,II I J II ' ll <-" r^. r.. F. VARI L ATTORN BY AT LAW/ LO« AMttILM, CAL /^^^^\ y^^&^^t^^$y X 5^w^(||^^ THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW GIFT OF A TREATISE LAW OF PARTNERSHIP. THE RIGHT HONORABLE SIR NATHANIEL LINDLEY, KNX., ONE OF THE LORDS JUSTICES OF HER MAJESTY'S COURT OF APPEAL, Assisted by WILLIAM C. GULL, M. A., of Linciln's Inn, Esq., Barrister- at-Law, Vinerian Scholar in the University op Oxford, 1883; AND WALTER B. LINDLEY, M. A., of Lincoln's Inn, Esq , Barrister-at-Law. TN TWO VOLUN1E3 VOL. I. Reprinted from advance sheets of the fifth English edition, furnished under contract by the English publishers, with American notes by Stewart Ra.pa.lje. JERSEY CITY: F. D. Linn & Co , Law Publishers, &c. 1888. Entered according to Act of Congress, in the year 1888, by FREDERICK D. LINN & Co., In the office of the Librarian of Congress, at Washington. \8S9b A CARD. The English publishers of " Lindley on Partnership " recommend to the American bar the American edition, published by F. D. Linn & Co., of Jersey City. This edition is published from advance sheets of the fifth English edition, purchased from us, and is the only edition printed or to be printed in the United States from the English advance sheets, or with authority from us. W. MAXWELL & SON. 8 Bell Yakd, Temple Bar London, May 8th, 1888. iv PREFACE TO ANIERICAN EDITION. In the selection and arrangement of the American notes, the aim of the annotator has been two-fold : First. To ascertain and state not only the true result of the authorities, but, upon important topics, to make extensive extracts from the opinions of eminent judges and text- writers, thus showing both the rules laid down and the reasomng upon which they are founded. Second. To so arrange and classify the notes, by means of catch-words or captions in bold type (following closely the classification adopted by the eminent author of the text), as to produce in the notes not merely a rambling mass of digest clippings, but a second treatise, exhibiting the American Law of Partnership in close juxtaposition with the English law as given in the text. To further assure this end, an independent index has been carefully prepared for the notes, and the annotator feels well assured that with its aid the American law upon any question of partnership can be readily and definitely ascertained. S. B. New York, May, 1888. PREFACE. The present volume is the fifth edition of a portion of the author's former " Treatise on the Law of Partnership, including its application to Companies." When that treatise was first published, viz., in 1860, the Law of Companies was being developed by legislative enactment and judicial decision out of the Law of Partnership ; and it appeared to the author desirable to trace that development, and to endeavor, in one treatise, to investigate the Law of Partnership and to determine the extent to which its principles were applicable to companies. But in the course of the last quarter of a century Company Law has been devel- oped to such an extent as to justify, if not to require, separate treat- ment ; and with a view to convenience and expense, advantage has been taken of the opportunity afforded by the demand for a fifth edition, to divide the former treatise into two parts, each of which shall be com- plete without the other, viz., the Law of Partnership proper, and the Law of Companies, in so far as it has any connection with the former. This volume is devoted to the first of these parts, viz., the Law of Part- nership proper. The volume relating to companies is in course of prepa- ration, and will be published shortly. In arrangement, the order of treatment previously adopted has been retained, with the exceptions that the causes of dissolution, the right to retire, and the right to expel, have been transferred to the chapter on Dissolution, in Book IV. This modification will, it is hoped, be con- sidered an improvement. Great pains have been taken to render this edition deserving of the favorable reception accorded to those which have preceded it. Several