are the elements of a partnership with respect to the partners themselves.

But, with respect to the rest of the world, a partnership may be held to exist, without uniting all these elements. If, for example, persons having no joint interest, which would constitute them partners with respect to each other, hold themselves out to the world as partners, the law will hold them liable as partners. And on the other hand, if persons not appearing to the world as partners, have nevertheless a secret joint interest in fact, such as would constitute them partners, the law will hold them liable to the world as partners. (a) Indeed, it is a general rule in the law of partnership, that no secret arrangement among partners, varying their general rights and liabilities with respect to each other, can affect their general liability with respect to third persons, unless made known beforehand. Without such a principle, partnerships might be a cloak for fraud and deception. But by holding partners responsible for the general aspect they assume before the world, and for attempting to conceal from the world the actual state of their relations, the ends of justice are effectually promoted. Thus you will perceive, that, in studying the law of partnerships, they are to be contemplated in two distinct aspects: the one embracing the mutual relations of the partners to each other; and the other, their joint relation to the rest of the world.

It is usual, in forming a partnership, to agree upon some name or style, under which all the business of the firm is to be transacted, and which each of the partners is authorized to use for that purpose. This name may or may not specify the names of all the partners; or it may not truly specify any of them; but, in either case, all the partners in fact will be bound by it; and if no name be agreed upon among the partners, a partner may act in the name of himself and company, and bind the firm. But here we see an important difference between a partnership and a corporation. The partnership name, though sufficient for many purposes, is not sufficient for all. In prosecuting and defending suits, conveying real estate, exccuting instruments under seal, and perhaps in some other transactions, it is necessary to use the names of all the partners; (b) and if they be very numerous, this may be no small inconvenience. However, these are exceptions to the general rule; which is, that the partnership name is sufficient for partnership purposes. Would it not be a salutary change. to provide by statute that the partnership name should be sufficient for all purposes? (c) And would

Stearns, 41 Vt. 397. But see Lengle v. Smith, 48 Mo. 276; Parker v. Fergus, 43 Ill. 437; Chapline v. Conant, 3 W. Va. 507.

(a) Fitch v. Harrington, 13 Gray, 468.

(b) Where one partner, R. M., affixed his name and seal to an instrument, the testatum clause of which set forth that R. M. & Sons, by R. M., one of the firm, had thereunto set their hands and seals, the instrument may be regarded as the deed of all the partners, on proof that, prior to the execution, the others had authorized R. M. to execute the instrument, and after execution with full knowledge acquiesced in what he had done. Gibson v. Warden, 14 Wall. 244.

(c) By the act of Feb. 27, 1846, partnerships in Ohio may sue or be sued in the

it not be well, in all cases, to require partners to record the names of the members of the firm in some public place, to which all persons interested might have access? The general interest of the community may be prejudiced, but cannot be promoted, by permitting concealment in these important matters.

§ 96. The Capital Stock (a) This may consist of personalty, realty, or both. It includes that which is originally contributed, and the subsequent additions and accumulations. Each partner has a joint interest in the capital stock, whatever be its specific character; the extent of which interest depends upon the agreement among the partners. But what you are to observe is, that the interest is a joint one in the whole, and not a separate one in any particular part. It cannot be severed and made exclusive, so that one partner can claim any specific portion as his own, until all the partnership concerns have been settled, and a division made, either by mutual consent, or the intervention of a court. For technical reasons, the law makes some distinction between realty and personalty, which will be better understood when we come to speak of tenants in common, in the lectures on property. But a court of chancery will treat both alike, whenever this is necessary to protect the rights of third persons; as in case of death or insolvency.

§ 97. Authority of each Partner. (b) The general rule is, that by the mere formation of a partnership, without any special agreement for that purpose, each partner becomes an agent for the whole firm, with authority to do in the firm name whatever the whole firm could do, within the regular scope of partnership business. But this authority extends only to what comes fairly within the partnership design; and beyond this the firm are not bound by the acts of one of the partners, because the world have no right to presume an authority any further. Within this general limit, the firm are bound with respect to the world, even though the act should be contrary to an express stipulation among themselves; because the

firm name. The names of the partners need not appear in the process or pleadings, or be proved at the trial; but when the partners sue in the firm name, they must give security for costs. This statute only applies to firms holding property or doing business within this State; and the petition in an action brought under this statute must aver the facts necessary to show that the statute applies. Haskins v. Alcott, 13 Ohio State, 210.

