At the end of the first year one Mosely desired to purchase an inter est in the business. He, however, was not a member of the "alliance," and, organized as this enterprise was, in line with or under the inspiration of that movement, it was necessary that he become such before he could be allowed to make such purchase. In order to qualify him to this end, the rules of the "lodge" to which these defendants. belonged were suspended, and at one meeting he was admitted to the privilege of full fellowship with them. He contributed $2,000 to the capital of the concern, and its name was changed to McClure, Mosely & Co. At the end of another term of 12 months Mosely sold out his interest to one Lucas and thereafter the enterprise was conducted in the name of McClure, Lucas & Co., until insolvency overwhelmed it with disaster. The claims of complainants accrued during the existence of and against this latter concern. In addition to these changes in the organization of and style of the business, two deaths occurred among the original subscribers-one of them before, and the other after, the creation of these debts. This latter death, however, can in no way affect this controversy, and will, therefore, not be further noticed. Upon this state of facts, it is insisted for the defendants-First, that this undertaking was in no sense a partnership, and that they did not sustain the relation of partners to either R. W. McClure & Co., Mosely, McClure & Co., or McClure, Lucas & Co.; secondly, if however, they are mistaken in this broad proposition, then that they were only partners in the firm of R. W. McClure & Co., and that all partnership relation and liability, on their part, were terminated or dissolved by the various changes already adverted to, and long prior to the creation of complainants' debts. The chancellor and the Court of Chancery Appeals held both these contentions against the defendants, and the case is now before us on, an appeal from the decree of this last-named court.

1. Were those parties engaged in a partnership enterprise? All of the defendants earnestly disclaim any purpose of entering upon such an undertaking. While, as has been stated, the prime motive of these parties was to organize a mercantile establishment where their various needs would be supplied at reasonable figures, yet they confess that, outside of this, they expected to share in any profits earned by it in proportion to the respective amounts contributed by them. These amounts were small, yet they were to serve as a basis for such distribution of profits. It is no doubt true that the defendants did not contemplate a partnership, and each supposed that he was simply taking a share in a joint-stock enterprise, in which all he risked was the small sum paid for such share; yet it is for the law to determine, on the facts already given, whether a partnership was created, with all its attending liabilities. In Mallory v. Oil Works, 86 Tenn. 598, 8 S. W. 396, is quoted approvingly the definition of a partnership as given by Judge Story. "A partnership," says the former writer, "is usually defined to be a voluntary contract between two or more competent

persons to place their money, effects, labor, and skill, or some or all of them, in lawful commerce or business, with the understanding that there shall be a communion of the profits thereof between them." Story, Partn. § 2. The facts found by the Court of Chancery Appeals, a general outline of which is given above, disclose the constituent elements of a partnership as required by this definition. It is a case where these parties have embarked their money "in lawful commerce, * * * with the understanding that there" should be a division of profits earned. In addition to this, they have taken a firm name, and thus have advertised themselves to the world as a commercial partnership. Calling their contributions to the capital of this business a "subscription for stock," and taking certificates for their payments from the company as a joint-stock company, it not being incorporated, cannot alter their liability. "There is no intermediate association, or form of organization, between a corporation and a partnership, known to the common law, and, unless otherwise provided by statute, as is the case in England and New York, a joint-stock company is treated and has the attributes of a common partnership." 1 Bates, Partn. § 72. And Judge Story says that, "in joint-stock and other large companies, which are not incorporated, but are a simple, although an extensive, partnership, their liabilities to third persons are generally governed by the same rules and principles which regulate commercial partnerships." And such has been the conclusion of the courts. wherever the character of joint-stock companies similar to the one in question has been passed upon, so far as our examination has disclosed. At least such was the holding in Hodgson v. Baldwin, 65 Ill. 532; Kenyon v. Williams, 19 Ind. 44; Manning v. Gasharie, 27 Ind. 399; Beaman v. Whitney, 20 Me. 413; Farnum v. Patch, 60 N. H. 294, 49 Am. Rep. 313. The Supreme Court of New Hampshire, in this last-cited case, have delivered an able, exhaustive opinion upon the law of partnership as it applies to an association like the one in question, and we content ourselves with what we have already said and by making special reference to that opinion. In the light of these authorities, we think there can be no doubt that these parties were partners in the firm of R. W. McClure & Co.

2. We think it equally clear, on the facts of this case, and in view of the legal principles applicable to them, that there was no termination of the partnership enterprise, resulting from the changes occurring during its progress, by the introduction and subsequent withdrawal of Mosely, and the accession of Lucas or his capital to it, or the death of one of the original subscribers intermediate between the start of this business and the final insolvency of McClure, Lucas & Co.; that, through all these changes, the defendants' relations remained as fixed by themselves in the beginning; and that they are. liable as partners for the debts sought to be enforced in this cause. This conclusion we rest on two grounds: First. It is found by the Court of Chancery Appeals to be a fact that these defendants were.