very important cises, and especially Kendall v. Hamilton, Scarf v. Jar- dine, and the Yorkshire Banking Company v. Beatsou, have been decided since the publication of the last edition. There bus also appeared the Digest of the Law of Partnership, by Mr. Frederick Pollock, which is full of observations of the greatest value ; and the third edition of which the author has constantly consulted. In the Appendix to it will be found the draft of a bill to consolidate and amend the Law of Part- nership. It is much to be regretted that this branch of the law should not be put into shape and codified by legislative authority. Mr. Pol- vii VI 1 1 PREFACE. lock's remarks ou this subject, in the Preface to the third and fourth editions of the Digest, deserve the serious attention of the legislature. But this is not the place to enlarge on the many advantages which would accrue to this country if its laws wei-e gradually revised on the model of the Indian codes. The whole of the present treatise has once more been cai-efully revised throughout. Whatever is obsolete has been omitted, or, if retained as being still useful, has been printed in small type. The author's increased experience has suggested additions and altei'ations, and many portions have been re-written and adapted to the most recent decisions. Notwithstanding, however, the labor bestowed upon the work, and the anxiety of the author to render it a trustworthy guide to the subject to which it relates, the multiplicity and difficulty of the questions with which he has had to deal are such, that he dare not venture to hope that he has always avoided error, or that his work is free from serious faults ; and although it has engaged his unremitting attention for more than thirty years, he is painfully aware that it is even now but an im- perfect production. The author's thanks are due to Mr. W. C. Gull and Mr. W. B. Lind- ley, for their assistance in revising the sheets, and to the former gentle- man also for his aid in prepai-ing materials, in examining American and Irish reports and authorities on doubtful points, and for the preparation of the indexes. Royal Courts of Justice, 1st March, 1888. ANALYSIS or CONTENTS. [Refertuct- is to Star (*) paging.] ♦Page Preface . v JEnolish Authorities Cited xxiii American Authorities Cited. Additions and Corrections. Introductory ........... 1 Book I. —Of Contracts of Partnership ...... 7 Book II. — Of the Rights and Obligations of Partners as regards Non-Partners . . . . . . . .124 Book III. — Of the Rights and Obligations of the Members of Partnerships between themselves . . ... 801 Booi: TV — Of the Dissolution and Wjnding-up of Partnerships . 570 IiJDEX TO Text 1207 l2fDEX to American Notes 1307 INTEODUCTORY. 1. Meaning of the word partnership ....... 1 2. Distinction between partnerships, corporations, and companies . . 4 BOOK I. OF CONTRACTS OF PARTNERSHIP. OFIAP. I. — The Nature of the CoxTRArT determined .... 7 Prelimiuarj' observations ....... 7 Sect. 1. — Of true partnerships ....... 10 1. Partnership is the result of an agreement to share prollts and losses . . . . . 10 ANALYSIS OF CONTENTS. ♦Page- 2. Partnership is prima facie the result of an agreement to share profits although nothing may be said about losses, and although there may be no common stock . . . .12 3. Partnership is prima facie the result of an agreement to share profits although commu- nity of loss is stipulated against . . . 15- 4. Partnership is not the result of an agreement to share gross returns . . . . .17 5. Partnership is not the result of an agreement ■which is not concluded . . . . . 19 6. Partnership is not the result of an agreement to share profits so long as anything remains to be done before the right to share them accrues .... .... 20 Application of this principle to Ordinary partnerships . . . . 20- Promoters of companies. . . .23- Sect. 2.— Of jwa^i-partnerships 25 1. By sharing profits 25 Of the doctrine that persons who share profits are lia- ble for each other's acts as if they were partners 1. State of the law anterior to Cox v. Ilichman 2. Modifications introduced by Cox v. Hiclcman 3. The act of 28 & 29 Vict. c. 86 2. By holding oneself out as a partner . Sect. 3. — Of sub-partnerships Skct. 4.