Lord Eldon in a recent case (a), no stipulation or secret agreement can protect a party from loss, because the law itself, to the right of receiving the profits of the trade, annexes a responsibility for the losses. Therefore, where two ship agents, at different ports, entered into an agreement to share, in certain proportions, the profits of their respective commissions and the discount on the bills of tradesmen employed by them in repairing the ships consigned to them, and the agreement provided, that neither should be answerable for the acts or losses of the other, but each for his own, it was held, that by this agreement they became liable, as partners, to all persons with whom either contracted in his character of ship agent (b). And this legal responsibility is not to be measured or computed by the extent of each partner's interest in the concern, since, whatever the share of the profits to which he is entitled may be, how great soever the inequality between the stipulated profit he may derive and the loss he will sustain, if subjected to general responsibility, it is immaterial to those who deal with the partnership, notwithstanding that a limited and contracted liability may properly form matter of private regulation amongst the partners themselves. In many parts of Europe, partnerships, restrictive as to liability, are admitted, provided they are entered on a register; but the law of England is otherwise, the rule being, that if a partner shares in advantages, he also shares in all disadvantages (c). As between the members of a firm and the persons having claims upon it, each individual member is answerable, in solido, for the amount of the whole of the debts contracted by the partnership, without reference either to the extent of his own separate beneficial interest in the concern, or to any private arrangement or agreement that may exist between himself and his co-partners, stipulating for a restricted re

(a) Ex parte Hamper, 17 Ves. 412. (b) Waugh v. Carver, 2 H. Bl. 235. (c) Per Lord Loughborough, Coope v. Eyre, 1 H. Bl. 37.

sponsibility (a). And upon this principle the members of an unincorporated company or society are liable to third persons, as general partners in the undertaking for which the company or society is formed (b). Those who have the management are, it is true, answerable to the whole extent of their engagements, but even as between them and the members of the society, each individual member is liable to a contribution for what they may have paid (c).

A distinction, however, prevails between an interest in the profits themselves, as profits, and the payment of a given sum of money, in proportion to a given quantum of the profits, as the reward of, and as a compensation for labour. For instance, a

remuneration made to a traveller or other clerk or agent by a portion of the sums received by or for his master or principal, in lieu of a fixed salary, does not subject the traveller, clerk, or agent to liability as a partner; such remuneration being merely a mode of payment adopted to increase or secure exertion. So a factor receiving for his commission a per centage on the amount of the price of the goods sold by him, instead of a certain sum, proportioned to the quantity of the goods sold, does not thereby become a partner (d). Neither is a person who receives from a trader an agreed sum in respect of goods sold by his recommendation, as one shilling per chaldron on coals or the like, to be considered a partner; for, there, there is no mutuality, such a case resembling a payment made to an agent for procuring orders, and having no distinct reference, in the terms of the agreement, to any particular coals purchased by the coal-merchant for resale, upon which a third person may become a creditor of the coal-merchant (e). This distinction was noticed

(a) Rex v. Dodd, 9 East, 527. Rice v. Shute, 5 Burr. 2611. Abbot v. Smith, 2 W. Blacks. 947. Wright v. Hunter, 1 East, 20. Doddington v. Hallet, 1 Ves. sen. 497. (b) Rex v. Dodd, 9 East, 527. Per Lord Eldon, Carlen v. Drury, 1 Ves. and Bea. 157, and Kinder v. Taylor, MSS. (c) Carlen v. Drury, supra. (d) Dixon v. Cooper, 3 Wils. 40. (c) Cheap v. Cramond, 4 B. and A. 670.

with regret by Lord Eldon in a recent case (a), in which his lordship expressed himself in the following manner: "The cases have gone farther to this nicety, upon a distinction so thin, that I cannot state it as established upon due consideration, that if a trader agrees to pay another person, for his labour in the concern, a sum of money, even in proportion to the profits, equal to a certain share, that will not make him a partner; but if he has a specific interest in the profits themselves, as profits, he is a partner. It is clearly settled, though I regret it, that if a man stipulates, that, as the reward of his labour, he shall have, not a specific interest in the business, but a given sum of money, even in proportion to a given quantum of the profits, that will not make him a partner; but if he agrees for a part of the profits, as such, giving him a right to an account, though having no property in the capital, he is, as to third persons, a partner." And in a still later case (b), the same very learned lord is reported thus to have observed: "It is impossible to say, as to third persons, they are not partners; the ground being settled, that if a man, as a reward for his labour, chooses to stipulate for an interest in the profits of a business instead of a certain sum proportioned to those profits, he is, as to third persons, a partner, and no arrangement between the parties themselves can prevent it." Having alluded to the opinion entertained by Lord Eldon of this refined, but known distinction, it will not be improper now to advert to the decisions by which that distinction has been settled and established. In the first case on the subject (c), a broker was employed to sell goods, under an agreement, that he was to have for his own profit, whatever he could obtain upon the sales beyond a stated sum, as a reward for his trouble; and it was held, that the broker was not a

