partnership

a partnership is created 'when persons join together their money, goods, labor, or skill for the purpose of carrying on a trade, profession, or business and when there is community of interest in the profits and losses

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The relation subsisting between two or more persons who have contracted together to share as common owners the profits of a business carried on by all or any of them on behalf of all of them, Shumaker, Partnership, 2. Elements: The essential elements of a partnership are (1) a contract between the partners; a true partnership being always formed by contract, not by operation of law. 138 111. 74; 43 Mo. 391; 63 Pa. St. 273. The socalled partnership by estoppel or holding out is only an apparent exception; it not being a true partnership inter s4, but only a liability of individuals to third persons as if they were partners. (2) A sharing of profits; but the profits must be shared between the partners as common owners C!as. 268; 5 Colo. 564; 30 Me. 384; 38 Cal. 206; 28 Ohio St. 319. But community of ownership in the stock or capital by means of which profits are earned is not essential. 15 Conn. 67. Test: Profit sharing, therefore, is not a test, nor is mutual agency, for mutual agency results from partnership, not partnership from agency. The true test is the intention of the parties to share in the profits as common owners. An agreement to share both profits and losses is prima fade but not conclusive evidence of intention to form a partnership (97 111. 303), as is an agreement to share profits with nothing said about losses (145 U. S. 611), or with a stipulation against the liability of one of the parties for losses (18 Fed. 888); but not an agreement to share gross returns (15 111. 31; 20 N. Y. 93), or to share losses or expenses only (92 111. 103; 132 Mass. 423). The common ownership of property does not create a partnership unless it be employed in business for common profit. 27 Iowa, 131. Classification: Partnerships classified with reference to the nature of the association are either (1) ordinary partnerships, (2) limited partnerships, being those wherein the liability of one or more partners is, by compliance with certain statutory provisions, limited to the amount of their contribution to the capital stock, or (3) joint-stock companies, being partnerships with a capital stock divided into transferable shares. Partnerships classified with reference to their extent are either (1) universal partnerships, being those in which the parties bring into the firm all their property, of whatever nature, and employ all their services for the common benefit, (2) general partnerships, being those formed to transact some general class of business, or (3) special or particular partnerships, being those formed for a particular transaction. Partnerships classified with reference to their business are either (1) trading or commercial partnerships, being those whose business consists in buying or preparing for sale and selling commodities for profit, or (2) nontrading partnerships.