— Of general and particular partnerships . Sect. 5.— Of clubs and societies not having gain for their object g,,f-P. 6.— Of co-ownership as distinguished from co-partnership Note on the remedies between co-owners CHAP. 11. — Of the Consideration of a Contract of Partnership Of the return of premiums .... 26- 30 35 40' 48 49 50 51 57 G3 64 70 CHAP. III.— Of the Persons Capable of Entering into Partner- ship Sect. 1. — Of their number 70 Sect. 2. — Of their capacity '''1 1. Aliens 72 2. Felons and outlaws 73 3. Infants 74 AX A LYSIS OF CONTENTS. XI 4. Lunatics 5. Married AVoraen 6. Corporations and companies *Pag& 76 77 78 CIIAP. IV. — Of the Evidence b\ which a Partnership or Quasi- Partnership may be proved 80 The Statute of Frauds 80 Tiie fact to be proved 83 The means of proving it . . . •. . . 84 CilAP. V. — Of Illegal Partnerships 91 Sect. 1, — What partnerships are illegal : — In general ......... 91 By particular statutes, and herein of Bankers ........ 95 Brokers 97 Insurers ........ 97 Medical practitioners . . . . . . 98 Newspaper proprietors ..... 99 Patentees . 99 Pawnbrokers ....... 99 Solicitors 100 Theatrical managers, &c. ..... 101 Unincorporated Joint-Stock companies with transferable shares . . . . . . 101 Unregistered partnerships .... 101 Sect. 2. — Consequences of illegality ....... 102 Especially as regards actions between the partners . 104 CHAP. YI. — Of the General Nature of a Partnership . . .110 Sect. 1. — Of the mercantile and legal notion of a firm . . . 110 Sect. 2. — Consequences of the non-recognition of the firm as distin- guished from the persons composing it . . . 112 1. Generally as regards its name . . . . 112 2. In legal proceedings . . . . .11.5 ■3. Partnership disabilites . . . . . . 11(5 4. As regards sureties and securities, and in particu- lar of the effect produced on them by a change in the firm . 117 CHAP. VII. —Of the Duration of Contracts of Partnership Of partnerships at will and for a term . [As to causes of dissolution, see Bk. IV. J 121 121 Xll ANALYSIS OV C'ONTKN'IS. ON THE BOOK II. RIGHTS AND OBLIGATIONS OF PARTNERS AS REGARDS NON-PARTNERS. CHAP. I. — Of the Liabilitiks of Partners fok the Acts of each OTHER .......... Sect. 1. — General piinci])les of agency as applied to ordinary part- nerships ......... Sect. 2. Liability of partners in respect of acts which are neither torts nor frauds ........ and herein of the implied powers of partners in matters relating to 1. Accounts ...... 2. Admissions ..... .3. Agents ...... 4. Arbitration ..... 5. Banking accounts .... 6. Bills of exchange and promissory notes 7. Bonds . 8. Borrowing money 9. Cheques 10. Contracts 11. Debts . 12. Deeds 13. Distress 14. Extension of business 15. Guarantees 16. Insurances 17. Interest 18. Judicial proceedings 19. Leases 20. Mortgages and pledges 21. Notice 22. Payments 23. Penalties 24. Purchases 25. Receipts 26. Releases 27. Representations 28. Sales 29. Servants 30. Ships 1-24 124 128 128 128 J 29 129 129 129 131 131 1:33 134 1.54 136 137 137 138 ]39 139 139 1.39 139 141 143 143 U4 Uo 115 M6 110 147 147 ANALYSIS OF CONTENTS Xlil ♦Page Sect. 3. — Liability of partners in respect of torts and frauds . . 147 1. Torts 149 2. Frauds . . , 150 Liability of partnerships for the misapplication of money by their members . . . .150 Liability of partnerships for the false repre- sentations of their members . . . . 102 Sect. 4. — Liability of partners in respect of acts which are unauthor- ised, and are known so to be ..... 16T Sect. 5. — Effect of the form of a contract on the liability of part- ners in respect of contracts not entered into on behalf of the firm, or not so in proper form . . . . 17G 1. Contracts under seal . . . . .177 2. Ordinary contracts not under seal . . . 177 3. Bills of exchange and promissory notes . .180 Bills in the name of the firm . . . . 180' not in the name of the firm . . .184 Promissory notes ...... 