Corpus iurisprudentiae Romanae

1 Paulus, On the Edict, Book XXXII. A partnership can be formed either perpetually, that is, to say during the life of the parties, or for a certain time, or to begin at a certain time, or under some condition. 1In the formation of a general partnership, the entire property of the partners immediately belongs to them all in common.

2 Gaius, On the Provincial Edict, Book X. Because, although delivery does not actually take place, still, it is tacitly presumed to do so.

3 Paulus, On the Edict, Book XXXII. The existing debts remain in the same condition, but the rights of action should be reciprocally assigned. 1When a general partnership has been expressly entered into, estates, legacies, donations, and property acquired in any way whatsoever, are acquired in common. 2The question arises, when a lawful estate falls to any of the partners to be held in common, what is meant by the term “lawful estate”? Must this be understood to be one that descends to a party by law, or one which is bequeathed by will? It is more probable that it only refers to an estate which descends by law. 3Where a partnership is contracted fraudulently, or for the purpose of committing fraud, it is void by operation of law, because good faith is opposed to fraud and deceit.

4 Modestinus, Rules, Book III. There is no doubt that a partnership can be formed by delivery of the property, verbally, and by means of a messenger. 1Partnerships are dissolved by renunciation, by death, by the forfeiture of civil rights, and by poverty.

5 Ulpianus, On the Edict, Book XXXI. Partnerships are formed either generally, where all the property is held in common, or specially, for some particular kind of business, for the collection of taxes, or even for a single transaction. 1Moreover, a valid partnership can be formed by parties who have not the same means; since frequently one who is less wealthy, makes up by his labor what he lacks in property. A partnership cannot legally be contracted for the purpose of making a donation.

6 Pomponius, On Sabinus, Book IX. If you form a partnership with me with the understanding that you are to have control of the shares of the partnership, this control should be such as would be exercised by a good citizen, and should be according to the judgment of one, as we may not be equal partners; for instance, where one of us has placed more labor, industry, or capital in the partnership.

7 Ulpianus, On Sabinus, Book XXX. It is lawful to contract a simple partnership, and then, if no other provision is made, it is held to be one including everything acquired by gain, that is to say, where any profit is obtained from purchase, sale, leasing, and hiring.

8 Paulus, On Sabinus, Book VI. Profit is understood to be whatever is derived from the industry of each of the partners.

9 Ulpianus, On Sabinus, Book XXX. Sabinus does not add that such a partnership should include an inheritance, a legacy, a donation mortis causa, or non mortis causa, and this is perhaps for the reason that these things do not come without a cause, but are granted on account of merit.

10 Paulus, On Sabinus, Book VI. And for the reason that very often an inheritance passes to us as a debt from a parent or from a freedman.

11 Ulpianus, On Sabinus, Book XXX. Quintus Mucius renders the same opinion with reference to inheritances, legacies, and donations.

12 Paulus, On Sabinus, Book VI. A debt due to a partner is not included in the capital of the partnership, unless it is derived from the profit obtained by one of the partners.

13 The Same, On the Edict, Book XXXII. If it is stated in the articles of partnership that the gains and profits shall be in common, it is clear that this is to be understood only to apply to such profits as come from the efforts of the partners.

14 Ulpianus, On Sabinus, Book XXX. If it is agreed by the partners that the property in common shall not be divided until a certain period has elapsed, they are not held to have agreed not to withdraw from the partnership before that time has passed. What would be the effect, however, if an agreement was made not to withdraw? Would it be valid? Pomponius very properly states that such an agreement would be void, for if it were not made, and one of the partners should withdraw at an inopportune time, an action on partnership will lie against him; and even if an agreement is made not to withdraw from the partnership within a certain period, and a partner should withdraw before it had elapsed, his withdrawal would be valid; nor would he be liable in an action on partnership who withdrew on the ground that the condition was not fulfilled under which the partnership was formed, or that his partner had caused him so much injury and loss that it was not advantageous for him to endure it;

15 Pomponius, On Sabinus, Book XIII. Or because it was not possible for him to enjoy the property on account of which the business of the partnership was undertaken.

16 Ulpianus, On Sabinus, Book XXX. The same rule applies where a partner withdraws from the partnership because he, even against his will, is obliged to be absent for a considerable time in the public service; although sometimes he can be opposed, since he may be able to conduct the transactions of the partnership through another person, or charge his partner with it; still, this cannot be done unless his partner is especially qualified for the business, or another can be easily obtained for the management of the partnership, by the partner who is obliged to be absent. 1Therefore, where it is agreed that the partnership property is not to be divided, unless some good reason arises, it cannot be sold, or disposed of in any other way so that a division may be made. And, in fact, it may be said that a sale is not absolutely forbidden, but an exception can be filed against the purchaser if he divides the property before the vendor had a right to do so.

17 Paulus, On Sabinus, Book VI. A partner who alienates property under such circumstances violates the agreement relative thereto, and is liable to an action on partnership, or for the division of property held in common. 1If a partnership is dissolved in the absence of a partner, the ownership remains in common until the latter ascertains what he who withdrew from the partnership has acquired, for any loss should be borne by him alone who withdrew; but what the absent partner may have acquired belongs exclusively to him, and any loss resulting therefrom must be apportioned in common. 2In the formation of a partnership, nothing is gained by the partner giving security not to withdraw; because an inopportune withdrawal causes liability for damages by operation of law, in an action on partnership.

18 Pomponius, On Sabinus, Book XIII. Where a slave forms a partnership, it will not be sufficient for him to be ordered by his master to withdraw from it, but his partner must be notified of his renunciation of the same.

19 Ulpianus, On Sabinus, Book XXX. Where anyone is admitted into a partnership he alone is his partner who admitted him. This is perfectly proper, for, since a partnership is formed by consent, he cannot be my partner whom I am unwilling should be such. What would be the case, however, if my partner should admit him? He would be his partner alone;

20 The Same, On the Edict, Book XXXI. For the partner of my partner is not mine.

21 The Same, On Sabinus, Book XX. And whatever such a partner may obtain from our partnership he will share with the one who admitted him; for we will not hold our share in common with him, and he who admitted him will be responsible for him to the partnership; that is to say, the said partner will have a right of action against him, and will pay to the partnership whatever he recovers.

