this advice, it is proper to note, else it be misunderstood, that a verbal agreement is absolutely as binding as a written one, provided it does not come within the limitations of the Statute of Frauds. It is, however, a fact that disputes arising out of misunderstanding are not as frequent where written agreements exist. Partnerships may be divided into the following main classes. with proper subdivisions:

(1) General Partnerships, subdivided as follows:

(a) Trading Partnerships, formed for the purpose of buying, vending, etc.

(b) Non-Trading Partnerships, which do not buy, manufacture or vend as a principal part of their undertaking.

(2) Special Partnerships, formed for one special enterprise. (3) Mining Partnerships; the chief feature of this class of partnerships is that while the co-owners are partners to the profits earned, the partnership does not extend to the property.

(4) Limited Partnerships, formed only under special statute; the dominant feature of this class of partnerships is that as long as certain of its members are inactive, their liability is limited to the amount actually invested by them.

(5) Joint Stock Companies; being ordinary partnerships, with this distinction, however, that the members thereof may transfer their interests without dissolution of the firm, as proprietorship is proven by the possession of shares of stock, similar to the shares of corporations.

There are also various kinds of partners, and hence the difficulty arises as to who are partners.

The number of persons who may unite for the purpose of forming a partnership is not limited in any of the states, while in England the Limited Partnership Act of 1907 provides that the number of persons who may form either a "General" or "Limited" partnership is restricted to ten in the case of a banking business, and to twenty in the case of any other business.

KINDS OF PARTNERS:

(1) Public or Ostensible Partner; an active and known member of the partnership.

(2) Secret Partner; although in reality a partner, he conceals the fact from the public.

(3) Nominal Partner; having no partnership relation with the other members of the firm, yet held forth as such by his own consent, because he has given his credit to the firm.

(4) Silent Partner; taking no active part in the business of the firm, but sharing profits.

(5) Dormant Partner; he is both unknown as a partner and inactive in the business.

(6) Special or Limited Partner; where the statute provides for limited partnerships, he contributes a certain sum of money and is not liable for the debts of the firm beyond the sum he contributed.

With regard to the last kind of partners mentioned, it is important to notice that no absolute immunity is assured in any event to the special partners in a limited partnership. These relations are the creations of statute, but the members are real partners, and by slight irregularities may become general partners. Great caution, therefore, should be observed in entering upon such relations, to see that due safeguards are taken in contracts of limited partnerships.

There are certain distinctive features, characteristic to partnerships, viz.:

(1) Each partner is an agent for his co-partners in all the transactions falling within the scope of the partnership, and therefore, binds all the members of the firm to any contract he may enter.

(2) In the absence of an agreement to the contrary, each partner shares equally in the profits or losses of the business. The partnership investment does not determine the partners' interests in the business. There is no necessary relation between a partner's investment and his participation in the profits or losses of the firm.

(3) In case of insolvency each partner is personally liable for the firm's obligations. It is in this most important feature that a partnership is so distinctly different from a corporation. (4) All firm property, including goodwill or other intangible possessions form the common fund of the partnership. This is also true of any subsequent acquisitions of property with partnership funds.

(5) A new member cannot be introduced into the firm unless

all partners agree to it. This is in fact the creation of a new partnership.

(6) A partner may on dissolution demand an accounting to ascertain his interests in the business.

(7) A partner cannot claim any interest either on his required investment, or on any excess, unless expressly so agreed. Nor can he claim any interests on profits left in the business.

(8) If a firm dissolves and no disposition is made as to the use of the firm's name, each partner has an equal right to its use, and may engage in business hereunder.

(9) Each partner has the same power over the property of the firm.

(10) A firm cannot hold real estate, as the law does not recognize it as a legal entity, capable of holding real property.

(11) A person who is admitted as a partner in an existing firm does not thereby become liable for debts incurred previous to his admission into the partnership.

