trade and commerce, and induce capitalists to embark
their capital therein, or a certain part of their capital,
by relieving them from the peril hanging over all part-
nerships by the common law merchant of losing not
only all they have in trade but all beside. On the
continent of Europe it has long been known and found
to be useful and safe."-Parsons on Partnership, p.
545. More than forty years ago it was permitted in
New York by a statute copied substantially from the
French Code of Commerce. "This being," says
Chancellor Kent (3 Kent's Com., p. 36), "the first
instance in the history of the legislation of that State
in which the statute law of any other country than
Great Britain has been closely imitated and adopted."
The example of New York has been followed in Maine,
Massachusetts, Rhode Island, Connecticut, Vermont,
New Jersey, Pennsylvania, Maryland, Indiana, South
Carolina, Georgia, Mississippi, Alabama, Florida, Illi-
nois, Virginia, Kentucky, Delaware, Tennessee, Ohio,
California, and perhaps other States.

consist.

2478. A special partnership may consist of one of what to or more persons called general partners, and one or more persons called special partners.

NOTE.-Stats. 1870, p. 123, Sec. 2; Parsons on Partnership, p. 550.

2479. Persons desirous of forming a special part- Certified nership must severally sign a certificate, stating:

1. The name under which the partnership is to be conducted;

2. The general nature of the business intended to be transacted;

3. The names of all the partners, and their residences, specifying which are general and which are special partners;

4. The amount of capital which each special partner has contributed to the common stock;

5. The periods at which such partnership will begin and end.

NOTE.-Stats. 1870, p. 123, Sec. 3. "All of these are preliminary measures of notice and precaution. And the special partner must look to it that all are complied with; for a substantial mistake, or an

statement.

Acknowledged and

intended omission or error, by himself or by a general partner, destroys the limitation of the partnership, and all the partners stand at once on the common liabilities of partners. This is certainly so with respect to creditors, without exception or qualification. As between the partners, their agreements might still be valid, and would then affect their mutual rights and obligations."-Parsons on Partnership, p. 551; Richardson vs. Hogg, 38 Penn., p. 153; Madison County Bank vs. Gould, 5 Hill, p. 309; Bowen vs. Argall, 24 Wend., p. 496; Smith vs. Argall, 6 Hill, p. 479; 3 Denio, p. 435. One who has not fully complied with the statute respecting special partnerships, cannot claim exemption as a special partner, from liability for the debts of the firm of which he is a member. In Massachusetts it has been held that the statute which requires an actual cash payment, as capital, to be made by one who enters a firm as a special partner is not complied with by a delivery to the firm of promissory notes, received and treated as cash; and further, that the actual cash payment must be made prior to the publication of the certificate of the formation of the firm.Pierce vs. Bryant, 5 Allen, p. 91. It would seem that the principles governing the formation of corporations would, to a great extent, apply, by analogy, to the formations of special partnerships. See note to Sec. 290.

2480. Certificates under the last section must be recorded. acknowledged by all the partners, before some officer authorized to take acknowledgment of deeds, one to be filed in the Clerk's office, and the other recorded in the office of the Recorder of the county in which the principal place of business of the partnership is situated, in a book to be kept for that purpose, open to public inspection; and if the partnership has places of business situated in different counties, a copy of the certificate, certified by the Recorder in whose office it is recorded, must be filed in the Clerk's office, and recorded in like manner in the office of the Recorder in every such county. If any false statement is made in any such certificate, all the persons interested in the partnership are liable, as general partners, for all the engagements thereof.

False

statement.

NOTE.-Stats. 1870, p. 123, Sec. 4; see note to Sec. 2479. A statement in the certificate that the special partner has contributed a certain sum, when in fact a portion thereof has been contributed by another person, with design of securing the rights and benefits of a special partner without becoming one, renders all the parties liable as general partners.-Bulkley vs. Marks, 15 Abb. Pr., p. 454; Ward vs. Newell, 42 Barb., p. 482; Haviland vs. Chace, 39 Barb., p. 283.

to sums

2481. An affidavit of each of the partners, stating Affidavit as that the sums specified in the certificate of the part- contributed nership as having been contributed by each of the special partners, have been actually and in good faith paid, in the lawful money of the United States, must be filed in the same office with the original certificate. NOTE.-Stats. 1870, p. 123, Sec. 5; Parsons on Partnership, p. 551; Bowen vs. Argall, 24 Wend., p. 496; see note to Secs. 290 and 2479. In Johnson vs. McDonald, 2 Abb. Pr., p. 290, it was held that the affidavit need not follow the exact words of the statute. That if it clearly established the facts required by the statute, it is sufficient. Thus, an affidavit that the special partner has "actually paid in" the capital contributed by him, is held equivalent to an affidavit that he has paid it "in cash."