A relation founded upon a contract between two or more persons to do business as individuals on joint, undivided account. A contract of two or more competent permerce or business, and to divide the profit and bear the loss in certain proportions. 3 Kent 23; Goldsmith v. Eichold, 94 Ala. 116, 10 South. 80, 33 Am. St. Rep. 97; Krall v. Forney, 182 Ta. 11, 37 Atl. 846. This definition was criticised by Jessel, M. R., in 5 Oh. D. 472, on the ground that there may be partners who do not contribute any property, labor, or skill, as where a share is gi\on to the widow of a former partner. Pollock (Partnership 3) considers it the most businesslike and substantially accurate definition, and one which might be accepted, with some verbal condensation and amendment. A voluntary contract between two or more persons for joining together their money, goods, labor, and skill, or any or all of them, in some lawful commerce or business, under an understanding, express, or implied from the nature of the enterprise, that there shall he a communion of profit and loss between them, will constitute a partnership. Tolly. Part. § 2; Peecham v. Dodd, 3 Harr. (Del ) 485; Howell v. Tlarvey, 5 Ark. 278, 39 Am. Dec. 376 A legal entity formed by the association of two or more persons for the purpose of carrying on business together and dividing its profits between them. Parsons, Pait., Heale’s ed. § 1. See 5 Oh. D. 158. The relation which subsists between persons who have agreed to shaie the protits of a business carried on by all or any of them on behalf of all of them. Colly. Part, 5th ed. 4. Sir F. Pollock says: “The nearest approach to a definition which has been given by judicial authority in England is the statement that ‘to constitute a partnership the parties must have agreed to carry on business and to share profits in some way in common;'” but he adds that this principle “excludes several kinds of transactions which, at fir'-t sight, have some appearance of partnership.” Poll Part. 4. A contract of partnership is one by which two or more persons agree to carry on a business for their own benefit, each contributing property or services and having a community of interest in the profits. It is, in effect, a contract of mutual agency, each partner acting as a principal in liis own behalf and as agent for liis co partner. Gray, J., in Karrick v. Ilannaman, 168 XJ. S. 331, 18 Sup. Ct 135, 42 D. Ed. 484. An agreement that something shall be attempted witli a view to gain, and that the gain shall he shared by the parties to the agreement, is the grand characteristic of every partnership, and is the leading feature in every definition of the term. Ewell’s Lind. Part., 2d Am. ed. *2, where many definitions are collected. a view of profit, English Partnership Act, 1890. Nature and Characteristics. It has been said that “the various definitions have been approximate rather than exhaustive;” Meehan v. Valentine, 145 U. S. 611, 12 Sup. Ct 972, 36 L. Ed. 835. Partnership, though often called a contract, is in truth the result of a contract; the relation which subsists between persons who have so agreed that the profits of a business inure to them as co-owners. George, Pa it. 30. That a partnership is an entity, distinct from the partners, is the mercantile conception of a partnership; Liverpool, B. & R. P. Nav. Co. v. Agar, 14 Fed. 615; Hallow ell v. Bank, 151 Mass. 359, 28 N. E. 281, 13 L. R. A 315; Bank of Buffalo v. Thompson, 121 N. Y. 280, 24 N. E. 473; and such is the law where the civil law is in force; Succession of Pilcher, 39 La. Ann. 362, 1 South. 1)29; hut the distinction is rarely recognized under (he common law; Drucker v. Wellhouse, 82 Ga. 129, 8 S. E. 40, 2 L. R. A. 328; Adams v. Church, 42 Or 270, 70 Pac. 1037, 59 L. R. A. 782, 95 Am. St. Rep. 740; L. R. 14 Ch. 1L 122, where James, L. J, said, “it was not the lease of the firm, because there is no su< h thing as a firm known to the law.” See Bracken v. Dillon, Cl Ga. 243, 37 Am. Rep. 70; Henry v. Anderson, 77 Ind. 301; Fitzgerald v. Grimmell, Cl Ta. 20 1, 20 N. W. 179. In an action at law, at least, the partners alone are recognized as parties in interest, any change among them destroys the identity of the firm and what is called its property is their property, as are its debts and liabilities, in fact, theirs; a partner may be the debtor or creditor of his copartners, but not in law of his firm; 4 Myl. & C. 171; yet even at law certain doctrines arc explained only by recognizing the firm as an entity. The courts of equity show more recognition of the true character of a partnership; but even in equity this has not been made clear until recently. There is now, however, a strong disposition on the part of the courts to recognize the mercantile doctrine. Pars. Part., Beale’s ed. 2. In the construction of statutes the courts frequently uet upon the conception that a firm is a separate entity, as by treating as sufficient the filing of a chattel mortgage at the place of business of the firm where one partner resided, the other being a non-resident; Ilubbardston L. Co. v. Covert, 35 Mich. 255; or by holding mercantile firms included in the terms “any person or persons, or body corporate,” in a statute to regulate commercial paper; West v. Bank, 6 Ohio St 169. The notion that the firm is an entity distinct from its members has grown in popularity and has been confirmed by recent are debts of the members of the firm and that the individual liability of the members is not collateral, but primary; Francis v. Mc Neal. 228 U. S. 005, 33 Sup. Ct. 701, 57 Li. Ed. 1020. “The firm is the contracting party, not the individuals composing the firm; the credit is given to the firm; the partnership, the ideal person, formed by the union of interest, is the legal debtor. A partnership is considered in law as an artificial person, or being, distinct from the individuals composing it.” Hollingshead v. Curtis, 14

