265
OFFICE OF THE ATTORNEYGENERAL OF T’RXAS
AUSTIN
-CL-
--
.DlBpartMult upon
dot of the parti
266
q8ur Unsnplopolsnt Compsnration Coaml88ion, 9868 L
Ths special partner agrees to diligently devote hi8
profasrional tiae and &Ill to such 18gaL aaft8r8, of th8
general partner and aeaooiated ap8olal partaem, a8 say x-8-
oelro his attention and to pay 0181 to the joint bookkeeping
0f the Esnrral partner and serroolatsd rpcrolal partn8rs all
fees aad ohargea raosived and oollea%od by hin in oonnsotlon
themwlth.
*5. It la mutually agreed that Sp8oial Patinar
shall be entitled to rcloalva, a8 hi8 rharcoi
and intsrset in, tho rpeoial partnrmh$p ham ia
and hereby oreatod, the followlag amunta, whioh
shell 4onetltut8 paiyment to him, in full, for
his entlm intamst la the ourmnt oamlngr and
busln84s or tha bpsolal partnemhlp horoln tornsdt
@rexi par cant or tho net oarh p r o r it$
lrsb$ aa
moaluad by Ganaral Partimr and all aarwiat84
rpeolal partaers ongogmd fn the $a~tal,)raatioe
or law under the Nmn m&ma of *x and I#~(auuh not
prorite to be d4t8rninod, at the 8~4 or 8aOh
oalendar pear during th8 tom of thi8 spproi'al
portnerahlp agmement by rubtnotiag from the ~088
lag81 ree8, aalarfar and mtelnarr l8tually oollrot84
durlas aacrh oalendar par oi thlr rpeohl partner8hi9
agmaont, the aggmgatoumunt of eperalbing wn8@8$
whioh, amcmg other it8m8, ahaIl inoludo 8alarioi paid
ta rt6nograph8r4, baokkoapa*'+'~~911s olork,, tolrphona
oparator janitor, aad other ~bfmflar w&ployebs, rent,
Zlgbt ab hoat If the88 thaw Items am paid
8tatioIl4l-y(md'Oif'iO4 8U99lb8, UBrarUBb& d89hOB.
and trlsgraph 8xpan88 and ohorg88, 8tw98, tue4,
bad dsbt4, 1~Iso4llansou8 8Xp8B4O8 an8 dcmatlolu,
or the 88~1 general oharaoter whish Oen8ral partner
ha8 heretofom inoludsd in Iniwallansw%a eXpwxae and
donation aownmta, and all mwnts reoeirrd ,by other
assoaiatd Spsoial FSIPrtner4r
“In determlnin$th@ net 48min(j8 0r Gensral %rtn*r
and assoolated partner8, in whlah Sproial Pkrtnsr
hemin naked shall 8ham, to the extent h8r8itnbeiOrr
mt wti, them shall bo rX4lud4d from th4 ,&roar
annual sxpenso or General Partnsrj ths 008t of at1
books, ocnstitutlng a part of the pexmanant law
librsty or 04neraL Partnar; 4180, all EuiBitU4,
Y
i’
,?’
93X.4 UncuaplOyment G4qawtion ~0Z&841On, page s
ffxtures, typewrlters ~9, ganeral OfiiOS equlp-
ment, all ot whloh are now, and will aontinue
to be the 8014 property of (kneral P8rtmr~
and bpaeial Partner 8hall not hev. any rlght,
tltl. or interest ther.ln, n.r in and to the
oapftal suppl.id by General iartnez with whidb
to operate the busine,es of raid law firm.
"0. iti Is iiatudly e4gSe.d @anera Partner rhill
be the exolu4ive judge of the gener.1 ~OliOi.8
0r said ertn4mhlp rim or X and Y, end that
hlU.1 e UtTl4r Sh11 h.VO SXOlU4it. Oh#@g.,
oontrol and au9ervlrl.n of o~‘f'loedetall8, or-
rlos management, bookkeeplng and aooounblag, rib
ing, puroha8e 0r orfloe stationery an& 8u991i48,
the hiring and dlsoharge, and. the flXi.ng of
8.hlpi.8, hour8 .!ld X-WJUhtiOBS gOv.raiX&g St6E.-
graphem, bookkeeper, rile olerk, telsphons
ap4rator, janitor, and other rimilar Wp&OAy4.8#
and, with r8894Ot to .ll swh a&tore tiner&l
Partner shall not be rxpeOt4d or required to OooI
#tit with, or SeOWe the oonsent Or S~eOi&l &?t-
mar, who hereby ratlfl68, epprcnee and oonfima
a11 that General Partner ary do In 4uolt a&tore.
