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PARTNERSHIP, INDUSTRIAL-PARTNERSHIP, LAW OF

profits without at the same time incurring unlimited liability towards creditors. The Partnership Act of 1890, embodying the provisions of "Bovill's Act" passed in 1865, recognises this principle, and states that the receipt of a share of the profit of a business or of a payment contingent on or varying with the profits, does not of itself make such person a partner. But whilst these provisions only relate to private arrangements, which may at any time be altered or cancelled between the parties, subject however to the restriction that, in the event of bankruptcy, a person entitled to a share of profits, but not being a partner, cannot prove in competition with other creditors, the form of partnership known as "Limited Partnership" and société en commandite, and used in most mercantile countries, including the United States, gives effect to the principle referred to in a much more consistent manner. In a commandite partnership, there are one or more partners managing the affairs of the firm, and liable to an unlimited extent, who are called "general partners," and one or more dormant partners, who are called "special partners" (commanditaires), who are only liable to a limited extent. The amount for which they are liable, and the time during which the liability continues, must be registered and published, and no arrangement between the partners varying the registered agreement can affect the creditors of the partnership.

Owing to the spread of limited Companies, commandite partnerships have in all countries come very much into disuse, and the fact that the provisions of the British Companies Act 1867, § 4, which allows limited companies to be formed in which the managers or directors are liable to an unlimited extent, have remained s dead letter, shows that in British countries there is no real demand for "commandite" partnerships.

[See Revised Statutes of the State of New York, pt. ii. ch. iv. title 1.-French Code de Comm., 23, 28, German M. C., §§ 150-206, Italian M.C., 114-120; Spanish M. C., §§ 145-150; Portug. M.C., SS 104, 113, 114, and other Mercantile Codes.]

PARTNERSHIP, PROFIT SHARING.

J. E. C. M.

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PARTNERSHIP (LAW OF). Partnership in the widest sense means every association for common purposes, and in a somewhat narrower but still comprehensive application, it means every association for purposes of gain. In the strictly legal sense the word is, however, of more limited import. In all countries partnerships are distinguished from incorporated companies (see COMPANIES; JOINT-STOCK

1 The following abbreviations are used throughout this erticle:-B. A. Bankruptcy Act 1883; C. A. = Compes Act; F. C. C. French Code Civil; F. C. d. C. -French Code de Commerce; G. M. C. German Mercan

Code; I. C. d. C. = Italian Codice di Commercio; P. A. Partnership Act 1890.

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| COMPANIES; STANNARIES). Subject to that exception, a partnership in the United Kingdom, as well as in such parts of the British empire in which the P. A. has come into force, is defined to be in (§ 1) as "the relation which subsists between persons carrying on a business in common with a view of profit," the word "business" including, according to the definition given by § 45 of the same act, "every trade, occupation, or profession."

English law does not distinguish between mercantile and other partnerships, as some of the continental codes do, in which non-mercan tile partnerships are governed by rules differing in many important respects from the rules governing mercantile partnerships. This is more especially the case with reference to the liability for the partnership debts, which in the case of mercantile partnerships extends to the whole debts for each partner, whilst in the case of non-mercantile partnerships the partners are liable in equal shares, no partner being liable beyond his share (see for instance F. C. C. §§ 1862 and 1863); but there are many other matters in respect of which nonmercantile partnerships, which in Germany include professional partnerships and partnerships between innkeepers, artizans, and small tradesmen generally, are, according to continental law, not governed by the rules applicable to mer cantile partnerships (see G. M. C. §§ 85 and 10; F. C. C. act 20, art. 1, and the decisions thereon; and the I. C. d. C. art. 76, and art. 3-7).