22 Gaius, On the Provincial Edict, Book X. On the other hand, he who has admitted him will be responsible to him for the acts of the other partners as well as for his own, because he himself has a right of action against them. It is also certain that there is nothing to prevent proceedings in an action on partnership from being instituted between the partner who admitted him and him who was admitted, before this is done between the other partners and the one who admitted him.

23 Ulpianus, On Sabinus, Book XXX. Pomponius is in doubt as to whether it will be sufficient for the said partner to assign to his associates the right of action which he has against the newcomer, in case of loss, if the latter should not prove to be solvent, or whether he should fully indemnify them. I think that he who admitted the new partner will be liable to indemnify them entirely, because it would be difficult to deny that he was to blame for doing so. 1He also asks whether any profits which may have accrued on account of the admission of the said partner can be set off against a loss which was caused by his negligence? He answered that they should be set off, which is not correct; for Marcellus states, in the Sixth Book of the Digest, that, if the slave of one of several partners having been placed in charge of the affairs of the partnership by his master, conducts them in a negligent manner, he who placed him in charge must make good the loss to the partnership; nor can any profits which may have accrued to the partnership through the slave be set off against the loss. He also says that the Divine Marcus decided that one partner could not say to another: “Relinquish the profits which have accrued through your slave, if you desire to be indemnified for the loss.”

24 The Same, On the Edict, Book XXXI. It is evident that if two partners place the slave of one of them in charge of the business of the partnership, the master of said slave will not be responsible except to the extent of the peculium; for both of them should be liable to the same risk, as they both appointed him.

25 Paulus, On Sabinus, Book VI. A partner is none the less liable for any loss suffered by his fellow-partners on account of his negligence; even though the value of the partnership property may have been increased in many other ways by his industry. The Emperor Antoninus rendered this decision in a case brought before him on appeal.

26 Ulpianus, On the Edict, Book XXXI. And, therefore, if a partner transacts business relating to the partnership in a negligent manner, but in many respects benefits the partnership pecuniarily, the profit will not be set off against the negligence; as Marcellus stated in the Sixth Book of the Digest.

27 Paulus, On Sabinus, Book VI. All debts contracted during the existence of the partnership must be paid out of the common fund, even though payment was not made until after the partnership has been dissolved. Therefore, if a partner entered into a contract under a condition, and the condition took place after the partnership had been dissolved, the indebtedness must be discharged out of the common property. Hence, if the partnership is dissolved in the meantime, security should be furnished to one another by the partners.

28 The Same, On the Edict, Book LX. If we are partners, and one of us owes a sum of money payable within a certain time, and the partnership is dissolved; the partner cannot deduct this sum as if it was due at that time, but it must be divided among all the partners, who should give security to defend their other partner when the day of payment arrives.

29 Ulpianus, On the Edict, Book XXX. Where the apportionment of shares is not mentioned in the formation of the partnership, it is held that they are equal. If, however, it should be agreed upon that one should have two shares, or three, and another, one, will this be valid? It is established that it will be, provided that the parties have furnished more money or labor to the partnership, or where any other good reason whatsoever exists. 1Cassius holds that a partnership can be formed in such a way that, while one of the partners will not be liable for any loss, the profit will be common to all. This, however, will only be valid (as Sabinus says) where the value of the services of the partner will be equal to the loss; for it frequently happens that the industry of one partner is of greater advantage to the partnership than the capital invested. The same rule applies if one partner alone makes a voyage by sea or land, as only he is exposed to danger. 2Aristo states that Cassius was of the opinion that a partnership could not be formed in such a way that one partner would take the profit and the other assume the loss, and a partnership of this description is usually called a “leonine” one. We, also, think that a partnership of this kind is void, where one of the partners takes the profit, and the other does not receive any gain at all, but sustains the loss; a partnership is extremely unjust where one partner suffers the loss, and receives no benefit whatever from it.

30 Paulus, On Sabinus, Book VI. Mucius states in the Fourteenth Book, that a partnership cannot be formed in such a way that one partner will suffer a certain part of the loss, and another receive a different share of the profit. Servius says in his Notes on Mucius, that such a partnership cannot legally be formed, for that only is understood to be profit which remains after all loss has been deducted, nor does loss exist unless all the profit has been previously deducted. A partnership can, however, be formed in such a way that different amounts of the profits remaining in the funds of the partnership, after all loss has been deducted, can be paid to the partners; and, in like manner, where loss has been sustained, different shares of it may be apportioned among the several partners.

31 Ulpianus, On Sabinus, Book XXX. In order for an action on partnership to be brought, the partnership must intervene in the proceedings, for it is not sufficient for the property to be in common, unless the partnership appears as a party to the suit, for an action can be brought in common even outside the partnership; as, for instance, where we happen to own property together without the intention of forming a partnership, which occurs where property is bequeathed to two parties, and also where an article is bought by two persons at the same time; or where an estate or donation passes, or is given to us in common, or where we purchase separately the shares of two joint-owners, without the intention of becoming partners:

32 The Same, On the Edict, Book II. For when a partnership is formed by express agreement, an action on partnership will lie; but where there is no agreement, an action can be brought with reference to the property itself, and the business is held to have been transacted in common.

33 The Same, On the Edict, Book XXXI. As in the case of farmers of the revenue, as well as where there are several purchasers; for where they are unwilling to contend with one another, they are accustomed to purchase the property in common by means of messengers, and this is very different from a partnership. Therefore, where a ward enters into a partnership without the authority of the guardian, he will still be liable to an action on the ground of business transacted in common.

34 Gaius, On the Provincial Edict, Book XX. In those instances where one party happens to have expended money on the common property, or collected the crops or profits of the same, or has diminished its value, there is no ground for an action on partnership; but among co-heirs an action for partnership of the estate will lie, and among others an action for the division of property owned in common. An action for the division of property held in common can also be brought between those to whom it belongs by hereditary right.

