aforesaid by such Company or Body
shall be signed by One of such Officers, and shall be verified by a Declaration of such Officer made
pursuant to the Provisions of the Statute of the Fifth Year of His late Majesty's Reign, intituled An
Act to repeal an Act of the present Session of Parliament, intituled' An Act for the more effectual
Abolition of Oaths and Affirmations taken and made in various Departments of the State, and to
323
substitute Declarations in lieu thereof ' and for the more entire Suppression of voluntary and extra-
judicial ' Oaths and Affidavits;' and to make other Provisions for the Abolition of "Unnecessary Oaths,
except that if there shall be no such Officer, or such Officer shall refuse to act, then such Return shall
be sighed and verified as aforesaid by some Member of the said Company or Body.
XVII. By whom Returns are to be registered.
And be it enacted, That all such Returns as are hereinbefore directed to be made to the Enrolment
Office of the Court of Chancery in England shall be registered by the Clerks of Enrolments in
Chancery, or their Deputy, and that all such Returns as are herein-before directed to be made to the
General Registry Office at Edinburgh shall be registered by the Lord Clerk Register or his Deputy,
and all such Returns as are herein-before directed to be made to the Enrolment Office of the Court
of Chancery in Ireland shall be registered by the Clerks of Enrolments in Chancery in Ireland, or their
Deputy, in Books to be by them respectively kept for that Purpose, and that an alphabetical Index
shall be kept of the Names of such Companies or Bodies, with References to such Returns, and that
there shall be paid for the registering of each Return a Fee of Sixpence per Folio, and no more; and
that any Person shall be at liberty to inspect such Books and Index, and that there shall be paid for
such Inspection a Fee of One Shilling, and no more; and that any Person shall be at liberty to require
a Copy of any such Return, to be certified by the said Clerks or their Deputy, and that there shall be
paid for such Certificate a Fee of One Shilling and Sixpence for each Folio of such Copy, and no
more; and the Day of the Registration of every Return to be made in pursuance of this Act shall be
written on such Return by the said Clerks or their Deputy.
XVIII. Certified Copy of such Return, &c. to be received in Evidence.
And be it enacted, That a Copy, so certified as aforesaid, of such Return, including the Date to be
marked on such Return, shall be received in Evidence in all Proceedings, whether Civil or Criminal,
and shall also be received as Evidence of the Day of the registering thereof.
XX. No Person entitled to share in Profits till registered as a Member.
And be it enacted, That no Person becoming a Member of any such Company or Body by the
Transfer of any Share therein, or otherwise, shall be entitled to sue for or recover any Share of the
Profits thereof, unless and until a Return of the Transfer or other Fact whereby he shall so become a
Member shall be registered pursuant to the Provisions herein-before contained.
XXI. Person ceasing to be a Member to continue liable till Transfer, &c registered.
And be it enacted, That any Person ceasing to be a Member of any such Company or Body,
whether by the Transfer of any Share therein, or by Death or otherwise, shall be considered for all
Purposes of Liability as continuing a Member of such Company or Body until a Return of the
Transfer or other Fact whereby he shall have so ceased to be a Member shall be registered pursuant
to the Provisions herein-before contained.
XXII Proceedings, commenced in the Name of Officer not to be abated by his Death, &c.
or by Change of Members of Company.
324
And be it enacted, That no Action, Suit, or Proceeding, whether Civil or Criminal, commenced
either by or against any such Company or Body (whether in the Name of one of the Officers,
appointed to sue and be sued as aforesaid, or of some Member of such Company or Body, in the
Case and in manner aforesaid), shall be abated or prejudiced by the Death or by any Act of such
Officer or Person, or by the Resignation or Removal .of such Officer, either before or after the
Commencement of such Action, Suit, or Proceeding, or by any Change in the Members of such
Company or Body by the Transfer of Shares or otherwise, but that the same shall be continued in the
Name of such Officer or Member (as the Case may be) notwithstanding such Death or Act, or such
