ownership in or of the profits as they accrue and are not ascertained or divided into portions. This community in unascertained and undivided profits he deems to be the true test of a partnership.1 But in practice this test likewise will be found a difficult one to apply. On the whole, it must be admitted that there is a great mass of decisions which are irreconcilable on any one of these principles. Even participation in the profits may not be decisive proof of a partnership where other facts contradict this assumption. And as to a secret or dormant partner, secrecy on his part and want of knowledge on the part of the creditor have been deemed essential elements of the liability. The intention of the partnership is to be considered in all cases; though we should admit that if parties secretly make an agreement whose plain effect is to bring them into the partnership relation, they will be deemed partners as to third persons, and generally as to external liabilities, even though such were not their intention in making the agreement. And, on the other hand, while participation in accruing profits is a most convenient test of the partnership relation, it establishes no such liability where the legal effect of the arrangement entered into was not to create a partnership.

§ 179. Ostensible Partnership; Nominal Partner's Liability. But partnership liability is, as we have said, also incurred in cases of ostensible partnership, whether actual or not. Here we come from the secret or dormant partner to his counterpart, the nominal partner. The general principle is, that if one holds himself out to the world as partner in a firm, he is liable as such, though he have no interest in it. But this principle is qualified by another; namely, that a creditor who had no reason to believe that the person so

1 Pars. Partn. § 50; Dry v. Boswell, 1 Campb. 329; Turner v. Bissell, 14 Pick. 192; Ambler v. Bradley, 6 Vt. 119.

2 Bullen v. Sharp, L. R. 1 C. P. 86; Cox v. Hickman, 8 H. L. Cas. 268. 3 Bigelow v. Elliot, 1 Cliff. 28. And see Palmer v. Elliot, 1 Cliff. 63.

8

4 See Bigelow v. Elliot, 1 Cliff. 28; Pars. Partn. 71, and cases cited in notes at length; Hargrave v. Conroy, 4 Green, 281; Loomis v. Marshall, 12 Conn. 69; Denny v. Cabot, 6 Met. 82; Hickman v. Cox, 3 C. B. N. s. 523.

held out was a partner cannot recover. The decisions are somewhat conflicting as to a nominal partner's liability; some holding that one put forth to the world as a partner is for that cause and on considerations of public policy liable to the creditors of the firm; others again, with better reason, that one is liable only because he was a partner in fact and interest, or at least because the creditor may justly have regarded him as such, and dealt with the firm from regard to the identity of interest, or the additional credit which such a name furnished. It would seem to come back properly to a question of actual circumstances: the true rule being, perhaps, that a nominal partner, who by his authority, consent, or connivance was held out to the public as a partner, must suffer the general consequences to every creditor or customer; while if nothing more than negligence can be imputed against him in such a connection, only the creditor who was actually misled by the improper use of his name as a partner should hold him liable.2 In the case of the nominal as well as the secret partner, we seem to trace a disposition of the courts to screen from the harshest legal consequences those who were found to have strayed carelessly, but unintentionally, into partnership combinations, especially as to third persons who were not actually misled in consequence.

In general, conversations, admissions, assertions, or acts tending to show a partnership interest, though they might be quite insufficient to establish an actual partnership between the parties, would often be conclusive of liability so far as concerned third persons. One cannot safely allow outside parties to believe him a partner and let them rely on his credit, if he would avoid a partnership liability; though an unsupported conjecture of the public is insufficient. Long and public manifestation is held to justify the inference of

13 Kent Com. 32, and notes; Story Partn. § 64; Wood v. Pennell, 15 Me.

52.

2 Spencer v. Billing, 3 Campb. 310; Swan v. Steele, 7 East, 210; Pars. Partn. § 82, and cases cited; Wood v. Pennell, 51 Me. 42; Fitch v. Har

rington, 13 Gray, 468. Two firms will be held to be one if they assume to constitute one. Beall v. Lowndes, 4 S. C. 258.

3 Pars. Partn. § 82; Goode v. Harrison, 5 B. & Ald. 147; Dutton v. Woodman, 9 Cush. 255.

one's general liability, so as to dispense with direct testimony that the party dealing with the firm relied upon it.1

Here it may be remarked that the partnership name and style has much to do with the question of a nominal partner's responsibilities; not that a partnership may not exist without any firm name, but because a firm name is usual and eminently proper. Though the agreement of partnership adopts no firm name, yet if the business be transacted in a particular style, as H. & J., this becomes the legitimate name of the firm.2 Sometimes a single individual doing business uses the words "and Co.," by way of amplifying his sole credit with the public; but this practice, though often harmless, is improper; and in New York and some other States we find legislation which makes the transaction of business in the name of a fictitious firm a penal offence or imposes special requirements, as a condition of doing such business.3 Even where a partnership name and style are agreed upon and have been used, this will not prevent persons from being bound by their dealings under some other partnership name which they habitually use besides.* But the use of such a name as usually indicates partnership, while it may be prima facie evidence of partnership, affords but slight proof that it legally existed.5 Our latest tendency in many States is to allow any name to be adopted as the firm name, even though in a form suggestive of a corporation.6

§ 180. The Same Subject. The question of a nominal partner's liability may be usually referred to his acts and

1 Sun Ins. Co. v. Kountz, 122 U. S. 583.

2 Le Roy v. Johnson, 2 Pet. 186; Ripley v. Colby, 3 Fost. 443; Pars. Partn. § 176.

3 See 3 Kent Com. 31, and notes; 8 Abb. N. C. 76; 70 Cal. 194. This New York penal statute is laxly interpreted by the courts. 97 N. Y. 472, 476; 83 N. Y. 74.