“9. The speolal partnership heroin Cora4d 8h8ll
be .ut.&itl.ally di88.lT.d by tb. death of litbe%
X 0~ yI h0 Or th4 &3BOa PUtBti8j OF by tb
d#.th Of Sproial pUtBe%, with drcurrth&S .~.S.Bt
is mado) or it may be t4XtnlMtd at the e1m3tlgn
.,. or elthu Gmual 9am1.r or Y9eU.l %rtaer, by
the on4 40 .Ieeting to texwlaate &rln& thirty
days' pmvlous notioe to the othera and, at the
end of said thirty day period, Chlr Sp6olal Partnu-
Ship Agraagmt shall in all re8peots be tefmimted,
and Sp4oial partner 8hall b4 entitled to hi8 @ham,
a4 herelnbetom 86t out, 0r th4 net 44mIng4 or
Gclneml PaHaer and all associated Ypeoial Partner8
up to the date OS the trrmfaotlc~ ot this &%Wtner-
ship agxeeaent, but no longer. At i4 furthrr
5utully 0grs.d that @O oos8lder+tlon will be f$v4a
or allowanoe mde to ~ppsaial Partam, upon the
termination of t&k@ fQ5eoi.l hrtaership &FeftM.nt
on acaouat or any unaolleoted leml r4*8, 8.l1wle8
and rstallZar8, or to eherg.4 or ..rningS, on My
268
unl'inluhed leg,61 b~sii~ssa wkioit hare JPF tbrn
been Irotuedly colloatsd$ it being ths inte::tioa
of General Partner and %,.peolalPartner to lialt
and reetriot, and Way a0 hereby agree to limit
and rcatrlot bpeolal =artner*a share anb inter#ot,
at the tiara OS the t6minetlon of' thin :;peaial rart-
nerehlp @rerzwmO, ta t&a aotual oath feo8, #alarha
and retainers oollsated u:, to the t&e of auoh dl8-
solution, but not themaTter, except in the lollow-
itg loutar:ost ~:peoial &mttll~~e~ pemontago, henla-
before sot out and ds$ined, shall be ap~llcab1.e to
that portfon oi any lags1 I'm of .#,OOO.OO, or sor8,
oolleotec? dthin 0%~ mnths ~froa81 thQ date thla
Bpmlal rartnerehip A4$reuatt~%tsrninatea on legal
buriaemn on tad thirty days prior thereto, whlsh
the period, rroa t&s tlinrthr:buslnaer QWMJ late
the o:f'ioe up to the time oi tba terahatloa Of Ohir
Agmemsent, bearr.to the total peri& of tiau adoring
whioh aaid burlorss was haf&eit~ for instrno8, 1s
the particulu plaoe of hurlntwe mme into the
ofCi6a air mtxatir prior to the temlnnBlon of thir
&&me@&, an& 'IIYS~noiuded sir aionths thereafter,
thsln one-hall of the fet oolSacte4 thererrom, uadar
t&r! ounditictu namd, rcd.d bs appliccrble to Ypecrlal
k.tncrr'61 pbXO"iltag~, the other OAO-halS Ut3t.
3pooial. iicartnerm
A considorstion of this eutd Oha cmnimaat cxreuiied with
3 Ulealorw3 IXslight Ulifterenaain the two cloatxaotr~ 00mm-
Quenhlp, we will dlepcrs of the oontract with ii, the isubstam3e
81 whiah id ,hcretoZorr aclt 6uts
269
Texae Unemployment Compensation OommIssion, page 5
::ze
have In 'Texas a general partncrehlp, and what we
term a limited or special partnership organized under the
provisions of Articles 6110 to 6132 of the Vernon's Revised
civil statutes of 1925.