187 Sect. 6. — Liability of partnerships in respect of contracts not bind- ing on them, but of which they have had the benefit . 189 CHAP. IL — Of tue Nature, Extent, and Duration of the Lia- bility OF Partners to Creditors . . . .192 Sect. 1. — Nature of the liability, and herein of joint and several liability 1. As regards contracts . . . . . .192 2. As regards torts and frauds . . . . . 198 Sect. 2. —Extent of the liability 200 Sect. 3. — Duration of the liability ....... 201 1. Commencement of liability ..... 201 liability of firm for acts preceding its formation . 202 liability of incoming partners for debts con- tracted before they join the firm . . . 205 2. Tei-mination of liability 210 A. As to future acts . . . , . . 210 1. without notice of dissolution . . . 211 Death 211 Bankruptcy . . . . .212 Retirement of dormant partners . 213 2. by notice of dissolution or retirement. . 213^ the effect of such notice . . . 215- XIV ANALYSIS OF CONTENTS. when there is a contiuued hold- ing out notwithstanding the notice . . . . .216 with referciice to the doctrine that a partnership, though dissolved, subsists so far as is necessarj' for the windiiigup of its affairs . 217 what amounts to notice . . . 221 and herein of the distinction be- tween old customers and other people . . . . . .221 B. As to past acts 223 and especially by 1. Payment 225 of the appropriation of payments . . . 226 where there is a single current account . . 228 where there are several distinct accounts . 231 2. Release 23T 3. Substitution of debtors and securities . . 239 (a) by agreement ..... 239 A. Where a retired partner has not been discharged a. no new partner having been intro- duced 242 I. although a new partner has been introduced ..... 245 B. Where a retired partner has been discharged ..... 247 Discharge of the estate of a deceased partner 249 (J) by merger and judgment . . . . 254 and herein of the effect of taking fresh securities for an old debt . . 254 4. Lapse of time and the Statutes of Limitation. 257 CHAP. in. — Of Actions between Partners and Non-Partners. Sect. 1. — Of actions by and against partners .... 2G4 1. General observations ...... 2G4 2. Where no change in the firm has occurred since the right accrued . . . . . .273 A. Actions in respect of legal rights . . . 273 (a) Actions by the firm . . . .273 Actions ex contractu . . . . 273 Actions ez delicto .... 278 ANALYSIS OF CONTENTS XV ♦Page (b) Actions against the firm . . . . 280 Actions C.C contractu .... 280 Actions ex delicto ..... 283 B. Actions in respect of eqnitrtbln rights . . 283 3. Where a change in the firm has occurrerl since the right accrued ....... 284 Sect. 2.— Of set-ofT 290 Sect. 3. — Of execution against partners for the debts of the firm . . 298 BOOK III. OF THE RIGHTS AND OBLIGATIONS OF, THE MEMBERS OF PxiRTNERSHIPS BETWEEN THEMSELVES. CIIAP. I. — Of the higut to take Pakt in the Management of the Affairs of the Firm ....... 301 CHAP. II. — Of the General Duties of Partners to observe Good Faith 303 Sect. L — Prelinn'nary remarks ........ 303 Sect. 2. — Of the obligation of partners not to Ijenefit themselves at the expense of their co-partners ... . 305 Sect. 3. — Of the powers of a majority of partners . . . . 313 1. in matters arising in the ordinary course of busi- ness 314 2. in matters involving a change in the nature of the business ....... 315 CHAP. III. — Of the Capitals of Partnerships 320 1. The duty of the sheritt 356 '2. The position of the purchaser fi-f)ni the sheriiF . . 358 3. The ])osition of the execution debtor ... . . 359 4. Jlodilications introduced by the Judicature Acts . . 361 Sect. 5. — Of the transfer of shares ....... 36.3 'N.B. — As to the reUnquishment and forfeiture of shares and as to the right to retire and ex- pel, see infra, Bk. IV., Chap. I, § 1.] CHAP. VT. — Of Contribution and Indemnity .... Sect. 1. — General observations ....... 1. Foundation of the right to contribution . 2. Of the right of agents and trustees to indemnity from their principals and cesticls qie trustent . 