35 Ulpianus, On Sabinus, Book XXX. No one can enter into a partnership in such a way that his heir may become a partner therein. An action, however, can be brought against the heir of a partner to compel him to fulfill the obligation of the deceased;

36 Paulus, On Sabinus, Book VI. And he must also make good the effects of any negligence of the party of whom he is the lawful successor, even though he himself may not be a partner.

37 Pomponius, On Sabinus, Book XIII. It is clear that, if the heirs of partners have the intention of forming a partnership in the estate by new consent, whatever they afterwards do will furnish ground for an action on partnership.

38 Paulus, On Sabinus, Book VI. The arbiter in an action on partnership should see that security is given for future loss or gain during the existence of the partnership. Sabinus thinks that this should be done in all bona fide cases, whether they are in general terms, for example, such as arise from partnership, or from voluntary agency, or from guardianship; or whether they are of a special character, as, for instance, where they are based on mandate, on loan for use, or on deposit. 1If you and I have formed a partnership, and the property derived from it is held in common, Proculus says that I can recover any expense I may have incurred on account of said property, and any profit you may have obtained from the same, by an action on partnership, or by one for the division of common property; and that one of these actions puts an end to the other.

39 Pomponius, On Sabinus, Book XIII. Where you and I own a field in common, and you bury a dead body therein, I can bring an action on partnership against you.

40 The Same, On Sabinus, Book XVII. The heir of a partner, although he is not a partner, should nevertheless finish what has been left incomplete by the deceased; and, in this instance, any bad faith of which he may be guilty can be taken into consideration.

41 Ulpianus, On the Edict, Book XX. Where one partner has entered into a stipulation with another with reference to a penalty, he cannot bring an action on partnership if the amount of the penalty was only equal to that of his interest.

42 The Same, On Sabinus, Book XLV. If, however, he has obtained the penalty of the stipulation after the action on partnership has been brought, he will be entitled to that much less, as the penalty will be charged against him to the principal.

43 The Same, On the Edict, Book XXVIII. Where suit has been brought for the division of property held in common, the right of action on partnership is not extinguished, for the latter has reference to the partnership and the obligations thereby contracted, and does not admit of adjudication; but if, an action on partnership is afterwards brought, less will be recovered by it than by the former one.

44 The Same, On the Edict, Book XXXI. If I should give you pearls to be sold, with the understanding that if you dispose of them for ten aurei you must pay me ten, but if you sell them for more, you can have the surplus; it seems to me that if this was done with the intention of forming a partnership, an action on partnership will lie, otherwise, one on a verbal contract can be brought.

45 The Same, On Sabinus, Book XXX. An action for theft on account of common property can be brought against a partner where, either through fraud or malicious intent, he has removed said property or disposed of it for the purpose of concealment, but he will also be liable to the action on partnership, for one action does not destroy the other. The same rule is applicable to all bona fide actions.

46 Paulus, On Sabinus, Book VI. The same rule also applies to a tenant, and to a party who is transacting the business of another, as well as to one who is executing a mandate of ours, and to a guardian.

47 Ulpianus, On Sabinus, Book XXX. If I bring suit for the recovery of stolen property, the right of action on partnership is extinguished, unless I have still further interest in the matter. 1Where a partner has caused damage to property held in common, Celsus, Julianus, and Pomponius say that he will be liable under the Lex Aquilia;

48 Paulus, On Sabinus, Book VI. But he will, nevertheless, also be liable to an action on partnership,

49 Ulpianus, On the Edict, Book XXXI. If he has injured the partnership by his act; as, for example, if he has wounded or killed a slave belonging to it and who transacted its business.

50 Paulus, On Sabinus, Book VI. The result of bringing the action on partnership is that the partner must be satisfied with one or the other of the two proceedings; because both have in view the recovery of the property, and not, as in an action for theft, merely the collection of the penalty.

51 Ulpianus, On Sabinus, Book III. It is also very properly added: “That an action for theft will only lie if the partner removed the property fraudulently, and with malicious intent,” because if he did so without malicious intent he would not be liable to an action for theft. And, indeed, it is generally held that a party who owns a share of the property would prefer to lawfully enjoy the same, rather than to form an intention to steal it. 1Therefore, let us see whether he will be liable under the Lex Fabia; and, although reason suggests that he should not be held responsible, still, if he has kidnapped the slave, or concealed him, he will be liable under the Lex Fabia.

