Where she may be a partner, her rights and liabilities are substantially the same as in the case of any other partner.15

§ 53. Corporations as partners.-A corporation has, as such, under the ordinary statute which confides its management to its own officers and directors, no implied power to enter into partnership either with an individual, a firm, or another corporation.16 Authority for this purpose must be expressly conferred.17 But, within its corporate power, a corporation and an individual may so contract as to incur a joint liability without actually entering into partnership.18

§ 54. Firms as partners.-With the consent of their members, two or more firms may enter into partnership, and a firm

15 See Burney v. Grocery Co. supra, and other cases supra.

16 See Whittenton Mills v. Upton (1858), 10 Gray (Mass.), 582, 71 Am. Dec. 681, Mechem's Cas. 68; People v. Sugar Refining Co. (1890), 121 N. Y. 582, 24 N. E. 834, 18 Am. St. R. 843, 9 L. R. A. 33; Gunn v. Railroad Co. (1885), 74 Ga. 509; Hackett v. Multnomah Ry. (1885), 12 Oreg. 124, 6 Pac. 659, 53 Am. Rep. 327; Mallory v. Oil Works (1888), 86 Tenn. 598, 8 S. W. 396; Morris Run Coal Co. v. Barclay Coal Co. (1871), 68 Pa. St. 173, 8 Am. Rep. 159; White Star Line v. Star Line (1905), 141 Mich. 604, 105 N. W. 135, 113 Am. St. R. 551; Geurinck v. Alcott (1902), 66 Ohio St. 94, 63 N. E. 714; Wilson v. Carter Oil Co. (1899), 46 W. Va. 469, 33 S. E. 249. Same, as to national banks: See Merchants' Nat. Bank v. Wehrmann (1906), 202 U. S. 295, 26 S. Ct. 613, 50 L. ed. 1036; California Bank v. Kennedy (1896), 167 U. S. 362, 17 Sup. Ct. 831, 42 L. ed. 198; Merchants' Nat. Bank v. Wehrmann (1903), 69 Ohio St. 160, 68 N. E. 1004, Gilm. Cas. 131. Mech. Part.-4

49

17 Butler v. American Toy Co. (1878), 46 Conn. 136. Many charters now expressly permit it.

18 In Cleveland Paper Co. v. Courier Co. (1887), 67 Mich. 152, 34 N. W. 556, the court say: "A corporation may, in furtherance of the object of its creation, contract with an individual, though the effect of the contract may be to impose upon the company the liability of a partner.' See, also, Boyd v. Amer. Carbon Black Co. (1897), 182 Pa. 206, 37 Atl. 937; Sabine Tram Co. v. Bancroft (1897), 16 Tex. Civ. App. 170, 40 S. W. 837; Bates v. Coronado Beach Co. (1895), 109 Cal. 160, 41 Pac. 855; Wallerstein v. Ervin (1901), 50 C. C. A. 129, 112 Fed. 124; Lehigh Val. R. Co. v. Dupont (1904), 64 C. C. A. 478, 128 Fed. 840; Catskill Bank v. Gray (1851), 14 Barb. (N. Y.) 471, Mechem's Cas. 73. See, also, as to the right of a partnership de facto to recover on obligations due it: French v. Donohue (1882), 29 Minn. 111, 12 N. W. 354; Wilson v. Carter Oil Co., supra.

may also enter into partnership with one or more individuals. The associating firms may or may not continue to carry on their original and separate businesses. As respects creditors of the joint firm, the associating firms ordinarily lose their separate identity, and each member of each firm is liable as a partner in the joint firm; but as between themselves, for the purposes of accounting and the division of profits or losses, the respective firms may be regarded as the partners.19

Where, however, one of the associations or constituent firms carries on a separate business, it will be so far regarded as an entity as that creditors of the joint firm, in seeking to reach the assets of the constituent firm, will be postponed until the creditors of the constituent firm are satisfied.20

Where contracts made for the joint firm are within the scope of the business of the associating firms, the contract of one partner in an associating firm made in the firm name will bind all of the partners in that firm, even though he would have had no authority to bind such copartners as individuals in their individual names.21

§ 55. Agent, etc., as partner.-An agent, trustee, administrator, and the like, may be a partner. Unless he excluded personal liability by the terms of the contract, he would usually be individually liable for the partnership debts, though he would ordinarily have a remedy for reimbursement or indemnity against the parties by whose authority and on whose account he acted as partner.22 In accordance with familiar rules, the dis

19 In re Hamilton (1880), 1 Fed. 800; Simonton v. McLain (1885), 37 La. Ann. 663; Bullock v. Hubbard (1863), 23 Cal. 495, 83 Am. Dec. 130; Meyer v. Krohn (1885), 114 Ill. 574, 2 N. E. 495; Meador v. Hughes (1879), 14 Bush (Ky.) 652; Raymond v. Putnam (1862), 44 N. H. 160; McLaughlin v. Mulloy (1897), 14 Utah 490, 47 Pac. 1031, Burd. Cas. 301; In re Gilbert (1896), 94 Wis. 108, 68 N. W. 863. Identity of a constituent firm

closed principal of an agent partner would usually, on the Z 2 grounds of election, not be liable directly to creditors of the firm, but an undisclosed principal would ordinarily be so liable.

§ 56. How many partners there may be.-In the absence of a statute fixing the limit, the partnership may be composed of any number of partners, though there must, of course, be more than one.23 In the case of joint stock companies and other partnerships with transferable shares, the partners are often very numerous.

