selves farther, enjoy it equally, each sharing in the profit that arises, and contributing his own proportional part in the necessary expenses for its maintenance (a). The same observations are applicable to the law of England. To constitute a private unincorporated partnership, no contract in writing is necessary: the acts and words of the parties are alone sufficient for that purpose (b). An ostensible partner is he whose name appears to the world as that of a partner. A nominal partner is an ostensible partner having no interest in the firm. A dormant partner is he whose name and transactions as a partner are professedly concealed from the world. When they are actually unknown to the world he is more strictly speaking a secret partner. But, as the law, with perhaps one exception relative to notice of retirement, is equally applicable to partners of both kinds, we shall use the word dormant as applied to both. The contract of partnership, as existing between the parties themselves, gives them a right of action in their character of partners against third persons. It also enables any one of them to file his bill in equity against the others for a dissolution of the partnership, a sale of the partnership effects, and a division of the proceeds amongst the partners. Persons become liable as partners to third persons, either by contracting the legal relation of partners inter se, or by holding themselves out to the world as partners. For, by the law of England, not only he who is actually a partner, but he who lends his name and credit to the firm, is liable for the debts and engagements of the body. No restriction of liability, except by charter, is permitted to any of the partners; all are liable not only to the extent of their interest in the joint stock, but also to the whole extent of their separate property (c); of this we shall discourse more at large hereafter. (a) Wats. Partn. 5, citing Barbeyrac's notes to Puffendorf. See also Dig. lib. 17, tit. 2, s. 4; and Dig. lib. 22, tit. 7, s. 5; also Voet. Comm. lib. 17, tit. 2, s. 1. The latter author "Societas dividitur in expressays, sam, quæ expressû conventione fit; et tacitam, quæ contrahi dicitur,d ,dum re bus ipsis et factis, simul emendo, vendendo, lucra et damna dividendo, socii ineundæ societatis voluntatem declarant." (b) Peacock v. Peacock, 16 Ves.49; Featherstonhaugh v. Fenwick, 17 Ves. 298; Alderson v. Clay, 1 Stark. 405. (c) In France, anonymous partnerB 2 SECTION 1. Of the Contract of Partnership between the Parties. We shall now endeavour to explain the nature of that contract which in law constitutes a partnership; and for this purpose we shall advert in their order to the several points of the definition already set forth. And, first, the contract must be voluntary. Therefore, no stranger can be introduced into a firm as a partner without the concurrence of the whole firm. In the case of Sir Charles Raymond (a), a banker in the city, a Mr. Fletcher agreed with Sir Charles that he should be interested so far as to receive a share of his profits of the business, and which share he had a right to draw out from the firm of Raymond & Co. But it was held, that he was no partner in that partnership, had no demand against it, had no account in it, and that he must be satisfied with a share of the profits arising and given to Sir Charles Raymond. So, where, upon the dissolution of partnership between A. and B., father and son, it was agreed that, until the son should be provided for, the father should allow him a third of the profits, and the affairs of the firm should finally be adjusted by arbitration; and afterwards, before any adjustment, the father entered into a new partnership with C.; Lord Eldon held clearly, that, until such provision for B. and such adjustment, B. was ships (which closely resemble such of our trading companies as are corporations, strictly so called) are not legally constituted, unless their establishment be specially authorized by the king. But trading partnerships may be constituted either en nom collectif, or en commandite, at the discretion of the interested parties. A partnership is denominated a partnership en nom collectif, when every partner, as between himself and strangers to the society, is liable, without limitation, for all its debts and engagements. It takes the name of a partnership en commandite, when it subsists between one or more part- a partner with A. as to a third of his interest, but not a partner with A. and C. (a). Upon the same principle, it seems to have been held, that, where there is no partnership agreement, a person filing a bill against others as his copartners ought to give some evidence that he has been accepted by them as a partner (b). Nor will a Court of equity supply any apparent defect in a partnership agreement, in order to defeat or qualify this principle. By articles between A. and B., it was agreed that A. should take B. into partnership for nine years, if B. should so long live; but if he lived to the end of the nine years, the partnership should continue for any further time not exceeding twenty-one years, as B. should desire, on giving notice to continue it. It was provided, that, notwithstanding the death of A., it should be carried on by his representatives; and that, even if B. should give that notice, he should not have it in his option to pay off the representatives of A. and carry it on himself, but with them. A. and B. having both died, a bill was filed by the widow and representatives of B., against the representatives of A., for an account, and for liberty to carry on the trade with the defendants; and it was contended, on behalf of the plaintiffs, that the provision which had been