PARTNERSLegal Dictionary -> PARTNERS
PARTNERS, contracts. Persons who have united together and formed a
partnership. 2. Every person sui juris is competent to contract the relation of a partner. An infant may by law be a partner. 5 B & A. 159; but a feme covert, not being capable of contracting, cannot enter into partnership; and although married women are not unfrequently entitled to shares in banking houses, and other mercantile concerns, under positive covenants, yet when this happens, their husbands are entitled to such shares, and become partners in their steads. Whether a feme sole trader in Pennsylvania could enter into such contract, seems not settled. See 2 Serg. & Rawle, 189; see also, 2 Nott & McC. R. 242; 2 Bay, 162, 333; Code Civ. par Sirey, art. 220. 3. Partners are considered as ostensible, dormant, or nominal partners. 1. An actual ostensible partner is a party who not only participates, in the profits and contributes to the losses, but.who appears and exhibits himself to the world as a person connected with the partnership, and as forming a component member of a firm. He is clearly answerable for the debts and engagements of, the partnership; his right to a share of the, profits, or the permitted exhibition of his name as partner, would be sufficient to render him responsible. 6 Serg. & Rawle, 259, 337; Barnard. 343; 2 Blackst. R. 998; 17 Ves. 404;. 18 Ves. 301; 1 Rose, 297; 16 Johns. R. 40; 3 Hayw. R. 78. 4.-2. A dormant partner is one who is a participant in the profile of the trade, but his name being suppressed and concealed from the firm, his interest is consequently not apparent. He is liable as a partner, because he receives and takes from the creditors a part of that fund which is the proper security to them for the satisfaction of debts, and upon which they rely for payment. 16 Johns. R. 40. Another reason assigned for subjecting a dormant partner to responsibility is, that if he were exempted he would receive usurious interest for his capital, without its being attended with any risk. 1 Dougl. 371; 4 East, R. 143; 10 Johns. R. 226; 4 B. & A. 663; 8 Man. Gr. & Scott, 641, 650. But in order to render one liable as a partner, he must receive the profits as such, and not merely his wages; to be paid out of the profits. Vide Profits. 5.-3. A, nominal partner is one who has not any actual interest in the trade or its profits, but, by allowing his name to be used, he holds himself out to the world as having an apparent interest. He is liable as a partner, because of these false appearance he holds forth to the world in representing himself to be jointly concerned in interest with those with whom he is apparently associated. 2 H. Bl. 235; 1 Esp. N. P. O. 29; 6 Serg. & R. 338; Watts. Partn. 26. 6. A partner in a private commercial partnership cannot introduce a stranger into the firm as a partner without the consent of all the copartners. If he should attempt to do so, this may make such stranger a partner with the partner who has associated with such third person; this will be a partnership, distinct from the first, and limited to the share of that partner who has so joined himself with another. 2 Rose 255; Domat, de la Societe, tit. 8, s. 2, n. 5. 7. As between the members of a firm and the persons having claims upon it, each individual member is answerable in solido for the amount of the whole of the debts contracted by the partnership, without reference either to the extent of his own separate beneficial interest in the concern, or. to any private arrangement or agreement that may exist between himself and his copartners, stipulating for a restricted responsibility. 1 Ves. & Bea. 157; 9 East, 527; 5 Burr. 2611; 2 Bl. R. 947; 1 East, R. 20; 1 Ves. sen. 497; 2 Desaus. R. 148; 4 Serg. & Rawle, 356; 6 Serg. & Rawle, 333; Kirby, 53, 77, 147. In Louisiana, ordinary partners are not bound in solido for the debts of the partnership; Civ. Code of Lo. art. 2843; each partner is bound for his share of the partnership debts, calculating such share in proportion to the number of the partners, without any attention to the proportion of the stock or profits each is entitled to id. art. 2844. 8. Partners are bound by what is done by one in the course of the business of the partnership. Their liability under contracts is commensurate and coextensive with their rights. Although the general rule of law is, that no one is liable upon any contract except such as are privy to it; yet this is not contravened by the liability of partners, as they are imagined virtually present at and sanctioning the proceedings they singly enter. into in the course of trade; or as each is vested with a power enabling him to act, at once as principal and as the authorized agent of his copartners. Wats. Partn. 167; Gow. Partn. 53. It is doubtful, however, whether one can close the business by a general assignment of the partnership property for the benefit of creditors. Pierpont and Lord v. Graham. Cir. Court, April 1820, MS. Whart. Dig. 453, 1st ed.; 4 Wash. C. C. R. 232; see 1 Brock. R. 456; 3 Paige's R. 517; 5 Paige's R. 30; 1 Desaus. R. 537; 4 Day's. R. 425; 5 Cranch, 300; 1 Hoffm. R. 08, 511; Sto. Partn. Sec. 101; 2 Washb. R. 390. 