3. Of some former differences between contribution at law and in equity ....... 4. Of contribution between wrongdoers 2.- — Of compensation for trouble ..... 3. — Of outlays and advances ...... Sect. 4. — Of debts, liabilities, and losses .... Sect. 5. — Of interest ........ Sect. Sect. CI1.\P. YII. — Of THE Division OF Profits CHAP. A'TII. — Of the Accounts of PAUTNERsniPs .... Sect. 1. — Of the mode of keeping partnership accounts . Sect. 2. — Of the duty to keep and the right to inspect them CHAP. IX. — Of Paktnehship Articles ..... Sect. 1.— General observations ....... I. Partnershi[) articles are not intended to define all th rights and duties of partners .... 367 368 368 \)m 374 377 380 381 385 389 393 396 396 404 406 406 406 ANALYSIS OF CONTENTS. XVll *Page 2. Partnership articles are to be construed with reference to the objects of the partners . . 407 3. and so as to defeat fraud ...... 407 4. and to prevent unfair advantages . .... 408 5. An}- clause, however express, is capable of being aban- doned by the tacit consent of all the partners . . . 408 6. Articles of partnership are presumed to apply so long as the parties to them remain partners . . . . 410 Sect. 2. — On the usual clauses in articles of partnership, and especially of those relative to 1. The nature and place of the business . . .412 2. The time of the commencement of the partnership. 412 3. The name or style of the firm . . . . . 413 . 413 . . 413 . 414 . . 418 . 418 . . 420 . 420 . . 422 . 425 . . 426 4. The duration of the partnership . 5. The premium ..... 6. The capital and property of the firm 7. Interest, allowances, &c. . 8. Conduct and powers of the partners 9. Partnership books .... 10. Accounts 11. Retiring ..... 12. Dissolving .... 13. Expelling 14. Valuation of shares . . . . . . 429 15. Transmission of shares and introduction of new partner ........ 433 16. Annuities to widows ...... 435 17. Prohibitions against carrying on business. . . 436 18. Good-will 439 19. Getting in debts 448 20. Assignment of share by retiring partner . . 449 21. Indemnities ........ 450 22. Arbitration clauses . . . . . .451 23. Penalties and liquidated damages . . . . 454 CHAP. X. — Of Actions between Paktneks . Sect. 1. — General observations .... 1. Law before the Judicature acts 2. Effect of the Judicature acts . 456 45 G 456 458 Sect. 2. — Parties to actions between partners .... 459 1. General rule as to partnership actions . . . 459 2. Where some partners may sue or be sued on behalf of themselves and others . . . 461 B XVIU ANALYSIS OF CONTENTS. ♦Page Sect. 3. — Cases in which Courts will not interfere between partners. 464 1. Of the rule not to interfere except with a view to a dissolution ...... 464 2. Of the rule not to interfere in matters of internal regulation . . . . ... . . 466 8. Of the rule not to interfere at the instance of those who have been guilty of laches . . 466 Sect. 4. — Actions for specific performance. 475 Sect. 5. — Actions for misrepresentation and fraud .... 479 1. General observations ....... 479 2. Actions for damages ...... 481 8. Actions for rescission of contract . . . . 482 Sect. 6.— Actions for dissolution, account, &c 491 1. Of account and discovery 492 (rt) Of account and discovery generally . . . 492 as to account ....... 492 as to discovery and production of documents . 501 as to payment into Court ..... 505 (I) The defences to an action for an account and dis- covery ....... 1. Denial of partnership .... 2. The Statute of Limitations 3. Account stated ..... 4. Award ...... 5. Payment. Accord and satisfaction. 6. Release ...... (c) The judgment for a partnership account Just allowances ..... The period over which the account is to extend 519 Account of profits since dissolution . . . 521 The evidence upon which the accounts are to be taken ....... 2. Of injunctions . 3. Of receivers ........ 4. Of the sale of partnership property under the order of the Court ....... 506 507 508 512 514 515 516 516 519 536 538 545 Sect. 7. — Other miscellaneous actions . . . . . . 