Partners assume different relations and responsibilities as regards the partnership and the business world. There are the ostensible partners who boldly advertise themselves as such, and as such assuming the hazards incident to commercial enterprises; then the nominal partner who seeks to help a partnership by lending it his name, and thereby holding himself out as a member of it and making himself liable to creditors for partnership debts, providing credit was given, because of his supposed connection with the firm, as a regular partner; secret partners, who keep their names from the public, seeking by this means to avoid liability, but at same time sharing with the other partners the profits arising from the business. If such partnership becomes known to creditors, they may enforce collection of claims due from the partnership, as against the property of the secret partner; and the special partner, recognized by the laws of some of the states, which limit his liability to the amount of his investment, on condition that he gives public notice of such partnership agreement in a manner prescribed.
The partnership is organized, the partners assuming such relation to the partnership as they mutually agree upon, bearing in mind the above description of liabilities.
The element agency becomes quite conspicuous here, for each partner is an agent of the partnership and invested with plenary power to bind the other partners by his acts, when within the business sphere of the firm. It will be observed that we say in the line of the copartnership business, because otherwise it would not be sanctioned. As an illustration: A member of a partnership engaged in the flour trade would not have authority to bind his partners, if he attempted to involve them in stock speculations, unless previous similar enterprises by him had been approved by them, in which case there might be a fair presumption that such authority existed. This leads us to the question of liability; and liable they are, each and every partner, unless by virtue of exception previously mentioned, exempted. Their individual property, in the event of there being insufficient partnership assets to liquidate the indebtedness of the firm, must respond to the creditors’ call.