tions.34 With these incidents firmly fastened upon it the firm was naturally regarded not as a unit in itself, but as an aggregate of the several partners who were joint owners of all its assets and joint obligors of its liabilities. This is the so-called "common-law" view affirmed by the majority of text writers and courts.35

36

In dealing with many of the problems arising out of partnership transactions courts have in numerous cases been forced to accept and apply the entity view of the nature of the partnership. As Jessel, M.R., said, "You cannot grasp the notion of agency, properly speaking, unless you grasp the notion of the existence of the firm as a separate entity from the existence of the partners.' A large number of cases can be found in which the courts for the purpose of reaching their decisions avowedly recognize the partnership as a legal person.37 As pointed out by Professor Burdick,38 this conception of the partnership is of long standing, dating back to 1832.39

34 West v. Scip, 1 Ves. 239 (1749); Kendall v. Hamilton, 4 App. Cas. 504 (1879).

35 LINDLEY, 8 ed., 136; BURDICK, 2 ed., 81; 1 BATES, § 171; GILMORE, 117; SHUMAKER, $53. Contra, BEALE'S PARSONS, I.

Riddle v. Whitehill, 135 U. S. 621, 633 (1890); Percifull v. Platt, 36 Ark. 456 (1880); Chambers v. Sloan, 19 Ga. 84, 85 (1885); State v. Krasher, 170 Ind. 43, 47, 83 N. E. 498 (1907); Faulkner v. Hyman, 142 Mass. 53, 55, 6 N. E. 846 (1886); Tidd v. Rines, 26 Minn. 201, 211, 2 N. W. 497 (1879); Matter of Peck, 206 N. Y. 55, 60, 99 N. E. 258 (1912); Byers v. Schlupe, 51 Oh. St. 300, 314, 38 N. E. 117 (1894); Wiggins v. Blackshear, 86 Tex. 665, 668, 26 S. W. 939 (1894).

36 Pooley v. Driver, 5 Ch. D. 458, 476 (1876).

37 Lacey v. Cowan, 162 Ala. 546, 549, 50 So. 281 (1909); Jones v. Bliss, 45 Ill. 143, 145 (1867); Johnson v. Shirley, 152 Ind. 453, 456, 53 N. E. 459 (1899); Lansing v. Bever Land Co., 158 Ia. 693, 698, 138 N. W. 833 (1912); Cross v. Burlington Nat. Bank, 17 Kan. 336, 340 (1876); Duquesne Distributing Co. v. Greenbaum, 135 Ky. 182, 187, 121 S. W. 1026 (1909); Woodman v. Boothby, 66 Me. 389, 391 (1876); Robertson v. Corsett, 39 Mich. 777, 784 (1877); Clarke v. Laird, 60 Mo. App. 289, 294 (1894); Clay, Robinson & Co. v. Douglas County, 88 Neb. 363, 365, 129 N. W. 548 (1911); Curtis v. Hollingshead, 2 Green (N. J.), 402, 410 (1834); Peyser v. Myers, 135 N. Y. 599, 604, 32 N. E. 699 (1892); Clarke v. Railroad Co., 136 Pa. 408, 413, 20 Atl. 562 (1890); Trumbo v. Hamel, 29 S. C. 520, 526, 8 S. E. 83 (1888); Good v. Jarrard, 93 S. C. 229, 237, 76 S. E. 698 (1912); Pierce's Adm'r v. Twigg's Heir, 10 Leigh (Va.) 406, 423 (1839). The firm has also been referred to as an "entirety." Pratt v. McGuinness, 173 Mass. 170, 172, 53 N. E. 380 (1899); Costello v. Costello, 209 N. Y. 252, 259, 103 N. E. 148 (1913); and as a "quasi-person," Drucker v. Wellhouse, 82 Ga. 129, 133, 8 S. E. 40 (1888).

38 "Some Judicial Myths," 22 HARV. L. REV. 393.

39 Warner v. Griswold, 8 Wend. (N. Y.) 665, 666 (1832).

Of equal interest are decisions not expressly based on the entity view of the nature of the partnership, but not to be reconciled with any other view, and therefore unconsciously applying it. A creditor holding security given by a partner individually is not treated as a secured creditor for the purpose of proving against the insolvent estate of the firm.40 Joint creditors of all the partners on obligations not arising out of partnership transactions cannot prove against the firm estate. When a firm signs a note as comaker with an individual the liability of the firm is that of one person for purposes of contribution.42 A bill bearing the names of two firms engaged in two distinct trades, but composed of the same members, is signed by two persons.43 A promissory note given by a firm to a partner or vice versa, or by one firm to another having a common member, is not enforceable at law by the original parties because of procedural difficulties, as the same person cannot be both plaintiff and defendant." But the contract is valid and may be enforced if the procedural difficulty is removed, as by assignment to a third person, even for the benefit of the assignee. So in the case of a balance of account due from the firm to a partner.46 A promissory note given by a firm to a partner may be enforced, though transferred after maturity.47 So also even though it be negotiated before maturity, re-transferred and again negotiated after maturity when it would be extinguished if the firm

45

40 In re Levin Bros'. Estate, 139 Cal. 350, 63 Pac. 335 (1903); In re Thomas, 8 Biss. 139 (1878); In the Matter of Plummer, 1 Phill. 56 (1841); Hiscock v. Varick Bank, 206 U. S. 28 (1906); AMES, CASES ON PARTNERSHIP, 352, n. 4.