1. Between persons who have agreed to become partners 2. Between partners ....... Note on the law as it stood before the Judica- ture acts 555 559 559 560 502 ANALYSIS OF CONTENIS. XIX BOOK IV. OF THE DISSOLUTION AND WINDING UP OF PARTNERSHIPS. *Page CHAP. I. — Causes of Dissolution 570 Sect. 1. — The will of auy partner . 571 1. Of the right to dissolve 571 2. Of the right to retire 573 3. Of the right to expel 574 Sect, 2. — The impossibility of going on ; in consequence of — 1. The hopeless state of the partnership business . . 576 2. Insanity 577 3. Misconduct and destruction of mutual confidence. . 580 Sect. 3. — The transfer of a partner's interest 583 [N. B. — As to Deat^i and Bankruptcy, see below.] Sect. 4. — The occurrence of some event which renders the continu- ance of the partnership illegal 585 CHAP. II. — Consequences of Dissolution * . 586 1. As regards the creditors of the firm . . . ^ . 586 2. As regards the partners themselves . . . . 587 CHAP. III.— Of Death and its Consequences 590 Sect. 1. — As regards the surviving partners and the executors of the deceased 590 Sect. 2. — As regards joint creditors 594 1. With reference to what occurred before death. . 594 And herein of actions against executors of de- ceased partners by creditors of the firm . . . 599 2. With reference to what has occurred since death . 604 And herein of the efifect of a trust to employ assets in the business of the firm . . . . 607 Sect. 3. — As regards the separate creditors, legatees, and next of kin of the deceased . . . . . . . 610 1. Of the rights of the separate creditors and legatees, &c., generally ........ 610 2. When the share of the deceased is not got in . .614 3. Of shares specifically bequeathed . . . . 619 XX ANALYSIS OF CONTENTS. ♦Page CHAP, rv.— Of Bankruptcy • ... 622 Preliminary observations 622 Sect. 1.— Adjudications of bankruptcy against partners . . . 625 1. Acts of bankruptcy 625 And herein particularly of fraudulent conveyances. 627 2. The petitioning creditor's debt . . ... 635 3. Of joint and separate adjudications . . . 637 And herein of annulling and consolidating adjudi- cations 640 4. Choice of trustee 644 And herein of inspectors to protect special inter- ests 645 Sect. 2. — The property which vests in the trustee and the conse- quences of such vesting ...... 646 1. Generally 646 2. Property divisible amongst the creditors. . . 650 3. Of set-oflf and mutual credit 654 4. Of the time from which the title of the trustee dates 663 And herein of the consequences of the doctrine of relation back as regards (a) transactions with the bankrupt partners (b) transactions with the solvent partners. (c) execution creditors .... Sect. 3. — Of the doctrine of reputed ownership .... 1. generally .....•• 2. particularly as regards partners where there has been a change in the firm where there is a dormant partner . Sect. 4. — The administration of the bankrupt's estate 1. General principles 2. Of joint estate and of separate estates 3. Of joint, separate, and joint and separate debts . 4. Of the proof and payment of partners' debts generally ....... of secured creditors and the rule in JEx parte Waring ....... A. Proof against the joint estate . the joint creditors .... the partners ..... the separate creditors . B. Proof against the separate estates . the separate creditors 666 669 674 676 676 683 685 689 691 691 697 701 707 709 720 720 721 728 729 730 ANALYSIS OF CONTENTS. XXI ♦Page the joint creditors 730 the ])artners ....... 737 C. Proof against both estates .... 743 General rule as to election . . . . 743 Cases in which double proof is allowed . 747 Cases where a secured creditor may split his demand 749 Sect. 5. — The bankrupt's order of discharge. . . . . . 751 Sect. 6. — Arrangements with creditors ...... 754 INDEX TO TEXT 1207 INDEX TO AMEBIC AN NOTES 1307 ENGLISH AUTHORITIES CITED. [Reference is to Star (*) paging.] l^The pciges iiiicMch a ease is pariicidarly referred to in the text, and is not merely cited, are in the folloicing list denoted by ayi asterisk. The cases in each slieet have been brought doicn to the latest possible moment. It ought, hoiocver, to be mentioned, that no attempt has been made to collect cases decided since the establishment of the Law Reports, and not reported therein.