the assertion or permission, should hold as a partner one who never was in fact, and whom he never understood or supposed to be, a partner, at the time of dealing with and giving credit to the partnership. There may be cases in which the holding out has been so public and so long continued that the jury may infer that one dealing with the partnership knew it and relied upon it, without direct testimony to that effect. But the question whether the plaintiff was induced to change his position by acts done by the defendant or by his authority is, as in other cases of estoppel in pais, a question of fact for the jury, and not of law for the Court. The nature and amount of evidence requisite to satisfy the jury may vary according to circumstances. But the rule of law is always the same; that one who had no knowledge or belief that the defendant was held out as a partner, and did nothing on the faith of such a knowledge or belief, cannot charge him with liability as a partner if he was not a partner in fact."

Question 572: On what ground may one be held to be liable as a partner to third persons, where he is not a partner in fact? What are the essential elements in such a case?

§ 567. (Partnerships, Sec. 8.) Doctrine of delectus personae.

(Note: All through the law of partnerships, we find it emphasized with various results, that a partnership is an agreement on a purely personal basis. This thought is expressed in the latin phrase "delectus personae." As a result, no member can without permission sell his share to either an outside person or to one of the other partners. A may be willing to be a partner with B and C, but not with B and D or with B alone. So, death of a partner dissolves the firm. So the partner may demand the highest good faith on the part of his co-partner. See cases throughout this subdivision.)

§ 568. (Partnerships, Sec. 9.) How partnership differs. from corporation.

(Note: The following are suggested as the important distinctions between partnerships and corporations:

§ 569. (Partnership, Sec. 10.) Kinds of partnerships.

(a) Trading and non-trading partnerships.

(a) Trading and Non-trading Partnerships.

(Note: See Judge v. Braswell, post, case No. 581. Partnerships are known as those which are trading and those which are non-trading. A trading partnership is one which as its main business, buys and sells. It includes the great bulk of commercial partnerships. A non-trading partnership does not buy and sell as its main business, but only casually. It renders service. Such are partnerships of lawyers, physicians, farmers, laundrymen, hotelkeepers, and the like. The distinction is important for this reason that in a trading partnership, i. e., one that buys and sells, whether as manufacturer or dealer, there impliedly exists in each partner all the powers that go with buying and selling, such as granting and taking credit, giving notes, accepting bills of exchange, giving security, etc. See, post, the authority of the partner. But if the firm is non-trading, then, a reliance on some custom of the firm, or apparent authority arising out of something more than the mere partnership relation must be shown to enable the third person to hold the other partners. The following have been held to be non-trading partnerships:

See Collection of Authorities, Annotated Cases, 1916A, 206.)

(b) Limited and Unlimited Partnerships.

(The word "limited" is applied sometimes to cases in which by agreement between the members, one partner is assured against loss; but more generally a limited partnership is meant one organized under a Limited Partnership Act permitting a limitation of liability by complying with the act in regard to publication record, etc. See Chapter 78 post.)

(c) Joint Stock Companies.

Case 573. People v. Rose, 219, Ill. 46.

Point Involved: The nature of a joint stock company.

*

MR. JUSTICE MAGRUDER: 66* A joint stock company is defined in the text books to be 'an association of individuals for purposes of profit, possessing a common capital, which is divided into shares, of which each member possesses one or more, and which are transferable by the owner. These associations, formed for business purposes, were at common law, and, as a general rule still are considered merely as partnerships, and their rights and liabilities are in the main governed by the same rules and principles which regulate commercial partnerships.' (17 Am. & Eng. Ency. of Law [2d Ed.],

pp. 636, 637.) While it is true that many companies, called joint stock companies, have many of the essential characteristics of a corporation, yet there is a distinction between such companies and regularly organized corporations, so-called. In 17 Am. & Eng. Ency. of Law, (2d Ed.), p. 638, it is said: 'In respect to their formation there is a broad distinction betwen a corporation, technically so called, which always owes its existence to the sovereign power of the state, and a joint stock company, which, being essentially a partnership, is brought into being by the contracts of its members inter sese.' Counsel refer to cases in other states, and in the Federal courts, holding that joint stock companies possess many of the characteristics of corporations, but the definition, which characterizes them as partnerships, has been recognized as correct, if not actually adopted, by the decisions of the Illinois courts."

Question 573: What is a "joint stock company"? How does it differ from an ordinary partnership? How does it differ from a corporation? Is it a partnership?

(Note: The words "joint stock company" are also frequently used to describe a corporation.)

§ 570. (Partnerships, Sec. 11.)-Kinds of partners.

(Note: The following adjectives suggest the state of participation in the firm by partners.

Real partners: Those who are actually partners, whether secret, active, silent or dormant.

Ostensible partners: Those who appear to outsiders to be partners whether really so or not.

Active partners: Those who are active whether ostensible or secret.

Silent partners: Those who take no part. May be ostensible

or secret.

Secret partners: Actual partners whose identity or existence is not revealed to outsiders.

Dormant partners: Secret and silent. Sometimes used synonymously with secret partner.)

§ 571. (Partnership, Sec. 12.) Subpartnerships.

(Note: "Subpartnership" is a word used to describe an ar rangement which a partner may have with a non-partner to divide his share of the partnership profits. Such outside person does not by reason of this arrangement become a partner in the main partnership.)