9. One partner can, in simple contracts, bind his copartners in transactions relative to the partnership. 7 T. R. 207; 4 Dall. 286; 1 Dall. 269. But a security given by, one partner, in the partnership name, known to be for his individual debt, does not bind the firm. 2 Caines' R. 246; 4 Johns. R. 251; 4 Johns. R. 262, in note; 2 Johns. R. 300; 16 Johns. R. 34; 4 Serg. & Rawle, 397. Nor can one partner bind his copartners by deed; and this both for technical reason and the general policy of the law. Wats. Partn. 218; Gow on Partn. 83; 3 Murph. 321; 4 Sm. & Marsh. 261; 7 N. H. Rep. 549; 1 Pike, 206; 2 Harr. 147; 2 B. Monr. 267; 5 B. Monr. 47; 4 Miss. 417; 1 McMullen, 311; 3 Johns. Cas. 180; Taylor's R. 113; 2 Caines' R. 254; 2 Caines' Err. 1;. 2 Johns. R. 213; 19 Johns. R. 513; 1 Dall. 11,9. But see 6 Watts & Serg. 165, where it is said this rule admits of some qualifications. The rule does not however apply to cases where the object is to discharge a debt as due to it; as to give a general release by deed. 3 John. 68; 7 N. H. Rep. 550; 1 Wend. 326; 20 Wend. 251; 22 Wend. 324. It seems to be an admitted principle, that one partner has no power to submit to arbitration any matters whatsoever, concerning or arising out of the partnership business. Story, Partn. Sec. 114; Com. Dig. Arbitrament, D 2; 3 Bing. R. 101; 1 C. M. & R. 681; 1 Pet. R. 222; 19 John. R. 137; 3 Kent, Com. 49, 4th ed. But in Pennsylvania, 12 S. & R. 243, and Kentucky, 3 Mont. R. 433, one, partner may by an unsealed, instrument refer any partnership matter to arbitration, though he has no implied authority to consent to an order for a judgment in an action against himself and his copartner. 3 Mann. G. & Scott, 742. Nor has one partner the power to confess a judgment, or authorize the confession of a judgment against the firm, when no writ has been issued against both. 1 Wend. 311; 9 Wend. 437; 1 Blackf. 252; 1 Scamm. 428, 442. Such a judgment, however is binding on the one who confessed it. 2 Bl. R. 1133; 1 Dall. 119; 1 W. & S. 340, 519; 7 W. & S. 142; 2 Caines, 254; 20 Wend. 609; and see 7 Watts, 331; 1 W. & S. 519, 525; 2 Miles, 436; 1 Hoff. Ch. R. 525. 10. With regard to the tight of the majority of, the partners, when there is a dissent among them, it may be laid down, 1. That when there are stipulations on this subject, they must govern. Tum. & Russ. 496, 517. 2. In the absence of all agreement on the subject, each partner has an equal voice, though their interests be different, and a majority have a right to conduct the business. 3 John. Ch. R. 400; 3 Chit. Com. Law, 236; Colly. Partn. B. 2, c. 2, s. 1; Id. B. 3, c. 1, s. 262, Story Partn. 123. 3. When there are only two partners, and they dissent, neither can bind the partnership, when the person with whom they deal has notice of such disagreement. 1 Stark. R. 164. See 1 Camp. R. 403; 10 East, R. 264; 7 Price, Rep. 193; 6 Ves. 777; 16 Vin. Ab. 244. But this right of the majority is confined to transactions in the usual scope of the business, and not to a change of the articles of the partnership, for in such case all the partners must consent, 4 John. Ch. R. 573. 11. The stock used in a joint undertaking by way of partnership in trade, is always considered in common and not as joint property, and consequently there is no survivorship therein; jus accrescendi inter mercatores, pro beneficio commercii, locum non habet. On the death of one partner, therefore, his representatives become tenants in common with the survivor, of all the partnership effects in possession. But with respect to choses in action, survivorship so far exists at law, as that the remedy or right to reduce them into possession vests exclusively in the survivor; although when they are recovered, the representatives of the deceased partner have, in equity, the same right of sharing and participating in them which their testator or intestate would have possessed had he been living. 1 Ld. Raym. 340. See 2 Dall. 65, 66, in note; 1 Dall. 248; 4 Dall. 354; 2 Serg. & Rawle, 494. 12. When real estate is owned by a partnership, it is held by the partners subject in all respects to the ordinary incident's of land held in common. 1 Sumn. R. 174; 7 Conn. 11; 5 Hill, (N. Y.) Rep. 118; 4 Mete. 537. But in equity the partners may by agreement, express or implied, affect real estate with a trust as, a partnership property, and, by that means, render it in, equity subject to the rules applicable to partnership property as between the partners themselves and all claiming under them. 2 Edw. R. 28; 2 Rand. R. 183; 7, S. & R. 438, 441; Conn. 11; 5 Metc. 582; 6 Yerg. 20. See, generally, as to partners, 5 Com. Dig. Merchant, D; Bac. Abr. Merchant, C; Wats. on Partn. passim; Gow on Partn. passim; Supp. to Ves. jr. vol. 1, p. 36, 279 281, 312, 389, 449, 503; Id. vol. 2, p. 40, 314, 315, 317, 362, 364, 377, 384, 456; 1 Salk. 291, 392; 1 Swanst. R. 506, 9; 10 East R. 265; 4 Ves. 396; 1 Hare & Wall. Sel. Dec. 292, 304; Civ. Code of Lo. B. 3, t. 11; Code Civ. L. 3, t. 9; Code de Proc. Civ. L. 1, t. 3; Chit. Contr. 66 to 82; Poth. Contrat de Societe; Bouv. Inst. Index, h.t. Vide Articles of Partnership; Death of. a partner; Dissolution; Firm; Partnership.