property, is to make a statement which every person who has ever been called upon to advise in transactions with partnerships knows to be false.

When the writer perceived these inevitable results of the legalperson theory and recognized that the theory was, in last analysis, based on an assumption which did not accord with business practice, he felt, as he still feels, that the Commissioners on Uniform Laws would never adopt a partnership act on the legal-person theory of partnership and that they should not do so. He believes that if the difficulties and confusions of our existing partnership law cannot be solved without the adoption of a theory which leads to such results, it would be better not to have any act.

Another, though minor difficulty, encountered in drafting an act on the legal-person theory of partnership was the necessity, or rather great desirability, under that theory, of some efficient system for the registration of all partnerships. If a partnership is a legal person it should only be sued under its name." To ascertain beyond possibility of dispute what that name is, every partnership doing business in the state should register its name in a public office.12 To enforce this requirement some penalty for its violation is necessary. The only practical penalty is the provision that until registration the partnership cannot maintain any action. Entirely apart from the fact that the sanction is only partly effective, as an unregistered partnership could nevertheless maintain a suit in the federal courts,13 and also apart from the practical difficulty arising out of the dislike in this country of registration systems for business associations, unless the necessity is clearly demonstrated, the whole idea that all common-law partnerships should be registered is based on the assumption that partners always know, or ought to know, that they have formed a partnership. This is another assumption that does not correspond to fact. Persons who form a business association in which they are co-owners of the business form a partnership, unless they organize under a statute providing for a special kind of association. Ownership involves control. It is impossible to state that this or that

"Dean Ames' drafts contain an express provision to this effect. First Draft, Sec. 5 (4); Second Draft, Sec. 4 (4).

12 First Draft, Sec. 6; Second Draft, Sec. 5.

13 In re Farmers' Supply Co., 170 Fed. 502 (1909).

power makes the man who possesses it an owner or co-owner of a business. Any one of an infinite variety of combinations of fact shows an ownership of a business. Again, no matter how many times courts pass on the question of whether under the facts presented a partnership has been formed, new cases will constantly arise in which, though the contract between persons alleged to be partners is known, it will nevertheless be impossible to say positively whether the courts will or will not declare that the contract makes the parties to it partners. A hundred and fifty years of recorded litigation in our courts should be sufficient to convince anyone that in many cases it is not practicable to determine without a court decision whether a partnership has been formed or not.14 A. may make a contract with B. which will give A. so much control over B.'s business as to make the business A. and B.'s, and A. and B. partners, although neither A. nor B. intended A. to become unlimitedly liable for the debts of the business or knew that he was a partner until a court so decide. Again, two or more persons may form a common-law partnership, though they believe they have formed another kind of business association because they have failed to comply with the requirements of the statute under which the other kind of association must be organized.15

At present the cases in which the question of partnership or no partnership is presented, are those in which the person who has dealt with what he alleges to be a partnership is trying to hold someone liable for the debts of a business who denies that he is a partner. The question is raised in order that justice may be done to the creditors of a business. If, however, we should adopt the legal-person theory of partnership, and as a consequence require all partnerships to be registered and each partner to sign the registration certificate, the question whether a partnership did or

14 The interested reader who desires to convince himself of the practical difficulty of determining in many cases whether a partnership does or does not exist should read: Grace v. Smith, 2 Wm. Bl. 998 (1776); Waugh v. Carver, 2 H. Bl. 235 (1793); Wilkinson v. Frasier, 4 Esp. 182 (1802); Dunham v. Rogers, 1 Pa. St. 255 (1845); Holmes v. Old Colony R. R. Co., 5 Gray (Mass.) 58 (1855); Mollwo, March & Co. v. Court of Wards, L. R. 4 P. C. 419 (1872); Eastman v. Clark, 53 N. H. 276 (1872); Pooley v. Driver, L. R. 5 Ch. Div. 458 (1876); Hart v. Kelley, 83 Pa. St. 286 (1877); Beecher v. Bush, 45 Mich. 188, 7 N. W. 785 (1881); Hackett v. Stanley, 115 N. Y. 625, 22 N. E. 745 (1889); Estabrook v. Woods, 192 Mass. 499, 78 N. E. 538 (1906).

15 Fourth Street Nat. Bank v. Whitaker, 170 Pa. St. 297, 33 Atl. 100 (1895); McLennan v. Hopkins, 2 Kan. App. 260, 41 Pac. 1061 (1895).

did not exist could be raised by many defendants to delay just claims. For example: A. and B. have a contract in regard to what both regard as A.'s business. Under this contract it is doubtful whether they are or are not partners. A., in carrying on the business, enters into a contract with C. by which C. is obligated to pay a certain sum. C. refuses to pay and A. brings suit. C. could defend on the technical ground that A. and B. are partners carrying on business under the name of A., that the obligation is a partnership obligation, and that the partnership is not registered. The case could not proceed until this doubtful and often most difficult question is determined, and if it is determined that a partnership exists, there will be still further delay, at least until the formalities of registration are complied with.16

