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PART I
TITLE IX
PARTNERSHI
P
(Arts. 1767-1867)

INTRODUCTION
Brief historical background.
(1) Development of partnership. The earliest form of conducting
business was the single entrepreneur ownership plan whereby
one individual owned the business, had sole control of the
same, reaped all the profits, and suffered all the losses. Under
this system, the growth of an individual business was limited,
owing especially to the limitation of capital and sometimes also
to the limitation of skill or knowledge. To permit combinations
of capital, or capital and experience, and to secure economy by
eliminating some of the overhead costs of individual
enterprises, the partnership plan of business association was
developed. The partnership may be traced back to ancient
history. (T.S. Kerr, Business Law: Principles and Cases, 2nd ed.,
p. 705.)
(2) Ancient origin of partnership as a business organization.
Development, as distinguished from origin, of the partnership
as a form of business organization, is often credited to the
Romans. They found in this form of business organization a
means whereby the capital, goods, talents, and credit of two or
more individuals might best be combined to carry on a trade
or business. Such trade or business might well have been, and
frequently, was too large an undertaking for a single individual.

PARTNERSHIP

(a) Historically, the partnership as a business organiza- tion

was used long before the Romans. As early as 2300 B.C.,
Hammurabi, the famous king of Babylon, in his compilation
of the system of laws of that time, provided for the
regulation of the relation called partnership. Commercial
partnerships of that time were generally for single
transactions or under- takings.
(b) Following the Babylonian period, we find clear-cut
references to partnerships in Jewish law. In this connection,
however, it must be remembered that the ancient Jews were
a pastoral people, and, therefore, the partnership as a
business organization under Jewish law was concerned with
the holding of title to land by two or more persons. The
Jewish word shutolin was used to designate this joint
ownership of land. Subsequently, this same word was used
to denote the partnership relation.
(3) The relative newness of the law of partnership.1 The partnership as
a form of business organization has had a very long history of
use. This would suggest that there would be a
correspondingly long line of precedents and decisions dealing
with this subject. Such is not the case. The explanation for this
situation is both clear and understandable. For at least a century
after the partnership as a business organization had been well
and generally established in British commerce, the English
courts of justice had scarcely dealt with this subject. The fact is
that disputes between merchants were considered and disposed
of by special courts.

Blackstones commentaries on the law which first appeared in 1765, do not contain any discussion on business partnerships. The fact is that partnerships did not have
an early start in England. They began in the trading nations of Holland and Italy. The
English law of partnerships is an ill-assimilated mixture of Roman Law, of the Law of
Merchants, and of the Common Law of England. (Charles W. Gerstenberg, Organization and Control [1919], 3 Modern Business, p. 36.) One should not be surprised to
learn, therefore, that the development of the law of partnership in England and the
United States, was accompanied with so much confusion and uncertainty that demands
for stat- utory uniformity arose. The result in England was Act of 1800, and in the
United States, the Uniform Partnership Act and the Uniform Limited Partnership Act.
(Wyatt & Wyatt, Business Law Principles and Cases [1963], p. 597.)
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