52 The Same, On the Edict, Book XXXI. Where a tract of land adjoining two others is to be sold, and one of the parties asks another to purchase it so that he can transfer to him that part which joins his own premises, and soon after he himself purchases the tract, his said neighbor not being aware of the transaction; the question arises whether the neighbor has any right of action against him. Julianus stated that this involved a perplexing question of fact, for if the intention was that the neighbor should buy the land of Lucius Titius, and convey it to me, the neighbor would have no right of action against me who made the purchase; but if the intention had really been that a purchase of common property was to be made, I would be liable to an action on partnership to compel me to transfer to you the remainder of the land after having deducted that portion which I directed you to buy. 1Good faith is an important element in this action on partnership. 2The question arises whether a partner is only liable for fraud, or whether he is also liable for negligence? Celsus states in the Seventh Book of the Digest, that partners are responsible to one another for negligence as well as fraud. And he says that, if, in forming a partnership, one of them promised to furnish his skill and labor, as, for instance, where a flock held in common is to be pastured; or we give a field to a party to be improved, and from which the crops are to be gathered in common; in this case he will surely be liable for negligence, for the consideration is the value of his labor and skill. Where a partner damages the common property, it is held that he is also liable for negligence. 3Partners are not responsible for unforseen accidents, that is to say, for those that are unavoidable. Therefore, if a flock, after having been appraised, is delivered to a partner and it is lost through an attack by robbers, or by fire, the loss must be borne in common, if no fraud or negligence attaches to the party who received the said flock after it had been appraised. Where, however, it was stolen by thieves, the loss must be sustained by the party to whom it was entrusted, because he who received the flock after its valuation was obliged to take care of it. These opinions are correct, and an action on partnership will lie, provided that the flock, even though it had been appraised, was delivered to be pastured with the intention of forming a partnership. 4Two parties formed a partnership in the business of manufacturing soldiers’ cloaks. One of them, having undertaken a journey for the purpose of purchasing materials, fell among thieves, and his money was taken, his slaves were wounded, and he lost his private property. Julianus says that the loss must be borne in common, and that, therefore, the partner will be entitled to an action on partnership for half of the loss not only of the money, but also of the other property which the partner did not take with him, unless he made the journey for the purpose of purchasing merchandise on account of the partnership. Julianus very properly holds that if any expense was incurred for physicians the other partner is liable for his share. Hence, if property is lost by shipwreck, and merchandise was involved which it is not customary to transport by vessel, both parties must sustain the loss; for it, as well as the profits must be divided in common when it does not occur through the negligence of a partner. 5Where two bankers are partners, and one of them profits by a transaction separately, and appropriates the gain therefrom, the question arises whether the gain should be divided? The Emperor Severus gave the following reply in a Rescript to Flavius Felix: “Where a partnership to carry on a banking business has been expressly formed for that purpose, any profit which a partner obtains in any way not connected with said banking business, has been determined by law not to belong to the partnership.” 6Papinianus also says in the Third Book of Opinions: “Where brothers retain undivided the estates of their parents, in order to share among themselves the profits and losses of the same, any acquisitions which they obtain from any other source do not belong to the common fund.” 7He likewise states in the Third Book of Opinions that, having been consulted with reference to certain facts, he gave the following opinion: “An agreement was made between Flavius Victor and Vellicus Asianus that land having been purchased with the money of Victor, certain buildings should be erected by the labor and skill of Asianus, and, after the said buildings were sold, Victor should receive the money which he had invested and a certain sum besides, and Asianus, who had contributed his labor to the partnership, should be entitled to the remainder.” In this instance an action on partnership will lie. 8Papinianus also states in the same Book that where a voluntary partnership was formed between two brothers, the salaries and other compensations should be brought into the common fund of the partnership; although a son who is emancipated would not be compelled to give what he obtained in this way to his brother who remained under the control of his father, because, he says, even if he should remain under paternal control, these things would still be his private property. 9He also gave it as his opinion that a partnership could not last beyond the death of the partners; and therefore that anyone could not be deprived of the power of testamentary disposition, or of transferring his estate to a more distant cognate than others who were more nearly related. 10Papinianus also gave it as his opinion that, where a partner repaired certain parts of a building belonging to the partnership which was falling into ruin, or had become dilapidated, that he could, as a privileged creditor, either recover the principal expended together with the interest within four months after the work had been completed, or he could acquire said building as his own after that time, and that he had a right, nevertheless, to bring an action on partnership for the recovery of his interest; for example, if he preferred to obtain what belonged to him rather than the ownership of the property. An Address of the Divine Marcus fixed the term of four months for the interest to cease, because, after that time, the partner would acquire the ownership. 11Where persons form a partnership in order to purchase something, and afterwards the property is not purchased on account of the fraud or negligence of one of them, it is established that an action on partnership will lie. It is clear that if this condition is added, namely, “If the property is sold within a certain time,” and the period elapses without the partner being guilty of negligence, the action on partnership can not be brought. 12Cassius stated that the action on partnership is also available for the recovery of expenses incurred by one of the partners in repairing a water-course owned in common. 13Mela also says that where two neighbors each contributed half a foot of land for the purpose of constructing a party-wall together, which was intended to support buildings belonging to each of them, and after said wall was built, one of them would not permit the other to use its support, an action on partnership would lie. The same authority held that, where two parties purchased a vacant lot to avoid their light being shut off, and it was delivered to one of them who would not allow the other to have what was agreed upon, an action on partnership can be brought. 14Where several partnerships are formed by the same persons, it is established that one judgment will be sufficient to decide all controversies which may arise with reference to them. 15Where one partner makes a journey connected with the business of the partnership, as for instance, for the purchase of merchandise, he will only be reimbursed for the expenses incurred by him on account of the partnership. He can, therefore, properly charge reasonable travelling expenses he incurred for hotel accommodations, for beasts of burden and the hire of vehicles, as well as for the transport of himself and his bales of goods, including the price of the same. 16Neratius says that where anyone is a general partner, he should place all his property in the partnership fund; and therefore he gives it as his opinion that the partnership will be responsible, under the Aquilian law, for any injury inflicted upon himself, or where any personal wrong has been inflicted upon him or his son. 17He also says that a partner, who has entered into a general partnership, is not required to bring into the common fund anything which he has acquired by unlawful means. 18On the other hand, it is also discussed by the ancient authorities whether a general partner who had had judgment rendered against him in an action for injury committed, could, by means of legal proceedings, compel the partnership to make good the judgment? Atilicinus, Sabinus, and Cassius answered that if he had been unjustly condemned, he would be entitled to recourse of this kind; but if the said injury resulted from some illegal act of his own, he himself alone must sustain the loss; which agrees with what Aufidius states was the opinion of Servius, that is, where there were two general partners, and one of them had judgment rendered against him for not appearing in court, he could not recover the amount of the judgment out of the partnership property; but if he, while present, suffered an unjust decision, he must be reimbursed from the partnership fund.

53 The Same, On Sabinus, Book XXX. It is clear that the proceeds of a theft or of any other breach of the law should not be placed in the partnership property, because a partnership in crime is base and dishonorable. Still, it is evident that if property obtained in this way becomes a part of the common fund, the gain must be divided:

54 Pomponius, On Sabinus, Book XIII. For the reason that where a partner places the proceeds of a crime in the partnership fund, he cannot recover it, except where he is compelled to surrender it by a judicial decision.

55 Ulpianus, On Sabinus, Book XXX. Therefore, if a party who committed an illegal act is sued, he can either surrender only what he misappropriated, or he can do this with a penalty. He can give up the property, which was taken, alone, in case the other partner was ignorant that he had placed it with that of the partnership. If, however, he was aware of the fact, he, also, will be liable to the penalty, for it is but just that he who participated in the profit should also share the loss.