The material transmitted to us with your letter of
request does not dlsolose that the etatuteo of Texas have
been oomplisd uIth in respeot to the formatlon of a limited
partnership.
Artlole 8119, Revised Civil Statutea, reads as follower
*No suah partnership shall bo deemed to have
been formed until a certltioate shall have been
made, aaknowledged, filed and reoordad, nor
until an affidavit shall have been tiled as
above direotedi and If any false statement be
made In such oertlrioate or affldavlt, all the
persons Interested in euah partnership nhall be
liable for all the engagomento thereof am general
partners. w
If such a certificate has been made and reoorded, we do
not have that Information. Prom the term of the oontraot,
it appears to be one that does not meet the provls~ons that
are deemed neoeeeary by the hgislature In enacting the
etrrtute pertaining to suoh partnamhip. The legislature haas
thou&t It necessary to make theme regulremente for tbo pro-
tsotion of the publio In dealing with limftad partnershipa.
Apparently, theae oontraotlng partners have sought to enter
Into an agreement for the mutual benefit of eaoh, but with
rtrlet llmltatlons upon the interest of the eo-oalled epooIa1
paPtier without giving the publio notice or tbeee limitations.
We do not purport to say thst attorneys may not enter Into a
epedial partnerehip; however we do find that Texas Jurlr-
prudenoe, Volume 32, page 58& In the notes lndlaates a doubt
that suoh a relationship may be e:-sated.
Article 622lb, 17 (g) (1) read* as follewa:
u'~~mplOymsnt' su'o,jeotto the other provisions of
this subsection, axemaa servioe), Including benIce
In interstate comm~roe, performad for wagee or
under any oontraat of hire, written or oral, exe
press or implied, provldid that any servloss per-
formed by an Individual for wages ehall be deemed
T*xms UaaQlOmeht Compansation Comz~Iss~on, page 6
to be employmnt subject to this kct unless and
until It is shown to the satisfaction of the Com-
mission that suah individual hlas been anA will
oontlnue to be free rrore oontrol or direction 0181~
the perf'ormahoa OZ such services both under his
ocmtract of ssrvLo8 and in fact.*
Artlole 522lb-18(o) tsads aa followsf
v(o) 'b&gas* smans all remuneration payable for
personal ssrvloes, Inoluding conmissions and
bonuses and the oaoh value of all remuneration
payable In any OaedIuLlother than oaah. CratuItIer
ouetomarlly received by an Individual In the oouEa8
of his employmnt frocn persons other than his
empl~ylng unit shall be treated aa wages payable by
hia esaploylng unit. The reasonable cash value ol
rammrntion payable by his employing unit. The
reasonable oash value of resmneration payable In
any medium other than cash, and the veasonabl8
amount of gratuItlas, shall be estimated and defer-
mined In aooordanoe with rule8 prasoribed by tha
c0m8tIsaion.*
PTs are not asksAt d8t8IW&A8 if the law rim I6 oitilly
liable for the mats of A and B, but if Um%ir the Iaots they
are in eff@lOymSnt under our d6finitiOn Of th8 term.
lt is not neoessary that all partnsre contribute
oapltal but they my eontribute servioes. kwever, persona
may oontribute to an entsrprlse, but if they own no Interest
In the bueiness they are not partners. ~ohleeihger vs.
Kemerly, 41 d. ii. (Ed) 1002. In SE Tef. Jurls., Seoblon iso,
page 845, we find the statement that a OoiKmuhIty of owner-
shIp and in profits or earnings as Well aa In a burineea
nama is neoessary to a partnership. Citing English ~8. .tiills,
899 ~j. ‘VU, 348.
In this instanoe the general partnera ham agreed to
furnish the capital, but they bV8 not given A any owner8hip
In the oapital contributed or any power ot oontrol.
In 313 Tex. Juris., pago 847, there %8 the stat85ent
that no partnerahlp is arested if the a$reasmnt is really to
sumre a superior for ooospenaatlon and without any genernl
sham In interest or control, though oornpmusatlon is dependent
Texas Unemployment Conp8nsatIon ComIs6lon, page 9
cn the makin. of prolits and ocnsists In a share of them.
