Lord Bramwell on Wednesday delivered before the Institute of Bankers
a most appreciative lecture on the system of limited liability. He approves it entirely, though he would, if he could, compel the promoters of such Companies to be more explicit in describing purchases, &c., so that bad properties might not be sold to shareholders for good value ; would in- crease the liability of directors; and would have a better system of liquidation, perhaps a liquidation in bankruptcy. We really do not see why we should not strike harder at the root of the present evil, and make wilful misdescription by a promoter, or wilful concealment of important truth, a criminal offence. Such an act is fraud, and fraud upon the blind. Lord Bram- well incidentally mentioned a fact which, as he says, few people knew,—that the shareholders in an Insurance Company are not always personally responsible. " Life and fire in- surance companies are really companies that might be said to have limited liability, because they put in their policies not that the individual members of the society will be liable for the amount, but that the funds of the society shall be liable for the amount ; and if by any ill fortune the funds of the society are not sufficient to pay the debt, then upon any claim being made on an individual member of the society, he says, I made no bargain with you other than that the funds of the society should be made liable for paying your debt. I am not liable." Lord Bramwell was describing a former condition of the law; but, according to the Times' report, he means this to be applicable now.
Previous page