56 Paulus, On Sabinus, Book VI. Nor does it make any difference whether the partner is compelled to surrender the property obtained by theft while the partnership is still in existence, or after it has been dissolved. The same rule applies to all actions which arise from dishonorable conduct, as, for instance, those based on injury, robbery with violence, the corruption of slaves, and others of this kind, as well as to all pecuniary penalties imposed in prosecutions for crime.

57 Ulpianus, On Sabinus, Book XXX. Pomponius says the fact must not be lost sight of that these rules only apply where a partnership has been formed for an honorable and lawful purpose; for if it has been formed in order to break the law, it will be void, as it is generally held that there can be no partnership in matters which are dishonorable.

58 The Same, On the Edict, Book XXXI. It should be considered whether an action on partnership can be brought where the property which one of the partners brought into the common fund has been lost. This point was discussed by Celsus in the Seventh Book of the Digest, with reference to a letter of Cornelius Felix as follows: “You have three horses, and I have one; we form a partnership with the understanding that you will take my horse, sell the four horse team and pay me one-fourth of the proceeds.” Therefore, if my horse dies before the sale is concluded, Celsus says that he does not think that the partnership will continue to exist, and that no portion of the value of your horses is due, for the partnership was not entered into to form a team of four horses, but to sell one. But if the intention of the parties was stated to be the formation of a four horse team, and the holding of the same in common, and that you should be entitled to a three fourths interest, and I to a one fourth interest in the same, there is no doubt that we are partners to that extent. 1Celsus also discusses the point, where we have contributed money for the purchase of merchandise, and my money has been lost, at whose risk would this be? He says that if the money was lost after it had been placed in the partnership fund, which would not have taken place unless the partnership had been formed, both parties must bear the loss; just as in the case where money is lost which was being taken to some distant place for the purchase of goods. If, however, the money was lost before it had been placed in the common fund, but after you had destined it for that purpose, he says that you can recover nothing on that ground, because it did not belong to the partnership when it was lost. 2Where a son under paternal control enters into a partnership, and is afterwards emancipated by his father, the question is asked by Julianus whether the same partnership continues to exist? Julianus states in the Fourteenth Book of the Digest, that the partnership does continue to exist, for the reason that in contracts of this kind the beginning of the transaction must be considered. There is ground, however, for two actions, one against the father, and the other against the son. The one against the father should be brought for what he ceased to be liable for on the day before the emancipation, for he is not liable for the time the partnership existed after the emancipation; the one against the son, however, includes both periods, that is to say, the entire time embraced by the partnership; for he says that if the partner of the son was guilty of any fraudulent act after the emancipation of the latter, an action on that ground should be granted to the son and not to the father. 3If my slave form a partnership with Titius, and it continues after the alienation of the slave, it can be said that the first partnership was terminated by the alienation of the slave and that an entirely new one began, and, therefore, that an action on partnership will lie both in my favor and in that of the purchaser of the slave. An action should also be granted against me as well as against the said purchaser, for any causes which arose before the alienation of said slave; but with reference to anything which took place afterwards, an action should be granted against the purchaser alone.

59 Pomponius, On Sabinus, Book XII. To such an extent is a partnership dissolved by death, that we cannot even admit that an heir may succeed to the partnership. Sabinus states that this applies to private partnerships, but in such as have for their object the collection of taxes, the partnership, nevertheless, continues to exist after the death of a partner; but only provided that the share of the deceased has been transferred to the heir, so that the other partner also must divide with the heir, and this also depends upon circumstances; for what if he on account of whose services the partnership was especially formed, or without whom its affairs could not be managed, should die? 1What a partner loses by gambling, or as the result of adultery, cannot be charged to the partnership property, but if a partner has lost anything on account of our fraudulent acts he can recover it from us.

60 The Same, On Sabinus, Book XIII. Labeo says that a partner who fails to report to the partnership the profit which he has obtained, or one who uses the money for his own benefit, must pay interest on it, not as ordinary interest, but by way of indemnity for what his partner has suffered by reason of his default. If, however, he did not make use of the money, or was not in default, the contrary rule applies. Moreover, after the death of a partner, no estimate of damages can be made on account of any act of his heir, because the partnership was dissolved by the death of the partner. 1A partner, while attempting to prevent slaves, who formed part of the stock of the partnership from escaping, was wounded; Labeo says that the expense which he incurred for medical services, in consequence, cannot be recovered by an action on partnership, because it was not actually caused by the partnership business, although it was done on account of it; just as if where someone had avoided appointing a party an heir, or had passed him by in bequeathing a legacy, or had managed his property more negligently on account of a partnership, for any gain which he himself had obtained on account of the partnership he would not be obliged to place in the common fund; as, for example, if he had been appointed an heir on account of the partnership, or anything had been given to him for this reason.

61 Ulpianus, On the Edict, Book XXXI. According to Julianus, however, he can recover what he paid out for himself for medical services in a case of this kind; and this is true.

62 Pomponius, On Sabinus, Book XIII. If Titius, with whom I have formed a partnership should die, and I am of the opinion that his estate belongs to Seius, and I sell the common property and take half of the proceeds of the sale, and Seius takes the other half; you, who are in reality the heir of Titius, cannot recover from me, in an action on partnership, the money which I have paid out; as was held by Neratius and Aristo, because I have only received the value of my share. Nor does it make any difference whether I dispose of my share separately, or together with that which the other party alleges is his. Otherwise, the result would be that, even if two partners should sell the property of the partnership, either one of them would be liable to the other in an action on partnership for half of whatever had come into his hands. But you would not be obliged to make good to me in a suit for the estate anything that you might have obtained from Seius, because what came into his possession was the price of your share, and nothing could be recovered from him by me, since I have already obtained what was mine.