See 3 Kent Com. 31, 32; Williamson v. Johnson, 1 B. & C. 146; Rogers v. Coit, 6 Hill, 322; Mifflin

v. Smith, 17 S. & R. 165; Beall v. Lowndes, 4 S. C. 258.

5 Charman v. Henshaw, 15 Gray, 293. Vice versa, if the name of the firm be merely that of an individual partner, it is not presumed that, where the individual signed his name to a bill, he did so on behalf of the firm. Yorkshire Banking Co. v. Beatson, 4 C. P. D. 204; United States Bank v. Binney, 5 Mason, 176; 16 Barb. 608.

6 Holbrook v. Ins. Co., 25 Minn. 229; Pars. Partn. § 97.

conduct. As was observed in Fox v. Clifton, the holding one's self out to the world as a partner, as contradistinguished from the actual relation of partnership, imports at least the voluntary act of the party. It is the lending of one's name to the concern, not the improper use of that name by others, which the court usually regards. Declarations of the actual partners carry no great weight of themselves when unsupported by circumstances evincing the nominal partner's concurrence; but if the latter knows that his name is used on the sign-board, in the advertisements and business circulars of the firm, or otherwise, he may become liable to customers, unless he seasonably repudiates and disavows all connection with the firm.2 The knowledge that his name is so used, and his consent thereto, is the ground upon which he is estopped from disputing his liability as a partner.

§ 181. Modern Legislation affecting Partnership Liability to the Public. The general uncertainty which thus prevails concerning partnership liability in its legal sense has led, in England, to the passage of an explanatory act, which is substantially to this effect: that neither the advance of money on contract to receive a share of profits, nor the remuneration of servants and agents by a share of profits, nor the receipt of profits by certain annuitants (such as the widow and child of deceased partners), nor the acceptance of profits in consideration of the sale of good-will, shall constitute the party so benefited a partner. But English courts of high authority have since observed that the common law is to the same effect, and that nothing has been really gained by this legislation.*

§ 182. Liability of Partners to Third Parties affected by Notice of Stipulations, etc. But the liability of partners to third parties may sometimes be affected by stipulations between themselves of which such third persons had knowledge.

16 Bing. 776. See Bourne v. Freeth, 9 B. & C. 632; Pars. Partn. §§ 84-97; Story Partn. §§ 64, 80.

2 Dolman v. Prichard, 2 C. & P. 104; Gill v. Kuhn, 6 S. & R. 338; Tuttle v. Cooper, 5 Pick. 414.

8 28 & 29 Vict. c. 86, July 5, 1865; Smith's Man. Com. Law, 197. This is known as "Bovill's Act."

See per curiam, L. R. 4 P. C. 419; 5 Ch. D. 458.

And while private or secret stipulations cannot control the liability of members composing a firm as concerns those without proper notice who dealt with them, there are, nevertheless, cases which tend to make reasonable stipulations between partners qualifying their partnership liability, operative and obligatory upon third parties to whom those stipulations were made known. This doctrine is quite analogous to that of credit given to one partner only; namely, that if a creditor sells goods or loans money on the sole credit of one of the partners, or otherwise deals with him as an individual, and not as a member of the firm, the other partners are exonerated from liability; though the presumption would be that business within the usual scope of a partnership is transacted with a partner as such, and not in his private capacity, and vice versa.2 Further, as we shall presently see, knowledge by one who deals with one partner that such partner acts outside the scope of his partnership authority, or is defrauding his associates, may invalidate the transaction as concerns the firm itself.

§ 183. Articles of Copartnership. - We have seen that a partnership is frequently to be inferred from the acts and conduct of the parties combining for business purposes. But parties usually execute some distinctive agreement when they mean to establish a firm for regular partnership transactions with the public; and a formal contract of this kind, reduced to writing and signed by all concerned, is familiarly known as "articles of copartnership." Articles of copartnership usually designate the partnership name, and may embrace a great variety of stipulations, like other contracts; and we frequently find in them restrictions imposed by way of mutual protection, as, for instance, in signing negotiable paper; and sometimes provisions for the expulsion of members in certain cases, or for the reference of differences which may arise to arbitration, or

1 See Pars. Partn. § 84 and notes; Parker v. Canfield, 37 Conn. 250; Knox v. Buffington, 50 Iowa, 320; Kimbro v. Bullitt, 22 How. 256; Croughton v. Forrest, 17 Mo. 131; 5 Pet. 529; 3 Kent Com. 44, 45.

2 Barton v. Hanson, 2 Campb. 97; Le Roy v. Johnson, 2 Pet. 186; Lafou v. Chinn, 6 B. Mon. 305; Ex parte Hunter, 1 Atk. 223; Pars. Partn. 104-115.