(12) The retirement of a partner does not release him from debts of the firm incurred previous to his retirement. A retiring partner may be so released by an agreement between the new firm, the creditors, and himself. The assent of the creditors is important; such assent, however, may be implied and need not be expressly given.

(13) A retiring partner remains liable not only for existing debts, but may also be held liable for debts incurred after his retirement unless he has given due notice thereof to all those who had dealings with the firm.

(14) The acts of each partner, in the usual business relating to the firm, are the acts of all, even if contrary to the partnership agreement, unless the party with whom he is dealing has knowledge of his want of authority. Thus when a partner sells the goods of the firm, and misapplies the proceeds of the sale, he nevertheless gives a good title to the buyer.

(15) No services, ordinary or extraordinary, can be charged against the firm.

(16) A partner cannot bind the firm by a guarantee of the debt of a third person, unless such has been the practice of the firm.

In connection with the sixth essential mentioned above, there

is an interesting case reported in The Accountant's Journal, Vol. 18, page 280. Briefly stated the contents are as follows:

One of the members of a partnership, about to sell his interest in the firm of his co-partners, in order to determine the value of his share of interest in the business, demanded an investigation by a professional accountant, upon article 16 of their partnership agreement, which read:

"Proper books of account shall be kept by the managing partners for the time being, in which all transactions relating to the partnership business shall be duly entered, and such books, together with all bills, letters, and other writings which shall from time to time reach the said partnership business, shall be kept at the Counting House of the partnership, and each of the partners shall have free access, examine and copy, or take extracts from any of the books and writings of the partnership at all reasonable times."

This the co-partners refused, claiming that it was sufficient that the firm auditor should present proper statements, or that the partner himself, but not through a professional accountant, investigate and examine the correctness of the accounts. While the first court sustained the contention of the co-partners, stating that it is a novelty, the Court of Appeals reversed the decision, remarking:

"When a right to do an act was conferred by a written instrument, in the absence of any limitation of the right to a merely personal right, it could not be said that the act might not be done by means of an agent."

It may perhaps be interesting to note how favorably the English Partnership Acts of 1890, by which, in the absence of an agreement to the contrary, the rights, interest and duties of the partners are determined, compares with our laws. This Act provides:

(1) Equal distribution of profits or contribution to losses. (2) No interest payable in respect of capital, but interest allowed at 5 per cent. on distinct advances.

(3) Every partner entitled to be indemnified in respect of payments properly made for the firm.

(4) No partner entitled to remuneration for his services. (5) Every partner may take part in the management of the business.

(6) No person to be introduced as a partner without the consent of all the partners.

(7) Differences on ordinary matters to be decided by a majority of the partners, but no change to be made in the nature of the business without the consent of all the partners.

(8) Partnership books to be kept at the principal place of business and every partner to have access to them and a right to make copies thereof.

The difficulties attending a proper understanding of partnership arise mainly from the following causes:

(a) The nomenclature in connections with partnerships is used in ambiguous senses.

(b) Business men have a conception of partnership which is at variance with the legal decisions.

(c) In entering into partnership relations merchants do not sufficiently provide in their articles of co-partnership for the various contingencies which may arise during the existence of the partnership or at its dissolution.

BUSINESS MEN'S IDEAS OF PARTNERSHIP.

(1) The average merchant considers a partnership as an entity, a sort of corporation. To him the accounts of the partnership are always the accounts of the firm. He even regards the accounts of the individual partners as that of debtors or creditors of the firm.

(2) In his accounts he considers the firm always solvent, as the partners are sureties for its solvency.

(3) All the property contributed by each individual partner forever loses its separate ownership and belongs to the firm as a firm.

(4) He does not distinguish in his accounts between personal property, real estate, and personal accounts.

(5) To him the firm is perpetual, unless the insolvency of the members composing the firm render it impossible to continue. the business.

(6) He believes that the firm may take in new partners or retire old ones without in any way destroying the firm entity.

(7) He believes that the courts should be open to settle all business disputes among the partners, without appointing a receiver to wind up the affairs of the partnership.