63 Ulpianus, On the Edict, Book XXXI. The opinion of Sabinus is correct, namely, that if the parties are not general partners, but only associated for a particular purpose, or where they have acted in bad faith to avoid responsibility, they can still have judgment rendered against them to the extent of their resources. This is perfectly reasonable, as a partnership in some respects resembles a fraternity. 1It should be considered whether only the surety of a partner should be indemnified, or is this, indeed, a personal advantage to all? I think the latter to be the better opinion; if, however, the surety should undertake to defend the action of the partner, he can profit by it; for Julianus says, in the Fourteenth Book of the Digest, that the defender of the partner can only have judgment rendered against him to the extent of the resources of said partner. And he adds that the same rule applies to one who acts as a defender of a patron. This rule is also generally applicable to all those who are sued to the amount of the means which they possess. 2This exception, however, should not be granted to the father or master of a partner, if the partnership was contracted by the direction of either; because it will not be granted to the heir and other successors of the partner, for the reason that we do not accord the same privilege to heirs or successors not to have judgment rendered against them beyond the extent of their resources. 3But how can an estimate of the financial resources of a partner be made? It has been established that the indebtedness of the partner should not be deducted; and this Marcellus stated in the Seventh Book of the Digest; unless, as he says, the debts had been contracted with reference to the partnership itself. 4It must also be considered whether the partner should, in a case of this kind, furnish security for what he cannot pay, that is to say, make a bare promise to do so. I think that this is the better opinion. 5If, where there are three partners, one of them should bring an action against one of the others, and recover his entire share, and then another should bring an action against the remaining partner, but is unable to recover his entire share because the said partner is not solvent; the question arises whether he who failed to obtain all that he was entitled to, can bring an action against the one who received the entire amount of his share, for the purpose of making a division, that is to say, of placing all the shares upon the same footing, since it is unjust that one should obtain more and the others less from the same partnership? This opinion is founded upon equity. 6In order to determine whether a partner is able to pay the amount which he owes, we must take into account the time when the judgment was rendered. 7Anyone is held to be able to make payment who has committed a fraudulent act in order to avoid doing so, for it is not just for anyone to profit by his own fraud. This should be understood to apply to all those against whom suit is brought to the extent of their resources. If, however, a party is unable to make payment, not on account of fraud, but because of his own negligence, it must be held that judgment should not be rendered against him. 8An action on partnership can also be brought against the heir of the partner, even though he may not be a partner, for even if he is not one, he is, nevertheless, the successor to the profits of the partnership. We observe the same rule with reference to partnerships for the collection of taxes and others of the same kind, namely that the heir is not a partner unless he has been admitted to the partnership; still, all the profits of the partnership belong to him, to the same extent that he is responsible for the losses which may occur either during the lifetime of the partnership in the collection of taxes, or afterwards. This rule is not applicable in the case of voluntary partnerships. 9If one of two masters bequeaths a legacy, without his freedom, to a slave held in common, this legacy belongs entirely to the surviving partner. Nevertheless, the question arises whether he can bring an action on partnership, for the division of the legacy, against the heir of the deceased partner? Julianus says that Sextus Pomponius states that the opinion of Sabinus is that the legacy cannot be divided. Julianus says, that there are good grounds for this opinion, for what has been acquired has not been done by reason of the partnership, but on account of the share of the partnership in the slave. It is not necessary for a division to be made of what a partner does not acquire through the partnership, but by means of his own property. 10A partnership is terminated by the non-existence of those who compose it; by loss of its property; by the will of the partners; and by legal proceedings. A partnership, therefore, is held to be dissolved when either the persons composing it, the property belonging to it, the agreement of the partners, or judicial proceedings relating to it, come to an end. The partners cease to exist, through the alteration of civil rights either in its greatest, intermediate, or least degree, or by death. The property is held to be lost where none remains, or its condition is changed; for no one can be a partner in property which is no longer in existence, nor in such as has been consecrated for religious purposes, or forfeited to the State. A partnership is terminated by the will of the parties, by withdrawal.

64 Callistratus, Questions, Book I. Hence, if partners begin to act separately, and each one of them transacts business on his own account, there is no doubt that the partnership is dissolved.