Citing iueny 48xaa oaeee..
The oase of Buzard vs. Bank of Qreenvllle, 2 ;. L. 54,
an opinion of the supreme Court by Judge Gaines is on8 of our
first oases on the subjeot. It held that an arrangement
whereby a formerly salaried agent who sorked for a 8heJe
of the expeoted prorit8 aa oompenaatioa for his s8NiC8s and
who would not be oompsnaated If there should be loeees was
not a partnsrshlp but an agenoy.
In tirray OlnnLng System Company vs. Exohangr ~atlonal
Bank, 61 S. W. !SOg, the zcanager of a gin contracted to take
oharge of a gin with a salary for all year, but a eharo in
the aarnlngr during the aea80n - all aquipswnt was furnished
by the original owner; this wa8 'held an agenoy.
patentl.y, the general partner8 hat8 given A none of
the oontrol of th8 firm's bueineos+ At the termination of
the contraot )i has no owMrehip,or interest in the fees
reoelvable even though the buslnses wae eoqulred and work
done aiter the timci Of hI8 contraat eroopt In the f88s or
over $S,OOO.OO oolleotsd if, as, and when provided by the
oontraob.
we tail to find the existenoe of the neoessary 6baentn
of a partnsrahlp between X and r law Plrrr and A. lb nebnm
to be serving for a psroentage of oartaln prorlta tiith no
control or ownership of the oapltal or of the business of the
firm.
The oontraot between the gQnOm1 partnsm X aaa Y,
a law ~IP%I doing busIn8se as x and y and.8 the ao-oall8A
"apeoial partneF I8 as followe1
This SPEoihL PART??ERBRXP AORl5ZbSNT,antemU into
between X and y, e partner8hIp firm, engaged In
the general practice of law, in Port Worth, Texas,
hereinafter, for OonVenIenCe, referred t0 as
Wen8ral Partner* ana 8, an attorney at law ot
Fort morth, 'Texas, her8Inaf%8P referred to, for
uonveniencle, a8 %peoial Partner,* Is to
's XT N 1(:
e-------w S S E T Et
.-- 272
Texas Unemployment Compensation Conmi*rlon, page 8
'1. Ganeral 2artner agrees to furnish, for the
use of Gsnsral Partner and assoolatsd Speoial
~artmsrs, praotloing law under the tlrm name of
X &I, at hart gorth, Teras, suoh neoee8ary
operating oapltal, law library, furniture, fix-
tures, typewritera, adding maohlnss, and general
oflloe equipment, as, in the opinion of Ganaral
Partner, baaed upon past sxperlanss, Is reasonably
nsoessarp,to oaxry 011and operato a pzg~l law
buslnesa in the City or B’ortWorth,
“2. Spaolal Partner agrees to diligently devote
his professional time fan& &ill to suoh legal
matters, OS General partner and arrooiated speolal
*artasrs, aa may reoslve his attention, and to
pay over to the joint bookksepsr oi General Part-
ner and associated Speolal rartnsra, all fses
and ohargee rsoeived and oalleoted by him in ooh-
nsstlon therewith.
"3. It is mutually agreed that Bpsolal Parttier
shall be.entltl.ed to reoeivs, am his shars of,
and interest in, ths speoial partnership hsrefn
and hereby oreatsd, the folilouing amounta, whioh
shall oonstltute payment to him, in full, for his
entlra lntsrsot in tha ourrent earnings and buui-
ness of the special partnership henin formsd.
