the full corporate privileges; and companies whose special act withholds from them some of the naturalia of a corporation. They are generally termed quasi corporations. Proper corporations. III. PROPER CORPORATIONS. A general description has been already given of such associations. They can only be formed by charter or special act. IV. CORPORATIONS WITH PECULIAR PRIVILEGES AND AGGRESSIVE POWERS. Privileged corporations. Order of treatment. Such corporations can only be created by Act of Parliament, and are now generally formed by combination of their special acts with the provisions of one or more of the Consolidation Acts, under which, by their special acts, they are brought. The Consolidation Acts have been enumerated in the Introduction (p. 11). It was originally intended to treat of each of these four classes seriatim, exhausting the one before entering on the other. But as the work advanced, it was found that this method would involve much repetition, and a continual reference to earlier chapters; and that the important object of showing how the fundamental principles of the two primary types-viz. the simple partnership and the corporation-have been by legislative aid expanded, limited, or supplemented, so as to meet the requirements of every kind of undertaking, could not in this manner be satisfactorily attained. What is deemed a more commodious method has accordingly been adopted. The four classes will be examined under each division of the subject, carrying them on abreast from their formation to their dissolution, and thus, while avoiding repetition, rendering the one illustrative of the other. CHAPTER V. FORMATION OF THE PARTNERSHIP RELATION IN PRIVATE COPARTNERIES AND COMMON LAW COMPANIES. necessary. PARTNERSHIP is one of those contracts which do not require Writing not writing for their constitution. It is constituted by mere consent, and may be proved not only by written contract, but by facts and circumstances (a). important. In all cases, however, when practicable, the contract should be Writing reduced to writing; for, though this will not in general avail in questions with the public, it will obviate many difficulties which may otherwise arise in determining the rights, duties, and liabilities of the partners among themselves. The written contract of partnership generally assumes the form of a contract or of partnership articles. Such documents are at best only limitatory of or auxiliary to the common law, which is always ready to break in when it has not been effectually excluded by contract. What ought to be contained in them will therefore fall to be considered at a subsequent part of this work, after the operation and effect of the rules of the common law have been explained. When the contract of partnership has been embodied in a document properly authenticated, the fact that the relation exists, as well as the date of its commencement, can generally be determined without much difficulty; but when, as frequently happens, the existence of the partnership relation has to be inferred from facts and circumstances, the problem becomes very complicated and embarrassing. (a) 2 Bell's Com. 622; 1 More's Lect. 198. Stevenson v. Wright, 1687, M. 12732; Logan v. Brown, 1824, 3 S. 15; Thomson v. Campbell's Trustees, 1831, 5 W. and S. 16; M'Kinlay v. Gillon, 1830, 9 S. 90, aff. 5 W. and S. 468; Difficulties relation has to from facts and when the be inferred circumstances. No test of the partnership relation. No practical definition. These difficulties will be understood, when it is borne in mind that the inquiry is not merely as to the date of the commencement or the termination of a particular firm or company, but frequently extends to such questions as the following: Are A. and B. partners of a particular concern? When did they become so, or when did they cease to be so? Does the partnership relation exist between A. and B., though neither is in connection with any ostensible company or firm? Are B. and C. dormant partners, though admittedly they do not appear to take any concern in the business of the firm? Furthermore, persons who have not constituted partnership inter se, not unfrequently find themselves involved in liabilities to the public to the same effect and extent as if they had; and this state of matters is often denominated quasi partnership, a phraseology which, though it may be conducive to brevity of expression, is often productive of great confusion of thought. The complication and embarrassment to which these various circumstances have given birth are familiar to every student of the law of partnership; and it must be admitted that neither in England nor Scotland have the courts succeeded in laying down practical rules for their effectual removal. In one sense, it is no doubt a question of fact to be ascertained by a jury or its equivalents, whether, in the absence of a written contract or equivalent admission, the partnership relation is established by the facts and circumstances of the case. But this presupposes the possibility of distinctly ascertaining what is of the essence of the contract, or at least of fixing upon some test which shall serve as a means of deciding in all cases whether the facts, as established, are to be taken as evidence of the existence of partnership. The difficulty