18
Again, the law recognizes partnerships of various descriptions, as, for instance, partnerships in a single transaction, such as arise frequently out of co-contracts to build a house or construct a public work. Partnerships of this description are very frequent here, and are calculated to raise legal inquiries as to the liability of individuals quite as important and difficult as those which have their origin in ordinary trading firms. As the Ordinance stands, presume it is clear that such partnerships would not be compelled to register unless they possessed "a shop, hong, or place of business." But suppose, for instance, one of the co-contractors keeps the books, pays the workmen, and transacts the various matters in connection with the contract at his house. Is it intended that it should be regarded as a "place of business within the meaning of the Ordinance, or not?
55
To turn to another point. It is well known that no portion of the law of partnership is more intricate, or turns upon more subtle distinctions, than that affecting so-called dormant partnerships. If a person has an interest in a firm and receives profits from the working of it, it is oftentimes a matter of extremo nicety to say whether he is liable as a partner or not, so long as his name is not published. In a very celebrated case heard in the House of Lords a few years ago (I refer to Cox v. Hickman, 8 House of Lords case 268). it was decided that “persons who share the profits of a business do not incur the liabilities of partners unless that business is carried on by themselves or by others as their real or ostensible agents." See also Ordin- ance No. 7 of 1867, adapted from an English Act, in which the doctrine receives legislative sanction. Bearing this rule in mind, it becomes obvious that this Draft trenches on ground both delicate and dangerous, for while, on the one hand, it is essential to the vitality of the measure to reach those dormant partners who have such an interest in the concern that they would be held partners with or without publication of their names, it is no less important in the interests of justice to avoid compelling those who are drawing profits from a firm, but who would not but for publication of their names be ranked as partners, to register themselves. The capital of Chinese firms of any position especially in certain lines of business, is generally divided into a large number of shares. The majority of those who subscribe portions of the capital remain, I believe, under the present system dormant, that is to say their names never appear in the business. They do not intend to risk more than the money they have subscribed, and therefore they do not intend to be- come "partners" in the English sense of the term, and they would not under such circumstances, according to Chinese customs, be held to have incurred any such liability as our law imposes. How far our Courts would give validity to considerations of this kind is uncertain, but after the ruling in Mallwo e. the Court of Awards, they would probably have much weight. The incautious registration under compulsion of persons occupying such positions might therefore obviously lead to immense injustice.
I have hitherto considered the register only in connection with creditors; it has, however, another aspect not less serious and intricate in its bearing upon the rights and liabilities of partners inter se, i.e., be- . tween each other. Upon this branch of the subject, a class of questions arises too numerous and technical to admit of discussion here. I give an instance. The intentional or unintentional omission of his name from the register would not, as against creditors, I presume, form any bar to an enquiry into a partner's liability, but how is it to be held to affect his rights against, or his liabilities to his co-partners in a suit for a partnership account? On the other hand, how far is the evidence contained in the register to be regarded as settling the mutual relations of the partners? Conclusively, or not? The Bill as it stands gives no clue leading to an answer to these enquiries one way or the other, and judicial authorities being equally wanting. our Courts of law would find them, I fancy, somewhat perplexing.
I might, but for fear of prolixity, point out many other technical difficulties which suggest them- selves to me, but I think I have said enough to show that this Ordinance cannot, if passed at all, be passed without great amplification. If this process, however, were once carefully entered on, it would be soon discovered that the hand of reform was being thrust into the vital parts of a complex system, the adjust- ment of whose constituent elements has been slowly settled during a lengthened period by spontaneous growth, and natural evolution. If a course of re-adjustment of parts, such as in my opinion registration would necessitate, were once initiated, it would I think be found that one re-adjustment logically led to another, and the final product would be something little short of codification, a task of much greater mag- nitude than that contemplated by the Bill.
When regarded under its criminal aspect, the measure seems scarcely more satisfactory.
In the first place, I am struck with the fact for the purpose of detecting and punishing a small fraud- ulent minority, it is intended to bring the whole body of Chinese traders within the grasp of the Criminal law for conduct which in itself is neither criminal nor vicious, a step tending not only to great annoyance and waste of time, but to the weakening of their self-respect. I say "small minority" advisedly, because, since we see that trade still flows on apparently in undiminished volume in the Colony, it is an inevitable inference that the large majority of debtors do honestly fulfil their obligations, trade being under any other conditions impossible, and certain to come to a stand-still.
As a penal statute it also lies open to the charge of great inequality in its possible pressure upon poor and rich. For, while on the one hand it seems absurd to suppose that the prospect of a fine of a hundred dollars would have much effect on the action of a trader about to embark in extensive speculations; on the other the imposition of such a penalty, even in a greatly modified form, might be sufficient to swamp utterly the resources of hundreds of poor traders.