PARTNERSHIP. 



143 



A quasi-partnership, i. e., a partnership as to third 

 persons, may result from sharing profits and not losses. 

 Partnership is a question of intention, and the intention 

 to contribute to the partnership and to share the profits 

 will, if apparent, create the relation, even against the 

 express stipulation of the parties. While the sharing 

 of profits raises a presumption of partnership, yet it 

 may appear that the share so taken was nothing more 

 than a compensation for labor or service, for furnishing 

 raw materials, etc. It has been held that the officers 

 and crews of whaling-vessels receiving part of the 

 produce of the voyage in lieu of wages are not partners ; 

 nor masters of vessels sailing them on shares ; nor 

 clerks receiving share of profits in lieu of wages, there 

 being no contribution. 



While there have been many, and in some instances 

 conflicting, decisions on this question of what constitutes 

 a person a partner, the underlying principle is, that if 

 there is an evident intention to derive the advantages 

 of the partnership relation, the liability attendant there- 

 upon will also be enforced. There is no particular 

 formality requisite to the formation of a partnership. 

 Where there is no written agreement, it may be proved 

 by evidence of the conduct of the parties, the mode in 

 which they have dealt with each other, and in which 

 each has, with the knowledge of the other, dealt with 

 other persons. This may be shown by the books of 

 account, by the testimony of clerks, agents, and other 

 persons, by letters, and admissions, etc. 



A general partnership is the relation as it ordinarily 

 i-xi.-t.s. A special or limited partnership is composed 

 of general partners, to whom all the ordinary rules of 

 partnership apply, and of limited partners with circum- 

 scribed power and liability limited to the amount of 

 their contribution. This kind of partnership is stat- 

 utory, and the requirement* of the statute as to adver- 

 tisement, placing the list of partners in a conspicuous 

 position at the place of business, indicating which are 

 general and which special, must be strictly complied 

 with. The penalty for non-compliance therewith is to 

 have the association declared a general partnership. 



A "partnership limited," also statutory, is in the 

 nature of a corporation, no liability being incurred by 

 the members beyond the amount of their subscription, 

 the penalty for a violation of the requirements of the 

 statute being the same as in the case of a special part- 

 nership. Joint-stock companies form another class of 

 partnerships. They consist of a large number of per- 

 sons, whose liability as a general rule is that of a general 

 partner, though in some instances the liability is limited 

 by the provisions of the statute. 



A quasi-partnership may be created by a man hold- 

 ing himself out as a partner, without having any con- 

 nection with the business or interest therein ; in such 

 case he is estopped to deny his liability as a partner. 

 Holding oneself out as a partner is a question of fact. 

 It may be by direct assertion, or by authority given to 

 a partner to use the stranger's name. It may also 

 occur by reason of failure on the part of a stranger to 

 turbid the use of his name ; it is usually proved by 

 evidence that the stranger suffered the use of his name 

 over the shop-door, in printed notices, bills, advertise- 

 ments, etc., or that he has done other acts, of whatever 

 kind, sufficient to induce others to believe him a part- 

 ner. It is essential, however, that the holding out 

 should have been prior to the contract with the third 

 person, as well as the inducement to it. 



Partnership was formerly confined to commercial 

 transactions ; its scope has been gradually enlarged, 

 however, until it includes associations for all sorts of 

 purposes, e. g., of attorneys-at-law, physicians, etc. 

 At the common law partnerships for trading in land 

 were not recognized, but at the present time, and espe- 

 cially in America, land is largely held by speculators, 

 who are recognized as partners by the law ; so with 

 building operations. Farming land on shares, how- 

 Ter, has been held to he no partnership. 



The partners are presumed to have the same interest 



in the stock that they have in the profits. There is 

 sometimes no joint stock, as where the partnership is 

 merely for the managing and disposing of the goods of 

 others. A partner may contribute but the use of his 

 capital, retaining full control of the principal ; and he 

 may charge interest for its use. whether profits are 

 earned or not. The partnership property has been 

 said to consist of the original stock, together with the 

 additions made to it in the course of trade. Real 

 estate bought with partnership funds is treated as 

 partnership property, whether the legal title thereto is 

 in all the partners or only in one. Leases of real estate 

 by one partner for firm purposes, mines, and trade- 

 marks have been held to be partnership property. 



A partner cannot convey land belonging to the firm , 

 his grantee in such case would take title subject to the 

 rights of the copartner to have the firm property 

 applied to the partnership debts. It has been held in 

 some cases that there was an equitable conversion of 

 land belonging to a partnership, and that it should be 

 treated in every respect as personalty. 



In administering bankrupt partnership estates the 

 firm and separate creditors nave priority upon and are 

 confined to the firm and separate funds respectively. 

 A surplus upon a separate fund is divided among the 

 firm creditors pro rata ; a surplus upon a firm fund is 

 divided among the separate creditors of the various 

 partners in proportion to the shares of the partners 

 therein. If there is- no firm fund the firm creditors 

 come in on an equal footing with the separate creditors 

 against the separate estate. If, however, there is no 

 separate estate, separate creditors cannot participate 

 in the firm estate, upon the theory of the partner's 

 right to have firm funds applied first to the payment 

 of firm debts. It has been held that insolvent partners 

 may divide the firm fund, in proportion to each one's 

 interest in the firm, among their separate creditors, and 

 the firm creditors cannot object ; contra, however, if 

 the fund were assigned to the separate creditor of one 

 partner only. 



A separate judgment is not a lien against the part- 

 nership real estate but only against the partner's 

 interest. A judgment against the firm, however, is a 

 lien on a partner's separate estate, and takes priority 

 over a subsequent separate judgment. 



While a partnership is presumed to be at will, it may 

 be entered into for a definite term by agreement, ex- 

 press or implied. If a partnership be continued by 

 express or tacit consent after the expiration of the 

 prescribed period it will be presumed to continue on 

 the same terms, but as a partnership at will. A part- 

 nership for a specified term is, nevertheless, dissolved 

 by a death within the term. While executors and 

 testamentary trustees may be admitted, either under 

 an original agreement or by testamentary direction, to 

 a partnership, yet it has generally been held that such 

 clauses gave them the option to become partners, and 

 did not constitute them such absolutely. Only the 

 fund already invested or directed to be invested by the 

 testator is subject to the claims of new creditors, unless 

 there be a clear direction to charge the general assets. 

 In England, if an executor undertakes to participate in 

 the business, whether in carrying out a testamentary 

 direction or not, he becomes personally liable as a 

 partner, in addition to the liability of the estate. In 

 several of the United States, inter alia, Alabama, 

 Maryland, and Pennsylvania, however, the executor 

 has been held liable only when continuing in the busi- 

 ness of his own motion, and not when doing so in 

 carrying out a testamentary direction. 



Dissolution of Partnership. A partnership may be 

 dissolved ( I ) by the net of the parties, as by their mutual 

 consent. Wliere no limit is fixed for its continuance 

 either party may dissolve it at any time. There are 

 authorities on both sides of the question whether one 

 partner can dissolve a partnership for a certain term 

 previous to its expiration ; (2) by the act of God, as by 

 the death of one of the partners, unless there be an 



