PARTNERSHIP (\l E. r. pan,. m OF. parecner, from All., part iomtri us, hat ing a portion, from Lat. par/Mo. division). An un incorporated association of two or more per-vns who have agreed to combine their labor, property. and skill. or some of them, and who, in aemrd ance with this agreement, earn on a lawful trade or business With a View to profit. The term is often used in popular speech. and sometime- in legal documents. with a different signification. We lind the first charter of the Levant mer chants (granted 1:e411 designating the grantee as partner:: but the association was in truth a corporation, not a partnership. In an •)arly N'ew York case, the Court of Chancery was upon to decide whether the members of a steam boat company-. who had styled themselves part ners in their articles of agreement. were or part owners (q.v.) : and the do eision was that they were part owners. It is to he borne in mind, therefore, that partiwr-hip is a teehnieal term in legal nomenclature. Persons may i.e called partners. and even call themselves by that name, without constituting a partnership.
the other hand. they may dent that they are partners, and believe that they are not partners. while in fact the partnership relation does sub sist between tliem. How are we to determine. in a particular case. whether a partnership ex ists or not? Tut: TEST OF P \ RTNERSIIIP. Ordinarily the an sWer to the foregoing question is hot di limit. if we apply the definition given above. First. we inquire whether the association is If it is, then it is not a partnership. If it is not. we are next to ask. whether the association is a voluntary one; for the law 'hie- not institute the relation of partners between persons against their Property may be left to children by a parent. This doe; not make them partner-. Eaeli has a right to say whether or not he will combine his interest with the interest- Of the others in carrvim• on a ennui on business. The reason for this rule will be apparent when we consider a little later the authority pos-esstd by eaeh partner to sell firm f.roperty and to hind hi. co-partners by an I ev,n tarts. It follows from this necessity of a bit a.rreement between the parties that they must possess legal capacity to contract. and that the partnership agreement must be of such nature and form as to be legally enforceable. An infant is not bound by a partnership contract. Convi(As. alien enemies, and, as a rule. corpora tions, are prohibited from entering partnerships. Judges are often debarred by statute from becom ing partners in law firms. At common law mar ried women were incapable of binding themselves by contract, and consequently could not become partners. Even when the parties have con tractual capacity, their partnership contract may be worthless, either because its object is illegal or against public policy, or because its form does not comply with the Statute of Frauds. (See FRAUDS, STATUTE OF.) Courts have prop erly refused to enforce partnership agreements for highway robbery, for conducting gambling establishments or houses of ill-fame, cornering markets, and for creating monopolies.
The third question to ask is whether the par ties are carrying on a business in common. A land-owner often lets his premises to a tenant 'to farm on shares.' This arrangement does not make them partners. Owners in common of a building agree that one of them shall have the general management of it and provide funds for necessary repairs, so as to make it habitable by tenants, and to divide the rent. Such an agree ment does not amount to a partnership. lf, however, they agree to supply the building with furniture at their joint expense, and to let furnished rooms to various tenants. they may well be held to intend the carrying on of a busi ness in common. The presumption that common owners of land or of interest: in land, as well as common um ners of chattels, are not part ners in their use of it, is due to the fact that such ownership was recognized and the relations of the owners defined by the common law long before the institution of partnership came before English courts for consideration. While it is now possible and even common for partnerships to exist for buying and selling real estate or for renting it, the courts usually require that the intent of joint owners to throw- such property into a fund as partnership stock shall be dis tinctly manifested. Such intent will not be pre sumed.
Still a fourth question to be answered before a decision as to the partnership character of an association can be reached is whether it was entered into with a view of profit. The earliest form of partnership known to English law w•as that of ordinary merchants. Its sole object was pecuniary gain. Hence the courts of England and of this country have had no hesitation in declaring that and clubs, organized and maintained for the promotion of temperance. for the enforcement of particular laws, for musical culture among their members, for the propaga tion of political, social, or religious doctrines, or even for mutual protection or insurance, are not partnerships. even though they may have for one of their objects the accumulation of property to be owned and enjoyed in common." Formerly, the sharing of the profits of a busi ness was thought to constitute one a partner, at least toward those dealing with the business, whether he was a co-owner in the enterprise or not. This view has been discarded in England and in most of our jurisdictions. A person may share the profits, as a servant or agent, as a lender of money, or as the lessor of property, without becoming a partner. Sharing the profits of a business is prima facie evidence that one is a partner; but it is no longer deemed conclusive. It may be overcome by evidence that the sharers are not carrying on the business in common— that they are not its joint proprietors.