This species of partnership has been but recently introduced into this country, but has already been adopted in very many of our States, and promises to be of great utility. 1 We have borrowed it from the continent of Europe, as it was formerly unknown in English practice, and is not recognized by the common law of England. Limited partnership is now permitted in England, but it is not the same thing there that it is in this country.

With us, a limited partnership, or, as it is sometimes called a special partnership, arises wholly from statute, and is defined and determined by statutory provisions. The purpose of it is to enable a party to put into the stock of a firm a definite sum of money, and abide a responsibility and share a profit which shall be in proportion to the money thus contributed, and no more. By the common law of partnership, he who had any interest in the stock, and received any proportion of the profits, is a partner, and as such, liable in solido for the whole debts of the firm. And mere joint-stock companies, without incorporation, are, as to all purposes of liability, like common partnerships. (q) Capitalists were therefore unwilling to place their capital in the stock of a trading company, unless advantages were offered them equivalent to this great risk. Men of * business capacity, who had only their skill, industry, and integrity, could not always borrow adequate capital, because they could not give absolute security; and they could not pay as a premium for the risk more than legal interest, because the usury laws prohibited this. But they may now enter into an arrangement with a capitalist, by which they receive from him adequate means for carrying on their business profitably, paying him a fair share of the profits earned by the combination of his capital and their labor, while he runs the risk of losing the capital which is thus earning him a profit, but knows that he can lose no more.

(q) Cox v. Bodfish, 35 Me. 302; Pipe v Bateman, 1 Clarke (Ia.), 369; Williams v. Bank of Michigan, 7 Wend. 542; Hess v. Werts, 4 S. & R. 356.

1 It has been adopted in all the States and several of the Territories of this country. Bates, Limited Partnership, Preface.

Partnerships of this kind, being, as has been stated, wholly unknown to the common law, are authorized and regulated only by statute. And these statutes differ considerably in the several States. But the provisions are generally to the following effect. First, there must be one or more who are general partners, and one or more who are special partners; secondly, the names of the special partners do not appear in the firm, nor have they all the powers and duties of active members; thirdly, the sum proposed to be contributed by the special partners must be actually paid in; fourthly, the arrangement must be in writing, specifying the names of the partners, the amount paid in, etc., which is to be acknowledged before a magistrate, and then recorded and advertised, in such way as shall give the public distinct knowledge of what it is, and who they are, that persons dealing with the linn give credit to. Besides these general provisions, others of a more particular nature are sometimes introduced. Thus in some States, no special partnership may carry on the business of insurance or banking. And there are often special provisions to give greater security to the public and persons dealing with such firms. But for these we must refer the reader to the statutes of the several States.

A special partner, complying with the requirements of the law, cannot be held as personally liable for the debts of the firm; although, of course, the whole amount which he contributes goes into the fund to which the creditors of the firm may look.

*It seems to be quite well settled, that the special partner must, at his own peril, comply precisely with the requirements of the statutes. (qq) Any disregard of them, or want of conformity, although it be accidental and entirely innocent on his part, or any material mistake by another, as by the printer who prints the advertisement, deprives him of the benefit of the statute. He is then a partner at common law, and, as such, liable in solido for the whole debts of the firm. (r)

(qq) Haggerty v. Foster, 103 Mass. 17; Pierce v. Bryant, 5 Allen, 91; Richardson v. Hogg, 38 Penn. St. 153; Hartland v. Chace, 39 Barb. 283; Van Ingen v. Whitman, 62 N. Y. 513; Durant v. Abendroth, 69 N. Y. 148, 152.

(r) Hnbbard v. Morgan, U. S. D. C. for N. Y., May, 1839, cited in 3 Kent, Com. 36; Argall v. Smith, 3 Denio, 435. In this case, which was decided by the Court of Errors of New York unanimously, it was held, that the publication of the amount contributed by the special partner as $5,000, whereas it was $2,000, left upon him all the liabilities of a general partner. The argument of Spencer, Senator, who alone gives the reasons of the decision, turns upon the necessity of a true advertisement; he regards an erroneous advertisement as no advertisement at all. But suppose the error had been the reverse of what it was. Instead of falling the contribution $5,000 when it was but $2,000, if it had called it $2,000, when it was in fact $5,000, it might have Keen well urged, in the absence of all ill-design or personal fault on the part of the special partner, that this error could

If a special partner sells out his interest to the general partner for a sum exceeding his invested capital, it has been held that this was such a withdrawal of his capital as the statute prohibits, and that it made him liable. (s) But it seems that the special partner may make loans to the partnership. (ss)

If the special partner of one firm is the general partner of another firm, the second firm may claim as creditor of the first firm. (t) not mislead the public, or any dealer with the firm to his injury, as it made the grounds of credit less than their actual value, instead of, as in the case at bar, making them more. But even then the necessity of a strict compliance with the provisions of the statute might be sufficient to hold the special partner as a general one. See Hogg v. Orgill, 34 Penn. St. 344, as to payment in checks of third persons, by special partner, being equivalent to an actual cash payment, as required by the New York statute.

(s) Beers v. Reynolds, 12 Barb. 288; s. c. 1 Kern. 97.

(ss) Walkensham v. Perzell, 4 Rob. 426.

(t) Hayes v. Bement, 3 Sandf. 394. See [also Hayes v. Heyer, 35 N. Y. 826. The rights, duties, and liabilities of special partners are considered under various points of view, in Singer v. Kelly, 44 Penn. St. 145; Dunning's Appeal, 44 Penn. St. 150; McKnight v. Ratcliff, 44 Penn. St. 156; Harris v. Murray, 28 N. Y. 574.