(3) Partnership by Estoppel " Holding Out" —Ostensible Partnership. -It has long been established (Waugh v. Carver, 1793, 2 Black. (H.) 235; and 14 R. R. 845) that a person who represents himself to be, or (as the phrase is) "holds himself out" as a partner in a firm, will be liable as a partner to anyone who has given credit to that firm on the faith of such representation (Part. Act, 1890, s. 14 (1)). This doctrine is nothing more than a particular instance of the general principle of estoppel by conduct. In order to fix a person with liability on this ground, two things must concur: first, the alleged representation must have been made by him, or he must have knowingly suffered it to be made; secondly, it must have been known to and relied on (see Smith v. Bailey, [1891] 2 Q. B. 403, disapproving Stables v. Eley, 1825, 1 Car. & P. 614) by the seeking to avail himself of it (s. 14). These are questions of fact, not of law (Wood v. Duke of Argyll, 1844, 6 Man. & G. 928; Lake v. Duke of Argyll, 1844, 6 Ad. & E. N. S. 477). Provided the above conditions are fulfilled, it is immaterial whether the representation was or was not made or communicated to the person relying on it by or with the knowledge of the person making the representation or suffering it to be made (s. 14; Martyn v. Gray, 1863, 14 C. B. N. S. 824).

person

The manner in which the representation is made is immaterial; it may be by words spoken or written, or by conduct (s. 14), as, for instance, by signing prospectuses (Collingwood v. Berkeley, 1863, 15 C. B. N. S. 145), by being party to resolutions (Maddick v. Marshall, 1864, 16 C. B. N. S. 387, and 17 ibid. 829), or by retiring from a firm and failing to give due notice of such retirement (Part. Act, 1890, s. 36, and infra, p. 428) Probably-though there has been no decision on the combined effect of secs. 14 and 36 of the Act of 1890-a person who retires from a firm and duly notifies his retirement, will not be liable to future creditors of the firm, by reason only of his former partners with his knowledge continuing to use the old firm name, even if his own name appears as part of it (Newsome v. Coles, 1811, 2 Camp. N. P. 617; 12 R. R. 756; Brown v. Leonard, 1820, 2 Chit. Rep. 120; 23 R. R. 744; Ex parte Central Bank of London, [1892] 2 Q. B. 633; cp. Williams v. Keats, 1817, 2 Stark. N. P. 290). If, however, his name does so appear, his former partners, though entitled to the goodwill of the business, may be restrained from using the old name without his permission in such a manner as to expose him to the risk of having actions brought against him, unless the right to use that name has been expressly assigned to them (Gray v. Smith, 1889, 43 Ch. D. 208; Thynne v. Shove, 1890, 45 Ch. D. 577, where, however, the Partnership Act did not apply; Townsend v. Jarman, [1900] 2 Ch. 698; Burchell v. Wilde, [1900] 1 Ch. 551). If the firm name consists only of the surname of the retiring partner followed by the words " & Co.," the continued use of that name will not, under ordinary circumstances, represent the retiring partner to be still a member of the firm or expose him to liability (Townsend v. Jarman, [1900] 2 Ch. 698; Burchell v. Wilde, [1900] 1 Ch. 551).

A person who holds himself out, or knowingly suffers himself to be held out, as a partner may be liable to others, although they may know that as between himself and his quasi-partners he does not share either profits or losses, for the lending of his name may justify the belief that he is willing to be responsible to those who may be induced to trust to him for payment (Brown v. Leonard, 1820, 2 Chit. Rep. 120; 23 R. R 744). Moreover, such a person may be liable, though his name be concealed, if the refusal to name him be accompanied by such a description

as clearly points him out (Martyn v. Gray, 1863, 14 C. B. N. S. 824). Nor will he be the less liable to third parties because he was induced to hold himself out as a partner by promises of irresponsibility or by fraud (see Collingwood v. Berkeley, 1863, 15 C. B. N. S. 145; Maddick v. Marshall, 1864, 16 C. B. N. S. 387, and 17 ibid. 829; Ellis v. Schmack, 1829, 5 Bing. 521; 30 R. R. 725).

The continued use of the old firm name, or of a deceased partner's name as part of it, by the surviving partners, does not expose the estate of the deceased partner to liability for debts contracted after his death (Part. Act, 1890, s. 14 (2)), even though the surviving partner who uses the old name is his executor (Farhall v. Farhall, 1871, L. R. 7 Ch. 123; Owen v. Delamere, 1872, L. R. 15 Eq. 134).

Though a bankrupt partner cannot by his acts bind his partners, a person may be liable for such acts if after the bankruptcy he holds himself out as a partner of the bankrupt (Part. Act, 1890, s. 38).

