PARTNERSHIP may be defined to be a contract between two or more persons for joining together their money, goods, labour, and skill, or any or all of them, upon an agreement that the gain or loss shall be divided between them; and its object must be some legal trade or transaction. The English law of partnership is founded on the common law, the so-called Law of merchants, and the Roman law. By the common law, a partner has no power to bind his co-partner by decd. By the law of merchants, he has power to bind his co-partner by a bill of exchange, and there is no survivorship in the partnership stock. From the Roman law is derived the principle that a partner ship is terminated by the death of a partner. (Gains, iii. l55.) If the judges have any doubt about the custom of merchants, they may send to them to know their custom, as they may send for the civilians to know their law; but the judges only recognise those customs of merchants that are general, not those that are particular Magee.
We have here to speak of private unincorporated partnerships, to constitute which no writing is necessary. The acts of the parties, wheu there is no partnership contract in writing, are the evidence of the contract. Partners may be either ostensible, nominal, or dormant. He whose name appears to the world as a partner is an ostensible part ner. An ostensible partner may or may not have an interest in the concern ; if he has no interest in the concern, but allows his name to appear as one of the firm, he is a nominal partner; if his name and transactions as a partner are purposely concealed from the world, he is a dormant partner ; but if his name and transactions are actually unknown to the world, he is more properly termed a secret partner. Generally speaking, any number of persons may be partners; but there are some exceptions, for which see the article on JOINT STOOK Comrs.Nies.
Any person of sound mind and not under any legal disability may be a partner. An infant may enter into this, as into any other trading contract which may possibly turn out to his advantage. It may, how ever, be avoided by him on corning of age, though the person with whom ho contracts will be bound. An alien friend may be a trader and sue in personal actions, and may therefore be a partner. But an Englishman domiciled hr a foreign country at war with England, or an alien enemy, cannot be a partner with a person in this country ; at least he cannot sue in this country for a debt due to the firm. Married women are legally incapacitated from entering into the contract of partnership ; and although they are sometimes, under positive cove nants, entitled to shares In banking-housea and other mercantile concerns, yet in these cases their husbands arc entitled to inch shares, and become partners. If parties share in the profit and lose they are
partners, although one may bring into the trade money, another goods, and a third Labour and skill, which was also the rule of the Roman law (Caine, iii. 149); and where one 'arty is sole owner of goods and another sole disposer or manager of them, if they share the profits, they are partners in those profits. Every man who has a share of the profits of a trade must also bear his share of the lose ; for a right to a share of the profit legally implies a liability to bear a share of the loss. Yet it is not necessary to the partnership contract that every party should undertake to share the loss, for one may stipulate to be free from all liability to loan, and such stipulation will hold good as between himself and his co-contractor., which was also the rule of the Roman law, though he will still be liable to all those who have dealt with the firm of which ho is a member. Persons who jointly purchase goods are not partners unless they are jointly concerned in the profit or the produce arising from the sale of them. It is not necessary that the division of and loss among partners should be it is sufficient that the parties share the profits, in order to render them partners. If they share the profits, they are by consequence bound to share the losses. But to constitute a man a partner on the ground of sharing profits, ho must have an interest in the profits, as a principal in the firm; if ho only receive a portion of the profits, by way of payment for his labour, trouble, or skill as a servant or agent of the concern, he is not a partner. Factors and brokers who receive a commission out of the profits of goods sold by them are not on that account partners with their prin cipals; nor are persons who receive a certain share of the profits of an adventure, as payment in lieu of wages for acting as servants, partners in the adventure; nor even are persons who receive wages in proportion to the profits of the undertaking considered as partners. If a person lend money to a firm, and receives an annuity or interest, certain as to amount and duration, he is not a partner ; but if he were to receive an annuity in lieu of the profits of the trade, and determinable on the event of the trade ceasing, it seems that he would be considered as a partner with the grantor of the annuity ; or if he received an annuity varying in amount with the profits, he would be clearly a partner in the concern.