Resignation or Removal, and notwithstanding such Change in the Members of such Company or
Body.
XXIII. Evidence of Officer or of Member of Company admissible.
And be it enacted, That in all such Actions, Suits, and other Proceedings, whether Civil or Criminal,
the Evidence of any-such Officer as aforesaid, or of any Member of such Company or Body, shall be
admissible in the like Manner as if such Officer or Member were not an Officer or Member of such
Company or Body.
XXIV. Effect of Judgments against Company.
And be it enacted, That all Judgments, Decrees, Inter, locutors, and Orders obtained in any such
Actions, Suits, or other Proceedings as aforesaid against such Officer or Member in manner aforesaid,
whether such Member or Officer respectively be Party to such Actions, Suits, or Proceedings, as Plain
tiff, Pursuer, Petitioner, or Defendant or Defender, shall have the same Effect against' the Property
and Effects of such Company or Body, and also (to the Extent herein-after mentioned) against the
Persons, Property, and Effects of the individual existing or former Members thereof, respectively, as
if such Judgments, Decrees, Interlocutors, or Orders had been obtained against such Company or
Body in Suits or Proceedings to which all the Persons liable as existing or former Members of such
Company or Body had been Parties, and that Execution or Diligence, or Executions or Diligences,
shall be issued thereon accordingly: Provided nevertheless, that where the Extent per Share of the
Liability of the individual Members shall have been limited by any Letters Patent as aforesaid, no such
Execution of Diligence shall be issued against any such individual existing and former Member of
such Company oi Body as aforesaid for a greater Sum than the Residue, if any, of the Amount for
which, by virtue of such Letters Patent as aforesaid, such individual Member shall be liable in respect
of the Share or Shares then or theretofore held by him in the said Company or Body, after deducting
therefrom the Amount, if any, which shall appear by such Register as aforesaid to have been advanced
and paid in respect of such Shares or any of them by himself or herself, or any previous or subsequent
Holder of the same Shares or any of them, or the Representatives of any such Holder, under by virtue
of any former Execution or Diligence, and not repaid at the Time of issuing such subsequent
Execution or Diligence.
XXV. Bankruptcy of Officer of Company not to affect Company or Liabilities of
Members.
325
And be it enacted, That the Bankruptcy, Insolvency, or stopping Payment of any Officer or
Member of such Company or Body in his individual Capacity shall not be construed to be the
Bankruptcy, Insolvency, or stopping Payment of such Company or Body ; and that the Property and
Effects of such Company or Body, and the Persons, Property, and Effects of the individual Members
or other individual Members thereof (as the Case may be), shall, notwithstanding such Bankruptcy,
Insolvency, or stopping Payment, be liable to Execution or Diligence in the same Manner as if such
Bankruptcy, Insolvency, or stopping Payment had not taken place.
XXVI Service of Notice on the Company.
And be it enacted, That in all Cases wherein it may be necessary for any Person to serve any
Summons, Demand, of Notice, Or any Writ or other Proceeding at Law or in Equity, or otherwise,
upon the said Company or Body, Service thereof respectively on the Clerk of the said Company or
Body, or by leaving the same at the head Office for the Time being of the said Company or Body, or
in Case such Clerk of the said Office shall not be found or known, then Service thereof on any Agent
or Officer employed by the said Company or Body, or by leaving the same at the usual Place of Abode
of such Agent or Officer, shall be deemed good and sufficient Service of the same respectively on
the said Company or Body.
XXVII. Service of Notice by the Company.
And be it enacted, That in all Gases wherein it may be necessary for the said Company or Body
to give any Summons, Demand, or Notice of any Kind whatsoever to any Person or Corporation,
under the Provisions or Directions contained in this Act, such Summons, Demand, or Notice may be
given in Writing, signed by the Clerk, Attorney, or Solicitor for the Time being of the said Company
or Body, without being required to be under the Common Seal of the said Company or Body.
XXVIII. Determination of Company not to prevent the winding up of their Affairs.
