in the case of a nominal or implied *partner, who has no actual interest in the trade or its profits, and he becomes responsible as a partner, by voluntarily suffering his name to appear to the world as a partner, by which means he lends to the partnership the sanction of his credit. There is a just and marked distinction between partnership as respects the public, and partnership as respects the parties; and a person may be held liable as a partner to third persons, although the agreement does not create a partnership as between the parties themselves. Though the law allows parties to regulate their concerns as they please in regard to each other, they cannot, by arrangement among themselves, control their responsibility to others; and it is not competent

The law as to Pitts v. Waugh, A dormant part

of them, or of some other person only, such name becomes the copartnership name, and all the members are bound by it. Bank of Rochester v. Monteath, 1 Denio, 402. Palmer v. Stephens, Id. 471. dormant partners is confined to commercial partnerships. 4 Mass. R. 424. Smith v. Burnham, 3 Sumner's R. 435. ner cannot join as plaintiff in an action, for there is no privity of communi. cation between him and the party who contracted with the firm. He is, nevertheless, suable as a defendant, because he participated in the profits of the contract. Lloyd v. Archbold, 2 Taunton, 324. Boardman v. Keeler, 2 Vermont Rep. 65. If one partner borrows money in his individual name, a dormant partner is equally liable, if the borrower represented it to be for the use of the partnership, though without such a representation, the creditor must prove that the money went to a partnership use. Etheridge v. Binney, 9 Pink. 272. Lloyd v. Ashby, 2 Carr. & Payne, 138. Story on Partnership, 139. The statute law of New-York, of 1833, (Laws N. Y. sess. 56, c. 281,) has checked the use of fictitious firms, by declaring that no person shall transact business in the name of a partner not interested in his firm; and that where the designation " and company" or " & Co." is used, it shall represent an actual partner or partners, and the violation of the provision is made a penal offence. A similar provision is in Georgia, Hotchkiss's Code, 377.

Guidon v. Robson, 2 Campb. 802. Young v. Axtell, cited in 2 H. Blacks. 242. Porter, J., 5 Miller's Louis. Rep. 408, 409. Fox v. Clifton, 6 Bingham, 776.

b Barry v. Neesham, C. B., November, 1846. It was held that a partici. pation in the profits, qua profits, created a partnership as to third persons, whatever the stipulation may be as between themselves.

for a person, who partakes of the profits of a trade, however small his share of those profits may be, to withdraw himself from the obligations of a partner.a Each individual member is answerable in solido to the whole amount of the debts, without reference to the proportion of his interest, or to the nature of the stipulation between him and his associates. Even if it were the intention of the parties that they should not be partners, and the person to be charged was not to contribute either money or labour, or to receive any part of the profits, yet if he lends his name as a partner, or suffers his name to continue in the firm after he has ceased to be an actual partner, he is responsible to third persons as a partner, for he may induce third persons to give that credit to the firm which otherwise it would not receive, nor perhaps deserve. *33 This principle of law inculcates good faith and ingenuous dealing, and it is now regarded by the English courts as a fundamental doctrine. It has been explicitly asserted with us, and is now incorporated in the jurisprudence of this country. So strict is the law on

▲ Waugh v. Carver, 2 H. Blacks. 235. Hesketh v. Blanchard, 4 East, 144. Nor can a partner exonerate himself from personal responsibility for the existing engagements of the company, by assigning or selling out his interest in the concern. Perring v. Hone, 2 Carr. & Payne, 401.

▷ Hoare v. Dawes, Doug. Rep. 371. Grace v. Smith, 2 Wm. Blacks. Rep. 998. Waugh v. Carver, 2 H. Blacks. Rep. 235. Baker v. Charlton, Peake's N. P. Rep. 80. Hesketh v. Blanchard, 4 East, 144. Ex parte Hamper, 17 Vesey, 404. Ex parte Langdale, 18 Vesey, 300. Carlen v. Drury, 1 Ves.

Bea. 157. Cheap v. Cramond, 4 Barnw. & Ald. 663. Best, J., Smith v. Watson, 2 Barnw. & Cress. 401. Lacy v. Woolcott, 2 Dowling & R. 458.

• Purviance v. M'Clintee, 6 Serg. & Rawle, 259. Gill v. Kuhn, Ibid. 333. Thompson, J., in Post v. Kimberly, 9 Johnson, 489. Dob v. Halsey, 16 Johns. Rep. 40. Shubrick v. Fisher, 2 Desauss. Ch. Rep. 148. Osborne v. Brennan, 2 Nott & M Cord, 427. Mr. Justice Story (Partnership, pp. 54, 55) prefers the Roman law, which did not create a partnership between the parties, as to third persons, without their consent, or against the stipulations

this point, that even if executors, in the disinterested performance of a trust, continue the testator's share in a partnership concern in trade, for the benefit of his infant children, they may render themselves personally liable as dormant partners."

(3.) Of sharers in profits.

A person may be allowed, in special cases, to receive part of the profits of a business without becoming a legal or responsible partner. Thus a party may by agreement receive, by way of rent, a portion of the profits of a farm or tavern, without becoming a partner. So, to allow a clerk or agent a portion of the profits of sales as a compensation for labour, or a factor a per centage on the amount of sales, does not render the agent or factor a partner, when it appears to be intended merely as a mode of payment adopted to increase and

secure exertion, and when it is not understood to *34 be an *interest in the profits in the character of profits, and there is no mutuality between the parties. A person in business may employ another as a subordinate, and agree to pay him a share of

of their own contract. He is of opinion that the common law has pressed its principles on this subject to an extent not required by, even if it is consistent with, natural justice; and that it would have been better if no partnership should be deemed to exist, even as to third persons, unless such were the intention of the parties, or unless they had so held themselves out to the public. For the Roman law, see Dig. 17. 2. 44. Voet, ad Pand. 17. 2.2. But if a dormant partner, when his name has not been announced, and no credit given to him personally, as a supposed member, he may with draw without giving any notice to the public. Lacage v. Sejour, 10 Robinson's Louis. R. 444.