(a) The real estate of a partnership, purchased with its funds and to carry out its purposes, is treated as personal property. But as between the personal representative and the heirs of a deceased partner, the surplus remaining after the payment of the debts of the firm and his liabilities to it will be treated as real estate. Dyer v. Clark, 5 Met. 562; Hoxie v. Carr, 1 Sumner, 173; Buchan v. Sumner, 2 Barb. Ch. 165; Goodburn v. Stevens, 5 Gill, 1; Sumner v. Hampson, 8 Ohio, 328, 364; Tillinghurst r. Champlin, 4 R. I. 173; Cilley v. Huse, 40 N. H. 358; Matlack v. James, 2 Beasley, 126; Buffum v. Buffum, 49 Maine, 108; Willis v. Freeman, 35 Vt. 44; Fowler r. Bailey, 14 Wis. 125; Ensign v. Briggs, 6 Gray, 329; Wilcox v. Wilcox, 13 Allen, 252. And real estate not purchased with partnership funds, but which, according to the agreement of the parties, is to be considered personal property, will be so considered in a court of equity. Heirs of Ludlow v. Cooper's Devisees, 4 Ohio State, 1.

(b) 3 Kent, Com. 40-52.

If.

world are not presumed to know of any secret limitation. however, a third person can be charged with actual knowledge of such limitation, then the rule ceases, because the reason ceases. The only difficulty in applying this general rule is, to determine what is within the general scope of partnership business. This is a question of fact, depending chiefly on the nature of the business. But, in general terms, the power of a partner to bind the firm embraces the purchase and sale of property, the collection, payment, and release of debts, and the making of all contracts required in the partnership business. (a) The leading exceptions are these: One partner cannot, without special authority, pledge the property or credit of the firm for matters unconnected with their business; nor bind the firm by a guaranty of the credit of a third person; (b) nor execute a deed in the name of the firm for the conveyance of real property. (e) These are only the leading cases and exceptions. To give details, would carry me too far for my limits. What I have said will illustrate the general rule, and that is all I design.

§ 98. Partnership Liabilities. We have seen that the stockholders of a corporation, unless the contrary be provided in the charter, are not personally liable for the debts or undertakings of the corporation, beyond the amount of their shares in the capital stock; but the reverse prevails with respect to partnerships. By the common law, there is no such limited responsibility; and each partner is personally liable for all the partnership debts and undertakings. To limit this liability, a special statute is necessary. In some of the States, such provision has been made, and limited partnerships are permitted, whereby a partner may put into the concern a given amount of capital, and by making public record of the fact, may

(a) One partner has power to compromise and release a claim due to the partnership, and payment to him will be good, although notice has been given to the debtor by the other partners not to pay, unless all are present. But quare, whether it would be safe to enter into an executory contract with one partner in the name of the firm, after notice by the other partners of their dissent. Noyes v. N. H., N. L. & S. R. R. Co., 30 Conn. 1. This right continues, even after dissolution, unless there be some agreement to the contrary. Robbins v. Fuller, 24 N. Y. 570; Granger v. McGilvra, 24 III. 152.

(b) Sweetserv. French, 2 Cush. 309; Andrews v. Planters' Bank, 7 Sm. & Mar. 192; Langan v. Hewett, 13 id. 122; Gano v. Samuel, 14 Ohio, 592.