And be it enacted, That in Case of the Determination of such Company or Body such Company
or Body shall nevertheless be Considered as subsisting, and to be in all respects subject to the
Provisions of this Act, so-long and so far as any Matters relating to such Company or Body shall
remain unsettled, to the End and Intent that such Company or Body may do all Things necessary to
the winding-up of the Concerns thereof, and that it may be sued and sue under the Provisions of this
Act in respect of all Matters relating to such Company or Body.
XXIX. Duration of Charters of Incorporation may be limited.
And be it also enacted, That it shall be lawful for Her Majesty, Her Heirs and 'Successors, in any
Charter of Incorporation to be hereafter granted, to limit the Duration thereof for any Term or
Number of Years, or for any other Period whatsoever; and also in any Charter of Incorporation
(whether in Perpetuity or for any Term or Period), either by Reference to this Act or otherwise, to
make the Corporation thereby formed, and the Officers and Members thereof, subject to all of the
Provisions, Liabilities, and Directions hereinbefore authorized to be imposed on or required from any
unincorporated Company or Body, or its Officers or Members, and also to confer on such Corporation
326
or its Members and Officers all the Powers or Privileges herein-before authorized to be conferred on
any unincorporated Company or Body, or its Officers or Members; and all the Powers, Provisions,
Clauses, Matters, and Things herein-before contained in reference to unincorporated Companies or
Bodies shall accordingly in such Case, and so far as the same may be applicable, be considered to
belong and apply to such Corporation.
XXX. Limitations as to Exemptions to be granted to Companies by Letters Patent.
Provided always, and be it enacted, That nothing in this Act contained shall authorize or be
construed to authorize Her Majesty, Her Heirs and Successors, by any such Letters Patent, to exempt
any Company or Body of Persons associated as aforesaid from the Necessity of entering into a Deed
of Partnership, from making the Return of the Patent to the Enrolment Office of the Court of
Chancery, from the Necessity of, carrying into execution the Provisions of this Act in respect to
Change of Name or Style of the Company or Body associated, in respect to the Cessation, or to the
Addition or to the Change of Name of any of the Individuals of the Company, or to the Transfer of
Shares and to the Notices to be given thereof, or to the Payment of any Sum by any Shareholder on
account of any Preferment against such Company or Body, or to the Returns to be made to the
Enrolment Office of such Payment, or of the Repayment thereof, or from making a Return to the
said Office of the Name of the Officer appointed by said Company to sue and be sued on its Behalf,
in case of the Death, Resignation, or Removal of the one registered, or to exempt any Company or
Body so associated from the Provisions of this Act in relation to the Period at which its several
Members shall become entitled or shall cease to share in the Profits thereof, the whole as required by
the Provisions of this Act.
XXXI. Act not to affect existing Privileges.
Provided always, and be it enacted, That nothing in this Act contained shall authorize or be
construed to authorize the Grant to any Company or Body of Persons of any Privilege in derogation
of any exclusive Privileges now enjoyed by any Company or Corporation under any Act or Acts of
Parliament.
XXXII. Notice of Application for Letters Patent to be inserted in the London Gazette, &c.
And be it enacted, That whenever an Application shall be made to Her Majesty to grant Letters
Patent or a Charter of Incorporation to any Company or Body of Persons associated together for any
Purpose of Trade, and such Application shall have been referred by Her Majesty to the Committee
of Privy Council for Trade and Plantations, then, before any Report shall be made to Her Majesty,
and before any such Letters Patent or Charter shall be granted, Notice of such Application shall be
inserted by the Parties applying Three several Times in the London Gazette and in One or more of
the Newspapers circulating within the County in which it is proposed that the principal Place of
Business of such Company shall be established, at Intervals of not less than One Week.
327
c. Defeat of An Attempt to Amend the Trading Companies Act (1838)

