§7. In some of the states, a partnership may be formed by a number of persons, some of whom are to be responsible only to a limited amount; and their names are not to be used in the firm. Before a partnership of this kind can do business, a writing and certificate signed by the parties stating the terms of partnership, and the amount for which the _special partners_ (as they are called) are to be responsible must be recorded. The terms of partnership must also be published in a newspaper.
§8. In these _limited_ partnerships, as they are termed, the special partners are liable only to the amount stated in the terms of partnership. The other partners, called _general partners_, whose names only are used, and who transact the business, are liable for all the debts contracted, as in ordinary partnerships. If such partnership is to be dissolved by act of the parties before the expiration of the term for which it is formed, notice of dissolution must be filed and recorded, and published in a newspaper. Such is the law in the state of New York; and it is presumed to agree, in its most essential provisions, with the laws of the other states in which these partnerships are authorized.
§1. A promissory _note_ is a written promise to pay a specified sum at a certain time, to a person named, or to his order, or to the bearer. A common form of a note is the following:
Three months after date, I promise to pay to James Smith, or bearer, one hundred dollars, value received.
§2. A note thus payable to Smith or bearer, or to him or his order, is called _negotiable_, because it may be sold or transferred to any other person, who has the same power to sue for and collect the money, as Smith, the original promisee. If it were made payable to Smith _or order_, he must indorse it by writing his name on the back of it, before it would pass as a negotiable note. The indorsement is considered as the order of Smith to the maker to pay it to any other person. But, though not negotiable, it might be transferred; but the holder must sue in the name of Smith, and Brown might offset any demands which he has against Smith.
§3. An indorsement, made by writing the name only on the back of a note, is called a _blank_ indorsement. A full indorsement is one which points out the person to whom the note is to be paid. A blank indorsement may be filled up at any time by the holder. For example: A note is payable to "John Jay or order," or to "the order of John Jay," who indorses it in blank which makes it payable to any other holder. Now if any holder or indorsee wishes it paid to any particular person, he fills up the blank by writing a request to that effect above the name of the indorser, thus: "Pay to George Bruce," or "Pay to George Bruce or order;" who, again, may by indorsement order it paid to some particular person. Or, if he should indorse it in blank, or order it paid "to the _bearer_," it would again pass, as at first, by mere delivery.