In the United Kingdom one kind of mercantile partnership only is known, i.e. that in which all partners are liable for the partnership debts without limit. A person may-under the law originally laid down by the House of Lords in Cox v. Hickmann (8 H. L., C. 268), and subsequently declared by Bovill's Act, now reenacted with certain slight alterations by P. A. 1890, § 2 (3)-have a share of profits without being a partner, but all partners are liable without limit. On the continent, on the other hand, there is a form of partnership called société en Commandite (see G. M. C. § 150; F. C. d. C. § 23; I. C. d. C. §§ 76, 117), in which one or several of the partners may limit their liability, whilst one at least of the other partners is liable without limit. The limited partners may divide their interest in the partnership capital into shares, in which case the partnership has some of the characteristics of a company, and is called société en Commandite par actions (see G. M. C. § 173; F. C. d. C. § 38; I. C. d. C. §§ 119 and 120) (see PARTNERSHIP, FORM OF, AS COMMANDITE). It was intended to introduce commandite partnerships with a share capital into the United Kingdom, and the provisions of C. A. 1867, § 4, are quite sufficient for the purpose; but it does not seem that any one has ever attempted to apply them. There is finally a form of partnership which exists in

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PARTNERSHIP, LAW OF

Germany, by virtue of a statute passed in 1892, in which all the partners are liable to a limited extent only (Gesellschaft mit beschränkter Haftung). This form of partnership is distinguishable from a limited "company" in various ways, but in the United Kingdom its place is taken up by "private companies," which are companies in the full sense, but have generally some provisions in their articles by which the more private character of the association is secured (e.g. clauses providing that shares cannot be sold without being offered to the shareholders).

According to English law a partnership established for banking having more than ten, and any other partnership having more than twenty members must, unless it belongs to certain privileged associations specially dealt with by statute, be incorporated as a company under the C. A. or by special act or by special charter (C. A. 1862, § 4). On the continent, on the other hand, there is no restriction as to the number of partners in private partnerships.

Persons who have entered into partnership are collectively called a FIRM (q.v.). In England the firm is only looked on as a collection of persons who have joint rights and joint liabilities, but in Scotland a firm is a legal person distinct from the partners of whom it is composed (P. A. 1890, § 4), and this is also the theory of French law. As it is now possible in England to bring and defend actions in the firm's name (R. S. C. 1891, Order xlviii. A. r. 1), the distinction has lost most of its importance.

One of the principal incidents of the partnership relation, which, in those continental countries in which mercantile partnerships are distinguished from others, attaches to mercantile partnerships only, is by the P. A. 1890, § 5, described as follows:-"Every partner is an agent of the firm and his other partners; and the acts of every partner who does any act for the carrying on in the usual way of business of the kind carried on by the firm of which he is a member, bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner." Where, however, one partner pledges the credit of the firm for a purpose apparently not connected with the firm's ordinary course of business, the firm is not bound, unless he is in fact specially authorised by the other partners (ib. § 7). On the continent, restrictions in a partner's implied authority are binding on third parties, although unknown to them, if entered on the register (sce G. M. C. §§ 115, 86, 87; I. C. d. C. §§ 88, 90).

The question as to who is or who is not a

partner in a firm is also of easier solution on the continent than in the United Kingdom, as a person registered as partner in a firm on the mercantile register is, as between himself and third parties, estopped from denying that he is a partner (G. M. C. § 25; I. C. d. C. §§ 103, 88; French St. 24th July 1867, §§ 55, 57, 61). In the countries governed by British law, registers of firms are not used, and it is therefore necessary to inquire into the exact facts in order to find out whether any given person may be treated as a partner or not, but persons "holding themselves out" as partners may be made liable as such, although they are not partners in fact (P. A. 1890, § 14).

The internal affairs of a partnership are generally arranged by contract between the partners. In the United Kingdom, a written contract is not required unless the duration of the partnership is to extend over a year, and in Germany a written contract is unnecessary in any event (G. M. C. § 85), but in France and Italy a written contract must be registered in all cases, and certain parts of it, including statements as to the names of the partners, the trade name, the authority of the partners to act for the firm, the duration of the partnership, and the amount of the partnership capital, must be published in certain newspapers (F. C. d. C. §§ 39, 41; St. of the 24th July 1867, § 57; I. C. d. C. §§ 87, 88, 90, 93).