(a) Ex parte Hamper, 17 Ves. 404. (b) Ex parte Rowlandson, 1 Rose, 89. See also Ex parte Watson, 19 Ves. 461. (c) Benjamin v. Porteus, 2 H. Bl. 590.

partner with the owner of the goods, nor did such an agreement constitute a liability in that capacity to third persons. In another case (a), the proprietor of a lighter agreed with a person who worked the lighter, that, in consideration of working her, the latter should receive one half of the gross earnings for his labour; and it was ruled by Lord Ellenborough, that such an agreement did not constitute a partnership, it being merely a mode of paying wages for labour; but that it would have been otherwise had the agreement been, that the two were to share the profits arising from the working the lighter. The same principle was acted upon in the case of Wish v. Small (b), where an agreement between two persons for a division of the net profits arising on a sale of cattle was considered as a method adopted by the one for payment to the other of the price of their pasturage. There the proprietor of cattle agreed with a grazier that the cattle should be depastured upon his land, and that, after being fattened, the latter should, as a remuneration, receive one-half of what the cattle sold for above a certain sum, which was their estimated value; and it was held by Mr. Baron Thomson, that this was merely a mode of paying for the pasture, and that it did not create a partnership between the parties. And Mr. Justice Holroyd has held, that an agreement, between a broker and a third person, that the latter should have one half of the commission, claimable by the former for brokerage, on effecting policies of insurance, did not constitute a partnership, but was a mere subcontract (c). In another case (d) on this subject, it was determined by the Court of Common Pleas, that an agent who has no interest in the capital, but who is paid by a proportion of the profits of an adventure, has not such

(a) Dry v. Boswell, 1 Camp. 329. See also Wilkinson v. Frazier, 4 Esp. N. P. C. 182. (b) 1 Camp. 331, in not. (c) Gibbons v. Wilcox, 2 Stark, N. P. C. 45. And see Muirhead v. Salter, cited 4 B. and A. 667. (d) Meyer

2. Sharpe, 5 Taunt. 74.

an interest in the goods themselves, or the profits specifically, as to render him liable, jointly with the owners, to third persons. Such are the cases establishing that distinction, the existence of which is deplored by the learned and noble lord to whose opinion we have already adverted; a distinction which may justly be open to the observation, of not having been established "upon due consideration." It does not seem to be perfectly in unison with the principle upon which every person having an actual and determinate interest in the profits is amenable to the joint creditors. Such a person, as we have seen, superinduces a liability, because, by abstracting a portion of the profits, he is depriving the creditors of a part of the fund, which they naturally regard as that out of which their demands are to be discharged. The same reason might, it is apprehended, be assigned with equal force in the case of a person, the wages of whose labour are paid by a sum proportioned to a given quantum of the profits. Nominally, indeed, there is a discrepancy between the two cases, but in what the substantial difference consists it is not easy to determine. The distinction, however, has so long prevailed, and has obtained successively the sanction and support of so many learned and enlightened judges, that it would be presumptuous to canvass or question its propriety.

A retiring partner, who receives an annuity fairly proportioned to the interest he possessed in the profits and the goodwill, at the time of his secession from the partnership, is absolved from continued responsibility to third persons (a), provided the fact of his retirement is sufficiently promulgated to the world (b). From the judgment of Lord Ch. J. Eyre in a celebrated case (c), it seems that great judge, at one time, entertained a doubt upon this question; but

(a) Young v. Axtell. cited in Waugh v. Carver, 2 H. Bl. 212. (b) Parkin 2. Carruthers, 3 Esp. N. P. C. 248. Gorham v. Thompson, Peake's N. P. C. 42. Goode v. Harrison, 5 B. and A.157. (c) Waugh v. Carver, supra.