two leading principles of the contract are, a common interest in the stock of the company, and a personal responsibility for the partnership engagements. The common interest of the partners applies to all the partnership property, whether vested in the first instance by their several contributions to the common stock, or acquired afterwards in the course of the partnership business; and that property is first liable for the debts of the company; and after they are paid, and the partnership dissolved, then it is subject to a division among the members, or their representatives, according to agreement. If one person advances funds, and another furnishes his personal services or skill, in carrying on a trade, and is to share in the profits, it amounts to a partnership. (6)2 But

tained the regulation of the ordinance, and it requires an abstract of the articles of partnership to be attested, and publicly registered; but the omission, though injurious to the parties as between themselves, does not affect the rights of third persons. (Code de Com. art. 39-44.) So, by the commercial Ordinances of Bilboa, confirmed by Philip V. in 1737, edit. N. Y. 1824, c. 10, sec. 4, it was made necessary, in every partnership to reduce the articles to writing, and acknowledge them before a notary, and file a copy with the university and house of trade. This would seem not to be now the general law in Spain; for it is admitted that partnerships may be formed, as in the English law, tacitly as well as expressly. (Institutes of the Civil Law of Spain, by Asso & Manuel, b. 2, c. 15, translated by Johnston, London, 1825.) In Missouri, no person or copartnership shall deal as a merchant without a license. R. S. of Missouri, 1835, p. 403.

(b) Dob v. Halsey, 16 Johns. 34; Story on Partn. § 15.

profits, after the expiration of the partnership. Mathewson v. Clarke, 6 How. U. S.

122.

And one who by misrepresentation has been induced to enter into a partnership may have the agreement rescinded in equity, and a guaranty afforded him against its debts. Rawlins v. Wickham, 3 De G. & J. 304; S. C. 1 Giff. 355.

A deed of assignment made to trustees for the benefit of creditors, empowering them to carry on the business of the debtor for the purpose of winding up his affairs, does not make the creditors partners. Janes v. Witbread, 5 Eng. L. & Eq. 431; Coate v. Williams, 9 Id. 481. But if the main object of the deed is the carrying on the business of the debtor for the purpose of making money to pay the creditors who are parties to it, those creditors, quoad third persons, become partners. Hickman v. Cox, 36 Eng. L. & Eq. 400.

2 Perry v. Butt, 14 Geo. 699. Where two firms agree to share profit and loss, upon contracts for the purchase or sale of merchandise, to be made by each firm in its own name, and to be executed with its separate funds, they are not liable as copartners, either between themselves or to third persons. Smith v. Wright, 5 Sandf. (N. Y.) 113. See Pattison v. Blanchard, 1 Selden, 186; Bingham v. Dana, 29 Vermont, 1. See also Holmes v. Old Colony R. R. 5 Gray, 58. An agreement between two firms to share commissions on sales of goods, forwarded by one to the other, does not constitute a partnership. Pomeroy v. Sigerson, 22 Missou. (1 Jones) 177. So an agree

25

each party must engage to bring into the common stock something that is valuable; and a mutual contribution of that which has value, and can be appreciated, is * of the essence of the contract. (a) It would be a valid partnership, notwithstanding the whole capital was, in the first instance, advanced by one party, if the other contributed his time and skill to the business, and although his proportion of gain and loss was to be very unequal. It is sufficient that his interest in the profits be not intended as a mere substitute for a commission, or in lieu of brokerage, and that he be received into the association as a merchant, and not as an agent. (b) A joint possession renders persons

(a) Pothier, Traité du Con. de Soc. Nos. 8, 9, 10; Ferrière, sur. Inst. 3, 26; Code Napoleon, No. 1833.

(b) Reid v. Hollinshead, 4 Barn. & Cress. 867; Hammil v. Willet, 6 Bosw. 533. The test of partnership is a community of profit, a specific interest in the profits, as profits, in contradistinction to a stipulated portion of the profits as a compensation for services. Loomis v. Marshall, 12 Conn. 69; Champion v. Bostwick, 18 Wendell, 175; Vanderburgh v. Hull, 20 Ibid. 70; Lord Eldon, Ex parte Hamper, 17 Vesey, 404. See post, p. 34. Mr. Justice Story, on Partnership, § 34, considers that a share in the nett, and not in the gross profits, is here meant, to constitute a partner.2 S. P. in Dry v. Boswell, 1 Campb. 330. To be a partner, one must have such an interest in the profits as will entitle him to an account, and give him a specific lien or preference in payment over other creditors. It is not essential to a partnership that there should be a communion of interest in the capital stock, and also in the profit and loss. If there be a community of profit, or of profit and loss, in the adventure or business between the parties, they will be partners in the profit and loss, though not partners in the capital stock. If, however, there be no agreement between the parties on the point, the presumption will be a community of interest in the property as well as in the profit and loss. Ex parte Hamper, 17 Vesey, 404; Story on Partn. §§ 27, 29; Reid v. Hollinshead, 4 Barn. & Cress. 867. The Roman law made the same distinction between a partnership in the capital stock and a partnership in the profit and loss arising from the sale. Dig. 17, 2, 58; Vinnius, ad Inst. 3, 26, 2, n. 3. There is also a distinction between a stipulation for a compensation for labor, proportioned to the profits,

ment by which a manufacturing firm give another firm, to which they are largely indebted, the entire control and management of their business, assigning all their machinery and tools to the latter firm, and authorizing them to collect all moneys due the former, and therewith pay themselves, does not constitute the two firms copartners. Brundred v. Muzzy, 1 Dutch. (N. J.) 268.