^ *Pase Abbott v. Burbage, 631 V. Smith, 200, 299 AbelB. Sutton, 215, 216,218, 219*, 667, 673 Abell, exjiarte, 730 Abraham v. Hannay, 462, 463 Acerro v. Petroni, 90 Ackerman, ex parte, 731 Ackroyd, ex parte, 645 Acraman v. Bates, 682 Adam, ex parte, 746, 747 V. Townend, 266 Adams, ex parte (3 M. & A.), 716 (1 Rose), ' 726 V. Bankhart, 129 V. Bingley, 143 Adamson, ex parte, 199,200, 702,745, 746 V. Jarvis, 370, 377, 378 Addams v. Ferick, 594 Addie v. Western Bank of Scotland, 163 Addis V. Knight, 291, 493, 591, 599, 648 Addison, ex parte (3 DeG. & Sm.), 633 (3 Mon. & Ayr.), 632 V. Overend, 278, 279 Adley v. Whitstable Co., 395, 537 Aflalo I'. Fourdriuier, 752 Agace, ex parte, ♦Page 146, 165*, 166. 171, 703 Agacio V. Forbes, 277 Agar V. Fairfax, 59 V. Macklew, 451 Agra Bank, ex parte, 679, 680 Agra and Masterniau's Bank, re 712 V. Hoffman, 291 A. G. V. Birkbeck, 96 V. Borrodaile, 61 v. Brunniug, 348 V. Burges, 149 V. Great Northern Railway Co., 316 V. Higgins, 340 V. Hubbuck, 347 V. Marquis of Ailesbury, 347 and Add. to p. 347 V. Mayor of Norwich, v. Siddon, V. Weeks, V. Wilson, Airey v. Borbam, Aitcheson v. Lee, Akhurst v. Jackson, Albion Life Assur. Soc, re Albretcht r. Sussmann. Alcock T. Taylor, Alder v. Fouracre, Alderson v. Clay, 372 148, 149 149 377, 379 68, 381* 665, 675 65, 67 32, 385 72, 73 121 807, 496, 541 41, 86, 87 XXIV AUTHORITIES REFERRED TO. ♦Page Aldcrson«. Pope, -141, 170, 174*, 175* Alexander, ex parte, 120 «. Barker, 275 V. Simms, 01, 355 AUcard v. Weeson, 75 o Allen r. Bonnett, 630, 631 V. Hartley, 032 r. Ivilbre, 542, 588, 009 Alletson v. Chichester, 680 AUfrey v. Allfrey, 512, 513 Alliance Bank, ex parte, 713 Alliance Bank Limited v. Kearsley, 129 AUowa}' V. Braine, 468 V. Steere, 658 Alsager r. Currie, 656 V. Rewley, 611, 613 Alston, ex pa7'te, 661, 718 Ambler v. Bolton, 331, 415, 558 Ambrose v. Kerrison. 373 Anderson's case (7 Ch. D.), 63 Anderson, ex parte (5 Ch,), 649 (14 Q. B. D.), 703 V. Anderson, 425, 466, 582 V. Maltby, 338, 486, 574, 653, 698 V. Wallace, 544 V. Weston, 214 Andrews, ex parte, 722, 738, 740 Andrews and Alexander's case, 51 Andrewes v. Garstin, 559 Anglesea Colliery Co., 403 Anon. (1 Camp. 492), 425 (2 K. & J. 441), 539, 544, 577, 578, 579, 581 (1 Madd. 144), 514 (1 Mod. 215). 654 (12 Mod. 446), 675 (3 Salk. 61, and 12 Mod. 446), 647 iy. Layfield, 136 Ansell V. Baker, 255, 256 v. Waterhouse, 283 Antram v. Chace, 129 Apperley v. Page, 463, 499, 500 Appleby, ex parte, 702, 705, 706 Appleton «. Binks, 177 Apsej', ex parte, 160*, 191 Arbouin, ex parte, 679, 686, 702, 746 Arbucklc r. Taylor, 150 Arden v. Sharpe, 171 i'. Tucker, 276 Arkwright v. Newbold, 163, 481 Arlington r. Meyrick, 117 Armitage v. AVinterbottom, 139 Armory v. Dclamirie, 148 ♦Page Armstrong v. Armstrong, 91, 105, 106 V. Lewis, 99 Arnold v. Bainbridge. 292 Arnott V. Hayes, 537 Arthur r. Lamb, 59, 60 Art on T. Booth. 145* Ashb)- T. James, 510 Ashley's case. 490 Ashton v. Blackshaw, 679 Ashurst V. Mason, 369, 377, 379 Ashworth v. Munu, 848 V. Outram, 78 V. Stanwix, 149 A spin wall v. London & North- western Railway Co., 135, 146, 284, 359 Assignees of Brewster and West, ex parte, 689 Astle'«. Wright, 66, 68, 69 Astley i\ Johnson, 268* Athenajum Life Ins. Soc. v. Pooley, 19l' Athenaeum Soc, re 201 Atkins, ex parte, 725 T. Tredgold, 262 Atkinson v. Laing, 286 V. Mackreth, 151, 284 Atkyns v. Kinnier, 438, 455 Attwood V. Banks, 636 %\ Munnings, 130 «. Rattenbury, 274 Attwool v. Attwool, 290 Atwood V. Maude, 68, 69 Aubert t. Maze, 94, 97, 105, 378, 388 Aubin V. Holt, 93, 100, 479 Auld i\ Glasgow Working Men's Building Soc, 319 Ault v. Goodrich, 220* 260, 511 Aulton V. Atkins, 450 Aunand x. Honiwood, 342 Austen, ex p>arte, I'll, 703 v. Boys, 435, 438, 445, 447* Austin X. Jackson, 402, 518 Aveling r. Knipe, 51 Averall v. Wade, 369 Aver}' V. Langford 437, 455 Baboo Jauokey Doss t\ Bindabun Doss, . 