its purposes, and he is not deprived of that power, notwithstanding the other partners offer to indemnify him against the loss that may be sustained by their embarking in transactions which were not, in the first instance, intended to form a part of the partnership concern; for, whilst the partnership continues, the right of a partner is to hold his copartners to the specified purposes of their association, and not to rest upon indemnities with respect to what he has not contracted to engage in (a). And this principle (upon which a court of equity will act in the case of a common partnership) applies with equal force to all companies or societies whose objects are, at the time of their institution, defined, and who are not purposely invested with a power of binding the body by a majority, or any select part of it. Such companies, if there be one dissentient member, cannot embark in undertakings not originally contemplated; nor can they compel that member to retire from the company on receivg his subscribed capital and interest, in order thereby to leave them at liberty to pursue their extended operations. And it is not a sufficient answer to the requisition of the shareholder, who calls upon the company to observe the objects for which the company was formed, to urge, that he may dispose of his shares at a price considerably beyond what he gave for them; because, for that very reason, coupled with having the partnership concern carried on according to the contract, he may expect augmented improvement in the value of his shares (b). A covenant, in articles of partnership, that none of the partners shall carry on, for their respective private benefit, that branch of commerce in which they are jointly engaged, is not only allowed, but is the constant course (c). Indeed the principles of a court of equity will not permit that parties

(a) Natusch v. Irving, Appendix, post. (c) Morris v. Colman, 18 Ves. 438.

(b) Id. ibid.

bound to each other, by express or implied agreement, to promote an undertaking for their common benefit, should any of them engage in another concern, which necessarily gives them an interest directly adverse to their original undertaking (a).

In considering the constitution of a partnership, the inquiry will be chiefly directed to its requisites in relation to strangers or the world at large. Inter se a difficulty seldom arises. The question is generally, not between the parties as to whether a partnership is formed, or what shares they shall divide, but respecting creditors claiming a satisfaction out of the funds of a particular house, who shall be deemed liable in regard to these funds. For when a partnership is entered into by persons engaging in a commercial or any other trade or speculation, there is usually a contract or agreement between the parties, providing for its existence, and defining the rights of the partners respectively. By this contract, where it subsists, the partnership is regulated: if there be not an express agreement, the partnership, as regards its regulation, is governed by the contract implied by the law from the relation of the parties. In the latter case, the concurrent opinion of all the writers on the civil law is, that the loss must be equally borne, and the profits equally divided (b). And by the law of England, where a partnership is constituted by the mere act of trading jointly, each of the persons so trading, though liable to creditors to the whole extent of the losses, is only responsible inter se for his own aliquot proportion of them; and, with respect to the profits, each will be considered as equally interested in the joint concern, unless the contrary be made to appear. There is, indeed, a nisi prius decision, in which it seems to have been

(a) Glassington v. Thwaites, 1 Sim. and Stu. 133.

(b) Et quidem si nihil de partibus lucri et damni nominatim convenerit, æquales scilicet partes et in lucro et in damno spectantur. Quod si expressa fuerint partes, hæ servari debent. Nec enim unquam dubium fuit, quin valeat conventio, si duo inter se pacti sint, ut ad unum quidem duæ paries et lucri et damni pertineant, ad alium tertia. Instit. lib. 3. t. 26. s. 1.