1 One of the partners may contribute the services of a person hired for a certain length of time. McGuire v. O'Hallaran, Hill & Denio (N. Y.) 85.

2 Wood v. Vallette, 7 Ohio (N. S.) 172; Hullet v. Desban, 14 Louis. Ann. 529; Wheatcroft v. Hickman, 9 C. B. (N. S.) 47; Cox v. Hickman, 8 Ho. of L. 268. In New Hampshire it seems to be denied that profits can be received as the measure of compensation for services, without entailing on the recipient the liabilities of a partner Bromley v. Elliot, 38 New Hamp. 288.

& Peel v. Thomas, 29 Eng. L. & Eq. 276; Brigham v. Dana, 3 Wms. (29 Vt.) 1.

tenants in common, but it does not, of itself, constitute them partners, and, therefore, surviving partners and the representatives of a deceased partner, are not partners, notwithstanding they have a community of interest in the joint stock. (c) There must be a communion of profit to constitute a partnership as between the parties, though it is not necessary that there should be a community of interest in the property itself. They must be not only jointly concerned in the purchase, but jointly concerned in the fu ture sale. A joint purchase, with a view to separate and distinct sales by each person on his own account, is not sufficient.5 If several persons, who have never met and contracted together as partners, agree to purchase goods in the name of one of them only, and to take aliquot shares of the purchase, and employ a common agent for the purpose, they do not, by that act, become partners, or answerable to the seller in that character, provided they are not to be jointly concerned in the resale of their shares, and have not permitted the agent to hold them out as jointly answerable with

without any specific lien upon such profits, and which does not make a person a partner, and a stipulation for an interest in such profits, which entitles the party to an account as a partner. 1 Rose, 91; Carey on Partn. 11, n. 1; and this Mr. Chancellor Walworth held to be a sound distinction as regards the rights of third persons. 18 Wendell, 184, 185; and Mr. Justice Wilde, in Denny v. Cabot, Metcalf, 82. See also Story on Partn. §§ 32, 38–40,6 It is further a general principle in partnerships, that no one partner is entitled to compensation for his services to the firm, nor for interest upon moneys advanced to or deposited with the firm, for its use, without a special agreement, or some very peculiar circumstances to justify it. Lee v. Lashbrooke, 8 Dana, 214, and infra, p. 37, n.7

(c) Pearce v. Chamberlain, 2 Vesey, 33. But a stipulation at the commencement of the partnership, that the personal representatives of a partner should succeed him in the partnership, is held to be valid and binding by the common law, and by the French and Scotch law. Collyer on Partn. b. 1, c. 1, pp. 5, 6; Code Civil Franc. de Société, n. 1868; Bell's Com. 620; though it was otherwise in the Roman law. Dig. lib. 17, tit. 2, 1, 35; Story on Partn. § 5.

4 Briggs v. Vanderbilt, 19 Barb. (N. Y.) 222; Ellsworth v. Tartt, 26 Ala. 733. If by the articles of copartnership a portion of the profits are set apart to pay the debt of a third person, it has been held such person is not thereby made a partner. Drake v. Ramey, 3 Rich. 37.

5 Banchor v. Cilley, 38 Maine, 553; Stoalings v. Baker, 15 Mis. 481.

Stocker v. Brockelbank, 5 Eng. L. & Eq. 67; Burckle v. Eckhart, 3 Comst. 132; Catskill Bank v. Gray, 14 Barb. (N. Y.) 471; Vassar v. Camp, Id. 341; Fitch v. Hall, 25 Barb. (N. Y.) 13.

7 Coursen v. Hamlin, 2 Duer, 513; Day v. Lockwood, 24 Conn. 185; Desha v. Sheppard, 20 Ala. 747. Seo In re German Mining Co. 19 Eng. L. & Eq. 591. In In re German Mining Co. 27 Id. 158, it was held that the directors of an unincorporated joint-stock company, being quasi trustees, were entitled to be repaid their advances.