TRADING COMPANIES105.
The Lord Chancellor moved the second reading of the Trading Companies Bill.
Lord Brougham totally objected to the bill which passed that House last year upon this very
subject. It passed that House per incuriam without ever having obtained any consideration from the
law lords, when the House was under the terrors of a dissolution, on their death bed, and,
consequently with but little time to attend to their temporal concerns. A worse bill, and one which
introduced more mischievous changes in commercial law, it would be impossible to frame. The bill
gave power to the Crown, without an act of Parliament, to make one, two, or three persons in the
country a trading company. The Secretary of State and the President of the Board of Trade, without
any judicial advice or assistance, had it in their power, under the bill, to erect those persons into a
trading company, and exempt them from the operation of the bankrupt laws, limiting their
responsibility to a certain amount, contrary to the whole genius and spirit of the English law, and
contrary to the genius and spirit of the constitution. Whether the principle of the French law of
partnership, commandite, should be adopted in this country or not, was a question which had been
much discussed, but all the great luminaries of political science were against it; and after what
professor M'Culloch had said against it, he had come to the conclusion that if this principle was
introduced into the English commercial law, it would be impossible to enumerate the evils which
would follow its introduction. For these reasons he would do nothing whatever to extend the operation
of the bill passed last year.
The Lord Chancellor said, that no opposition whatever had been offered to this bill in the House
of Commons. It had certainly not passed without observation, but it had not been opposed. Whatever,
however, might be the merits and demerits of the system of commandite, the present question was
whether the present bill should or should not be permitted to pass in order to correct omissions and
defects in the law as it stood.
The Duke of Wellington. observed, that he was not all satisfied with the bill which [841] passed
last year, and he wished that some discussion should take place on this bill.
Debate adjourned.
TRADING COMPANIES106.
Lord Brougham. I should hope that the noble Lord on the woolsack does not mean to press this
most exceptionable bill, founded on a principle the most abominable, for carrying into effect the bad
act of last Session, giving rise to every species of fraud and dishonesty. It has not answered in France.
105 HL Deb 31 July 1838 vol 44 cc840-1 840. URL: http://hansard.millbanksystems.com/lords/1838/jul/31/trading-