§ 57. Of the delectus personarum.-Partnership being founded on the agreement of the parties, and being a relation demanding mutual confidence and trust, it is clear that a person cannot become a member of a firm without the consent of the other members. Hence, one partner cannot introduce a third person into the firm without the consent of the others,24 nor upon the death of one partner can his personal representative, merely by virtue of any provisions of the will or the consent or desire of the heirs or next of kin, become a partner with the survivors, except with their consent.25 A sale of one partner's interest does not, therefore, make his transferee a partner, but ordinarily dissolves the firm.26

Consent to the admission of new partners or, in case of death, of the personal representative, may be given in advance, as by being stipulated for in the partnership articles.27

To the rule requiring this choice of persons (delectus personarum) there are two exceptions one usually statutory, and the other customary, viz., joint-stock companies and mining partnerships. In these a transfer of one partner's share or

(1899), 82 Mo. App. 615: Morrison v. Dickey (1905), 122 Ga. 353, 50 S. E. 175, 69 L. R. A. 87.

23 Stirling v. Heintzman (1880), 42 Mich. 449, 4 N. W. 165.

24 Love v. Payne (1880), 73 Ind. 80, 38 Am. Rep. 111; Morrison v. Austin Bank (1905), 213 Ill. 472,

72 N. E. 1109, 104 Am. St. R. 225.

25 See post, § 361; Wild v. Davenport (1886), 48 N. J. L. 129, 7 Atl. 295, 57 Am. Rep. 552.

26 See post, § 359.

27 See Wild v. Davenport, supra: McGrath v. Cowen (1898), 57 Ohio St. 385, 49 N. E. 338.

his death does not in fact operate as a dissolution, but his transferee or representative may be received as a partner.28

§ 58. Of "sub-partnerships," so-called. One or more of the partners of a firm may agree with a third person to share with him the interest of such partner or partners in the firm. Such a relationship is frequently called a sub-partnership, and the third person so associating with the partner is often called a sub-partner. "A sub-partnership," says Mr. Justice Lindley,29 "is, as it were, a partnership within a partnership; it presupposes the existence of a partnership to which it is itself subordinate." The term "sub-partnership," however, is a misnomer. The sub-partnership carries on no business; the subpartner has none of the authority of a partner; he does not thereby become a partner in the original firm,30 he is not liable as such to creditors of the original firm,31 and he has no right of accounting as a partner against the original firm, but only against such members of it as united with him to form the subpartnership.3

32

28 Kahn v. Smelting Co. (1880), 102 U. S. 641; Skillman v. Lachman (1863), 23 Cal. 198, 83 Am. Dec. 96, and note; Harris v. Lloyd (1891), 11 Mont. 390, 28 Pac. 736, 28 Am. St. R. 475.

29 Lindley on Partnership (Ewell's 2d Am. ed.), vol. I, p. 48.

30 Setzer v. Beale (1882), 19 W. Va. 274; Meyer v. Krohn (1885), 114 Ill. 574, 2 N. E. 495. See Miller v. Rapp (1893), 135 Ind. 614, 35 N. E. 963.

31 Burnett v. Snyder (1880), 81 N. Y. 550, 37 Am. Rep. 527, Mechem's Cas. 157, Ames' Cas. 128, Gilm. Cas. 117; Riedeburg V. Schmitt (1888), 71 Wis. 644, 34 N. W. 336; Setzer v. Beale (1882), 19 W. Va. 274; Morrison v. Dickey (1905), 122 Ga. 353, 50 S. E. 175, 69 L. R. A. 87. Contra, Fitch v. Harrington (1859), 13 Gray

(Mass.), 468, 74 Am. Dec. 641.

32 The sub-partner may, however, acquire such a vested interest in the assets as to give him the right to an accounting upon dissolution. Nirdlinger v. Bernheimer (1892), 133 N. Y. 45, 30 N. E. 561. "A sub-partnership does not in fact exist where one party furnishes all the capital, receives all the profits, and owns all the assets. Such an arrangement lacks all the essential elements of a partnership. The ostensible partner, in such case, may be held liable to third parties on the ground that he has held himself out as a partner, and they have treated him as such; but he has no interest which will entitle him to an accounting, or to any action at law or in equity against the other party." Webb v. Johnson (1893), 95 Mich. 325, 54 N. W. 947.

§ 59. No particular formalities required.-No particular formalities are required in entering into the contract of partnership. By the common law, no official act or ceremony is necessary; sealed instruments are not required, and, except in those cases within the operation of the statute of frauds, a written contract, though desirable, is not essential.

Express agreement is not necessary, neither is it essential that the parties shall have had a conscious intention to become partners. The relation may grow out of transactions and dealings in which the word "partnership" was never uttered; if the acts or contracts of the parties in law create partnership, that relation will ensue, even though the parties did not have that result consciously in mind, or though it was consciously in their intention to avoid partnership. The fact that they de

1 See Jacobs v. Shorey (1868), 48 N. H. 100, 97 Am. Dec. 586, Mechem's Cas. 164; Duryea v. Whitcomb (1858), 31 Vt. 395, Mechem's Cas. 89; Townley v. Crickenberger (1908), 64 W. Va. 379, 63 S. E. 320; Wade v. Hornaday (1914), 92 Kan. 293, 140 Pac. 870; Johnson v. Carter (1903), 120 Iowa

355, 94 N. W. 850, Gilm. Cas. 54.

No express agreement is essential: Davis v. Davis [1894] 1 Ch. 393, Burd. Cas. 12.

No specific intent is essential: Duryea v. Whitcomb, supra; Green v. Beesley (1835), 2 Bing. N. C. 108, Ames Cas. 38, Burd. Cas. 20.