We are accustomed to form a partnership either with respect to Our entire property, which the Greeks especially designate as koinopraxia; or with respect to one particular kind of business, as, for instance, the buying and selling of slaves, oil, wine, or grain.

(1) And, indeed, if no specific agreement is entered into with reference to the division of profit and loss, equal participation in both is presumed. Where, however, the division of the same is stated, it must be observed; for there has never been any doubt that a contract is valid when two parties have agreed with one another that, for example, two thirds of the loss and profit shall belong to one, and the remaining third to the other.

(2) A question has arisen whether a contract like the following shall be deemed binding; for instance, where Titius and Seius have agreed with one another that two thirds of the profits shall belong to Titius, and that he shall be liable for one third of the losses; and that two thirds of the losses shall be assumed by Seius, who shall be entitled to one third of the profits. Quintus Mucius thought that an agreement of this kind was opposed to the nature of partnership, and therefore should not be considered valid. Servius Sulpicius, whose opinion has prevailed, held the opposite, because the labor of certain persons is often so valuable in a partnership that it is only just that they should be admitted into it on the most favorable conditions; for no doubt whatever exists that a partnership may be formed with the understanding that one of the parties shall furnish money and the other shall not furnish any, and still the profits be divided between them; because the labor of one is often as valuable as money. The law has been established so conclusively against the opinion of Quintus Mucius, that it is even permissible for one party to take a part of the profits and not be liable for any of the losses which Servius held consistently with his opinion; but this must be understood in such a way that if profit results in one transaction and loss in another, only what remains after a set-off has been made shall be understood to be profit.

(3) It is settled that if the share is stated in only one instance, as, for example, with reference solely to the profit, or to the loss, and is omitted in the other, the same share is understood to be included in the one which has been omitted.

(4) A partnership lasts as long as those who compose it are in common accord; but when any of them has renounced it, it is dissolved. Evidently, however, if anyone slily renounces a partnership with a view to obtaining some advantage exclusively for himself; as for example, if a partner in the entire capital when left an heir by some one renounces the partnership with the intention of enjoying the advantage of the estate alone, he can be forced to contribute this profit. If, however, he should gain some advantage which he did not designedly secure it belongs to him alone. On the other hand, everything which is acquired from any source after the partnership has been renounced, is conceded to him alone to whom the renunciation was granted.

(5) Moreover, a partnership is dissolved by the death of a partner, because he who enters into a partnership contract chooses a certain person for himself; and even if a partership is formed by the consent of several, it is dissolved by the death of one, although the rest may survive, unless it was otherwise agreed when the partnership was formed.

(6) Again, if a partnership is formed for a certain purpose, and that purpose is accomplished, the partnership is terminated.

(7) It is evident that a partnership is also terminated by confiscation, that is, if all the property of one of the partners is confiscated; for when another takes his place, he is considered as dead.

(8) Moreover, if any one of the partners, oppressed by the weight of his debts, surrenders his property, and it is then sold to discharge bis public or private obligations, the partnership is terminated; but in this instance if the parties still consent to remain in partnership, a new partnership is considered to begin.

(9) Whether one partner is liable to another in an action of partnership, if he commits fraud, like him who consents to become a depositary, or whether he is liable for negligence, that is to say, for want of care and neglect, was formerly a question; but it has now been established that he is liable on that ground. Negligence, however, should not be determined by the most exact diligence; for it is sufficient for a partner to bestow upon the common business the same diligence which he employs in his own affairs; for he who takes a careless partner should only complain of himself.(1)

FOOTNOTES

1. The Societas, or partnership of the Romans, was a term of most comprehensive signification. It might be public, as in the collection of taxes committed to farmers of the revenue; or private, having reference merely to the business enterprises of individuals. When a partnership was formed by the placing of the entire property of which the partners were possessed into the common stock, with the understanding that all gains of every description obtained by the employment of the same were to be divided, it was designated universalis, or unlimited; where the association was created for some particular purpose it was styled specialis, or special. A "general" partnership was one of inferior scope to the universalis, and was inferred where the intention to create the latter was not expressly stated. Partnerships were also perpetual or temporary, dependent upon the time required to accomplish the object of their formation. They were either quæstuariæ or non quæstuariæ, according to whether they were, or were not instituted for the purpose of profit. A Societas Leonina, or Leonine Partnership, that is one by which one partner was to receive all the profits — or the "lion's share" — and the other sustain all the losses, was void at Civil Law; as in organizations of this kind the presumption existed that each of the parties was entitled to a certain portion of the gains. Where nothing was said on the subject, the profits and losses were equally apportioned among the members of the partnership; and, as mentioned in the text, if one department of the business proved to be profitable, and another did not, all the transactions of both must be taken into consideration and an average made, in order to ascertain the emoluments obtained and the proportion of the indebtedness to which the partners would severally be liable. In all kinds of partnerships, as soon as they were formed, the members acquired a common interest in the total stock or capital, constructive delivery of the entire property of each being presumed when actual delivery did not take place.
   
   By the ancient Hindu Law, only persons of high character, and who were industrious and intelligent, were allowed to form a partnership. When, as the result of accident, the stock was spoiled, the partners were liable; and if any of them, without the consent of his associate, undertook any business which caused injury or loss, he was required to make it good. If fraud was committed, the guilty party forfeited all claim to the profits, and was expelled. A partner could retire and appoint some one to take his place on his own responsibility, a rule at variance with that of the Civil Law: "Socii mei socius, socius meus non est." He could also transmit his interest to his heirs. (Gentoo Code, VI, 1, 2.)
   