A person does not incur liability by holding himself out as willing to become a partner; to incur liability he must hold himself out as a partner (Bourne v. Freeth, 1829, 9 Barn. & Cress. 632; 33 R. R. 275).

It would appear that an infant who holds himself out as a partner incurs no liability by so doing (Price v. Hewitt, 1852, 8 Ex. Rep. 146; Glossop v. Colman, 1815, 1 Stark. N. P. 25; 18 R. R. 741; Green v. Greenbank, 1816, 2 Marsh. 485; 17 R. R. 529), though he will incur liability if he continues to do so after he has come of age (Goode v. Harrison, 1821, 5 Barn. & Ald. 147; 22 R. R. 307).

(4) Who may be Partners.-The common law of England imposes no limit on the number of persons who may be associated together in partnership, but since the Companies Act, 1862, s. 4, no partnership may be formed between more than ten persons if the partnership business be that of bankers, or more than twenty persons in other

cases.

In general, all persons are capable of entering into partnership. Enemy. A person, of whatever nationality, residing and carrying on trade in a country at war with this country cannot, during the continuance of the war, become a partner with a person resident in this country; and if two partners are resident in different countries, their partnership is determined by war between those countries (Part. Act, 1890, s. 34; Evans v. Richardson, 1817, 3 Mer. 469; 36 E. R. 181; Griswold v. Waddington, 1818, 15 John. 57, and 16 ibid. 438 (Amer.); Albretcht v. Sussmann, 1813, 2 Ves. & Bea. 323; 35 E. R. 342; 13 R. R. 110; M'Connell v. Hector, 1802, 3 Bos. & Pul. 113; 6 R. R. 724; Brandon v. Nesbitt, 1794, 6 T. R. 23; 3 R. R. 109; and compare Wells v. Williams, 1697, 1 Raym. (Ld.) 282). This rule is only recognised and enforced by the belligerent powers.

Infants. An infant may be a partner, but whilst an infant he incurs no liability and is not responsible for the debts of the firm (Lovell v. Beauchamp, [1894] A. C. 607). His partners, however, have the right to apply the whole of the partnership assets, including his share, in payment of the partnership debts (ibid.), and the infant cannot insist that on taking the partnership accounts he shall be credited with profits and not be debited with losses (London and North-Western Railway Co. v. M'Michael, 1850, 5 Ex. Rep. 114). If in an action against a firm of which an infant is a member, judgment is obtained in the proper form— i.e. against the firm other than A. B. an infant partner-execution may

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issue against the property of the firm, but not against the separate property of the infant (Lovell v. Beauchamp, [1894] A. C. 647, varying the order of the Court of Appeal in In re Beauchamp Bros., [1894] 1 Q. B. 1; Harris v. Beauchamp Bros., [1893] 2 Q. B. 534).

An infant may determine the partnership either before or within a reasonable time after attaining his majority, and if he has derived no benefit from the partnership (but not otherwise, see Holmes v. Blogg, 1817, 8 Taun. 508; 19 R. R. 445; Ex parte Taylor, 1856, 8 De G., M. & G. 254; 44 E. R. 388), he may recover any premium he has paid (Corpe v. Overton, 1833, 10 Bing. 253; 38 R. R. 422; Hamilton v. Vaughan-Sherrin Electric Engineering Co., [1894] 3 Ch. 589).

An infant on attaining his majority should determine the partnership at once if he intends to do so, and give notice of such determination, otherwise he may be liable under the doctrine of holding out for debts of the firm incurred after he attained twenty-one (Goode v. Harrison, 1821, 5 Barn. & Ald. 147; 24 R. R. 307).

Lunatics.-A lunatic is bound by a contract (see LUNACY) entered into by him with a person who acts bona fide and does not know of his lunacy (Imperial Loan Co. v. Stone, [1892] 1 Q. B. 599; Drew v. Nunn, 1879, 4 Q. B. D. 661; Molton v. Camroux, 1848, 2 Ex. Rep. 478, and 4 ibid. 17). Lunatics, therefore, are capable of being partners. Moreover, an existing partnership is not dissolved by one member of it becoming lunatic (Jones v. Noy, 1833, 2 Myl. & K. 125; 39 E. R. 892; 39 R. R. 160; Sadler v. Lee, 1843, 6 Beav. 324; 49 E. R. 850; 63 R. R. 95; Part. Act, 1890, s. 35 (1)).

