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so long as in our federal system the Congress of the dominant nation chooses to respect punctiliously the jurisdiction of the legislatures of its several states, this rule of our constitutional law will continue to add its complications to a matter already complex enough in itself.
Bruce Wyman. BOSTON, MASS.
THE UNIFORM PARTNERSHIP ACT
THE "HE conference of commissioners on Uniform State Laws, held
at Washington, October 14, 1914, approved the eighth draft of the "Act to Make Uniform the Law of Partnership” (hereinafter called the "Act"), and have recommended it to the state legislatures for adoption. It has already been introduced in the legislatures of Massachusetts, Pennsylvania and other states. The literature on the subject at present available consists in explanatory notes by the learned draftsman, Dr. William Draper Lewis, contained in a pamphlet 1 issued by the Conference, and magazine articles by Dr. Lewis, Professor Samuel Williston and Edmund Bayly Seymour. As the law of partnership is not a branch of the law with which the legal profession is especially familiar, comment and criticism from every point of view should be of welcome assistance. The writer proposes to call attention to features of the Act not fully dealt with in the articles referred to, but which, it is submitted, should be given consideration by anyone forming a judgment as to the desirability of adopting the Act.
The initial difficulty in undertaking a codification of the law of partnership is involved in the question of the nature of the partnership. Professor James Parsons, commenting on statements of Lindley and Pollock to the effect that the law was ripe for codifica
* The writer wishes to acknowledge his indebtedness to Professor Brannan, of the Harvard Law School, for helpful criticisms and suggestions during the preparation of this article.
1 “The Uniform Partnership Act, adopted by the conference of Commissioners on Uniform State Laws, with explanatory notes."
2 Lewis, “The Desirability of Expressing the Law of Partnership in Statutory Form,” 60 UNIV. OF PA. L. REV. 93; Williston, “The Uniform Partnership Act, with Some Remarks on Other Uniform State Laws,” 63 UNIV. OF PA. L. REV. 196 (Prof. Williston is a member of the Conference's Committee on Commercial Law); Lewis, “The Uniform Partnership Act,” LEG. INTELL., Feb. 12, 1915; Seymour, “The Uniform Partnership Act, An Appreciation,” LEG. INTELL., Feb. 19, 1915.
tion, said, “They stumble and halt on the very threshold. The definition of partnership breaks them all up. Having no guiding principle to start with, how can they create a system?”3 Ten years later, referring to the English Partnership Act of 1900, he declared that “it ignores the theories by which the cases must be classified. This is codification run mad. The Act leaves out of its purview the theory or fundamental principle which underlies the relation, and by enacting makes inflexible the commonplace details of partnership.” 4
The issue is whether the partnership is in itself a legal person, owning the property and incurring obligations to the partners individually and to third persons, or whether the partners are the only legal persons owning the so-called partnership property and owing the so-called partnership obligations. The former view is called the mercantile or entity theory; the latter, the commonlaw or aggregate theory.
A legal person is an entity having legal capacity for rights and obligations. Whether or not the partnership is an entity distinct from its members is a question of fact. It appears that modern jurists are coming to accept the view that any group of human beings united for a common purpose forms a real or natural entity distinct from its members. Whether or not the partnership entity is or should be treated as a legal person is a legal question. Let us see how the matter has been dealt with by various legal systems. The classical Roman law took cognizance of the contract between the partners under the name of societas. Like other contracts it had no effect as to persons not parties thereto, and the partnership was not treated as a juristic person.” Partners could not, unless duly authorized, bind each other to obliga
3 PARSONS, PARTNERSHIP, 1 ed., Intro. lxiii. * Id., 2 ed., Pref. viii.
6 SALMOND, JURISPRUDENCE, 4 ed., 273; HOLLAND, JURISPRUDENCE, II ed., 93, MARKBY, ELEMENTS OF LAW, 6 ed., 84; 1 PLANIOL, Droit Civil, 6 ed., 8 362; GAREIS; SCIENCE OF LAW, § 15 (1); GRAY, NATURE AND SOURCES OF THE LAW, 27.
6 GIERKE, POLITICAL THEORIES OF THE MIDDLE AGES, Intro. by Maitland, xxvi ff; Machen, “Corporate Personality,” 24 Harv. L. REV. 253, 258; MORAWITZ, PRIVATE CORPORATIONS, 1; Pollock, “Has the Common Law Received the Fiction Theory of Corporations ?" 27 L. QUART. REV. 219; Bibliography of Foreign Literature in 1 PLANIOL, Droit Civil, 6 ed., $ 2015.