The codes relating to the law of partnership contain regulations as to the rights in respect of the partnership property, the sharing of profits, the interests payable on advances of capital, the duty of partners not to carry on business in competition with the firm, the powers of majorities, the expulsion of partners, the duration of partnerships, and other matters (see P. A. 1890, §§ 19, 31; G. M. C. §§ 90109; F. C. d. C. § 18; I. C. C. §§ 1707-1725; C. d. C. § 107-113) which have to be applied in the absence of contractual stipulations to the contrary.

The procedure to be adopted for the purpose of recovering partnership debts by execution against the property of individual partners, or the estates of deceased partners, is too complicated to be discussed in this place (as to the U. K. see P. A. § 9, and Kendall v. Hamilton, 4, Ap. c. 504; as to Germany, M. C. § 112; as to France, C. d. C. §§ 22, 64; C. C. §§ 1200, 1202; as to Italy, C. d. C. §§ 76, 206; C. C. SS 1186, 1189). The rules in this matter arc, in the view of English courts, mere matter of procedure, and must therefore be decided by the law of the place in which the action is brought, without reference to the law of the place in which the partnership business is carried on (in re Doetsch [1896] 2. ch. 830).

In case of bankruptcy the partnership creditors are, in the United Kingdom and Germany, entitled to the partnership property, and the

PARTNERSHIP, LAW OF-PARTNERSHIP, MEDIÆVAL

separate creditors of any partner are entitled to such partner's separate property. If any surplus remains in either case, such surplus is available for the partnership creditors, or the separate creditors, as the case may be (B. A. 1883, § 40 (3); G. M. C. § 122).

From an economic point of view the regula tion of partnership law by rules adapted to the usages and requirements of mercantile life, is of great importance, as in consequence of such regulation the formation of partnerships and more especially their dealings with other traders and with each other, are considerably facilitated. The disadvantages of trading without partners are so obvious that they hardly require mention, but the comparison between partnerships and companies is more difficult. For those classes of business in which the personal capacities of the managers are of great importance, private partnerships may appear preferable, as they are more likely to retain permanent customers, but even in this respect much may be said on the other side, as the vicissitudes of health and the uncertainty of life make it impossible to rely with confidence on the continuance of the personal qualities which, in a given case, make it desirable to transact business with a particular firm, whilst on the other hand a company is more likely to be able to replace a capable manager by one equally capable, who, by having previously assisted his predecessor, will continue to work in the same manner.

In a private partnership there is, of course, a greater possibility for sons to continue in the footsteps of their father than in a company, and the continuance of firms by successive generations of the same family has many obvious advantages from a public point of view; but these advantages were much greater when the mercantile classes were socially distinct from the leisured classes. In our days a share in the family business is frequently looked on as property not involving any duties, enabling the owner to share the life of those who in former days would not have associated with persons deriving their income from "trade," and in such a case the advantages of the business traditions of the family must soon disappear.

The greater privacy of private partnerships may be more advantageous for the preservation of trade secrets, but with proper precautions the same result may be secured by a company.

The risks and disadvantages of trade being carried on by companies as distinguished from private partnerships have been frequently discussed. In a company there is nobody whose personal honour is affected by failure, and the persons who have a directing voice in the management do not necessarily suffer from the consequences of their carelessness or recklessness, and may be even benefited by the disasters of their company. The risk attendant on this

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circumstance may be lessened by legislation (see JOINT STOCK COMPANIES), and also by the education of public opinion which hitherto has been much too lenient in respect of the deficiencies of company directors, except in a few conspicuous cases, in which there were sensational features of a special kind.