Again, to require the names of all partners to be registered before the partnership is allowed to begin or maintain an action, as is done by the advocates of the legal-person theory,17 assumes that partners who allow one of their number to be secret and inactive - that is dormant - are acting wrongfully and should be punished. To regard the dormant partner as a wrongdoer and his partners as wrongdoers, makes a radical change in the law. So far is existing law from regarding the dormant partner as a wrongdoer that an exception is made in his favor; he is not held liable for contracts made in the partnership name after his retirement, although no notice of dissolution has been published. It is submitted that the attitude of our common law toward the undisclosed principal generally, of which its attitude toward the dormant partner is an example, is sound. By remaining dormant he has not deceived others to their disadvantage. The active partner or partners have declared that they will be liable for the performance of the contracts, and they are liable. If another principal is discovered, he also can be held liable; not because he has deceived anyone by remaining dormant, but because he is an

16 In the drafts submitted to the Commissioners on Uniform State Laws by Dean Ames, he provided that no suit could be “begun or maintained" until the registration requirements were complied with. This apparently would require a new suit to be brought in the supposititious case given in the text if the court should hold that A. and B. were partners. Had the word "begun" been omitted, thus prohibiting merely the maintaining of a suit by an unregistered partnership, registration would apparently remove the bar to the continuance of the suit.

17 First Draft, Sec. 6 (5); Second Draft, Sec. 5 (5).

owner of the business in the carrying on of which the contract was made.

In view of the impractical and unjust effect on the rights of partnership creditors to which the legal-person theory inevitably leads us, as well as the minor difficulties in respect to the establishment of an efficient system of partnership registration to which reference has been made, the writer tried to ascertain if the difficulties and confusions which all admit exist in our present law could not be overcome without adopting that theory. These difficulties and confusions, as has been pointed out, largely center around the nature of a partner's rights in specific property. As we have seen, Lord Holt held in effect that partners were co-owners of partnership property, holding as joint tenants. It is evident that the first assumption is a fact. Partners are co-owners of partnership property. But why the legal theory that the incidents of this co-ownership are the incidents of joint tenancy? Joint tenancy is not the only form of co-ownership known to our law. Even at the time of Lord Holt, tenancy in common, joint tenancy, and co-parcenary, each with different legal incidents, were recognized forms of coownership. To use Hearn's definition, which Mr. Crane quotes: "Ownership is merely a collective term denoting the aggregate of several independent rights." 18 The kind of ownership is determined by the legal incidents or rights in relation to the property which the law recognizes as existing in the owner. There can be as many kinds of ownership, joint or several, as there are possible combinations of rights in relation to property. It is true that joint tenancy has the incident that on the death of one co-owner his rights of control pass to the surviving tenants, and it is also true that this legal incident is adapted to the practical needs of the situation which arises on the death of a partner. But nothing shows more clearly than the decision of Lord Holt that other legal incidents of joint tenancy are not adapted to partnership property. If applied, these other legal incidents produce great injustice. This is not to be wondered at, because each form of co-ownership known to our law had its origin in some economic, social, or political necessity. Joint tenancy, whatever its origin, did not arise out of the custom of persons combining their property to carry on a

18 HEARN, LEGAL RIGHTS AND DUTIES, 186.

business. It would, therefore, be an extraordinary coincidence if the legal incidents of the tenancy were suited to the needs of the partnership relation. But if the law recognized the legal incidents of joint tenancy because those incidents were once adapted to the needs of some holders of land as co-owners, why should we not to-day give to partnership co-ownership the legal incidents which are adapted to the partnership relation? Or to state the question in the form of a proposition: Persons become co-owners of property as partners to further the ends of the partnership and the law should attach to their co-ownership legal incidents fitted to the partnership relation.

Acting on this principle the writer prepared a draft of a partnership act on the so-called aggregate or common-law theory of partnership, treating the partners, not as joint tenants, but as coowners of the partnership property holding by a distinct tenancy which he called tenancy in partnership. To this tenancy in partnership he gave those legal incidents which seemed to correspond to the understanding of partners and promote partnership as a practical form of business organization. He then submitted the draft which he had drawn on the legal-person theory, and this other draft, to the Committee on Commercial Law of the Commission on Uniform State Laws, suggesting that the two drafts, as two distinct methods of meeting what were acknowledged as existing difficulties of our partnership law, be first referred by the committee to a conference of persons who could, because of special experience, be fairly called experts.19 The committee adopted this suggestion and invited, besides lawyers in general practice known to have large experience in advising partnerships, all the writers on partnership in the United States, as well as the teachers of partnership in the leading law schools of the country, to meet with the committee in Philadelphia. The invitation was generally

19 The two drafts, Drafts 3 and 4, are usually referred to in the Reports of the Conference of Commissioners of Uniform State Laws as Draft B, the one drawn on the legal-person theory, and Draft C, the one drawn on the theory thereafter adhered to in the subsequent drafts and which is embodied in the present Act. In the pamphlet in which these two drafts are printed there is also printed as Draft A the second or last draft submitted to the commissioners by Dean Ames. This second draft of the Act is sometimes referred to in the reports of the conference as Draft A. In preparing Drafts B and C the writer had the advantage of the assistance of Mr. James B. Lichtenberger of the Philadelphia bar.