Married Women.-Apart from the Married Women's Property Acts and the doctrine of separate estate, a married woman is incapable of entering into a contract (Marshall v. Rutton, 1800, 8 T. R. 545; 5 R. R. 448), and therefore of becoming a partner, except-(1) when her husband is a convicted felon (Ex parte Franks, 1831, 7 Bing. 762); (2) when the husband and wife are judicially separated (20 & 21 Vict. c. 85, ss. 25, 26); (3) when the wife is deserted by her husband, and has obtained a protection order against him (20 & 21 Vict. c. 85, s. 21, and 21 & 22 Vict. c. 108, ss. 6-10); (4) when the husband is an alien enemy and abroad (Derry v. Mazarine, 1697, 1 Raym. (Ld.), 147; Barden v. Keverberg, 1836, 2 Mee. & W. 61); and (5) by the custom of London, the wife of a freeman may trade as a feme sole (see Beard v. Webb, 1800, 2 Bos. & Pul. 93; 28 R. R. 776). In equity a married woman has power to contract so as to bind her separate property, which is not subject to a restraint on anticipation. The Married Women's Property Acts, 1882 to 1893, also enable married women to contract so as to bind their existing and (since the Act of 1893) their future separate property, which is not subject to such restraint. To this extent, therefore, a married woman may be a partner even with her husband (see Butler v. Butler, 1885, 16 Q. B. D. 374), and though she will incur no personal liability, her separate property not subject to restraint on anticipation will be liable for the debts of the firm (Scott v. Morley, 1887, 20 Q.B.D. 170); judgment may also be enforced against any income of her property, subject to such restraint, which has accrued due at or before the date of the judgment (Bolitho & Co. v. Gidley, [1905] A. C. 98; Hood Barrs v. Heriot, [1896] A. C. 174, overruling Hood Barrs v. Cathart, [1894] 2 Q. B. 559). If she carries on a trade separately from her husband, she is liable to the bankruptcy laws in respect of her separate property (45 & 46 Vict. c. 75, s. 1 (5); Ex parte Soan and Morley, [1896]

2 Q. B. 407; Re Worsley, [1901] 1 Q. B. 309); but not otherwise (see In re a Debtor, [1898] 2 Q. B. 577). A bankruptcy notice cannot be served on her in respect of a judgment obtained against her in the usual form (Ex parte Lester, [1893] 2 Q. B. 113), or in the firm name, even though she has since become a widow (Ex parte Handford, [1899] 1 Q. B. 566; Ex parte Levene, [1895] 1 Q. B. 328). On her bankruptcy her separate property which is subject to a restraint on anticipation vests in her trustee subject to such restraint, but the restraint ceases on the death of her husband (Briggs v. Ryan, [1899] 2 Ch. 717).

As to Felons, see 33 & 34 Vict. c. 23.

(5) Form of Partnership Contract.-A contract of partnership does not require to be entered into with any particular formalities, and may be proved by parol evidence or inferred from the conduct of the parties. It would appear, however, that an agreement for a partnership to commence more than a year from the date of the agreement, or for a present partnership to last for more than a year from its commencement, is within the 4th section of the Statute of Frauds (Williams v. Jones, 1826, 5 Barn. & Cress. 108; 29 R. R. 181); but if the parties have acted on the agreement, and become partners, the statute is inapplicable (Essex v. Essex, 1855, 20 Beav. p. 449; 52 E. R. 674; Baxter v. West, 1860, 1 Drew. & Sm. 173; 62 E. R. 344; Burdon v. Barkus, 1862, 4 De G., F. & J. 47; 45 E. R. 1098). Moreover, the fact that the partnership property consists of land (Forster v. Hale, 1798, 5 Ves. Jun. 308; 31 E. R. 603; 4 R. R. 128; De Nicols v. Curlier, [1900] 2 Ch. pp. 416-417), or that the business of the partnership is the buying and selling of land (Dale v. Hamilton, 1846, 5 Hare, 369; 67 E. R. 955; on appeal, 2 Ph. Ch. 266; 41 E. R. 945; cp. Caddick v. Skidmore, 2 De G. & J. 52), does not bring the partnership agreement within that part of the 4th section which relates to land. As to agreements for dissolution, see Gray v. Smith, 1889, 43 Ch. D. 208.

(6) Illegal Partnerships.-A partnership for a purpose forbidden by positive law, morality, or public policy (e.g. for deriving profit from robbery, Everet v. Williams, Lindley on Partnership, p. 107; the slave trade, Stewart v. Gibson, 1838, 7 Cl. & Fin. 707; 7 E. R. 1237; trading with an enemy, Evans v. Richardson, 1817, 3 Mer. 469; 36 E. R. 181), is illegal. So also is a partnership formed to attain a legal object in an illegal manner. Thus a partnership which ought to be registered under the Companies Act, 1862 (see s. 4), by reason of the number of partners, is illegal if it be not so registered (Padstow v. Total Loss Association, 1882, 20 Ch. D. 137; Shaw v. Benson, 1882, 11 Q. B. D. 563).

