Chapter II. On Partnership and the Triple Contract

The contract which is called partnership is an agreement concerning some thing to be possessed in common for a common good, or for profit to be received according to a proportional part. But the contract which is called triple by theologians is the same contract of partnership, to which two other contracts are joined, namely the insurance of the principal and the insurance of profit, or the sale of the hope of receiving greater profit for a lesser profit that is certain and insured. And it is instituted thus: I contract, for example, with Peter by handing over to him a sum of money for conducting business. But since the hope of gaining 15 per 100 shines upon me, and on the other hand I fear lest I lose the principal, I enter upon a second contract with Peter, paying him 5 per 100 if he is willing to take upon himself the insurance of the principal. This second contract having been entered into, now only 10 per 100 remain for me to be gained. But I would prefer a profit still smaller but certain, rather than greater and uncertain. Therefore I propose to my partner that he hand over to me only 5 per 100, but certainly refund it, whatever may supervene. Hence a threefold contract is given, namely of partnership, of insurance of the principal, and of insurance of profit.

I say 1st. The contract of partnership concerning a licit and honorable thing, and entered into for the common good of the contracting parties, is licit, provided the required conditions have place. It is established from the civil laws of all nations, from the universal use of all peoples, and from natural law; for it is not less licit for several jointly than for individuals to make profit from their own things. But the required conditions are: 1st. that there be equality, that is, the division of profit according to the proportion of the thing contributed; 2nd. that the risk of the principal pertain to the owner, unless a pact has been entered otherwise; 3rd. that each undergo the burden of damages and expenses which arise in view of the partnership; 4th. that each employ the same diligence in the partnership as in private business. - Cf. St. Alphonsus, n. 905.

I say 2nd. The triple contract likewise is licit according to the common opinion of theologians, provided the money is spent in business. The reason is: 1st. because those three contracts, separately and with diverse persons, are of themselves licit and just; therefore also if they are made together and with the same person; 2nd. because there is nothing against equality, for compensation is given, and the risk is equivalently sustained by the one handing over the money; 3rd. because Benedict XIV declares, in the work On the Diocesan Synod, lib. 10, cap. 5, that the opinion can be defended which asserts that the triple contract was not condemned by Sixtus V, and in the Encyclical Vix pervenit he says that he does not wish to condemn contracts about which there is dispute among theologians. - Cf. St. Alphonsus, n. 908. - Kenrick, n. 136.