But it is clear to any intelligent observer that private partnerships and unlimited liability are rapidly disappearing, and under these circumstances it is hardly worth while to propose any legislative reforms of partnership law; but an act providing for the compulsory registration of firms, and thus enabling creditors to ascertain who at a given moment are the partners in the firm with whom they are dealing, would be of great advantage, and could be introduced without much difficulty. The introduction of "commandite" partnerships, at one time much discussed by reformers of partnership law, would probably be without any practical effect; if there was any real want for this form of partnership it could be easily supplied by taking advantage of the above-mentioned provisions of C. A. 1867, § 4. In the event of company law being made more stringent, it will probably be desirable to find a special form of association to facilitate trading with limited liability without the necessity of the restrictions which would then be imposed upon the formation and management of public companies (see as to this, paragraphs 65 and 66 of the Report of the Departmental Committee of the Board of Trade on the Companies Acts published in 1895), and for this purpose the introduction of private partnerships with limited liability similar to those established under the above-mentioned German statute of 1892 would be convenient. [See PARTNERSHIP; LIMITED PARTNERSHIPS ACT, in App.]

[As to continental law, see the art. "Sociétés Commerciales," Continental Mercantile Codes.-Also Troplong, De la Société.-Deloison, Traité des soc. commerciales franç. et étrangères, 2 vols. 1882.Houpin, Traité général théorique et pratique des Sociétés Civiles et Commerciales, 2 vols. 1895.Hergenhahn, Das Reichsgesetz betreffend die Ges. mit beschr. Haftung, 1895.-See also the articles under the heading: "Die Handelsgesellschaften i. to iii. in Endemann's Handbuch, vol. i. pp. 310. 357. As to English and Scotch law, see Lindley, Treatise on the Law of Partnership, 6th ed. 1893. -Pollock, Digest of the Law of Partnership, 6th ed. 1895.]

E. S.

"

PARTNERSHIP, MEDIEVAL. The modern practice of partnership has a threefold root in medieval usage. (1) The oldest form of partnership in the middle ages took its origin from Italy, and was known as commenda. This implied the handing over, for a particular voyage or enterprise, of goods or money by one person who remained at home (commendator, socius stans) to another who undertook the management of the business (commendatarius,

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tractator). The commendatarius was commonly rewarded with one-fourth of the gain. In the later centuries, the commendatarius usually contributed capital himself, and acted on behalf of a number of socii stantes or sleeping partners. It was in this way that most commercial undertakings were conducted which involved considerable capital; and the practice survived in the société en commandite, so general to-day on the continent of Europe (see COMMANDITE, SOCIÉTÉ EN).

(2) The joint household of brothers, relatives, or friends, "eating one bread" (companis), and engaged in the same industry, was apparently the direct parent of the ordinary private partnership of modern England and the offene Gesellschaft of modern Germany, and seems to have given them the characteristic of unlimited liability which distinguishes it from the société en commandite.

(3) The mechanism of the modern joint-stock company, however, may be traced back in large part to the GILD. The earliest joint-stock companies, like the English EAST INDIA COMPANY, had in every respect, except the jointstock, the same organisation as the earlier companies of "adventurers" in foreign trade. These latter were modelled on the great town "crafts" or "companies," like those of the mercers or grocers; and these, in their turn, had but followed the example of the earlier merchant and craft gilds. In all these, though there was a small fund for certain common religious and social purposes, and various restraints were imposed on the economic action of members, each member traded on his own account and with his own stock. Even the East India Company began with a joint stock only for each voyage, and did not for some years create a permanent joint stock. The introduction of a joint stock was immediately due to the lessons of experience, but the forms adopted for the purpose were probably influenced by contemporary practice in the matter of government loans (see also PARTNERSHIP, LAW OF; and PARTNERSHIP, HISTORY OF).