*(a) -5- per aen? of the net sash profits earnod
and reaelved by %mral Partnsr and all aasoolatsd
special partneri engaged in ths gensral prastloe
or law under the rlrm uaas of "x an& Tat suoh nst
profits to bs dstenulned, at the enb of saoh
oalsndar year during ths toma ot this speolal
partnership agreement by subtraating from ths
gross legal r488, salarias and retainers actually
oolleroted during each calendar year of this spssial
partnership agrssmsnt, the aggrsgata amount of
operating expenssa; which, among other ltsms, ohall
lnoluds salaries paid to atanographsrs, bookkseper,
tile olerk, telephone opsrator, janitor, and other
slmllar smployees, rent, ll$ht and heat, if these
Texas bemployment CompensationCommission,page 9
three itaae are paid, stationery au6 office
~upplics, uurefuudsd telephone and telegraph
expense and charges, stamps, taxes, bad debts,
~iseellaneous expenses and donations,of the
same Fenera oharaoter whloh General Partner
has heretofore inoludad in nie44llaneous ex-
pense and donation acoounts together with the
sum of Cne hundred TrPenty-five Dollar6 (~lSS,OO)
per month, being the estimated and agreed depra-
olatton sustained by Oensral Partner on law
library, fuFnitur4, fixtur4s, and offioe equipment
belonging exolusively to General 2artner.
"In datermlning the net earnings of Goneral Part-
ner and essooiated partnerD, in whlah 6peoial.
Partner herein named shall rhare, to the extent
hereinbefore set out, there shall be excluded
from the groea annual expense of Qe.nsraf,Partner,
the oost of all books, aonstltutlng a put of the
permanent law library of @enera Partner; also,
all rurniturr, fixtures, typeuriterr aa gameral.
offloe equipment, all of whlah are now, and will
oontlnue to be the sole property of @enera Part-
ner; and Special Partner shall not have any rlghh,
title OF intexwst therein, nor in and to the
capital supplied by General 2artner with which to
operat4 the buainaes of maid law fira
v(b) General Partner guarantee8 to Special Part-
ner that his share, as hera+nbefore set out, of
the net profits Qf %ieraJ. YaFtn4F and associated
Speolal Partnbrs, during eaoh twelve months*
period that thle oontraat of 4peoiPl partnership
ahall oontinue, shall not be less than $a,OOO.QO
and, General Part&u agrcres to advanae to Speolal
Partner this guarsnteod miniaura slssunt of Qfi,O00&0
in twelve (12) equal ~sums, payable monthly. At
the end of eaoh calendar year, if jpeolal Partner*s
share in the net profits, as hsF4inbafore defined,
of the joint venture, shall bs more than $5,000~00
(the minimum annual guaranteed amount) Cansral~Part-
ner agrees to pay the amount of the exoe8s to
speolal Partneri but if tha share of Yp4ois.l Partner
shall be leas than th4 minimum annual (guaranteed
amount of @5,000.09 thsn it 1s uutually agreed that
said mlnlmaa annual guaranteed amount shall @on-
etitute paym4nt in full for the interest and 6har4
4
TeSa8 Cneaploymnt Conpenestion Corr&44ion, pag4 10
of 2pecial tartnm during suah oolendur year in
;ueatlon.
"4. It is aontazplated that GHUSFA~ partner
Will, fFOJ?Iti.se to tim, enter into additional
opeoial partnership agF4ensnts with other attor-
neys, now and hereafter associated with General
2artncr in the general praotioe of law, under the
firm name or X ma P, in Fort worth, I-4x44; and
may, rr0p time to tI.04, Ohang4 and 4mend eaa4j
and, with rsepsat to all such spsclal partnerrrhip
agreements and mendments thereto, it is mutually
agreed that General Partner shall have and poeseas
at all tifnaa the full Fight and authority to enter
into and make an may addltioual special parther-
ship agreements, ohangss and am4ndm4nt8 thereto,
a4 Censral Partnar my 4On4id4F to the beat
interest of eaid firs of X a Y, and upon auoh term
and conditions aa hneral partnew slnd any speolal
partner may mutually arae uponj and, the temalna-
tion of a apeolal partnerrhip agrcrement with one
special partner shall not, in any way, involve et
effect a spaolal partnership agreement with othsr
special partnerr; eaoh speoiti partnership agree-
ment being independent of snd eeparats am3 dis-
tinot rraon the others.