41 Forsyth v. Woods, 11 Wall. (U. S.) 484 (1870) (semble); In re Nims, 16 Blatch. 439 (1879); In re Weisenburg & Co., 131 Fed. 517 (1904).

42 Hosmer v. Burke, 26 Ia. 353 (1868); Chaffee v. Jones, 19 Pick. (Mass.) 260 (1837). 43 Second Bank v. Burt, 93 N. Y. 233 (1883).

Thompson v. Young, 90 Md. 72, 44 Atl. 1037 (1899); Walker v. Wait, 50 Vt. 668 (1878); I AMES, CASES, BILLS AND NOTES, 747, n. 1. 45 AMES, CASES ON PARTNERSHIP, 418, n. 4. Stettheimer v. Tone, 114 N. Y. 501, 21 N. E. 1018 (1889). So under the New York code the procedural difficulty is removed and actions are brought between firms having common members. Cole v. Reynolds, 18 N. Y. 74 (1868); Schnaier v. Schmidt, 13 N. Y. Supp. 725 (1891); Mangels v. Schaen, 21 N. Y. App. 507, 48 N. Y. Supp. 526 (1897).

46 Bingham . Tuttle, 82 Hun (N. Y.) 51 (1894); Beacannon v. Liebe, 11 Ore. 443, 5 Pac. 273 (1884).

47 Thayer v. Buffum, 11 Met. (Mass.) 398 (1846); Richards v. Fisher, 2 Allen (Mass.) 527 (1861); Knaus v. Givens, 110 Mo. 58, 19 S. W. 535 (1892); Norton v. Downer, 15 Vt. 569 (1843); Sherwood v. Barton, 36 Barb. (N. Y.) 284 (1862). But see Cutting v. Daigneau, 151 Mass. 297, 23 N. E. 839 (1889).

were not personified.48 A deposit by a partner with bankers of collateral as security for any sum in which he may become indebted does not authorize its application to a partnership debt.49 Two firms consisting in part of the same members are joined in an insolvency proceeding. A non-resident creditor who has proved against one is not barred thereby from later seeking to enforce a claim against the other.50 One partnership having joined with natural persons to form a second partnership, and both being insolvent, the assets of the first partnership are to be applied to payment of its own debts, then to payment of those of the second partnership of which it was a member.51 A sheriff seizing firm property on an execution against a partner is subject to an action of trespass by the firm.52

These and other cases which might be cited indicate the impossibility of consistently applying the common-law theory of partnership. The courts have been consciously or unconsciously tending toward the entity theory, and it is not unreasonable to expect that it may eventually be openly accepted and consistently applied, if the courts are not hindered in so doing by legislation.

Heretofore legislators having occasion to deal with the partnership incidentally, while legislating for some purpose other than that of codifying the law of partnership, naturally treat the partnership as a legal person, the subject of rights and duties like a natural person or corporation. The Sales Act, Sec. 76 (1), the Bills of Lading Act, Sec. 49, the Warehouse Receipts Act, Sec. 58, produced by the Conference of Commissioners on Uniform State Laws, all define "person" for the purpose of the respective Acts as including partnerships. In five states the firm

48 Woodman v. Boothby, 66 Me. 389 (1876). But see Easton v. Strother & Conklin, 57 Ia. 506, 10 N. W. 877 (1881); Deavenport, etc. v. Green River Dep. Bank, 138 Ky. 352, 128 S. W. 88 (1910).

49 City Bank Case, 3 DeG. F. & J. 629 (1861); In re Starkey, Ex parte Freen, 2 Glyn & Jameson Bankruptcy Cases, 246 (1827); Wolstenholm v. Banking Co., 54 L. T. R. N. S. 746 (1886); Bank of Buffalo v. Thompson, 121 N. Y. 280, 24 N. E. 473 (1890). Contra, Hallowell v. Blackstone Nat. Bank, 154 Mass. 359, 28 N. E. 281 (1891); In re Hill & Sons, 186 Fed. 569 (1911).

50 Pattee v. Paige, 163 Mass. 352, 40 N. E. 108 (1895).

51 In re Knowlton & Co., 196 Fed. 837 (1912).

52 Russell v. Cole, 167 Mass. 6, 44 N. E. 1057 (1896); Haynes v. Knowles, 36 Mich. 407 (1877); Garvin v. Paul, 47 N. H. 158 (1866); Dunbarrow's Appeal, 84 Pa. 404 (1877).

may sue or be sued in the firm name.53 In eight it may be sued in the firm name.54 Many of the state tax laws treat the partnership as the subject of taxation in the same way that they do the corporation, requiring property to be listed and assessing it in the firm name. 55 Other statutes, such as Fish and Game Laws,56 and Anti-Trust Laws,57 treat the partnership as having capacity to commit a crime and be punished therefor. The Federal Bankruptcy Act, for many purposes, treats the firm as a person.