[The most complete information on the subject will be found gathered together in the Universalgeschichte, forming vol. i. of L. Goldschmidt's Handbuch des Handelsrechts (new ed. 1891), where are also given abundant references to the literature. Among recent special monographs should be mentioned W. Silberschmidt, Die Commenda in ihrer frühesten Entwickelung (1884), M. Weber, Zur Geschichte der Handelsgesellschaften im Mittelalter (1889), and F. G. A. Schmidt, Handelsgesellschaften in den deutschen Stadtrechtquellen (1883). On these works is founded the account in Ashley, Economic History, vol. i. pt. ii. § 67. See also Parsons, Principles of Partnership (Boston, 1889), S$ 2, 3, 26; Troplong, Du Contrat de société (1843); Frignet, Histoire de l'association commerciale jusqu'aux temps présents (1868).]

W. J. A.

PARUTA, PAOLO (1640-1698), a Venetian

nobleman; a clear-headed political writer and historian of the Venetian republic. His work, Della perfettione della vita politica, discusses wealth, and, in opposition to socialistic views, defends private property.

Whilst other authors of his day considered wealth solely from a moral point of view, Paruta recognised also an economic side to it. He does not confuse the desire for wealth with the unrestrained longing to accumulate, nor is he biassed by preconceived ideas of ascetic morality which other writers of his day had inherited from the canonists (see CANON LAW). He considers man's desire to live and to improve his social position to be a right desire based on natural instinct. Therefore, that which other writers of his time condemned, Paruta considered only human and moral.

In the work we quote, Paruta defends private property, combats communism, and shows the impossibility of absolute equality, confuting the numerous writings, the outcome of the sad conditions of the times, which advocated reform based on communism. The law-giver, says Paruta, cannot equalise the wealth of citizens, because this would destroy liberality. It would not be reasonable that the most worthless citizen should be on the same level for wealth as the worthiest. This happens even now, he observes, but being due to chance and not to the law, is more easily tolerated. It would, in any case, be impossible to preserve equality if it were established, and it would necessarily bring about the community of goods and children, upheld by PLATO, and lead to most serious troubles.

The real remedy, according to Paruta, is to distribute honours and taxation so that all may share in them according to their status, while educating all citizens to make a good use of their wealth, and abolishing gambling, usury, and all useless occupations. Further, while Paruta defends property, he objects to excessive concentration of possessions.

Della perfettione della vita politica di M. Paolo Paruta, nobile Vinetiano, Venetia, 1599.

[See Cossa, Introduzione allo studio dell' economia politica, Milan, Hoepli, 1892. -Supino, La scienza economica in Italia dalla seconda metà del secolo XVI. alla prima del XVII., Loescher, 1888.]

U. R.

PASCOLI, LEONE (18th century). Born in Perugia, an abbé and a considerable writer on economic subjects, too soon forgotten. In his book, written 1728, published anonymously 1733 at Perugia, untruly dated from Colonia, Pascoli anticipated the economic financial reforms attempted later by Pius VI. in the papal states.

Pascoli follows BOISGUILBERT, deriving from him the title of his principal work, and proposing protection for agriculture, but he does not absolutely repudiate mercantilism, his leanings towards which are shown in his

PASHLEY-PASSE-DEBOUT

monetary policy which was designed to cause more coin to be brought into the country than left it. To secure this, trade was to be fettered, that the nation might preserve its economic independence and not waste its money on luxuries.

Pascoli's work has special regard to the condition of the pontifical states which he sought to improve. He proposes plans to raise agriculture and industry again to a flourishing condition, and he discusses the supply of food, trade, coinage, and finance. Free trade internally, free export of agricultural produce to foreign countries, simplification of the system of taxation, constituted the basis of the economic organisation suggested by him. To restore prosperity to agriculture, he proposed to re-establish the ancient privileges granted to cultivators, to release them from all taxes, and to prohibit the import of foreign cattle. He studied the best methods of rendering the Roman Campagna healthy, and maintained that the state should compel landowners to execute sanitary works. He advocated proportional taxation and special taxes to provide relief for the poor, similar to the English system, prohibition of the export of raw materials, and taxation of imported manufactures.

The title of Pascoli's book is, Testamento politico di un accademico fiorentino, in cui con nuovi e ben fondati principii si fanno varii e diversi progetti per istabilire un ben regolato commercio nello stato della chiesa, etc., Colonia, 1733.

