plaintiff of the said sum, &c., upon the said ship, &c., and would perform and fulfil all things in the said policy contained on their part, as such insurers, to be performed and fulfilled; and the defendants

[*45 then became and were insurers to the plaintiff, and then duly subscribed the policy as such insurers of the said ship. The declaration then contained the usual averments of the plaintiff's interest and the loss of the ship, and proceeded to allege that, although the capital stock and funds of the said Company always, from the time of the making of the said policy hitherto, have been and are sufficient to pay the plaintiff the sum insured, of which the defendants had notice, and were, after the loss, requested to pay the amount insured, yet the defendants have not paid the sum insured, and the same is still unpaid.

The objection was, that there was no personal obligation upon the defendants to pay. I am, however, of opinion that there is no fatal objection upon the face of the declaration. It is there alleged that the defendants made the promise and subscribed the policy; both of which facts are admitted by the demurrer; and it seems to me that the declaration alleges and imports a direct personal promise by the defendants to pay the amount insured if the capital stock was sufficient for the purpose, and which it was averred in the declaration, and admitted by the demurrer, to have been. The breach is, that the defendants did not perform what, as it appears to me, they admit they promised should be done, viz., the application of the capital stock to the payment of the loss. The cases of Andrews v. Ellison, 6 B. Moore, 199 (E. C. L. R. vol. 17), and Dawson v. Wrench, 3 Exch. 359,† are directly in point; and I am not prepared to say they were not rightly decided. So, also, the cases of Gurney v. Rawlins, 2 M. & W. 87,† and Reid v. Allan, 4 Exch. 326,† are to the same effect: *and I think that the judgment of the Court of Queen's Bench on the demurrer to the declaration ought not to be reversed.

[*46

The second question arises upon the bill of exceptions; and the point which has been argued before us is, whether there was any evidence to go to the jury against the defendant Gooden upon the issue on the plea of Non assumpsit.

The following was the evidence adduced by the plaintiff: The deed of settlement of the Company, dated 23d April, 1840, executed by all the defendants; (the parts material are set out in the bill of exceptions); That all the defendants severally and individually held shares in the capital stock of the Company; That the defendant Gooden was a director, and held 250 shares of 1001. each in the capital stock; That Brightman, Everard, and Chambers were three directors, and as such signed the policy; The policy itself, which is set out at length in the bill of exceptions; That a total loss was adjusted at 1100l.; That 7500 shares had been subscribed for, and were held originally by the defendants and others; That 5000 were so held at the time of the commence

ment of this suit, the remainder having become forfeited in various ways; That calls had been made to the extent of 251. per share, the last being a call of 107., made on 29th September, 1847, but that nothing was paid upon it, although certain directors and proprietors had advanced 10,500l. in anticipation of it; That, in October, 1847, the Company ceased to underwrite policies, but the directors continued to attend the office for some months, when it was given up. On behalf of the defendant Gooden it was proved that the Company had not, at the time of the accruing of the causes of action, or at any time after, any money, property, or available funds in their hands wherewith to satisfy the plaintiff's claim.

*47]

Upon this evidence the counsel for the defendant Gooden submitted that there was no evidence to go to the jury upon the issue on the plea of Non assumpsit. The Chief Justice ruled that there was: and thereupon the bill of exceptions was tendered. The points submitted to the Chief Justice, as stated in the bill of exceptions, were:

First, that no action at law would lie upon the policy. Secondly, that the defendants were not jointly liable upon it; but, if liable at law at all, were only liable severally to the extent of the shares held by them individually. Thirdly, that no action would lie against Gooden, as he had not signed the policy. Fourthly, that the promise laid in the first count had not been proved, as the promise therein alleged was to be and become an insurer; whereas the only promise was, to pay out of the capital stock and funds if they were sufficient.