*

himself. (d) The same distinction was known in the civil law; qui nolunt inter se contendere, solent per nuntium rem emere in commune; quod a societate longe remotum. (a) It has been *26 repeatedly recognized in this country, and may be considered as a settled rule. (b)

If the purchase be on separate and not on joint account, yet if the interests of the purchasers are afterwards mingled with a view to a joint sale, a partnership exists from the time that the shares are brought into a common mass. (c) A participation in the loss or profit, or holding himself out to the world as a partner, so as to induce others to give credit on that assurance, renders a person responsible as a partner. (d) A partnership necessarily implies a union of two or more persons; and if a single individual, for the purpose of a fictitious credit, was to assume a copartnership name or firm, the only real partnership principle that could be applicable to his case would be the preference to be given to creditors dealing with him under that description, in the distribution of his effects. But that would be inadmissible, and contrary to the grounds upon which partnerships are created and sustained; and so the law on this point has, in another country, been understood and declared. (e) If the partnership consists of a large unincorporated association, or joint-stock company, trading upon a joint stock, it is usually regulated by special agreement; but the established law of the land, in reference to such partnerships, is the same as in ordinary cases, and every member of the company (whatever private arrangement there may be to the contrary between the members, and which is only a mischievous delusion) is liable for all the debts of the concern. (f) It is, however,

(d) Hoare v. Dawes, Doug. 371; Coope v. Eyre, 1 H. Blacks. 37; Gibson v. Lupton, 9 Bing. 297.

(a) Dig. 17, 2, 33.

(b) Holmes v. United Insurance Company, 2 Johns. Cas. 329; Post v. Kimberly,

9 Johns. 470; Osborne v. Brennan, 2 Nott & M'Cord, 427; Harding v. Foxcroft, 6 Greenl. 76.

(c) Sims v. Willing, 8 Serg. & Rawle, 103.

(d) Lord Ellenborough, M'Iver v. Humble, 16 East, 173; Olmstead v. Hill, 2 Ark.

316.

(e) Nairn v. Sir William Forbes, Bell's Commentaries on the Law of Scotland, vol. ii. 626.

(f) The King v. Dodd, 9 East, 516; Holmes v. Higgins, 1 Barn. & Cress. 74;

1 See Cox v. Bodfish, 35 Maine, 302; Pipe v. Bateman, 1 Clarke (Ia) 369; Hickmana Cox, 36 Eng. L. & Eq. 400. Where executors, in pursuance of the direction

the judicial language * in some of the cases, (a) that the *27 members of a private association may limit their personal responsibility, if there be an explicit stipulation to that effect made with the party with whom they contract, and clearly understood by him at the time. But stipulations of that kind are looked upon unfavorably, as being contrary to the general policy of the law; and it would require a direct previous notice of the intended limitation to the party dealing with the company, and his clear understanding of the terms of the limitation. (b) Incorporated compa

Hess v. Werts, 4 Serg. & Rawle, 356; Carlen v. Drury, 1 Ves. & Bea. 157; Keasley v. Codd, cited in a note to the case of Perring v. Hone, 2 Carr. & Pa. 401; Vigers r Sainet, 13 Louis. 300; Williams v. Bank of Michigan, 7 Wendell, 542; Walburn v. Ingilby, 1 My. & Keen, 61; The Douglas Bank, 2 Bell's Com. 623. Lord Ch. Hart observed, in Ex parte Sneyds, 1 Molloy, 261, that joint-stock companies were bodies of comparatively modern invention, to which statute gives the right to sue and be sued by their officers; and now, by the statute of 1 Vict. c. 73, authorizing the formation of joint-stock companies, the crown in England is authorized, by letters-patent, to grant to companies, though not incorporated, the privileges of incorporated companies, and suits may be carried on in the name of one of the officers of the company. The patent may declare the individual responsibility of the members for contracts to the extent of their shares. Again, by the statute of 7 and 8 Vict. c. 110, 111, and 113, provision is made for the registration of all joint-stock companies, by a registrar at the board of trade, with the qualities and incidents of corporations; and such companies may, in cases of insolvency, wind up their concerns, as in cases of bankruptcy Joint-stock banks must be created by letters-patent; and if such companies be incorpo rated, the liability of the shareholders is not to be limited thereby. By the statute of 7 Geo. IV. c. 46, for regulating copartnerships of certain bankers, it was declared, that on judgment against a registered officer of the company, execution may issue against any members for the time being; and if the debt cannot be levied on them, the former members may be subjected to execution by leave of the court, by process of scire facias, and they are only secondarily liable. Eardley v. Law, 12 Adol. & Ell. 802.2

(a) Gibson J., Hess v. Werts, 4 Serg. & Rawle, 361; Platt J., Skinner v. Dayton, 19 Johns. 537.

(b) It seems to be still an unsettled point, whether a stipulation in the articles of association, limiting the responsibility of the members to the mere joint funds, or to a qualified extent, be binding upon the creditors dealing, with notice of the stipulation. Mr. Justice Story inclines to the opinion, that the creditor acting with the knowledge of it, would be bound by it. Story on Partn. § 164. Unless the creditor has previous notice of the stipulation, he certainly would not be bound by it. Blundell v. Winsor,

of a will, continue a business for the benefit of an infant, the whole estate, and not merely the capital embarked, is liable for the expenses. McNeillie v. Acton, 21 Eng. L. & Eq. 3.

2 See a decision under this statute respecting the enforcement of claims against the assets of a deceased partner in Howard v. Wheatley, 15 Eng L & Eq. 271