"5. It lerma&ally agreed that the legal fo@s,
salariecs, and retainer4 oolleot4d by General
partner and aaraoaiated Opeoial paFtneF8, doing
buainesa under the Pirn ham? of X h Y, in the City
0s Sort xfortth,Texas, 4h4ll not lnoludo any oom-
tiiasion4, allowances or ptkymsnte, earnsd or X4-
oaivad by any one of the g4n4ral partnere, OF by
any one of ths ;ipealal Partners, for aoting as Ad-
&niatrator, Ex4outor, or Truet44 of an s&at4 or
under a wll.1, or under a tru4t ir4trunWlt; but I444
and allowances paid to and received by auy of the
General op Speelal Partners for acting (18 trustae
in bankruptoy, attorney for trueMe in bankruptdy,
recrelver, or a4 attorney for ths reo4lver. appointed
by sither the State or Federal Courts, 4hall be Oon-
aidered a legal fee, and ?.r.~alud4cI
in the gr044
aarnings of Oenaral and associated Speaial PartneW.
Lt i4 mtu4l.l~ agrrad OQnaral Partner shall
zt*the eraluaive judge of th4 general POliOl4a of
T8Xa8 hl8aplOp8nt CGmpensa~iUl COIZIlQiEeiOn, pace 11
PaId partnership firm of X & Y, and that General
i'artner shall have exclusive charge, control and
supervision of offloe detalle, offloe management,
bookkaepiog and aocountlng, Piling, purahase of
office stationary and supplies, the hiring and
@lsoharge, and the 22x1~ of salaries, hours and
regulations governing stenographers bookkeeper,
file clerk, telephone opera&r, janitor, and
other similar 8mployee~; and, with reapsot to all
such matters General Partner shall not be eXp8Ot8d,
or required to oonsult with, or s6aur8 the oonaant
of Epaalal Partner, who hereby ratifies, approves
and confirms all that General Partner may do in
eucrh matters.
"7. The follow~lng is of the easenoe of this oon-
traat: Due to the faot that one or more of the
special partnerships entered Into by General Part-
ner may be tarmlnated from time to time, on at$OOuat
of a spealol Partner alther desiring to enter the
practfoo of law by himself or to join another Urm
of attorneys, General psrtnex aonslders lb high17
desirable to retain and tr6at es oonfldential the
reoelpte and disbursements ol the 'firm of X L Y,
gomposed of General Partner and assoaiated ~peclal
Partners; and,, tipeoial ?art.nar, nemd in thie agree-
ment, having aonfidanoe in the fafrness, honesty
and Integrity of General partner, doas hereby
agree, bind and obligate hfmsslf to aooapt, at all
t&mea during the oontlnuanoo of this speolal part-
aer+hip, and at it8 dissolution, the statement Of
General Partner as to the amount of money whioh
represents the share of Spssial Partncrr in the not
sarninge of said firm of X b Y$ and, it shall
never be neoessary or required of General Partn6r
that an iteralzed sta$ezent of receipts or earnings
be given to Speelal Yartner, either during the
period of the operation of this agreement, or at
its termination, and a certlfloat?, under oath,
if required by the bookkeeper of,,.,1 9; Y that the
emount du8 and owin& to Speoial eartner as and for
his share, as hereinbefore Set oat, shall be QOn-
clualre and binding upon him, his hairs, assi6W3
end legal representatives.
The special partnership herein formed shall
;8,*automatieally dissolved by the death of eitb
”..~276
Texas UnslaPlOment Compensation Conraission, page 12
Y or X, two of the Gzxerel Partners, or by the
death of Spealal t'ertner, with when tl;ls agree-
ment is L?ade; or it rns be teminated at the
election of either General Partner or +eoial
Pertner, with whom this agraerzent is made; or
it mey be termlneted at the election of either
General Partner or ~pealel partner, by the one so
elsoting to terf~~lns.ta
giving thirty days' notice
to the other; end, at the end of said thirty day
period, this qetiial ~ertnerrhlp Agreement shall
in all reapeots be terminated, and ~peclal pert-
ner shall be entitled to his share, as hereinbe-
fore sat out, of the net earningo of General Part-
ner end all assoalated bpeaiel Partners up to the
date of the termination of this partnership agree-
ment, but no longer. It is further mutually agreed
that no aonelderatlon will be given or allowanoe
made to Speolal Partner, upon the termination of
this Special ?artnershlp Agreemsnt on aooount of
any unaolleoted legel fees, salaries and retainers,
or to oherges or earnings, on any unflniehed legal
business, which have not then been eotually col-
leoted; it being the intention of General Partner
and Spaoial Partner to limit and reetriot, and
they do hereby agree to limit end restriot Spoolal
Paxtner*s share end interest at the time of the
termination of thfs S~eclal Partnership Agrewent,
to the aatual oash fees, salaries and retainer8
aolleated up to the time of suoh dlssolutlon, but
not thereafter.