assumed, that each member of a firm is not, in all cases in which the rights of the partners are undefined, necessarily intitled to an equal share of the profits. In that case, a father, on his son's coming of age, told him that he should have a share in his business, and the son was held out to the world as a partner, and acted, in that capacity, between five and six years, and upon an issue, out of Chancery, to ascertain the son's interest, Lord Ellenborough said, that he was not to be presumed to be entitled to a moiety, on account of the indefinite nature of the agreement, but left it to the jury to consider what was a fair proportion, under the particular circumstances of the case; and the jury gave the son one fourth part of the profits (a). But Lord Eldon has expressed his dissatisfaction at the result of this issue, observing, that he had no conception of the principle upon which a jury, on the footing of a quantum meruit, could have held the son entitled to a quarter share only; for, as no distinct proportion was ascertained, by force of any express contract between the parties, they must, of necessity, have been equal partners, if partners in any thing (1). However, articles of partnership are, in most cases, executed at the time the partnership is constituted, and they are capable of being determined legally by their expressive form. The duties and obligations, as well as the rights of the partners inter se, being ascertained and defined by the several provisions contained in such articles, they are regulated, and can alone be enforced, consistently with the terms and stipulations agreed upon. With reference to their own individual interests, and as a matter of private arrangement, joint traders may stipulate among themselves that they are severally to be responsible only for their own losses and defaults, or they may contract for any specific apportionment of the losses in their discretion. The same observation

(a) Peacock v. Peacock, 2 Campb. 45.

(4) S. C. 16 Ves. 56.

applies to the profits, the division and distribution of which is more peculiarly the object of compact or agreement. In fact, the various stipulations and provisions, relating to the manner in which the business. is to be conducted, the space of time for which the partnership is to endure, the capital each is to bring into the trade, the proportion in which the profits and loss are to be divided, the mode agreed upon for settling the accounts, together with the various covenants adapted to the circumstances of each particular case, are purely and entirely the subject of personal and private agreement and arrangement; and, in whatever way they may ultimately be settled, they cannot be impeached, unless they interfere with or contravene any rule or principle of law. But although, where a partnership has, for its basis, written articles, the different provisions of which have been acted upon and observed by the partners, those articles are to be regarded as supplying the rule by which to determine any disagreement between them, yet the subsequent transactions of the partners may control and supersede clauses in those articles, or may furnish evidence of a new agreement different from the written articles, provided those transactions show a probability, amounting almost to demonstration, that the articles were otherwise intended; for, whatever may be the language of a partnership-deed, the dealings and transactions among the partners may be such as to amount to distinct evidence, that some of the articles in that deed were waived by all parties, and were not to be considered as rules which should regulate the rights and duties of the partners (a).

A partnership may legally subsist as between individuals and the world, and yet not as between the individuals themselves. For the former purpose, appearing as partners, or participating in the profits

(a) Geddes v. Wallace, 2 Bligh, 270., and see Jackson v. Sedgwick, 1 Swanst.

of a trade, is sufficient; for the latter, the parties must have joint shares in the stock, and must be jointly interested in the general trade or the particular adventure (a). Thus, a right to share in the profits of a particular adventure will render a person liable to third persons, as a partner, in respect of transactions arising out of the particular adventure in the profits of which he is to participate; but still it does not invest him with the character of partner inter se, nor does it give him any interest in the property itself which is the subject-matter of the adventure; the power over the property remains in the person who furnished the capital with which it was purchased (b). And, notwithstanding a person, who is not in fact a partner, may incur the responsibilities of a partner to those who are unconnected with the firm, it does not follow that he contracts the same responsibilities as between himself and the firm. For although a joint and mutual liability necessarily attaches upon, and results from a co-partnership, it is not a consequence that it necessarily constitutes one, or that, as there can be no partnership without a joint responsibility, there can be no joint responsibility without a partnership. Thus, a servant or manager, engaged in a partnership concern, who acts as one of the partners in the partnership, is unquestionably a partner with respect to the world, and liable for loss to the creditors of the partnership, yet he is not so liable as between himself and his employers. Such a partner stands distinguished from the others in the nature of his interest; he is one capable of being dismissed at any time, and, as he has no stock in the partnership, he consequently can exercise no dominion over any part of it. It would, indeed, be singular if he were to be held responsible inter se ; because if, in any one year, his proportion of a loss amounted to a sum which equalled or fell short of his salary, that proportion would substantially or

(a) Hesketh v. Blanchard, 4 East, 141. (b) Smith v. Watson, 2 B. and C. 401.