In the argument of the learned counsel for the plaintiff in error it was contended: That the partnership created by the deed of settlement of 23d April, 1840, was a lawful partnership; that there was nothing illegal in the capital of the partnership being divided into shares, and the partners or shareholders agreeing that no one should be liable to be called on to pay more than the amount agreed to be subscribed by him; that the plaintiff below had agreed with the Company, by an express term contained in the policy, that the capital stock and funds of the Company should alone be liable to make good all claims under the policy, and that no proprietor should be in anywise subject or liable to a *claim, made by reason of the policy, beyond the amount of his *48] share or shares in the capital stock, it being one of the original and fundamental principles of the Company that the responsibility of the individual proprietors should, in all cases and under all circumstances, be limited to their respective shares in the said capital stock; that, except as against the individuals who signed the policy, the plaintiff below could not, in any event, maintain an action against more than one shareholder without a violation of the express condition that the liability of each shareholder should be restricted to the amount of his own share and that he should not be responsible for his co-shareholders. It was also contended that no action at law was maintainable on the

policy, except against the persons who actually signed it; that in this there was no repugnancy, for that a suit in equity was maintainable against all the shareholders of the Company, and that it was no valid objection to a contract, that, in the event of a breach of it, the proceedings to obtain redress were confined to the courts of equity.

The case of Reid v. Allan was cited to show what was the real nature of the legal liability, as alleged by the counsel for the plaintiffs in error, viz., a separate one, confined to the extent of the shares not paid up; and the cases of Halket v. Merchant Traders' Insurance Company, 13 Q. B. 960 (E. C. L. R. vol. 66), and Hassell v. Merchant Traders' Association, 4 Exch. 525,† were cited as authorities that the defendant was not liable at all at law.

On the other hand it was contended, on behalf of the defendant in error, that The Maritime Assurance Company was a mere trading partnership; that, in law, *there was no distinction as to liability be[*49 tween a joint stock partnership, as this is usually called, and an ordinary partnership; that throughout this policy the Company were universally described as the contracting party; and that in this action (there having been no plea in abatement) the plaintiff below was entitled by law to consider every shareholder as the Company, and as if the Company were named as defendants on the record. That the true rule as to partnership liability was that laid down in Hawken v. Bourne, 8 M. & W. 703,† viz., that the partner authorized to make a contract was in the nature of a general agent, and had, by law, authority to bind his copartners in contracts usually made in the partnership business, although in direct contradiction to the actual authority given by the copartners; and the case of Smith v. The Hull Glass Company, 8 Com. B. 668 (E. C. L. R. vol. 65), was cited to show that there was no distinction between joint stock Companies and other partnerships.

The question which arises here is one of great importance. There are very many Companies (life insurance Companies and others) carrying on business under deeds similar to that in the present instance; and provisions substantially the same as those contained in the present policy are, I believe, universally inserted with the view of restricting the liability of the shareholders. The circumstance that Gooden was himself a director will make no difference; for, assuming that the liability of a director who has not signed the policy is different from that of a mere shareholder, there are, in the present case, other defendants who were mere shareholders, and it is quite clear that, in order to fix the defendant *Gooden upon the plea of Non assumpsit, evidence must [*50 be given of the liability of all the defendants upon the promise alleged in the declaration. The question of the general liability of the shareholders, therefore, directly arises.

The first question is, Are the stipulations in the deed, as to each subscriber or partner being responsible only to the amount subscribed for

VOL. XVIII.-7

by him, lawful and valid as amongst themselves? I entertain no doubt that they are. Such stipulations have been long in general use; their object is to restrict, as far as possible, the liability of the partners to the same extent as that of shareholders in the various corporations which have for a long period been created by Acts of Parliament for the purpose of effecting great public works. The partners agree amongst each other that each shall subscribe for and be responsible to a certain amount only; and that, in the event of one being compelled to pay a demand, the others will indemnify him separately, and in proportion to the extent of their respective interests, and no farther; and it seems to me clear that, as amongst themselves, when one has paid up the whole amount subscribed for by him, he is no longer responsible to any further amount to his co-shareholders, their liability to each other being precisely the same as that of shareholders in the ordinary joint stock corporations created by Acts of Parliament, in which the subscribers are liable to the extent of their subscriptions only, and, when they have once paid up all their calls, the legal liability to contribute further is at an end.