2482. No special partnership is formed until the provisions of the last five sections are complied with.

NOTE.-Stats. 1870, p. 123, Sec. 6; see notes to Secs. 290 and 2479. "Defects in the certificate, or publication, or record, or in any compliance with the requirements of the law, do not vitiate, if these defects are merely formal, and such as cannot injuriously mislead any party. But if they are substantial-that is, if they can be injurious-they leave all the partners liable as general partners, although none of them were in fault." Parsons on Partnership, p. 557; Andrews vs. Scott, 10 Barr. Penn., p. 47; Bowen vs. Argall, 24 Wend., p. 496; Smith vs. Argall, 3 Denio, p. 435; 6 Hill, p. 479; Lachaise vs. Marks, 4 E. D. Smith, p. 610; Bulkley vs. Marks, 15 Abb. Pr., p. 454; Buckley vs. Bramhall, 24 How. Pr., p. 455.

15-vol. ii.

No partuntil com

nership

pliance.

2483. The certificate mentioned in this Article, or a statement of its substance, must be published in a newspaper printed in the county where the original certificate is filed, and if no newspaper is there printed, then in a newspaper in the State nearest thereto. Such publication must be made once a week for four successive weeks, beginning within one week from the time of filing the certificate. In case such publication is not so made, the partnership must be deemed general.

NOTE.-Stats. 1870, p. 123, Sec. 7; Madison County Bank vs. Gould, 5 Hill, p. 309; Bradbury vs. Smith, 21 Me., p. 117; Parsons on Partnership, p. 558.

2484. An affidavit of the making of the publication mentioned in the preceding section, made by the printer, publisher, or chief clerk of the newspaper in which such publication is made, may be filed with the County Recorder with whom the original certificate was filed, and is presumptive evidence of the facts therein stated.

NOTE.-Stats. 1870, p. 124, Sec. 8.

2485. Every renewal or continuance of a special partnership must be certified, recorded, verified, and published in the same manner as upon its original formation.

NOTE.-Stats. 1870, p. 124, Sec. 9; Andrews vs. Schott, 10 Barr. Pa., p. 47. If this is not done, the partnership, being continued, becomes a general one.Lachaise vs. Marks, 4 E. D. Smith, p. 610; Parsons on Partnership, p. 555.

ARTICLE II.

POWERS, RIGHTS, AND DUTIES OF THE PARTNERS.

SECTION 2489. Who to do business.

2490. Special partners may advise.

2491. May loan money. Insolvency.

2492. General partners may sue and be sued.
2493. Withdrawal of capital.

SECTION 2494. Interest and profits.

2495. Result of withdrawing capital.

2496. Preferential transfer void.

business.

2489. The general partners only have authority to Who to do transact the business of a special partnership.

NOTE.-Stats. 1870, p. 124, Sec. 10; Parsons on Partnership, p. 550.

partners

2490. A special partner may at all times investi- Special gate the partnership affairs, and advise his partners, may or their agents, as to their management.

NOTE.-Stats. 1870, p. 124, Sec. 11; Parsons on Partnership, p. 550.

advise.

money.

2491. A special partner may lend money to the May loan partnership, or advance money for it, and take from it security therefor, and as to such loans or advances has the same rights as any other creditor; but in case of Insolvency. the insolvency of the partnership, all other claims which he may have against it must be postponed until all other creditors are satisfied.

NOTE.-Stats. 1870, p. 124, Sec. 12.

partners

2492. In all matters relating to a special partner- General ship, its general partners may sue and be sued alone, in the same manner as if there were no special part

ners.

NOTE.-Stats. 1870, p. 124, Sec. 13. But if the special partners have become general partners by some noncompliance with the requirements of law, they may be joined; and if the plaintiff seeks to hold them beyond their limited liability, he must join them.-Artisans' Bank vs. Treadwell, 34 Barb., p. 560; Schulten vs. Lord, 4 E. D. Smith, p. 206; Battaille vs. Battaille, 6 La. An., p. 682; Parsons on Partnership, p. 553.

may sue

and be sued.

drawal of

2493. No special partner, under any pretense, may With-, withdraw any part of the capital invested by him in capital. the partnership, during its continuance.

NOTE.-Stats. 1870, p. 124, Sec. 14; La Chorneete vs. Thomas, 1 La. An., p. 120; Buckley vs. Marks, 15 Abb. Pr., p. 454; Beers vs. Reynolds, 12 Barb., p. 288; 1 Kernan, p. 97; Parsons on Partnership, p. 551.