58

The first draft of the Uniform Partnership Act was prepared by the late James Barr Ames on the mercantile or entity theory, acting under instructions to that effect by the Conference.59 A few years later, after Professor Ames' death, when the work had fallen into other hands, the Committee on Commercial Law was persuaded that it was undesirable that the draftsman should be limited to the entity theory and by vote of the Conference the Committee was directed to consider the subject at large as if no such restriction had been placed upon it.60 The Committee subsequently requested Dr. Lewis to prepare a draft on the so-called common-law theory.61

Though the intention of the draftsman was apparently to proceed on the aggregate theory, the question of whether the Act embodies that theory, or any other, depends primarily on the meaning and effect of the several provisions of the Act itself.

53 Iowa Code, § 3468; 5 Howell's Mich. Stats., § 12217 (in Justice's Court); Neb. Rev. Stats., § 7594; Ohio 5 Gen. Code, § 11260; Wyo. Comp. Stats., § 4329.

54 Ala. 2 Code, § 2506; Cal. Code Civ. Proc., § 388; 2 Idaho Rev. Codes, 84112; Minn. Gen. Stats., § 7689; Nev. 2 Rev. Laws, § 5007; Utah Comp. Laws, § 2927; W. Va. Code, § 1976 (in Justice's Court); Wisc. Stats. (1911), § 2612.

55 Ark. Kirby Dig. Stats. (1904), § 6903; Ala. 1 Code, § 2108; Ariz. Rev. Stats. (1913), § 4860; Cal. Pol. Code, § 3629 (2) (6); Col. 2 Mill Anno. Stats., § 6231; Idaho 1 Rev. Codes, § 1673; Ill. Stats. Anno., § 9219; Ind. 4 Burn's Anno. Stats., § 10162; Iowa Code (1897), §§ 1313, 1317; Mass. Acts (1909), ch. 490, §§ 27, 41, 43; Mich. 1 Howell's Stats., § 1780; Minn. Gen. Stats. (1913), § 1994; Mont. 1 Rev. Codes, § 2521; Nev. 1 Rev. Laws. §§ 3626, 3629; Neb. Rev. Stats., §§ 6298, 6313; Okla. 2 Rev. Laws, § 7311; Ohio 3 P. & A. Anno. Gen. Code. §§ 5320, 5370; Pa. 5 Purdon's Dig., § 6060; Tex. Civil Stats., § 7509; W. Va. Code (1906), § 744.

56 Ohio 1 P. & A. Anno. Gen. Code, § 1462; W. Va. Code Supp. (1909), § 2803 a 4. 57 Neb. Rev. Stats., §§ 4029, 4030; Okla. 2 Rev. Laws, §§ 8222, 8225. 58 Sec. 1 (19), 5. See cases collected in COLLIER, BANKRUPTCY, 8 ed., 146. 59 Report C. U. S. L. (1905), 29; Report Amer. Bar Assn. (1905), 738.

60

Report C. U. S. L. (1910), 53; Report Amer. Bar. Assn. (1910), 1044. 61 Report C. U. S. L. (1911), 149; Report Amer. Bar Assn. (1911), 827.

Sec. 2 contains the definition of "person," to be found in the other Uniform Acts referred to.62 Sec. 6 defines partnership as "an association of two or more persons to carry on as co-owners a business for profit."63 The term "association" is ambiguous — an association may or may not be treated as a legal person. The significance of "co-owners" will be discussed later. Sec. 8 is entitled "Partnership Property," and this term is used continually throughout the Act. It implies ownership by the partnership, an entity, distinct from the partners. Sec. 8 (3) enables the partnership to take title to real estate in the partnership name, and such estate can be reconveyed only in the partnership name.64 This would seem to make the partnership as such the subject of rights, and thus a legal person. Cases which have denied the right to take legal title in the partnership name were so decided on the ground that only a legal person can take a title to real estate, and that the partnership is not a legal person.65 Sec. 9 (1) makes every partner the agent of the partnership, not of the partners.66 Sec. 12 speaks of a fraud by a partner on the partnership, not on his co-partners. If "partnership" means merely "all the partners," this involves a partner's committing a fraud on himself.67 Sec. 18 (a) makes it the duty of a partner

62 Sec. 2. (Definition of Terms.) "Person" includes individuals, partnerships, corporations, and other associations.

63 Sec. 6. (Partnership Defined.) (1) A partnership is an association of two or more persons to carry on as co-owners a business for profit.

64 Sec. 8. (Partnership Property.) (3) Any estate in real property may be acquired in the partnership name. Title so acquired can be conveyed only in the partnership

name.

65 Holmes v. Jarrett, Moon & Co., 7 Heisk. (Tenn.) 506 (1872); Tidd v. Rines, 26 Minn. 201, 211, 2 N. W. 497 (1879); Riddle v. Whitehill, 135 U. S. 621, 633 (1889).

66 Sec. 9. (Partner Agent of Partnership as to Partnership Business.) (1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

67 Sec. 12. (Partnership Charged with Knowledge of or Notice to Partner.) Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.