The further question then arises, what is the liability of shareholders and partners in such companies to third parties upon contracts made by the directors in the *ordinary course of business? And it seems *51] clearly established by the authorities, that, with respect to third persons who have no notice of the terms of the partnership, the shareholders and partners in joint stock Companies are liable to the same extent and in the same manner as the partners in ordinary partnerships: and that the law pays no regard to the stipulations contained in the partnership deed as to the restriction of liability, or to any particular provisions as to the mode of carrying on the business different from that ordinarily used in such concerns.

In the case of Rex v. Dodd, 9 East, 516, 527, Lord Ellenborough, in delivering the judgment of the Court, stated that the holding out in the prospectus of two proposed trading Companies, one for manufacturing paper, and the other for distilling spirits, that no subscriber would be responsible beyond the amount of the shares for which he subscribed, was a mischievous delusion; that, as amongst the subscribers themselves, they might stipulate with each other for such restricted liability; but that, as to the rest of the world, it was clear that each subscriber was liable to the whole amount of the debts contracted by the partnership. So, also, Lord Eldon, in Carlen v. Drury, 1 Ves. & B. 154, 157, stated that he held it to be clear law that each individual in a joint stock brewery company was answerable for the whole of the debts of the concern.

The case of Hawken v. Bourne, 8 M. & W. 703,† before mentioned, as relied on by the defendant in error, was as follows. The defendant was a shareholder in a Company who worked a mine in Cornwall. There

were directors of the Company, of whom the defendant was not one. *There was a stipulation amongst the directors and shareholders, [*52 that all supplies for the mine were to be paid for in cash, and that no debt was to be incurred. The order for the goods, for the price of which the action was brought, was given by the purser or agent of the directors, which was the customary course in such concerns. The plaintiff knew nothing of the defendant being a shareholder; but it was not proved that he had any notice of the agreement as to not dealing on credit. It was objected, on behalf of the defendant, that there was no authority in the purser to bind him in a contract upon credit; that there was no liability by reason of the defendant appearing to be a partner, as the plaintiff knew nothing of him; and that, as a contract upon his credit was absolutely forbidden by him to the directors, a purser or agent appointed by them could not have any authority to pledge his credit. My brother Maule, who tried the cause, was of opinion that, the mine being worked with the knowledge and for the benefit of the defendant, he was liable on a contract entered into for articles ordered in the usual way of conducting such concerns on behalf of the owners, unless the party ordering them was, in fact, not authorized by the defendant, and the party supplying had notice of that fact. This ruling was objected to in the Court above; but the Court was of opinion that it was right. My brother Parke delivered the judgment. He stated that there was evidence that the defendant was a complete partner with the directors in working the mines in the manner in which they were worked; and that one partner, by virtue of that relation, is constituted a general agent for the others as to all matters within the scope of the partnership dealings, and has *communicated to him, [*53 by virtue of that relation, all authorities necessary for carrying on the partnership, and all such as are usually exercised by partners in the business in which they are engaged: that any restriction which, by agreement among the partners, is attempted to be imposed upon the authority which one possesses as a general agent for the other is operative only between the parties themselves, and does not limit the authority as to third persons who acquire rights by its exercise, unless they know such restriction has been made; and that, as it was usual to buy the articles in question upon credit, and also to buy them through a purser appointed by the directors, the defendant was liable.

The judgment in the case of Smith v. The Hull Glass Company, 8 Com. B. 668 (E. C. L. R. vol. 65,)(a) is to the same effect, and also that in this respect there is no distinction between the liability of partners in joint stock trading Companies and partners in ordinary partnerships.

The result of these authorities therefore is, that, when persons constitute a partnership, whether in the form of a joint stock Company or (a) See Same v. Same, 11 Com. B. 897 (E. C. L. E. vol. 73).