65 Paulus, On the Edict, Book XXXII. It is terminated by legal proceedings when the purpose for which it was formed is changed, either by stipulation or judicial decision; for Proculus says that a partnership is dissolved whether it be general or special, whenever legal steps are taken for the purpose of putting an end to it. 1Labeo says that a partnership is dissolved where the property of one of the partners is sold by his creditors. 2Labeo also says that if the partnership was formed for the purpose of purchasing or leasing something, that then, any profits which may have accrued, or any loss which may have taken place, must be divided in common after the death of one of the partners. 3We have stated that a partnership can be dissolved by the dissent of the parties, that is, if all of them are of one mind in this respect. But, what if only one of them should withdraw? Cassius stated that he who retires from the partnership releases his partners from responsibility, so far as he himself is concerned, but does not release himself from liability to them. This rule, however, should only be observed where the withdrawal is made from fraudulent motives; as, for instance, if we form a general partnership, and afterwards an inheritance passes to one of the partners and he retires on this account; if the inheritance should be productive of any loss, this must be borne by the partner who withdrew from the partnership, but he can be compelled by an action on partnership to share with the others any profits arising from the same. If he should acquire any property after his withdrawal, it will not be shared with the other partners, because fraud has not been committed with reference to it. 4Moreover, if we form a partnership for the purchase of certain property and afterwards you wish to purchase it yourself, and for this reason you withdraw from the partnership, you will be liable to the extent of my interest in said property. But if you withdraw because the purchase was displeasing to you, you will not be liable even if I purchase it; because in this instance no fraud exists. These opinions were also held by Julianus. 5Labeo also stated in his work on recent cases, that if one partner should withdraw from the partnership at a time when it was the interest of the other for it not to be dissolved; he will be liable to the action on partnership; for if we form a partnership for the purchase of slaves, and, after doing so, you withdraw from the association at a time which is not favorable for the sale of the slave, in this case, you will be liable to an action on partnership, because you have rendered my position worse. Proculus holds this opinion to be correct only where it is the interest of the partnership not to be terminated; for greater consideration is usually shown to what is beneficial to the partnership, than for the private advantage of one of the partners. These rules are only applicable where nothing has been agreed upon with reference to these matters, when the partnership was formed. 6Where a partnership has been formed for a certain time, one of the partners, by withdrawal from it before the time has elapsed, releases his partner from liability to himself, but he does not release himself from liability to his partner. Hence, if any profit is obtained after his withdrawal, he will not be entitled to any share of it; but if any expenses have been incurred, he must also pay his share, unless his withdrawal took place on account of some necessity. When, however, the time has elapsed, either party is free to withdraw, because this can be done without fraudulent intent. 7We can also withdraw from a partnership by the agency of others, and therefore it is held that an agent can also withdraw in behalf of his principal. Let us consider, however, whether what has been stated on this point applies to him to whom the general management of the partnership property has been entrusted, or to him to whom special directions on this subject have been given; or can the withdrawal legally be made in either instance? The latter is the more correct opinion, unless the principal expressly forbade the agent to withdraw. 8It is also settled that my partner can give notice of his withdrawal to my agent. Servius says in a note on Alfenus that it is in the power of the principal, when notice of withdrawal is given to his agent, to ratify or reject it at his pleasure; therefore, he will be held to be released from liability to whose agent notice of withdrawal was given; but he, also, who gave notice to the agent of his withdrawal, will be released if he so desires; as we have stated with reference to one partner who personally notifies the other of his withdrawal. 9A partnership is dissolved by the death of one of the partners, even though it was formed with the consent of all, and several survive, unless some other arrangement was made when the partnership was formed; nor can the heir of a partner succeed to the partnership, but he can share in the profits of it afterwards. Moreover, any loss resulting from fraud or negligence in transacting the business before the death of the partner, must be made good to the heir, as well as by him. 10Moreover, a partnership formed for any special purpose is terminated when the business for which it was entered into is finished. If, however, one of the partners should die, while the affairs of the partnership were still unchanged, and the reason for the formation of the partnership should only appear after his death, we must then make the same distinction as in the case of a mandate; namely, that if the death of one of the partners was unknown to the other, the partnership will continue to exist; but if it was known, it will be dissolved. 11Just as the partnership does not pass to the heirs of a partner, so also it does not pass to an arrogator; lest, otherwise, a partner might become associated with persons against his will. The party who was arrogated will, however, remain in the partnership, for even if a son under paternal control should be emancipated, he will still continue to be a partner. 12We have stated that a partnership can also be dissolved by the confiscation of property, which is held to relate to the forfeiture of all the property of a partner to the State, for the latter is considered as dead when another partner succeeds him. 13If any expense should be incurred with reference to the partnership property, after the partnership has been dissolved, a partner cannot recover said expense in an action on partnership, because it is not true that this was done in behalf of the other partner, or on account of the partnership interest; but, in an action for the division of property held in common, account must be taken of this expense, for although the partnership may have been dissolved, the division of the property nevertheless remains. 14Where money belonging to a partnership is in the hands of one of the partners, and the capital of one of the latter is, to a certain extent, diminished; suit should only be brought against the partner who has possession of the money; and, after what is due to him has been deducted, all of them can bring suit for the balance which is due to each one. 15It is sometimes necessary to bring an action on partnership while the partnership is still in existence; as, for instance, where the latter was formed for the purpose of collecting taxes; if on account of various contracts it is to the advantage of neither partner to withdraw from the partnership, and one of them fails to place what he has collected in the common fund. 16Where one of the partners is married, and the partnership is dissolved during the marriage, the said married partner can take the dowry of his wife out of the partnership property, in preference to any other claim; because it should be in the hands of him who sustains the burdens of marriage. If, however, the partnership is dissolved after the marriage has ceased to exist, he should receive the dowry on the very day when it should be paid.

66 Gaius, On the Provincial Edict, Book X. If at the time when the partnership property is divided, circumstances exist which make it certain that the dowry, or even a portion of the same, should not be given up; the judge should order it to be divided among the partners.

67 Paulus, On the Edict, Book XXXII. Where one of the partners sells the property of the partnership with the consent of the others, the price ought to be divided, and security furnished to indemnify him for the future; and if the said partner has already suffered any loss, it must be made good to him. If, however, the purchase-money is divided without any security being given, and the partner who made the sale was compelled to pay something on account of it; can he recover from some of the partners what he has not been able to collect from the others, where all of them are not solvent? Proculus thinks that this burden should be sustained by the others, if it cannot be collected from some of them; and that this can be defended on the ground that when the partnership was formed, a community of profit as well as loss was established. 1Where one of several partners, who did not belong to a general partnership, lent money which belonged to all of them, and collected the interest, he should only divide the interest if he lent the money in the name of the partnership; for if he did this in his own name, since he ran the risk of losing the principal, he is entitled to retain the interest. 2Where a partner incurs some necessary expense with reference to the business of the partnership, he can bring an action on partnership for the interest, if he should have borrowed the money at interest. But where he used his own money for this purpose, it is held, and not without reason, that he has a right to claim the same amount of interest which he could have collected if he had lent the money to anyone else. 3Judgment cannot be rendered against a partner to the extent of his resources, unless he acknowledged that he is a partner.

68 Gaius, On the Provincial Edict, Book X. No partner, even though the partnership is a general one, can alienate a larger amount than that which composes his share. 1The question arises whether a party is held to have committed an act to avoid making payment of the amount for which he is responsible, who disposes of his property fraudulently to avoid a future suit, or who does not make use of an opportunity for profit on this account? The better opinion is that, in this instance, the Proconsul had in mind a party who had disposed of his property, and this we can infer from the interdicts in which the sentence, “Because you have committed fraud in order to avoid being in possession,” is inserted.

69 Ulpianus, On the Edict, Book XXXII. When a partnership is formed for the purpose of making purchases, and it is agreed upon that one of the partners shall furnish the others with provisions, and shall leave the transaction of the business to them, if he does not provide them with supplies, an action on partnership, as well as one on sale, can be brought against him.

