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this opinion, that those persons are partners, who contribute either property or money to carry on a joint business for their common benefit, and who own and share the profit thereof in certain proportions.' This practically makes the test a double one, depending on the two indispensable elements mentioned above-contributing and sharing in profits. But even this test is defective, since, as has been stated, an employe may contribute his services, and receive a stipulated share of the profits, without becoming a partner, and, consequently, the only real test by which to determine the question of partnership is the intention of the parties. If they have intended to assume the liabilities and claim the rights incident to that relation, it exists; if not, it does not exist." But their intention can only be gathered from the circumstances attending each individual contract, and no general test can be laid down.

be very influential, though not the question.

Those stated will, however,

conclusive, in determining

8. There may be a partnership for the carrying on of every known branch of business. People may engage as partners in mining, manufacturing, lumbering, farming, and mechanical arts, and in the legal and medical professions. Even contract laborers in some industries enter into a partnership relation; and partnerships may be created for the buying and selling of land. But there cannot be a legal partnership for an illegal purpose, as for doing any business prohibited by law, as counterfeiting, gambling, smuggling, and the like, nor for any purpose opposed to the policy of the law; and illegal partnership contracts will not be enforced by the courts.

18 145 U. S. 611, 623 (1891).

19 149 Ill. 575 (1894).

KINDS OF PARTNERSHIP

9. Partnerships are divisible, in the first instance, into general, or ordinary, and special, or particular, partnerships. These divisions are important only in fixing the character and extent of the business engaged in. Another division of partnerships is into trading and non-trading, according to the class of business for the prosecution of which they are formed.

A general, or ordinary, partnership is one in which the line of business engaged in is general in character, and which is conducted for the benefit of all the parties concerned.

A special, or particular, partnership is one where the parties have united for mutual benefit in the prosecution of a particular branch of business, or a special transaction or enterprise.

A trading partnership is one conducted for buying and selling, and for the usual commercial pursuits, including the manufacture of commodities, or articles, for trading

purposes.

A non-trading partnership is one for the pursuit of non-commercial business; one formed for the practice of a profession is usually called a professional partnership.

A universal partnership, which is a very unusual kind, is defined to be one where all the property owned by the parties is contributed, and all the profits, however made, are for their joint benefit.

A limited partnership is one in which the liability of some one or more of the partners is limited to their contribution to the capital stock. As far as third persons are concerned, such a partnership can exist only by authority of statute. This kind of a partnership will be treated separately at the end of this article.

A quasi-partnership is a term commonly applied to an association, not actually existing as a partnership, but similar to one. A joint-stock company and a limited-partnership association are often designated as quasi-partnerships; so,

where one not an actual partner holds himself out, or permits himself to be held out, as a partner, it is called a case of quasi-partnership;" and where persons have associated to form a corporation, but fail to comply with the statutory requirements, in consequence of which the corporation is not created, such persons form a quasi-partnership."

A joint-stock company is an aggregation of persons for profit, possessing a common capital contributed by the members, divided into aliquot parts, called shares, the evidences of which are then distributed among the members in proportion to their respective contributions. In England and in some of the United States, such companies are invested with some of the privileges of corporations. In the matter of a name, which is usually descriptive of the business, a joint-stock company is like a corporation; also, in having officers, by-laws, and rules, and in the transferability of its stock; but it does not use a seal.

A limited-partnership association is a partnership in which the liability of all the partners is limited by law to their contributions to the capital stock. Like a limited partnership, it can exist, as far as third parties are concerned, only by statutory authority.

An inchoate, or executory, partnership, so called, is simply not a partnership, under any proper definition of that

It is strictly an incipient partnership-one intended. but not yet put in operation; it will not have effect as a partnership until the agreement is carried into effect and the parties actually engage in the joint undertaking."

A mining partnership, which is accorded separate classification because of some peculiarities in the relation of the partners, is a commercial partnership in the working of a mine; it arises by agreement or by implication from actual cooperation. Such partnerships are generally regulated by statute. The doctrine of delectus personarum, the right of each partner to choose his associates, does not prevail as to a mining partnership, nor does the death of a partner, or the

20 27 N. H. 252 (1853); 17 Vt. 449 (1845).

21 85 Ill. 164 (1877).

22 73 Ill. 234 (1874); 75 Ill. 418 (1874).

assignment of a partner's share, or interest, create a dissolution of such a partnership." In these respects, it resembles a joint-stock company; but, in other respects, it is not distinguishable from the ordinary relation. In Idaho, a mining partnership is held by virtue of the statute to be in all its essential elements the same as a corporation."

An unincorporated association is an association organized for charitable, social, or political purposes, and not for trade purposes or for profit; it is, therefore, in no sense a partnership, though in many respects governed by the same rules. To this class of associations belongs the cooperative store, or grange, which is conducted to supply goods to its own members only. If such an institution should sell to the outside world, it would be a partnership."

FORMATION OF PARTNERSHIPS

10. The first step in the formation of a partnership is the making of a contract between the partners for the general purposes already indicated; but this is not sufficient of itself. A mere intention or common agreement to enter into a partnership does not create it." Before a partnership can exist, the parties to the contract must enter upon its performance, not necessarily by engaging in the business for which the partnership is formed, but by doing some act which shows their intention to carry out the contract, such as the contribution of capital, in money or goods. One who has agreed to enter a partnership, but has done nothing in furtherance of that agreement, cannot be compelled to carry it out." The law will not compel any one to become, or even to continue as, a partner against his will. No particular formality is required in the formation of a partnership; it may be formed in two ways, by express agreement, or by implication.

23 102 U. S. 642 (1880); 149 Ill. 575 (1894). 24 33 Pac. Rep. 42 (1893).

25 124 Mass. 81 (1878); 65 Ill. 532 (1872).

26 10 Ill. 402 (1848); 73 Ill. 234 (1874); 75 Ill. 418 (1874).

27 183 III. 239 (1899).

11. Formation by Express Agreement. - Formation by express agreement is where two or more persons enter into a contract to conduct a certain business or trade, the essential elements of the relation being intended, if not specified. The terms must be definitely settled, however, or there will be no contract which can be enforced.

The contract need not be in writing, but may be by word of mouth, and, while it has been held that it will not be valid, if not to be performed within a year, unless in writing, this only means that the partners cannot compel specific performance of it; and this they cannot do, even if it be written. For all other purposes, such as the enforcement of the rights of creditors, the collection of claims against debtors, and the adjustment of the respective claims and liabilities of the partners themselves, a verbal contract is as effective as a written one. It is no defense to a claim by one partner for an accounting that the partnership contract was not in writing." Moreover, the law does not require that the agreement of partnership shall be in writing, to enable the firm to purchase lands. Where a partnership is constituted under an oral agreement, it may be shown that its property consists of land, and it may own, possess, and enjoy the same." According to the better opinion, a partnership for the purpose of dealing in land may be formed by a verbal agreement;" and while in some states a partner cannot establish an interest in the lands themselves under such an agreement, he can claim his share of the profits arising from their sale."

In all cases, however, a written agreement is preferable. Such an agreement is usually termed the articles of partnership. It affords the best evidence of the rights, powers, and duties of the parties, all of which should be properly provided for, against the possibility of dispute. Whether oral or written, the agreement of partnership must be founded, like all other contracts, upon a sufficient consideration, usually a contribution to the capital, in money or goods, or

=

286 Ill. App. 229 (1880). 29 130 Ill. 9 (1889).

30 51 Ind. 358 (1875).
31 106 Pa. 349 (1884).

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