members of the alliance lodge that, by a suspension of its rules, hurriedly qualified Mosely, so that he might bring his capital and his name to the aid of this joint undertaking. They do not claim to have been ignorant of this proceeding, or to have offered any opposition to it, either in or out of their lodge, or that they made any protest against his accession to the business. On the contrary, their zeal for the success of the movement continued undiminished. And so with regard to the withdrawal of Mosely and the introduction of Lucas in his room and stead. The record shows consultation with quite a number of these defendants as to the advisability of this change, and an agreement with them in regard thereto, and acquiescence, at least by silence, on the part of the remainder. All these parties, through the various changes in the personnel of the organization, by death and purchase, and in the firm name under which the business was carried on, not only stood by and watched the movements of the concern, as one in which they had a part, but they made no claim of dissolution by reason thereof until confronted by the claims of these complainants. It was then too late. For, conceding that either one of these acts might have been availed of by the defendants as working a dissolution of their partnership, yet, at their election, they might waive this effect. Second. The nature of this enterprise repels the idea that it was in the contemplation of the parties that either death or any transfer of shares should work a dissolution of the business. Not only was it to continue for five years, "unless two-thirds of, the stockholders ‘agreed' to discontinue the business in a shorter time," but the shares of the stockholders were transferable. Says Mr. Bates, in his work on Partnership (volume 1, § 72): "The fact of transferable shares makes such an association different, not merely in magnitude, but in kind, from ordinary partnerships, because not based upon mutual trust and confidence in the skill, knowledge, and integrity of every other partner. Hence a sale of his shares by a member, the shares being transferable, is not a dissolution. Death of a member is not a dissolution, if such was the intent and the character of the association, in that the shares are transferable, and it is governed by officers, and is in the form of a corporation, is evidence of such intent." What the text-writers and the opinions of many courts call the "delectus personarum," an element in an ordinary commercial partnership, is lacking when a partnership assumes the character of a joint-stock company with transferable shares. 2 Bates, Partn. § 581; Machinists' Nat. Bank v. Dean, 124 Mass. 81; Walker v. Wait, 50 Vt. 668; McNeish v. Oat Co., 57 Vt. 316.

It follows that the assignments of error upon the decree of the Court of Chancery Appeals, in the particulars above indicated, must be overruled. The assignments of error upon the court's decree as to the Lipscomb claim are disposed of only. The decree of that court. is in all things affirmed.

CHAPTER II.

THE CREATION OF A PARTNERSHIP.

SECTION 1.—ARISES OUT OF CONTRACT.

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Societie is a contract by consent about a thing to be had or used in common on both sides. But that only is properly called Societie, which by mutual consent is applied to that end, that there may be partnership or fellowship among the persons contracting; wherein so soon as they are fully agreed, the one is properly called the other's fellow. West's Symboleography, § 26.

PHILLIPS v. PHILLIPS.

(Supreme Court of Illinois, 1863. 49 Ill. 437.).

CATON, C. J. The only question in this case is one of fact. Was there a copartnership between John Phillips, and his four sons, or was he the sole proprietor of the business about which the controversy has arisen? It must be remembered in the outset that this is a controversy inter sese, and is not between third parties and the alleged members of the firm. Parties may so conduct themselves as to be liable to third persons as partners when in fact no partnership exists as between themselves. The public are authorized to judge from appearances and professions, and are not absolutely bound to know the real facts, while the certain truth is positively known to the alleged parties of a firm. A partnership can only exist in pursuance of an express or implied agreement to which the minds of the parties have assented. The intention or even belief of one party alone cannot create a partnership without the assent of the others. If John S. Phillips designed and really believed that there was a partnership, but to which his father and brothers never assented, and in the existence of which they did not believe, then there was no partnership, unless, indeed, a copartnership could be formed and conducted without their knowledge or consent. This would be simply absurd. We cannot in this way surprise them into a partnership of which they never dreamed.

Over 20 years ago John Phillips emigrated from Scotland and settled in Chicago with his family, consisting of a wife and four sons

GIL. PART.-8

and two daughters. He was then very poor. He was a wood turner by trade, and commenced that business in a very small way with a foot lathe. He was frugal, industrious, and honest, and prospered as but few men, even in this country, prosper. He labored hard with his own hands, and as his sons grew up they joined their work to his, all except John S., who at a proper age was put as an apprentice to learn the chair maker's trade; but, his health proving delicate, his father made an arrangement with his master by which his time was released when he had but partially learned his trade, when John S. returned home and took a more or less active part in the business of his father. His health was, however, for many years very delicate, and he was enabled to do but little physical labor. He, however, mostly took charge of the office and books, for which the testimony shows he was very well qualified, and where he rendered efficient service. In the meantime the business had grown from the smallest beginning, with a single foot lathe, to a large manufactory, with extensive machinery propelled by steam; and chair making, which was introduced. at an early day, had become the principal or largest branch of the business. Thus this business was begun and continued and prospered till 1860, when the complainant left his father and the business, and filed this bill for an account as among partners.

The business had always been conducted, as it was begun, in the name of John Phillips, the father, although in a few instances bills. were made out to John Phillips & Sons by persons with but a superficial acquaintance with them, which were paid without eliciting remark or particular attention. The books were all kept in the name of John Phillips, with the exception of a few entries made by a bookkeeper in the name of John Phillips & Sons. Indeed, there is, and can be, no question that, if there was a copartnership embracing the father and sons, the firm name adopted was John Phillips.

The complainant, to show a copartnership, proves that the sons all devoted their time and attention to the business after they attained their majority, without regular salaries as laborers or servants; that funds which they drew from the concern for their support were charged to each one separately, while neither received a credit for labor or services; that the father, upon one or two occasions, stated to third persons that his sons were interested in the business; and he also relies upon the appearances to the outside public and the interest which all took in the success of the business.

For the defense it is claimed that, following the habits and customs of their forefathers in Scotland, the sons continued to serve the father in the same relation and with the same fidelity after attaining their majority as before, under the distinct and often declared understanding that all should belong to the father during his life, and at his death the business and property should be left by him to his children, as he should think proper. If such was the understanding and purpose of the parties, then there was no partnership. Originally, undoubt