[See, concerning Pascoli, Cossa, Introduzione allo studio dell' economia politica, Milan, 1892.Ricca Salerno, Storia delle dottrine finanziarie in Italia, 2nd ed., Palermo, 1896.-Gobbi, La concorrenza estera e gli antichi economisti italiani, Milan, 1884.-Graziani, Le idee economiche degli scrittori emiliani e romagnoli, Modena, 1893.]

U. R.

PASHLEY, ROBERT (1805-1859), barristerat-law, afterwards Queen's Counsel. In 1833-34 he visited Greece and Asia Minor, and on his return published his Travels in Crete (2 vols. 8vo, Cambridge, 1837), a work which was much valued for the statistical knowledge it contained.

Pashley is best known to economists as the author of Pauperism and Poor Laws (London, Longman and Co., 1852, 1 vol., 8vo), a work in nineteen chapters, which treats of the subject under the following heads :-The number and cost of paupers in England, and in the metropolis; the pauperism of the agricultural and manufacturing districts; ecclesiastical provision for the poor till the Reformation; pauper legislation before and during the reign of Elizabeth; the relief of the poor from the reign of Elizabeth till the restoration of Charles II. ; the statute of Charles II. for the removal of the poor; pauperism from the reign of Charles II. till the end of the 17th century; pauperism and the poor laws of England during the 18th century; the same from 1800-1834; the pauper legislation

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of the year 1834; the pauperism and poor laws of England since the passing of the Poor Law Amendment Act in 1834; the effect of the law of settlement on the dwellings of labourers in agriculture; on the necessity of a total repeal of the law of settlement and removal of the poor; the remedy by abolishing removals and substituting relief in money; proposed remedy by union settlement and union rating; other proposed remedies; the author's proposal, which was "that the law of settlement be wholly repealed, that the various provisions for raising and administering relief to the poor be consolidated into one statute; that the yearly sums needed for such relief continue to be raised by parochial rates on real property; that two-thirds of this sum be raised by a pound rate equal throughout the whole country; and the remainder by a further pound rate, raising in every parish a sum equal to one-third of the actual expenditure of such parish (ch. xix. Pauperism and Poor Laws).

Pashley also published Observations on the Government Bill for abolishing the Removal of the Poor (2nd ed. revised, London, 1854, 8vo).

A. L.

PASLEY, LIEUT. -GENERAL Sir C. W., R. E.

(1780-1861), wrote:-Observations on the Expediency and Practicability of Simplifying and Improving the Measures and Weights and Money used in this Country without materially altering the Present Standard (8vo, London, 1834).

As the result of his investigations Pasley was made a member of the commission of scientific men, appointed in 1838 to report on the steps to be taken for the restoration of the standards of weight and measure consequent on the destruction of the standard yard by fire at the House of Commons. Pasley assisted in drawing up the report issued in 1841, and in his capacity of commissioner proposed the adoption of the DECIMAL SYSTEM of coinage, preparatory to the introduction of a similar scale of weights and

measures.

He

In his Plan for simplifying... the weights. measures, and money of this country, a paper read before the British Association at Cheltenham, 12th Aug. 1856, and published 1857, Pasley gave in detail tables of the proposed new measures of length, surface, solidity, capacity, and weightand (ch. v.) of the new monetary system. stated the difficulties urged as objections to the proposed decimal coinage; and showed their groundlessness (ch. vi.). In ch. vii. he detailed the advantages of the new system; and, in the last chapter, discussed the objections to the French metrical system: "that it has proved an entire failure as regards astronomy and navigation, and that, instead of proposing uniformity, it has caused greater confusion in the weights and measures of France than ever prevailed before" (ch. viii.).

He also wrote much on military subjects.

A. L.

PASSE-DEBOUT(Fr.). The permit delivered to the carrier of provisions or merchandise passing through a town in which octroi duties

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