as to the law of the question would be removed, if the Legislature had arbitrarily defined what constitutes partnership, or if lawyers could have fixed on a definition of that contract at once exhaustive and practical. But such has not been the case. The Legislature has not as yet spoken authoritatively; and no definition has ever been given of partnership, which is either sufficiently exhaustive or sufficiently exclusive to be adopted as a practical rule. In the absence of a practical definition, the tribunals have proposed. endeavoured to meet the difficulty by fixing on certain elements, the presence or absence of which has been supposed to furnish a test of the partnership relation. Sharing of profits, contribution to Various tests losses, mutual agency, etc., have been all assumed as tests of this kind, and have been more or less in vogue at different periods. When judiciously applied, they are undoubtedly of excellent use in the interpretation of evidence; but their application is often accompanied with great embarrassment, and they cannot be taken as unfailing tests. contract. The reason of this becomes apparent when the nature of part- Partnership not a simple nership is considered. It is not a simple contract, but one which combines in itself the principles of many contracts, e.g. agency, suretyship, guarantee, co-ownership, loan, etc., all of them forming elements which receive more or less prominence, according to the nature and purposes for which the society is formed. Now, sharing of profits, contribution to losses, agency express or implied, are elements which afford strong indications of the partnership relation, and in certain circumstances, and in the absence of proof to the contrary, often irresistibly lead to that conclusion. Yet, taken separately, they may frequently be nothing more than consequences of other contracts; e.g. loan, suretyship, simple mandate, and the like. In short, while they are consequences of partnership, they are also consequences of other contracts; and whether they evidence the one or the other, must be judged of from the extent to which they are in combination, and the complexion of the surrounding circumstances. We must not therefore be surprised, if, in reviewing the decisions on this important subject, we find dicta seemingly, and sometimes actually, at variance with each other; nor should we look so much for absolute rules, as for indications of how evidence is most likely to be dealt with. In prosecuting our inquiries into this branch of the subject, we shall consider first, the constitution of partnership properly so called, i.e. of the contract whereby the parties to it are on the one hand entitled to the rights, and on the other incur the liabilities of partners. We shall then proceed to examine those cases in which they who are either not partners, or have not been proved to be such, are nevertheless subjected in liability to the public as though they were. And lastly, we shall endeavour to point out the differences between formed and contemplated partnership. Evidenced by right to share profit and loss. Right to share profits. CONSTITUTION OF PARTNERSHIP PROPER. The contract of partnership is usually said to infer a community of interest in the profits and losses, and in the capital of the concern, and also a community of right to share in the management. Cases, however (as we shall afterwards see), are of continual occurrence, in which all of those elements are not found in combination; but yet in which true partnership has been undoubtedly created. A more correct notion of the contract will be obtained if we take the following as a fundamental principle, that wherever persons agree to carry on a certain trade, business, or undertaking of a mercantile kind, on condition of sharing the profits and losses arising therefrom, they constitute amongst themselves the contract and relation of partnership, and that without the necessity of making use of the term partnership or its equivalents (a). But when the fact of partnership is disputed, the evidence of a contract to share profit and loss is seldom so clear as this amounts to; and accordingly, if an agreement to share profits as such be established, this has for a long time been taken as ex facie evidence of the existence of partnership. A right to share profits is of the very essence of partnership. Any agreement by which a man is rendered liable for the smallest share of loss without the chance of profit, may indeed form a valid contract, but it is not the contract of partnership. This principle holds good in every system of European law, and is evident from the very definitions which are given of the contract; all of which, how much soever they may differ in other respects, agree in requiring the right to participate in profits (b). It is in virtue of this principle, that societies and clubs, whose object is not the sharing of profits, are not regarded as partnerships; as, for example, societies for the protection of trade (c), or clubs for political purposes, or for the convenience of their members (d). (b) See Appendix. (a) Voet. Com. ad Pand. 1. xvii. t. 2, pro socio, s. 1; Ersk. iii. 3, 18; Green v. Beesley, 2 Bing. N. C. 108; Greesham v. Gray, 4 Irish Com. Law Rep. 501. (c) Caldicott v. Griffiths, 8 Ex. 898. 172; |