70 Paulus, On the Edict, Book XXXIII. A perpetual partnership cannot be formed.

71 The Same, Epitomes of the Digest of Alfenus, Book III. Two persons formed a partnership to teach grammar, and to share among themselves any profits that might be obtained from this profession. After having agreed in the articles of partnership on what they wished to be done, they then stipulated with one another as follows: “Whatever is written above must be carried out, and cannot be opposed, and if the said provisions are not complied with, then twenty thousand sesterces shall be paid.” The inquiry arose whether if any of these provisions was violated, an action on partnership could be brought? The answer was that if, after their agreement had been made with reference to the partnership, they had stipulated as follows: “Do you promise that these provisions shall be observed as herein set forth?” The result would be that if the parties had done this for the purpose of changing their contract, an action on partnership would not lie, but the whole matter would be considered to have become a stipulation. But if they had not stipulated in these terms, “Do you promise that these provisions shall be observed as herein set forth?” but, as follows, “If these provisions are not observed, then ten aurei shall be paid;” it was held by him that the matter had not become a stipulation, but only what related to the penalty had been altered, because the party promising had not bound himself to do both things, that is, he would make payment and also perform the agreement, and that if he did not do so he would suffer the penalty; and therefore an action on partnership would be available. 1Two fellow freedmen formed a partnership for the purpose of sharing all “gains, profits, and emoluments,” and afterwards one of them, having been appointed an heir by his patron, a legacy was left to the other. The answer was that neither of them was obliged to place what he received in the partnership fund.

72 Gaius, Diurnal, or Golden Matters, Book II. One partner is liable to another on the ground of negligence, that is to say of failure to act and lack of diligence. Negligence in this instance, however, is not understood to mean want of the most exact diligence, for it is sufficient for him to employ the same diligence in the partnership affairs as he is accustomed to do in his own; because where anyone takes a partner who displays very little diligence he has only himself to blame.

73 Ulpianus, Opinions, in Answer to Maximin, Book I. Where persons form a partnership of their entire property, that is to say of whatever property either one may subsequently acquire, an estate which falls to either of them must be placed in the common fund. He also stated to Maximin that, where persons form a partnership of their entire property in such a way that whatever is expended or gained shall be to the common profit or expense; any sums which may be expended for the children of either must be charged to both.

74 Paulus, On the Edict, Book LXII. Where anyone has formed a partnership, and makes a purchase, it belongs to him individually, and not to the common fund, but he can be compelled by an action on partnership to make it common property.

75 Celsus, Digest, Book XV. Where a partnership has been formed with the understanding that Titius shall have the regulation of the shares, and Titius dies before he renders a decision, the partnership is void; because the intention was that no other partnership should exist than that which is subject to the decision of Titius.

76 Proculus, Epistles, Book V. You formed a partnership with me under the condition that Nerva, our common friend, should decide with reference to the shares thereof; and Nerva decided that you should be a partner to the extent of one-third, and I to the extent of two-thirds of the capital. You ask whether this should be ratified in accordance with the rights of the partnership, or whether we are equal partners, nevertheless? I think that it would have been better for you to have made the inquiry whether we were partners to the extent of the shares which he had established, or whether to the extent of those which would have been apportioned by a good citizen; for there are two kinds of arbiters, one whose award we should obey whether it be just or unjust, which rule must be observed when recourse is had to arbitration by common consent of the parties. There is another kind, whose award must be compared with that which would be rendered by a good citizen, although the party who is to give it has been expressly selected;

77 Paulus, Questions, Book IV. For instance, when the intention of a lease is involved, and the decision of the lessor is required.

78 Proculus, Epistles, Book V. I think that, in the case stated, the judgment of a good citizen should be followed, and all the more so, because a decision in an action on partnership is one where good faith is concerned.

79 Paulus, Questions, Book IV. Wherefore, if the award of Nerva is so improper that its manifest injustice is apparent, it can be corrected by a judgment on the ground of good faith.

80 Proculus, Epistles, Book V. What would be the result if Nerva decided that one party should be a partner to the extent of one thousand shares, and the other to the extent of two thousand shares? The decision of a good citizen could not fail to be that we are not partners to the same extent; for example, just as if one of us should bring into the partnership more labor, skill, credit, and money than the other.

81 Papinianus, Questions, Book IX. Where a partner promised a dowry in behalf of his daughter, and, before he paid it, died, having left her his heir, and she afterwards brought an action against her husband for her dowry; she was released by a receipt from her husband. The question arose whether, if she brought an action on partnership, she ought to receive the amount of the dowry as a preferred claim, if it had been agreed between the partners that the dowry should be taken out of the common fund? I say that the contract was not an unjust one, provided that the girl had not made it merely with reference to one of the partners; for, if the agreement was reciprocal, it did not make any difference if only one of the partners had a daughter. Moreover, if the father should recover the dowry which he had given after the death of his daughter during marriage, the money ought to be returned to the partnership, for we should interpret the contract equitably in this way. If, however, the marriage should be dissolved by a divorce during the existence of the partnership, the dowry would be recovered with its accessories, so that it could again be given to another husband. But if the first husband was not able to restore the dowry, another could not be taken from the funds of the partnership, unless this had been expressly agreed upon. In the example proposed, however, it seems to be most probable that the dowry was actually paid, or at least promised. For if the daughter had received the dowry by operation of law, after she became the heir of her father, the money ought not to be placed in the partnership fund, because she would be entitled to it, even if there should be another heir. But, if she was released by a receipt from her husband, money should not be credited to the partnership which had not been paid.

82 The Same, Opinions, Book III. One partner is not bound for the debts contracted by another, according to the law of partnership, unless the money was deposited in the common chest.

83 Paulus, Manuals, Book I. The question arose whether, where a tree which grows on the boundary line, or a stone which extends on each side of the line of two contiguous tracts of land, will belong proportionately to the owner of each tract; or, if the tree is cut down, or the stone removed, it will remain undivided; as occurs where two masses of metal belonging to two owners are melted together the entire mass becomes the common property of both; and thus, in this instance where a tree is separated from the soil, there is all the more reason for considering it to belong to both owners, than is the case with a mass of metal; since it only forms one body composed of the same substance. It is in accordance with natural reason, however, that, after the separation of the stone or the tree, each of the two owners should have the same share of the same to which he was entitled while it remained in the earth.

84 Labeo, Abridgments by Javolenus, Book VI. Whenever a partnership is formed by the direction of anyone, either with the son of the latter or with another person, a direct action can be brought against the one who was in view when the partnership was formed.