   Moslem jurists divide partnerships into two classes, that created by right of property, and that arising from contract. The first of these is synonymous with joint ownership, and is not embraced in the term partnership, according to the ordinary modern interpretation. It is subdivided into optional and compulsory; that is where the parties voluntarily purchase, or otherwise acquire an article in common by conquest, gift, legacy, or merger; or where, without their consent, their property becomes so intermingled or consolidated that each individual portion can not be separated or distinguished.
   
   In the institution of a partnership by contract, all that is necessary is oral proposal and consent. In most instances, equality of capital is required, and identity of religion is indispensable as a Mohammedan cannot form such an association with an infidel. A debt can only be collected from the partner who makes it, but he has a right to compel contribution by the other for his share, provided, of course, that the obligation was incurred in the ordinary course of business. The existence of mutual agency must be expressly stated in the agreement, otherwise one partner will have no interest in property purchased by the other, as it will belong exclusively to the latter. The partnership is valid even if the capital of the parties interested is not brought into a common fund, or mass. Each partner has the right to appoint an agent to act in his place without the consent of the other; a rule which would cause dissolution under most other legal systems. The profit of each partner must be in proportion to the amount of capital invested; and the contract is annulled by the death or apostasy of either of the parties. (The Hedaya, Vol. II, XIV.)
   
   French law requires every partnership contract to be in writing when the object of it is worth more than one hundred and fifty francs, or $30.00. Partnerships are either universal or special, and, unless otherwise stated, last during the life of the parties. Partners are responsible only for the amounts which they have agreed to contribute to the enterprise, and their individual liability does not, as under the Anglo-Saxon system, extend to their entire possessions, unless this has been specifically set forth in the contract. (Cod. Civ. III, IX, III, 1.)
   
   In Spain, a partnership is void if real property is brought into the common fund without an inventory being attached to the deed. It has no legal standing when the members enter into secret contracts with one another, or where each one contracts in his own name with third parties. While a partner can associate anyone as a joint share-holder with himself, the former cannot enter the partnership without the unanimous consent of the other members. (Cod. Civ. de España, IV, VIII, 1, 2.) The Italian rules on this subject, are, for the most part, a mere transcript of the provisions of the French and Spanish laws. (Cod. Civ. d'Italia, III, X.)
   
   A partnership, is styled an "association" in Japan. Any member may transact its business without authority from the others if no objection is made by them; and an elected manager cannot resign or be removed from office, without unanimous consent, or good and sufficient reasons. A partner may withdraw in case of bankruptcy, if he is prohibited from transacting his own affairs, or if he is expelled. Expulsion is valid only where all the other members agree to it. Any member of the association may call for its dissolution when circumstances imperatively demand such a step. At dissolution all remaining assets are divided pro rata, according to the amount contributed by each. (Civ. Cod. of Japan, Sec. XII.)
   
   Under the Scotch law, as under the Roman system which in many other respects it closely follows, a partnership is a separate and distinct legal person, and a corporation is a species of partnership. While a defence may be valid against a single partner it would not be against the others or a company. A partner can bind his copartners in any form in which he can bind himself. A private partnership can sue and be sued by any of its members. (Paterson, A Compendium of English and Scotch Law, II, IX.)
   
   Corporate bodies were considered partnerships at Civil Law, but, as is well known, the two organizations are entirely distinct in both England and America. In the latter, which is not a legal person, the individuality of the members is retained; in the former it is lost and merged into the corporation. The act of one partner is the act of all and renders them individually liable, provided the transaction had reference to the affairs of the partnership. This rule also applies to the commission of torts, where the partner did not exceed his general authority as an agent for his associates. A silent or dormant partner is liable with the others as soon as his existence has been ascertained. Participation in the profits is prima facie evidence of membership. In limited partnerships a certain number of the firm are responsible for all obligations, and the others only to the amount of their investment. (Stephen, Commentaries on the Laws of England, II, V, 6.)
   
   In the United States a partnership may exist in the profits alone. It has been settled that real estate owned by a partnership is not liable to the same extent as personal property, where the real estate has not been purchased with partnership funds, unless a specific agreement exists to that effect. A partnership may be formed either with, or without a written contract. Third parties, who are not actually partners, may become liable with members, if there is an intention that they should be, and they share in the profits.
   
   A partner is, to all intents and purposes, both a principal and an agent; an ordinary agent, however, has no interest in the property or business. Partnership has, indeed, been placed in the same category as mandate: "Contractus societatis non secus ac contractus mandati." In every instance a community of interest is created as soon as any party makes a contribution to the partnership fund, as they are all practically joint tenants having possession of, and an interest in, the entire property of the association as well as every portion of the same. When a father and a son are partners, in the absence of any express contract, they are considered to be equally interested.
   
   Generally speaking, the rules of the Civil Law with reference to partnerships are, in other respects, applicable to the jurisprudence of England, America, and Continental Europe. A Leonine Partnership is universally held to be null and void. (Parsons, The Law of Contracts, I, XII. Story, Commentaries on the Law of Partnership, I, II, III, IV.) — ED.