companies#S3V0044P0_18380731_HOL_14. Contains Parliamentary information licensed under the Open Parliament
Licence v1.0.
106 HL Deb 14 August 1838 vol 44 cc1207-10 1207. URL:
http://hansard.millbanksystems.com/lords/1838/aug/14/trading-companies#S3V0044P0_18380814_HOL_20.
Contains Parliamentary information licensed under the Open Parliament Licence v1.0.
328
A man of straw is set up, and all the rest are answerable only to the amount of about 100l. I hope the
present Trading Companies Act will not pass, and if it is brought forward now, I shall move that it be
read a third time this day three months.
The Lord Chancellor. I cannot give up the Bill.
Lord Brougham. Then, my Lords, I move that the Bill be read a third time this day three months.
The Lord Chancellor. My Lords, in order to accommodate my noble Friend, as he appears rather
anxious to quit the House, I will at once move the order of the day for the third reading of the Bill.
Lord Brougham. Then, my Lords, I move as an amendment, that the Bill be read a third time
this day three months. The object of the Bill is to enable the Crown to constitute any three or twenty
persons a corporation for the purpose of carrying on a trade; at the same time making those persons
liable only to the amount they have embarked in that trade. Now that, my Lords, in my opinion, gives
a licence to every species of fraud. The last Bill that has been introduced on this subject has been
productive of the worst results, and the effect of the present measure will be to make that which was
bad enough before, ten times worse.—Therefore it is that I hope your Lordships will not allow this
measure to be read a third time.
The Lord Chancellor. My Lords, the bill of last year requires great alterations, and the object of
the present measure is to supply its omissions and defects. The Act of the [1208] last Session
authorised the Crown to sanction the incorporating associations of persons for effecting, by their
joint capital, public works and objects, but it did not comprehend companies formed prior to the Act.
The object of the present bill was to remedy that defect upon all companies complying with the
regulations laid down by the act that was now in force. There is sometimes great difficulty in making
corporations pay the demands against them, because very often their property is not to be found; by
the present bill, every person must register their shares; parties, therefore, well know the extent to
which they are liable, and the public will be aware of the persons with whom they have to deal.
Lord Brougham. My Lords, I have already stated to your Lordships the objections I entertain to
this measure, and also to the bill of last year. That measure gives to the proprietors of Trading
Companies only a limited responsibility, and relaxes that care and vigilance which every partner in a
concern ought to keep over the whole of his partners. The result of which is, my Lords, that for want
of that vigilance many a concern will be brought to a stand still, and many hundreds of individuals
will be ruined. Oh! but, says my noble and learned Friend, the names of all the shareholders must be
registered. Now, I think there is very little in that. We all know the effect of great names, such as
Baring, Mellish, and others. A man when he gets a bill of theirs, does not go inquiring about their
respectability, because he knows he can get the money for that bill at any time; so with respect to many
of these companies, people don't go to the Register to see who are proprietors and who are not. They
see great names attached to the direction, in many instances without the sanction of the parties, they
give them credit, they advance them money, and probably the next day they find them all in the
Gazette.—Now, a law on the same principle has been tried in France, and most signally failed. It is the
practice often in companies, for some of the acting partners to fabricate accounts of fictitious
329
property, and to make it appear that they are able to pay a dividend of twenty per cent, for the present
year, and a similar dividend for the next, and so they go on till the whole capital is absorbed, while all
the time there has been nothing [1209] but loss instead of profit. It is very easy, my Lords, to produce
mystification and delusion by means of accounts, when persons are disposed to do so; and, therefore,
it becomes necessary that means should be taken to prevent such proceedings. Under the good old
system, in case of a defalcation, the directors were made to disgorge their profits if it should be proved
that they had not acted fairly, but under the new French system they are allowed to pocket their own
accounts, to the ruin of the other shareholders, and are not to be liable beyond the extent of 100l. I
think, as I have clearly shewn, that the result of this system in France has been most mischievous,
your Lordships will hesitate long before you make it effectual in England—and that being the object
of the present bill, that you will reject it altogether.—The measure, my Lords, was originally resorted
to in a poor country, where the means were required to draw capital into trade, but that is not the case
in England, for here there is too much disposition to invest capital in trading speculations. My Lords,
it is far from my wish to check the spirit of fair speculation, but I cannot but think that the present
bill if it become law, would tend to encourage the investment of small sums in enterprises which
would neither afford benefit to those engaged in them or the community at large.—For these reasons
I trust that your Lordships will reject the bill.
The Lord Chancellor. My Lords, the observations of the noble Lord may apply very well to the
ordinary matters of trade, but they can have no reference at all to great public works. My Lords, I