made for the representatives of one party, negatived the idea that the parties intended that this should be a general partnership, subject to the ordinary consequences of dissolution; and therefore, in the absence of any express provision for the representatives of the other party, the provision which had been made ought to be considered mutual. But the Master of the Rolls held, that, on the face of the articles, the plaintiff was not entitled to a decree to carry on the partnership. And he added, that, on general principles, it would be of ill consequence to say, that, in articles of partnership in trade, where no provision for the death of either is made, they might subsist for the benefit of an executor, who may not have skill therein (c). It appears, therefore, that the delectus personæ, as it is called, is so essentially necessary to the constitution of a partnership, that even the executors and representatives of partners them (a) Ex parte Barrow, 2 Rose, 255. (b) Bray v. Fromont, 6 Madd. 5. (c) Pearce v. Chamberlain, 2 Vez. 33. See Brown v. De Tastet, Jac. 284. selves do not, in their capacity of executors or representatives, succeed to the state and condition of partners. The civilians carried this doctrine so far, as not to permit it to be stipulated that the heirs or executors of partners should themselves be partners (a). But, in this respect, the law of England is otherwise (b). I. 2. Notwithstanding, however, the general rule of law which has just been propounded, it appears to have been decided in a recent case that a person, though he be not accepted or known as a partner by the members of a firm generally, may, to some purposes, at least to purposes of detriment to himself, become a partner by means of an agreement with individual members, under which the latter are constituted his trustees. In Goddard v. Hodges (c), the plaintiff, as solicitor to an undertaking for building a bridge over the Thames, brought his action against the chairman of the company to recover the amount of advertisements and the expenses of a journey for furtherance of the undertaking. The defence was, that the plaintiff was a partner in the undertaking; he having prevailed upon a person of the name of Fall to allow him to take ten shares in Fall's name. It appeared that the plaintiff told Fall, that, as solicitor of the company he could not take shares himself, but that, if Fall would allow him to use his name, he would pay the deposit and every thing required. Fall consented to this, and, in consequence of this agreement, registered his name as a shareholder, and the plaintiff afterwards brought him a receipt for ten shares, for which Fall was never called upon to pay anything. It appeared, also, that £200 had been paid on account of these shares. Upon this evidence, the Court of Exchequer directed the plaintiff to be nonsuited; Lord Lyndhurst, C. B., and Bayley, B., both considering him as a partner in the undertaking, independently of the question of fraud in his taking the benefit of these shares contrary to the rules. Lord Lyndhurst said that the plaintiff stood in the situation of being liable for the debts of the concern; that the claim here was for a debt against the company, and that, therefore, on the ordinary principle, that one partner cannot recover against another at law, because he (a) Domat, lib. 1, tit. 8, s. 2. (b) 2 Vez. 34. (c) 1 Cromp. & M. 33; 3 Tyr. 209. would be liable to contribute, the plaintiff must fail in the action; that Fall was a mere agent, and the case was really the same as if Goddard's name was actually in the books of the company as a member. And Bayley, B., said, that, though the plaintiff did not think fit to be entered in the books of the company as an ostensible partner, the question was, whether he was not a real partner. The shares were taken in Fall's name, but Goddard paid all the calls. Then, as between Fall and Goddard, who would be entitled to any benefit? Would not every thing received by Fall on such shares be received by him to Goddard's use? If a loss happened, ought Fall, as between him and Goddard, to contribute to bear it? It would be most unjust if he were. The substance of the case was, that Fall should be the nominal, and Goddard the real, partner; but that was the same, as far as related to all other persons, as if the plaintiff had been the ostensible partner. The concealing that he was the real partner could make no difference either in justice or in law. But, with great deference to the opinions of the very learned judges by whom this case was decided, it is difficult to reconcile this decision with all the principles on which the contract of partnership is founded. The assumption, that Goddard was the real partner in these shares, appears to be far too strong. It is true that, by his agreement with Fall, he was entitled to the benefit of the profits of the shares standing in Fall's name, but there were many other substantial rights as a partner which he could not acquire by such agreement; and, if so, it was foreign to the question in this action to advert to the equities subsisting between him and Fall. In truth, there seems to have been no substantial distinction between this agreement, and that where a person contracts with one of several partners to share in that partner's profits-a contract which it is clear does not render the person so contracting a partner in the concern (a). There might, no doubt, be equitable reasons why the plaintiff in his character of solicitor ought not to have entered into the agreement in question, but those reasons would be equally cogent whether the agreement rendered him a partner or not. (a) See post, Book 2, chap. 2, sec. 1, art. 5. |