* Wightman v. Townroe, 1 Maule & Selw. 412. The better way would be, for the executors, in such cases, to have the trade carried on for the benefit of the infants, under the direction of the Court of Chancery, as has frequently been done in England. See 4 Johns. Ch. Rep. 627.

See supra, p. 25. n. b. as to a sharer of profits.

Perine v. Hankinson, 6 Halst. 181.

the profits, if any shall arise, without giving him the rights or liabilities of a partner. So, seamen take a share by agreement with the ship-owner, in the profits or gross proceeds of a whale fishery or coasting voyage, by way of compensation for their services; and shipments from this country to India upon half profits are usual, and the responsibility of partners has never been supposed to flow from such special agreements. This distinction seems to be definitely established by a series of decisions, and it is not now to be questioned; and yet Lord Eldon regarded Vide Sruth the distinction with regret, and mentioned it frequently, with pointed disapprobation, as being too refined and 116.

subtle, and the reason of which, he said, he could not ction... well comprehend."

• Burckle v. Eckart, 1 Denio, 337.

b Dixon v. Cooper, 3 Wils. 40. Cheap v. Cramond, 4 Barnw. & Ald. 670. Benjamin v. Porteus, 2 H. Blacks. 590. Meyer v. Sharpe, 5 Taunton, 74. Hesketh v. Blanchard, 4 East, 144. Dry v. Boswell, 1 Campb. N. P. 329. Wilkinson v. Frazier, 4 Esp. N. P. 182. Mair v. Glennie, 4 Maule & Selw. 240. Geddes v. Wallace, 2 Bligh, 270. Muzzy v. Whitney, 10 Johns. Rep. 226. Rice v. Austin, 17 Mass. Rep. 206. Lowry v. Brooks, 2 M'Cord, 421. Baxter v. Rodman, 3 Pick. 435. Cutler v. Winsor, 6 Pick. 335. Hardin v. Foxcroft, 6 Greenleaf, 76. The Crusader, Ware's Rep. 437. Coffin v. Jenkins, 3 Story's Rep. 108. 112. See, also, supra, p. 25. n. b. Loomis v. Marshall, 12 Conn. R. 69. Hazard v. Hazard, 1 Story R. 371. See, also, Story on Partnership, pp. 60–75, who has analyzed the principal cases on the subject. See, also, Pardessus Droit Comm. tome ii. n. 560; tome iii. n. 702 ; tome iv. 969; and Duvergier, Droit Civ. Franc. tome v. n. 48 to n. 56, for the French law as to the cases in which an agency as distinct from a partnership is within the intention of the parties. • Ex parte Hamper, 17 Vesey, 404. Ex parte Rowlandson, 1 Rose, 89. Ex parte Watson, 19 Vesey, 458. Miller v. Bartlet, 15 Serg. & Rawle, 137. Mr. Carey, in his recent treatise on the Law of Partnership, p. 11, vindicates the principle on which the above distinction is founded, and insists that it is perfectly clear and just. Collyer, also, in a still more recent treatise on the Law of Partnership, p. 17, is in favour of the reasonableness of the distinction in the cases where there is, and where there is not a mutual interest in the profits.

(4.) Of limited partners.

The English law does not admit of partnerships with a restricted responsibility. In many parts of Europe, limited partnerships are admitted, provided they be entered upon a register. Thus, in France, by the ordinance of 1673, limited partnerships (la Société en commandite). were established, by which one or more persons, responsible in solido as general partners, were associated with one or more sleeping partners, who furnished a certain proportion of capital, and were liable only to the extent. of the funds furnished. This kind of partnership has been continued and regulated by the new code of com

merce; and it is likewise introduced into the *35 *Louisianian code, under the title of partnership in commendam. It is supposed to be well calculated to bring dormant capital into active and useful employment; and this species of partnership has, accordingly, been authorized by statute in Massachusetts, Rhode Island, Connecticut, Vermont, New-Jersey, Pennsylvania, Maryland, South Carolina, Georgia, Alabama, Florida, Mississippi, Indiana and Michigan, as well as in NewYork. It is declared, in the latter state, that a limited partnership for the transaction of any mercantile, me-chanical or manufacturing business within the state, may consist of one or more persons jointly and severally responsible according to the existing laws, who are called general partners, and one or more persons who furnish.

* Lord Loughborough, 1 H. Blacks. Rep. 48.

Repertoiré de Jurisprudence, par Merlin, tit. Société, art. 2. Code de Commerce, b. 1. tit. 3. sec. 1.

• Civil Code of Louisiana, art. 2810.

Laws of N. Y., April, 1822, sess. 45. c. 244, and sess. 50. c. 238;. re-enacted by N. Y. Revised Statutes, vol. i. 764, .with some slight variations.

In New-York, New-Jersey, Pennsylvania, Maryland, South Carolina, Alabama, Georgia, Florida, Mississippi, Connecticut and Vermont, the business of banking and insurance is specially excepted.