The following contract was held to create no partnership: Party of the first part covenants to pay 10 per cent of the net profits of a business to be carried on under the name and style of Elmwood Chemical Works in consideration of a loan of $5,000, and also to pay 2 per cent of the net profits for each additional $1,000 loaned; that he will keep books of account open to the inspection of party of the second part and will conduct the business with diligence and care.

8 See Holmes vs. Old Colony R. R., 5 Gray, 58; Ames' Cases on Partnership, page 125.

And the party of the second part covenants that he will loan $5,000 for one year to party of the first part and will also, if in his judgment the business requires more money, indorse notes to an amount not exceeding $2,000. Ames' Cases on Partnership, page 131.

It is to be noted that in the case of loans the period of the loans is not co-extensive in duration with the existence of the business which they support and that there is no power to terminate or control the business except through the withdrawal of the means of support. "The business is mine, the money is yours, and when I repay you your money, the business is still mine." The good-will, that is, the advantages derived from the establishment of a successful business, is an important constituent element of the business. A business is not conducted for and in behalf of another in a legal sense when it is conducted so far as he is concerned simply with the object of repaying him his loan, but with a further and prime object to establish the business on a substantial and profitable basis in which the money lender has no interest. These contracts do not go to the life of the business, but are rather in the nature of incumbrances of a terminable character.9

It must be admitted, however, that the landlord of the Samoset House, or of the Chicago Opera House, can take the fruits of a share of the good will of the business unless the lease is for a fixed rent covering a long period, and the assumption that the tenant is not conducting the business of the house for and in behalf of the landlord might seem technical rather than substantial, and perhaps the courts in a proper case might invoke the doctrine of elaborate contrivances and ingenious devices.

9 Polk vs. Buchanan, 5 Sneed, 721, and Williams vs. Sauter, 7 Iowa 435.

In this connection it might be remarked that the institution of limited partnerships hereafter noticed has arisen under the statute law to legalize what seems necessary to meet the requirements of justice, namely, full responsibility to managing partners and limited liability to those who merely furnish capital. And so in the efforts of legislative bodies to harmonize the equitable principles of the law, it is frequently provided that officers of corporations shall have imposed upon them the liabilities of members of partnerships whenever they do certain acts that create a liability unauthorized by the legal or financial situation of the corporation. For illustration see statute law of Illinois in regard to corporations.

In the following case the suit was for work and labor performed and materials furnished in and about the repairs of a lighter. There was no question as to the plaintiff's right of recovery7 against some one. It was a question whether Boswell or Russell individually or Boswell and Russell jointly as partners were liable.

First the evidence showed that the lighter was the property of Russell and that Boswell worked her and divided the profits with Russell. But then the question was whether Russell paid half the profits to Boswell for his services, or Boswell paid half the profits to Russell for rent, or whether Russell and Boswell divided the profits under an agreement that Boswell should put his work against Russell's capital and they should conduct the business with equal rights as to direction and control of the business.

Only in the latter case could they be sued jointly unless they had held themselves out as partners.

Either one who ordered the repairs might be held responsible if he did not disclose his principal. That is Boswell might be held liable in any case if he ordered the repairs and did not disclose that he was servant or partner of Russell. In such case if he was actually a partner the plaintiff on discovering this later would have his option of suing Boswell, or Boswell and Russell; and so if Boswell was the servant of Russell the plaintiff on discovering this would have his option of suing either Boswell or Russell, but in the latter case he could not sue them both. If the plaintiff had notice of a partnership at the time the repairs were ordered he must sue both.

The evidence finally showed that Boswell was servant and that he ordered the repairs without disclosing his principal and as he was the party sued he was held liable. This case is a good illustration of the doctrine that the law of partnership is a branch of the general law of agency.10