2 CuQ, INSTITUTIONS JURIDIQUES DES ROMAINS, 441; MOYLE, INSTITUTIONUM, 3 ed., 453.
tions, and were not liable in solido, but could require the creditor to exhaust the joint assets before seeking execution against the separate assets of the partners.' The limited development of partnership law among the Romans was largely influenced by the analogy of consortium among co-heirs.10
During the later middle ages partnership law was developed as a branch of the law merchant. The member of a firm acquired the power to represent his partners and bind them to obligations, to which they were liable in solido.11 Modern civil law countries have by their commercial codes made of the partnership something quite different from the old Roman societas.
The German commercial code, while not expressly declaring the commercial partnership to be a juristic person, in many ways treats it as such, providing that “A partnership can in its firm name acquire rights and contract obligations, acquire property and other real rights in immovables, can sue and be sued." 12 Gareis, one of the most authoritative commentators on the commercial code, says that its juristic personality is thus recognized, la and Lehmann appears to admit that conclusion with some qualifications.14 The Swiss code is in this respect similar to the German.15 The Japanese code, modelled on the German, explicitly declares the partnership to be a juristic person.
Though there is no explicit provision in the French code, doctrinal writers agree that the commercial partnership has from time immemorial been recognized as a juristic person, and since 1890 at least all partnerships have been treated by the courts as
2 Roby, ROMAN PRIVATE LAW, 132; MOYLE, INSTITUTIONUM, 3 ed., 454. 9 MOYLE, INSTITUTIONUM, 3 ed., 453. 10 SALKOWSKI, INSTITUTES, $ 124; Pound, "Scope and Purpose of Sociological Jurisprudence,” 24 Harv. L. Rev. 603; PARSONS, PARTNERSHIP, 1; 2 Roby, ROMAN PRIVATE LAW, 128, n. 1.
11 MITCHELL, EARLY HISTORY OF THE LAW MERCHANT, 124-140; also printed as “Early Forms of Partnerships,” 3 Select Essays Anglo-American Legal History, 183.
12 HANDELSGESETZBUCH (1897), $ 124, Platt's Translation.
13 GAREIS, HANDELSGESETZBUCH, 124 (1). See also Ames's comments in American Bar Association Reports, 1905, 736.
14 LEHMANN, HANDELSRECHT, 2 ed., 293 ff.
1 PLANIOL, Droit Civil, 6 ed., $ 3040; 2 id., § 1956; 2 BAUDRY-LACANTINERIE, PRÉCIS DE DROIT CIVIL, II ed., 1021.
juristic persons.18 Belgium, Spain,20 Chili 21 and Mexico 22 explicitly declare the partnership to be a juristic person. Italy, 23 Roumania 24 and Portugal 25 declare it to be a juristic person so far as third persons are concerned. In Russia, 26 Scotland 27 and Louisiana 28 it is treated as a juristic person. The fact that in all of these civil law countries the solution of recognizing the legal personality of the partnership has been reached, although not to be found in the classical Roman law, is strong evidence of its inherent merit and utility in commercial environments not unlike our own, and makes it probable that eventually we shall reach the same result.
The Anglo-American law of partnership is a mixture of the civil law, the law merchant and the common law.29 The earliest treatises were full of citations to civilians,30 and the argument of counsel in a leading English case shows that practitioners also were familiar with the continental writers.31 The custom of merchants at first was matter of fact to be found by the jury, not the court. This accounts for the barrenness of early cases in propositions of substantive law.32 Lord Mansfield undertook the task of incorporating the law merchant into the common law, himself making a diligent study of its customs,33 but unfortunately had few occasions to deal with partnership cases.
The important contributions of the common law to the subject of partnership were joint ownership of property and joint obliga
I PLANIOL, DROIT CIVIL, 6 ed., $ 2500; 2 id., § 1957. 19 Code de Commerce (1873), LX art. 2. 20 Code de Commerce (1885), § 116. 21 Code de Commerce (1865), 8 348. 22 Code de Commerce (1889), 8 90. 23 Code de Commerce (1882), $ 77. 24 Code de Commerce (1887), $ 78. 25 Code de Commerce (1888), § 108. 26 Code de Commerce (1893), Tshernow's Translation 21. 27 Bell Laws of Scotland, 6 ed., $ 357. English Partnership Act of 1890, $ 4 (2). 28 Stothart v. Hardie, 11o La. 696, 700, 34 So. 740 (1903). 29 COLLYER, PARTNERSHIP, I. 30 WATSON, PARTNERSHIP (1794). STORY, PARTNERSHIP (1841). 31 Waugh v. Carver, 2 H. Bl. 235 (1793). 32 SCRUTTON, ELEMENTS OF MERCANTILE LAW, 13.
2 CAMPBELL, LIVES OF CHIEF JUSTICES, 407 n.; BIGELOW, CENTRALIZATION AND THE Law, 16. Mansfield was also well read in the continental writings on mercantile law, as appears from his opinion in Luke v. Lyle, 2 Burr. 882 (1759).