"This Speolal Pertnsrehlp Agreement shall be etf80-
tive as of Jenuaxy 1, 1930, an8 shall continue until
dissolved in the manner above 88t out.
General Partner
bpeaisl Partner
Texas UnesiployineutConspensation Commlnsfon, page 13
Story on 2artnership, 4th a., Sec. 8, had defined
s partnerehip to be:
*A voluntary contraot between two or more colt-
peter& persons to plaoe thelr mmey, srrects,
labor, and skill, or SOW or all of them, in law-
rul eoameroe or busineas, wi.th the understanding
that there shall be a ooarnunion of the profits
thereof between them. *
I
The aontraote dlaclose that the general partners my
take in or oontract with other apeolal partners without oon-
malting A or 3. One oi the most @portant elements or part-
nershlp is the deleotus personarum - the right to ohooae
oae*e owa partner. A partner’s right to objeot to the ad-
mirsion 0r a new partner ie not a Platter or oontraot right
wbioh oan be bargained away but erirts as a ruudamntal right
or a partner.
These so-called speoial partnerm have merely oontraoted
to perform personal services ror oompensation which our law
defines am -ageam or rmvinerationror personal 8enloee.
ft is nottoeable that the general partnsro epeolrleally
withha the power to rix the polioies or the tim3 giving
t&mm assoofates no voioe or control of the union they hare
ioxmsd .
Paragraph (b) or the contraot with B guarantees him a
early compensation of ~5,000.00 payable in twelve equal sums.
L ha.s no olaisx ror any other asount of money if the nst
earnings, as defined by the oontraot, do not reaoh a rlgure
that would bring him more on a oomputation of 5% of the net
earuinga. Ee has no right to ask for an aooounting of the
reoelpt 8 and dl sbursemnts. he oontributea 8ervlae8, but no
oapltal nor fe he ppcmitted. to aoquire any interest in the
property or the partnership, At the minute of the expiration
or hlb: oootraat with X and 11, he has no interest wbat&wr in
any unoolleotsd fees or retainera. The firm is as rrae or
him, undsr the oontraot, aa they would be of any employee.
In oonoluaiox~ we mish to quote from Story on Parher-
ships, 4th Zid., action 49, the rollowing:
t
278
Texas &Munployment Corapensation C!xxr&ssion, page 14
" , wheze om party is stripped of the
p&&s end rights of a partner, and clothed only
with ths more limited powers and righta of an
agent, It seems harsh, if not unreasonable, to
crowd upon his the duties and responsIbilItIse of
a partner, which he has never aseuivied,and for
wtiah tie has no reoiprooity of reward or Intereet.
it has, therefore, been well said by ibr. Chanoellor
&ent,, In his learned ~omaentaries, that *to be a
partner, otie zust ham sirchaa Interest in the
proi'itrr,as wili entitle hiti to an 6iooOunt,
aEd give
him a specifio lien or preferenoe In payment over
other 0red;torm. There is a distinction between a
stIpulatIon r0r a oompsnsation for labor propor-
tioned to the profits, whioh does hot make a person
a partnerg and a stipulation for an Interest In
s.uoh profits uhiah eutitlee the party to au amount,
as a partner.' And sr. Collyer has given the
sarm doctrine In equally expressive terms, when
he says, that In order to oonatitute a oonmuuIon
or profits between the parties, whioh ehallmako
then partners, the lnteramt in the profits mast be
srutual1 that is, each person must have a speoifio
Interest In the prorite, as a priuelpal trader."
The contracts subcxitted tail to satiery these testa.
s'e are of the opinion that A and E are not partners but
are In the e;aployinentof the law firiu of X and Y.
Yours very truly
Untitled Texas Attorney General Opinion
Combined Opinion