the result of trade in association, there must be a division or sharing of profits; however, there need not be a sharing of losses. In the early adjustments of partnership questions, in determining whether the relationship of partners existed, the question, How are the profits to be shared? was a vital one. Profit is the distributive part after creditors have been paid in full.

There must be community of principals sharing the joint profits. This excludes all agents or servants who may receive a share of the profits in lieu of wages.

"In the present state of the law upon this subject, it may perhaps be doubted whether any more precise general rule can be laid down than 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 profits thereof in certain proportions. If they do this, the incidents or consequences follow, that the acts of one in conducting the partnership business are the acts of all; that each is agent for the firm and for the other partners; that each receives part of the profits as profits, and takes part of the fund to which the creditors of the partnership have a right to look for the payment of their debts; that all are liable as partners upon contracts made by any of them within the scope of the partnership business; and that even an express stipulation between them that one shall not be so liable, though good as between themselves, is ineffectual as against third persons."

Partnership is a contract relation in which each partner is an agent for all.

The object of partnership is to combine capital and experience.

It is created for the purpose of carrying on any lawful business. The general rules of contracts apply as to competency to form the partnership contract.

The agreement may be either express, implied, or partly both.
The partners must share in the profits, and as principals.

The law presumes an equality of division, but the division may be in any proportion.

What is a partnership? Its object? Who may be partners? Define partnership by express terms. By implied terms. Give examples. What has profit to do with establishing partnership?

133. Incidents. The law attaches no significance to the manner by which the contract of partnership is formed, no formality being essential. Yet the contract is so important, so full of possibilities for subsequent disputes, that no part should be omitted or detail be considered too slight to be recorded.

134. Articles. The contract of partnership is usually a written contract enumerating the important parts and known as articles of partnership. These articles should include, generally, the following: Firm name, length of time, amount to be invested by each, the duties of each, the place of business, the object, the restrictions, and proportion or the division of profits. The articles should be signed by each partner. Some of these articles will be discussed; some need no attention.

1. The Firm Name. No special rule can be laid down in this matter. The usual firm name includes the names, or part or some of the names, of the members of the firm. A firm name is not necessary—it is a matter of convenience. Each name may be

signed separately or the name of one may be sufficient. The use of the term "& Co." is forbidden in some states unless it actually represents partners. The common law recognizes no objection. The name may be distinctive of the business.

There is no restriction in regard to a firm name except that "one firm is not at liberty to mislead the public by so using the name of another firm as to pass off themselves or their goods for that other or for the goods of that other."

The law will protect a firm in the use of its name. There is no law, however, that a number of persons may not use their own names as a firm name in carrying on a certain business, even though their name may be the same as some other firm. This, however, must be in good faith and not used as a deceit.

2. Capital. The capital of a firm is the total of the several investments made by the partners. It is customary for the amount and nature of each partner's investment to be shown in the agreement. If not so shown the investments are understood to be equal.

Subject to agreement, the investment of each need not be money, but property of any kind. Instead, skill and experience may be invested. This does not increase the appreciable capital. In fact, simply the use of property may be invested, the title remaining with the partner.

The capital is firm property, yet it does not follow that upon dissolution it is to be divided equally. It is returned as invested before the sharing of gains.

3. Losses and Gains. If no agreement is recorded, the law presumes an equal distribution. A distribution of profit must be had to constitute a partnership, and the profits must be shared by the partners as principals. It is not essential that losses be shared by the partners. To receive a share of the profits in lieu of a salary does not create a partnership.

4. Partnership Property. This may consist in the property originally invested by the partners and subsequently acquired by the partnership. The title is in the partnership, each partner hav

ing a proportionate and undivided share in the whole, there being generally no limit to the amount of capital a firm may have in personal or real property.

5. Property Bought or Acquired in Name of Partner. When one partner takes title to property purchased with partnership funds in his individual name, he holds it in trust for all members of the firm. This is but an application of the rule that the principal is entitled to the benefits of the contracts made. by his agents. The title to personal property may be held in the name of the firm. All papers relating to business interests, such as notes, drafts, checks, chattel mortgages, may be given or held in the firm's name. They may be held by a partner for the benefit of the firm.

6. Good-Will. "The good-will of a trade is nothing more than the probability that the old customers will resort to the 'old place' to do business." It is the reputation and character of a business. "It is a hope or expectation, which may be reasonable and strong, and may rest upon a state of things that have grown up through a long period and been prompted by large expenditures of money. And it may be worth all the money it has cost and a great deal more; but it is, after all, nothing more than a hope grounded upon a probability."

The good-will is a resource and passes with a sale of the business, but does not necessarily pass with the sale of the stock. Upon dissolution of a firm, the good-will is to be disposed of as an asset.

7. Notice. In the usual course of the business, notice that comes to the attention of a partner is notice to the partnership.

The law requires no formality in establishing the contract of partnership.

The partnership contract, if written, should be specific as to terms.
The common law knows no restriction as to the name a firm may use.
The capital is the investment-money, goods, experience, etc.
There must be a sharing of gains as principals.