(e) 3 Kent, Com. 47; McNaughten v. Partridge, 11 Ohio, 223. But he may bind his copartner if he signs the deed in his presence and with his authority. Ball v. Dunsterville, 4 T. R. 313. So a previous parol authority, or a subsequent parol ratification, will make the deed good. Cady v. Shepherd, 11 Pick. 400; Smith v. Kerr, 3 Comst. 144; Purviance v. Sutherland, 2 Ohio State, 478. One partner may sell the whole stock at a single trade. Arnold v. Brown, 24 Pick. 93. Whether one partner can make an assignment of all the partnership property to pay its debts is not, settled. Anderson . Tompkins, 1 Brock. 456; Harrison v. Sterry, 5 Cranch, 300; Havens v. Hussey, 5 Paige, 30; Kirby v. Ingersoll, 1 Doug. (Mich.) 477; Hayes v. Hayer, 4 Sandf. Ch. 485; Halstead r. Shepard, 23 Ala. 558; Wetter v. Schlieper, 4 E. D. Smith, 707; Sheldon v. Smith, 28 Barb. 593; Lasell v. Tucker, 5 Sneed, 33: Ormsbee v. Davis, 5 R. I. 442. Wells v. March, 30 N. Y. 344; Coope v. Bowles, 42 Barb. 87; Palmer v. Myers, 43 Barb. 509. One partner cannot legally confess judgment so as to bind the firm. Shedd v. Bank of Brattleborough, 32 Vt. 709; York Bank's Appeal, 56 Penn. State, 458; Remington v. Cummings, 5 Wis. 138; Edwards v. Pitzer, 12 Iowa, 608; North v. Mudge, 13 Iowa, 496. Nor can a partner submit a partnership claim to arbitration. Martin v. Thrasher, 40 Vt. 460.

exempt himself from liability beyond that amount. (a) Such provisions are deemed highly beneficial; because they take away the fear which often withholds capitalists from employing their means in this way. But as we have no such law, there can be no limited liability here; and if the partnership means are unequal to the liabilities, the deficiency must be made up by the individual partners. The course of proceeding is this: The first claim upon the partnership fund is that of the partnership creditors. When they are satisfied, the next claim is that of the individual partners, to whom the firm may be indebted. If a surplus still remain, the creditors. of an individual partner may reach his share, when ascertained; but if the partnership funds have been exhausted, without paying all the partnership debts, the unsatisfied partnership creditors have the same right to be paid out of the separate means of one of the partners, as his private creditors have; there being no preference in such cases. (b)

§ 99. Partnership Remedies. Of remedies in general, I am to

(a) See the recently published treatise of Troubat on "The Law of Commandatory and Limited Partnership in the United States." An act regulating Limited Partnerships was passed in Ohio, Jan. 24, 1846.

(b) Grosvenor v. Austin, 6 Ohio. 103 Allen v. Wells, 22 Pick. 450; Bardwell v. Perry, 19 Vt. 292. As to the English rule, see 3 Kent, 65 and note. The act of Feb. 27, 1846, provides a mode whereby the individual property of the partners may be reached to satisfy the debts of the firm after the partnership property has been exhausted. The respective rights of the joint and separate creditors of a partnership have recently undergone elaborate discussion in Ohio. Where there are joint and separate assets for distribution in equity, the joint assets are first to be applied to the payment of the partnership debts, and the separate assets to the payment of the private debts, and in each case the surplus is to be applied to the payment of the other class. Rodgers v. Meranda, 7 Ohio State, 179. See Howe v. Lawrence, 9 Cush. 553; Somerset Potter Works v. Minot, 10 id. 592; 1 Parsons's Cont. 180. Crooker v. Crooker, 46 Maine, 250; Pohlman v. Graves, 26 Ill. 405, Hill v. Beach, 1 Beasley, 31: Matlack v. James, 2 Beasley, 126; Black's Appeal, 44 Penn. State, 503; Holton v. Holton, 40 N H. 77; Treadwell v. Brown, 41 N. H. 12; Moline, &c. Co. v. Webster, 26 Il. 233. The joint creditors of a partnership have not, as such creditors, any specific lien on the assets of the firm; and their right to enforce the application of the joint property to the payment of their claims can only be worked out through the equities of the partners, and it terminates when these equities are gone. The firm, while in the possession of such property, although unable to pay its firm debts, may sell it, or, by the consent of all the members of the firm, appropriate it to the payment of a separate debt of one of the partners. But where a firm is dissolved, and its property divided between the partners, the individual members cannot, in contemplation of insolvency, make an assignment of their property, both individual and that derived from the firm, for the benefit of the individual creditors to the exclusion of the firm creditors. Gwin v. Selby, 5 Ohio State, 96: Miller v. Estell, 5 id. 508; Sigler v. Knox County Bank, 8 id. 511. See Hubbard v. Curtis, 8 Clark (Iowa), 1. Thompson v. Frist, 15 Md. 24; Wintersmith . Pointer, 2 Met. (Ky.) 457; Backus v. Murphy, 29 Penn. State, 897. As to the rights of a private creditor in levying upon or attaching a partner's interest in the property of the firm, see 1 Parsons's Cont. pp. 174, 179; Place v. Sweetser, 16 Ohio, 142. The interest of a private partner in a firm can be levied upon under a judgment obtained by a private creditor. The levy must be made upon the undivided interest of the debtor partner, and the purchaser at sheriff's sale will only acquire his actual beneficial interest in the property sold. The creditor may, how ever, at any time before the sale, file a bill against the other partners for an account to ascertain the beneficial interest of the debtor partner, and have such interest subjected to the payment of his debt. The latter mode is, of course, preferable, as under the former it is difficult to find purchasers, on account of the uncertainty of the interest sold. Nixon v. Nash, 12 Ohio State, 647; Claggett . Kilbourn, 1 Black, 346; Wiles v. Maddox, 26 Mo. 77; Haskins v. Everett, 4 Sneed, 531.