Where unqualified persons are forbidden by statute, as, for instance, by the Solicitors Acts, to carry on a particular business, a partnership, in the ordinary sense of the term, between a qualified person and one who is not qualified is illegal (Williams v. Jones, 1826, 5 Barn. & Cress. 108; 29 R. R. 181; see too Hill v. Clifford, [1907] 2 Ch. 236; affd. sub nom. Clifford v. Timms, [1908] A. C. 12, a case under the Dentists Act, 1878); but if the unqualified person is to take no part in the conduct of the business, an agreement entitling him to a share in the profits is not illegal (Scott v. Miller, 1859, John. 220; 70 E. R. 404; Candler v. Candler, 1821, Madd. & G. 141).

If a partnership be illegal, the partners have no remedy against each other for contribution towards payment of the losses of the firm (Mitchell v. Cockburn, 1794, 2 Black. (H.) 380); nor can one partner maintain an action of account against another (Armstrong v. Armstrong, 1834, 3 Myl.

& K. 45; 40 E. R. 18; 41 R. R. 10; cp. Thwaites v. Coulthwaite, [1896] 1 Ch. 496). If any such action be brought, the defendant may resist the proceedings on the ground of illegality, or the Court will of its own accord decline to interfere if the illegality be brought to its notice (Scott v. Brown, Doering, M'Nab & Co., [1892] 2 Q. B. 724; Gedge v. Royal Exchange Assurance Corporation, [1900] 2 Q. B. 214).

Moreover, the members of an illegal partnership cannot maintain any action in respect of a transaction tainted with the illegality (Briggs v. Lawrence, 1789, 3 T. R. 454; 1 R. R. 740; Jennings v. Hammond, 1882, 9 Q. B. D. 225). But the illegality of the partnership affords no defence to an action brought against it by a person who is no party to the illegality, in respect of a transaction which is legal in itself.

(7) Duration of Partnership.—A partnership is a partnership at will, unless some agreement to the contrary can be proved (Part. Act, 1890, s. 26 (1)). Such an agreement may be express or implied. The fact that partners have taken land for partnership purposes on lease for a term of years is not of itself a sufficient ground for implying an agree ment that the partnership is to last for the same term (Crawshay v. Maule, 1818, 1 Swans. 495, and 18 R. R. 126). Again, when one partner agrees with a stranger for a sub-partnership (see p. 415), it is not to be implied therefrom that the duration of the sub-partnership is to be extensive with the original partnership (Frost v. Moulton, 1856, 21 Beav. 596; 52 E. R. 990). Where a partnership entered into for a fixed term is continued after the term has expired, and there is no agreement as to the additional time it is to last, it is treated as having become a partnership at will (Part. Act, 1890, s. 27 (1); Neilson v. Mossend Iron Co., 1886, 11 App. Cas. 298, and infra, p. 442).

If a partnership be entered into for a single adventure or undertaking, an agreement that the partnership shall last until the termination of the adventure or undertaking will be inferred (Part. Act, 1890, s. 32 (b); Reade v. Bentley, 1858, 4 Kay & J. 656; 70 E. R. 273; and see M'Clean v. Kennard, 1874, L. R. 9 Ch. 336).

(8) Nature of Firm and Firm Name.-Partners are called collectively a firm, and the name under which they carry on business is called the firm name (Part. Act, 1890, s. 4).

Although partners may now in most cases sue and be sued in the firm name (R. S. C., Order 48 A), speaking generally, the law of England does not recognise a firm as distinct from the members composing it (Ex parte Corbett, 1880, 14 Ch. D. p. 126), and any change amongst them destroys the identity of the firm. Thus if a person be appointed the agent of a firm, the death or retirement of one of the partners determines the agency (Tasker v. Shepherd, 1861, 6 H. & N. 575; see, too, Friend v. Young, [1897] 2 Ch. p. 429), and the retirement may even operate as a wrongful dismissal of the agent (Bruce v. Calder, [1895] 2 Q. B. 253). An authority to trustees to lend money to a firm does not, as a general rule, authorise a loan to the continuing partners after the death or retirement of one of them (Smith v. Patrick, [1901] A. C. 282; In re Tucker, [1894] 3 Ch. 429, affirming [1894] 1 Ch. 724; Fowler v. Raynal, 1848, 2 De G. & Sm. 749; 64 E. R. 335; 3 Mac. & G. 500; 42 E. R. 353). So, too, & continuing guaranty given either to a firm, or to a third person in respect of the transactions of a firm, is, in the absence of agreement to the contrary, revoked as to future transactions by any change in the constitution of the firm (Part. Act, 1890, s. 18).

Generally speaking (pawnbrokers are an exception; see 35 & 36 Vict.