would ask your Lordships whether there are no Railway Companies and no Canal Companies whose
directors deal fairly with their proprietors? The real question for your Lordships is, whether the
proposed system is not better for the individuals concerned and the community at large, than that of
placing their capital in the hands of Corporations, against whom the individual creditors could not
enforce their claims?
Lord Brougham. I beg to say it is not. Five hundred persons cannot form themselves into a
company—they must have an Act of Parliament, and the Act of Parliament almost always gives them
a general responsibility, and hardly one of them are liable. If Railway and other Companies go on well,
much of this is to be attributed to the wisdom of Parliaments and the new rules of the House, by
which the merits of every private bill are fully and [1210] accurately sifted. By the present bill the
whole details are taken out of the hands of Parliament, and transferred to the discretion of two or
three private individuals, who may perhaps be influenced by party or personal motives.
The House divided. Contents 10; Not Contents 12; Majority 2.
Bill thrown out.
330
Table of cases
Blundell v. Winsor (1837) .............................................................................................................................................. 254
Clarke v. Powell (1833) ................................................................................................................................................... 110
Dominus Rex v. Caywood................................................................................................................................................ 93
Duvergier v. Fellows (1828) ........................................................................................................................................... 236
Ex parte Dyster in the Matter of Moline .................................................................................................................... 117
Garrard v. Hardey (1843) ............................................................................................................................................... 257
Harrison v. Heathorn (1843) ......................................................................................................................................... 263
Highmore v. Molloy (1737)............................................................................................................................................ 106
Janssen v. Green (1767) .................................................................................................................................................. 106
Josephs v. Pebrer (1825) ................................................................................................................................................. 187
Nockels v. Crosby (1825) ............................................................................................................................................... 189
Pratt v. Hutchinson (1812)............................................................................................................................................. 184
Rex v. Dodd (1808) ......................................................................................................................................................... 173
Rex v. Webb (1811) ......................................................................................................................................................... 177
Van Sandau v Moore (1826) .......................................................................................................................................... 222
Walburn v. Ingilby (1833)............................................................................................................................................... 246
Wilkes v. Ellis (1795)....................................................................................................................................................... 108
Table of statutes
Act to restrain the number and ill practice of brokers and stock-jobbers, 8 & 9 W. III c. 32 2
(1697)
An Act for enlarging the Capital Stock of the Bank of England, 8 & 9 W. III c. 20 (1697) 3
An act for repealing the act for the well garbling of spices, 6 Anne, c. 16 (1707) 11
The Cards and Dice Act, 10 Anne, c.19 (1711) 14
An act to reduce the rate of interest, 12 Anne Stat. 2, c.16 (1713) 15
Bank of England Act, 5 & 6 W. & M., c. 20 (1694) 17
An Act for enlarging the Capital Stock of the Bank of England, 8 & 9 W. III c. 20 (1697) 23
South Sea Company Act, 9 Ann., c. 21 (1711) 26
Act to enable the South Sea Company to redeem the public debt, 6 Geo. I, c. 4 (1720) 36
The Bubble Act, 6 Geo. 1 c. 18 (1720) 74
Act to extend the Bubble Act to the American Colonies, 14 Geo. II c. 37 (1741) 93
Barnard’s Act, 7 Geo. II. c. 8 (1734) 100
An act to repeal Sir John Barnard’s Act, 23 & 24 Vic., c. 28 (1860) 101
An act to create the Company of Proprietors of the Warwick and Birmingham canal navigation, 136
33 Geo. III c. 38 (1793)
An act to create the Wisbeach Canal Company, 34 Geo. III 92 (1794) 139
An Act to enable The Globe Insurance Company to sue and be sued, 47 Geo. III, c. 30 (1807) 154
An Act to alter and explain An Act to enable The Globe Insurance Company to sue and be 156
sued, 49 Geo. III, c. 122 (1809)
An Act for establishing an Agreement with the Bank of England, 39 & 40 Geo. III, c. 28 (1800) 158
An Act for the better regulating Copartnerships of certain Bankers in England, 7 Geo. IV, c. 166
46 (1826)
The Act to repeal the Bubble Act, 6 Geo. 4, c. 91 (1825) 220
Trading Companies Act, 4 & 5 Will 4 c. 94 (1834) 315
Chartered Companies Act, 7 Will 4 & 1 Vict. c. 73 (1837) 318
332
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HISTORY OF CORPORATE LAW:

CASES AND MATERIALS

MARIO NAIM, ESQ.

© 2013 by Mario Naim.

a. The Pernicious Art of Stock Jobbing (1696-7)

3 8 & 9 W. III c. 32. URL: http://goo.gl/hJZRE. Paragraphs added.

This Act to continue for three Years.

4 8&9 W. III c. 20. URL: http://goo.gl/GwsMC.

Daniel Defoe: The Villainy of Stock-Jobbers Detected (1701)5

b. Anderson on the Act of 16976

to glass-bottles, earthenware, tobacco-pipeclay, &c.—The deficiencies of which funds, for answering

c. Regulation of Brokers by the City of London (1707)

17 6 Anne, c. 16 (1707). URL: http://goo.gl/aK5Hm.

Regulations passed by the City of London (1708)18

d. Nature of City of London Regulations Concerning Brokers (1723)

19 Ludlam v. Lopez, 1 Str. 529 (1723). URL: http://goo.gl/G44dt.

e. Regulation of Commissions and Rates of Interest (1711-3)

20 10 Anne, c.19 (1711). URL: http://goo.gl/Njt7O.

21 12 Anne Stat. 2, c.16 (1713). URL: http://goo.gl/jsbTu. Paragraphs added.

a. Creation of the Bank of England (1694)22

22 5 & 6 W. & M., c. 20. URL: http://goo.gl/CLJij.

23 8 & 9 W. III c. 20. URL: http://goo.gl/mqTvS.

b. Creation of the South Sea Company (1711)24

c. Defoe on the Nuisance of Stock-Jobbing (1719)25

26 7 Cobb. Parl. Hist., pp. 644-5. URL: http://goo.gl/vdV9F.

28 6 Geo. I, c. 4. URL: http://goo.gl/QmHkj. Paragraphs added to text.

e. Appointment and Report of a Parliamentary Committee (February - April 1720)

Subscription of £. 2,000,000 taken in at Cooper’s Coffee-house in Cornhill, for preventing and

f. The Bubble Act’s Legislative History (May-June 1720)

35 Journals of the House of Commons 19, 355-6. URL: http://goo.gl/gn1jE.

May 27, 172041

g. The Bubble Act (11 June 1720)45

h. Anderson on the South Sea Bubble47

50 7 Cobb. Parl. Hist., pp. 654-9. URL: http://goo.gl/xk1Yc.

j. An Unsuccessful Proposal to Address Excessive Speculation in the Stock Market 51

k. Sentencing of a Defendant Convicted under the Bubble Act (1722)52

52 Rex v. Caywood, 1 Stranger 472 (1722), URL: http://goo.gl/mNOPl.

l. Extension of the Bubble Act to the American Colonies (1741)53

53 14 Geo. II c. 37. URL: http://goo.gl/6XHpF.

54 9 Cobb. Parl. Hist., pp. 49-68. URL: http://goo.gl/ol20I.

b. Barnard’s Act (1734)

c. Consequences of Barnard’s Act on Exchange Alley60

Janssen v. Green (1767) 62

61 1Atk. 205. URL: http://goo.gl/5BwPc.

Wilkes v. Ellis (1795)63

63 126 E.R. 699. URL: http://goo.gl/UhBrR.

Clarke v. Powell (1833)64

64 4 B.& Ad. 846. URL: http://goo.gl/hKGJD.

e. Nature of City of London Regulation Concerning Brokers (1816)

65 1 Mer. 156 (1816). URL: http://goo.gl/EZfLc.

a. The Deed of Settlement of the Society for Equitable Assurances (1762)66

b. Prospectuses of Mining Companies (1825)

“UNITED MEXICAN MINING COMPANY68

of 3 do. and no more.

c. Form of Provisional Agreement for Joint Stock Company (1842)69

a. MacPherson on Canal Mania70

b. Acts for the Creation of Canal Corporations (1793-4)

72 34 Geo. III 92 (1794). URL: http://goo.gl/1X2Dn. Paragraphs added.

b. Report on the Petition for the Globe Insurance Charter (1802)74

74 Ibid, pp. 60-74. URL: http://goo.gl/UXDU5.

76 49 Geo. III, c. 122. Paragraphs added.

a. An Act for establishing an Agreement with the Bank of England (1800) 77

77 39 & 40 Geo. III, c. 28. URL: http://goo.gl/cE0yi.

b. Parliamentary Debates on the Bank Charter Amendment Bill (1826)