speak in the sixth part of these lectures; but the relations of part ners, in this respect, are so peculiar, that a few words on the subject will be proper here. One partner cannot sue the firm at law for a debt due by them to him, because, in so doing, he would have to sue himself, as one of the firm. For the same reason, if one person be a member of two distinct firms, neither firm can sue the other. (a) Again, one partner cannot sue the rest of the firm for his share of a debt due by the firm to him; because, until the business is closed by dissolution, the joint interest cannot be thus severed. In all such cases, therefore, the only remedy is in chancery, which can rise above these technical difficulties. But one partner may sue another for a breach of the partnership agreement, because this supposes the partnership at an end; and for any matter not growing out of the partnership, of course partners have the same remedies as other persons. (b) When the litigation is between a partnership and third persons, all the firm must sue or be sued jointly, and not separately; because the right or liability is always joint and not separate. And when a judgment has been obtained against the firm, a court of chancery will compel the creditor to exhaust the firm property, before proceeding against that of the individual partners. In like manner, when a judgment has been recovered against an individual partner, chancery will compel the creditor to exhaust his private property before he can proceed against his ultimate share in the property of the firm, which can only be ascertained on a final adjustment of accounts. From these remarks, it will be seen that whenever partners are concerned in litigation, the remedies in chancery are much more efficacious than those at law. (c)

§ 100. Termination of Partnerships. When a partnership embraces only a single transaction, it is of course at an end when that is completed. When it is created for an indefinite period, either of the parties may dissolve it at pleasure, unless there be an agreement that a certain notice shall be given; in which case the agreement must be complied with. In some cases, also, where a sudden dissolution would produce great injury, chancery will interfere by injunction to prevent it, even though there be no agreement as to notice; but when the partnership is for a definite period, it must continue through that period, unless all the partners agree to a dissolution, or some one of the following causes intervenes to effect a dissolution: 1. The death of one of the partners always works a dissolution; for his representatives cannot come in as partners, except by special consent. (d) All they succeed to is the

(a) Englis v. Furniss, 21 E. D. Smith, 587.

(b) A suit at law may be maintained for a breach of partnership articles, where the business of the partnership has not been commenced. Vancer. Blair, 18 Ohio, 532. See Bailey v. Starke, 1 English (Ark.), 191. In Sykes v. Work, 6 Gray, 433, it is held that after the dissolution of the partnership and the payment of its debts, one partner may sue the other to recover a balance due. See Robinson v. Green, 5 Harring. 115; McKnight . McCutcheon, 27 Mo. 486.

(c) 1 Story, Eq. Jur. ch. xv.

(d) A partner may provide in his will that the partnership shall continue after his