A voluntary contract between two or more competent persons to place their money, efforts, labar, and skill or some or all of them, in lawful commerce cr business, with the understanding that there shall be a proportional sharing of the profits and losses between them. Story, Parin. § 2; Colly. Par,In. § 2; 3 Kent, Comin. 23. Partnershlp is the association of two or more persons for the purpose of carrying on business together, and dividing its profits between them. Civ. Code Cal. § 2395. Partnershlp is a synallagmatic and commutative contract made between two or more persons for the mutual participation in the profits which may accrue fro?h property, credit, skill, or industry, furnished in determined proportions by the parties. Civ. Code La. art. 2801. Partnership is where two or more persons agree to carry on any business or adventure together, upon the terms of mutual participation in its profits and losses. Mozley & Whitley. And see Macomber v. Parker, 13 Piek. (Mass.) 181; Bucknam v. Barnum, 15 Conn. 71; Farmers' Ins. Co. v. Ross, 29 Ohio St. 431; In re Gibb's Estate, 157 Pa. 59, 27 Atl. 383, 22 L. R. A. 276; Wild v. Davenport, 48 N. J. Law, 129, 7 Atl. 295, 57 Am. Rep. 552; Morse v. Pacific Ry. Co., 191 III. 356, 61 N. E. 104.

— General partnership. A partnership in which the parties carry on all their trade and business, whatever it may be, for the joint benefit and profit of all the parties concerned, whether the capital stock be limited or not, or the contributions thereto be equal or unequal. Story, Partn. § 74; Bigelow v. Elliot, 3 Fed. Cas. 351; Eldridge v. Troost, 3 Abb. Praa, N. S. (N. Y.) 23.

— Limited partnership. A partnership consisting of one or more general partners, jointly and severally responsible as ordinary partners, and by whom the business is conducted, and one or more special partners, contributing In cash payments a specific sum as capital to the common stock, and who are not liable for the debts of the partnership beyond the fund so contributed. 1 Rev. St. N. Y. 764. And see Moorhead v. Seymour (City Ct. N. Y.) 77 N. Y. Supp. 1054; Taylor v. Webster, 39 N. J. Law, 104.

— Mining partnership. See Mining.

— Particular partnership. One existing where the parties have united to share the benefits of a single individual transaction or enterprise. Spencer v. Jones (Tex. Civ. App.) 47 S. W. 665.

— Partnership assets. Property of any kind belonging to the firm as such (not the separate property of the individual partners) and available to the recourse of the creditors of the firm in the first instance.

— Partnership at wiH. One designed to continue for no fixed period of time, hut only during the pleasure of the parties, and which may be dissolved by any partner without previous notice.

— Partnership debt. One due from the partnership or firm as such and not (primarily) from one of the individual partners.

— Partnership in commendam. Partnership in commendam is formed by a contract by which one person or partnership agrees to furnish another person or partnership a certain amount, either in property or money, to be employed by the person or partnership to whom it is furnished, in his or their own name or firm, on condition of receiving a share in the profits, in the proportion determined by the contract, and of being liable to losses and expenses to the amount furnished and no more. Civ. Code La. art. 2839.

— Secret partnership. One where the existence of certain persons as partners is not avowed to the public by any of the partners. Deering v. Flanders, 49 N. H. 225.

— Special partnership. At common law. Oae formed for the prosecution of a special branch of business, as distinguished from the general business of the parties, or for one particular venture or subject. Bigelow v. Elliot, 3 Fed. Cas. 351. Under statutes. A limited partnership, (q. v.)

— Subpartnership. One formed where one partner in a firm makes a stranger a partner with him in his share of the profits of that firm.

— Universal partnership. One in which the partners jointly agree to contribute to the common fund of the partnership the whole of their property, of whatever character, and future, as well as present. Poth. Socidte, 29; Civ. Code La. 1900, art. 2829.

An association of in which the members (partners) agent, and share in the profits ship. Limited partnership: special partners. Dormant profits, but has no power in does not appear in the firm. name appears in the firm, but sible partner: one who holds fering in partnership affairs, name to appear in the firm. liable for losses to the extent of authority in partnership affairs.