a quantity of
iron, unless it was needed in rebuilding the store, or in some other
connection with the business. He can make and indorse negotiable paper
that is used in connection with the business. Suppose he borrows money
on his own note and he gives the money to his firm, is it responsible
for the amount? This has proved a hard question for the courts. If the
money though loaned on his note was for the benefit of the
partnership, and it was known at the time that it was to be used in
that way, the partnership would be liable; but if the money was to be
used by the borrower and this was known and believed by the lender he
could look only to the borrower for payment.

The receiving of a new member constitutes a new partnership. It may
reorganize the old partnership and become responsible for its debts,
or it may not. Unless recognized in some way by paying interest on
them and the like, the new member does not become responsible for
them.

A partnership is formed usually by a definite agreement that is put in
writing. Yet it may be simply an oral agreement with very general
terms about the contribution of capital or skill of the respective
partners and their division of profits. They may and usually do have
distinct fields of employment, each doing the thing for which he is,
or supposed to be, best prepared. By reason of their general
liability, in the olden days persons who wished to thus engage and yet
not be responsible, were kept in the background, and were known as
secret and dormant partners. If found out they were liable because
they were to share in the profits. The fact that they were unknown
when credit was given to the partnership at the time of selling goods
to the concern did not shield them from liability after the discovery
of their relation.

The difficulty has since been removed in two ways, by incorporating
the partners into a corporation whose powers and liabilities are fixed
by law and therefore known to all, and by forming limited liability
partnerships. These consist of two or more general partners, also
special partners who contribute an amount of capital, of which the
public is publicly informed. If such an association is unsuccessful,
the special partners may indeed lose all, or a part of the capital
they have contributed, but are liable for no more. This is a great
improvement over the secret and dormant methods of getting the capital
needed for partnership purposes. One of the matters th