DIVISION F PARTNERSHIPS Part I. General Nature and Formation of Partner Part II. Part III. ships. Firm Name, Capital and Property. Mutual Rights and Obligations of Partners. Part IV. Rights of Third Persons against the Part ners. Part V. Dissolution of the Partnership. PARTI GENERAL NATURE AND FORMATION OF Chapter 67. The General Nature of Partnerships. § 560. (Partnerships, Sec. 1.) Partnerships defined. Case 566. Uniform Partnership Act, Sec. 6. "A partnership is an association of two or more persons to carry on, as co-owners, a business for profit." Question 566: Define a partnership? (Note: To appreciate the definition of a partnership, the various phases suggested by the section headings throughout this chapter must be understood.) § 561. (Partnerships, Sec. 2.) The partnership not an entity. Case 567. E. I. Dupont Demours Powder Co. v. Jones Bros. et al., 200 Fed. 638. Facts: A partnership was composed of two partners, and had its place of business in the county where one of the partners resided, but the other partner resided in another county. The Ohio law provided that a conditional sale contract to be valid against bona fide purchasers and mortgagees and creditors shall be filed with the county recorder of the county where the party signing the instrument resides. The conditional sale in question was signed in the partnership name by one of the partners, and recorded in the county where the partnership business was carried on, but not in the other county. Jones Bros. went into a receivership and the receiver sold the goods under an order of court. This is a suit against the receiver for the proceeds of the sale by the conditional vendor. The receiver claims that as to him, as a representative of creditors, the conditional sale is invalid because not properly recorded. It is contended that under this statute and a statute permitting a partnership to sue and be sued in the firm name—a partnership is made an entity, and that filing the contract in the place of business of the partnership is filing it in accordance with the law. Point Involved: The nature of a partnership as an entity or a relationship between parties. SATER, D. J.: As regards the doctrine of partnership entity, it may be observed that one conception of a partnership, arising out of the agreement on which it is founded, is that it is an aggregation of persons associated together to share its profits and losses, owning its property and liable for its debts. Another conception is that it is an artificial being, a distinct entity, separate in estate, in rights, and in obligations, from the partners who compose it. Re Bertenshaw, 157 ed. 363, 365, 85 C. C. A. 61, 17 L. R. A. (N. S.) 886, 13 Ann. Cas. 986. The intervener adopts the latter conception, and relies on Curtis v. Hollingshead, 14 N. J. Law, 402, 409, 410; Pooley v. Driver, L. R. 5 Ch. D. 458, and Parsons on Partnership (4th Ed.) § 184, to which may be added the discussion in Bates on Partnership, c. 8, § 170 et seq., and authorities cited in Re Telfer, 184 Fed. 224, 106 C. C. A. 366 (C. C. A. 6). In West v. Valley Bank, 6 Ohio St. 168, 173, a firm is characterized as an ideal mercantile person. This is the mercantile conception of a partnership. Gilmore, Part. 114 et seq. The legal conception, however, is quite different. Gilmore, Part. 117; Bates, Part. § 170. In Byers v. Schlupe, 51 Ohio St. 314, 38 N. E. page 121, 25 L. R. A. 649, the attitude of a partnership in the eye of the law, as viewed by the Ohio Court, is stated thus: ""The members of a partnership do not form a collective whole, distinct from the individuals composing it; nor are they collectively endowed with any capacity of acquiring rights or incurring obligations. The rights and liabilities of a partnership are the rights and liabilities of the partners. 1 Lind. Part. 5. It is not a creation in which the identity of the individual members is merged and lost, in seeking to enforce against them the obligations of the firm.' "The doctrine of partnership entity, in the sense that a partnership is an ideal artificial person or being distinct from the individuals composing it, and in which the identity of the individual members is merged and lost, does not obtain in Ohio. Nor does the judicial recognition of the doctrine of partnership entity change the established rule fixing the substantive rights either of the creditors of the partnership or of its individual members. Re Telfer, 184 Fed. 230, 106 C. C. A. 366. The partnership entity, after the enactment of the remedial statute permitting it to sue or be sued in the firm name, remained precisely the same as that prior to its passage, plus the remedial right thereby conferred. Such enactment does not affect the application of the statutory requirement that a chattel mortgage [or conditional sale] shall be filed with the recorder of the county where the mortgagor resides at the time of its execution. The same rule consequently applies as to the filing of such an instrument in Ohio as in those states in which the common-law rule is in force-the rule that actions affecting partnerships must be brought in the name of or against the individuals composing the same." Question 567: Is the partnership an entity? How did the question come to be raised in this case and how did the Court decide? |