460 Backhouse t. Charlton, 133, 135 V. Hall, 118, 119 Backhurst v. Clinkard, 357 Backwell v. Child, 020 Badeley t. Consolidated Bank, 36, 37 38*, 255, and Add. to p. 38 AUTHORITIES REFERRED TO. XXV Badger «. Shaw, 679 Baglehole, ex parte^ Bagot «. Easton, 491 73 501 Bagshaw v. Parker, 572 579 Bailey, ex parte, ■». Bidwell, 627 1G9 V. Finch, 659 V. Ford, 559 577 «. Johnson, 643 657 Baillie v. Goodwin, 266 Baird's case. 124. 212 Baird v. Planque, Baker's case, 43 76 Baker v. Charlton, 184* V. Martin, 612 Baldney v. Ritchie, 281 Bale V. Cleland, 482 Ball, ex jJCtrte, 740* «. Dunsterville, 137 T. Lanesborough, Ballam v. Price, 224, 190 2.37 Balmain v. Shore, 328, 347, 434* Balsh V. Hyham, 371, 374 Bam ford, ex parte, 633 Banco de Portugal «. Waddell, 719, 749 Bank of Australia v. Nias, 255 Bank of England, case of, 329, 330* 337, 385 V. Anderson, 96 V. Booth, 96 Bank of Ireland «. Perry, 713 Bank of Scotland v. Christie, 119, 230 Bankhead's Trusts, 683 Banks, ex parte, 743, 744 V. Gibson, 445, 446, 544 Bannatyne ®. Leader, 630 Banner, ex parte, 704 V. Berridge, 260, 511 V. Johnston, 711 Barber, re or ex parte, 402, 409, 421, 422, 429, 430, 432 ■y. Barber, 509 «. Mackrell, 601 Barclay, ex parte, 733 v. Lucas, 117 Barden v. Keverberg 77 Barff, ex parte, 651 Barfield u. Loughborough, 390 Barfoot v. Goodall, 223 Baring ii. Corrie. 295 V. Dix, ' 57G* V. Stanton, 307 Barker ». Allan, 563 ■0. Goodair, 359, 671, 675 *Page Barker v. Richardson, 145, 146 Barklie v. Scott, 12=*= Barnard, re 186, 193, 598 Barnardiston v. Chapman, 562 Barnett, ex parte (9 Ch.), 658 (DeG.) 715 Barnett v. Lambert, 23 Barnett, Hoarcs & Co. «. South London Tramway Co., 163 Barnewall, ex piarte, 161, 162, 617, 702, 745 Baroness "Wenlock v. River Dee Co., 191 Barron ». Fitzgerald, 113, 114 Barrow, ex parte, 48*, 337, 460, 493, 688 Barr's trust, re, 680 Barry, ex parte, 678 V. Nesham, 23 ®. Stevens, 458 Barter, ex ptan'te, 651, 658 Bartlett v. Vinor, 95 Barton v. Hanson, 179, 203, 828 r. Williams, 61, 124, 140, 502 568* Barwick v. English Joint Stock Bank, 163 Bass «. Clive, 112 Bassaro, ex parte, 645 Bassetfrv. Wood, 255 Batard «. Douglas, 24 «. Hawes, 24, 376, 566 Bate, ex parte, 256, 704, 750, 754 Bateman v. Pinder, 261 Bates, expjarte, 75 Bateson, ex parte, 641 V. Gosling, 237 Bath, ex parte, 719 Batson. ex parte (1 Gl. & J.), 645 (Cook's B. L.), 678 Batte v. Robbins, 390 Battersby v. Smyth, 324 Battley v. Lewis, 22, 202, 413 Batty V. M'Cundie, 103 Baudier, ex parte, 729 Bauerman, ex parte, 731, 732 Bawdcn t. Howell, 274 Baxter v. Brown, 348 V. Hozier, 560 V. The Earl of Portsmouth, 76, 213 t. Pritchard, 629 r. West, 81, 85, 89, 581 Bayley, ex parte, (i6 Bayly v. Schofield, 425 XXVI AUTHORITIES REFEURED TO. Baynard v. "Woollcy, Beak v. Beak, Beale, re, V. Caddick, ♦Page S77, S-i 9 519, 520 040 105, 209, 228, 230, 234 T. Mouls, 206*, 207 Beamish v. Beamish, 435 Bear v. Bromley, 50 Beard v. Webb, 77 Beasley v. Beasley, 632 Beaumont v. Boultbee, 513 V. Greathead, 224 i\ Grover, 498 V. Meredith, 5, 50 Beavan v. McDonnell, 76 Beck V. Kantorowicz, 4G4, 480, 496 Beckford v. Wade, 260 Beckham v. Drake, 144, 147, 178*, 189, 192, 275, 281, 652 T. Knight, 178, 281 Bedford v. Bagshaw, 482 V. Brutton, 457, 563, 565, 567 V. Deakin, 244* 247, 253. 254 Beech v. Evre, 207 Beecham r." Smith, ^ 116,565,568 Beecher v. Gufiburn, ' 391 Beer v. Beer, 560 Belcher v. Prittie, 630 V. Svkes (8 B. & C), 337, 449 r. Sykes (6 B. & C), 450 Beldon e. Campbell 133 Bell, ex parte, 97, 268% 270 V. Banks, 257 V. Morrison, 261 V. Phyn, 343*, 346, 347 V. Reid, 73 V. Simpson, 629 Bellairs r. Ebsworth, 118 V. Tucker, 481, 482 Bellamy and Metropolitan Board of Works, re Belshaw r. Bush, Belton V. Hodges, Benfield, ex 2^(t,rte, Benham r. Gray, Beningfield r. Baxter, Benjamin r. Portcus, Bennett a. Blain, V. Lytton, Benson, ex parte, V. Iladtield, r. Healhorn, Bentham Mills Spinning Co., re, Bentley, ex parte, 151 226 75 637 328, 562 475, 488, 517, 613, 614 29* 348 594 702 241, 284 309 652 746 i *Page- Bentley v. Bates, 55, 56, 333, 366, 493, 498, 650 V. Craven, 30.j^ 380 Beresford v. Browning, 194*, 197, 596 j Bergmann v. Macmillan, 364, 461 t Bernasconi v. Fairbrother, 638 1 Berney v. Davison, 630, 631 V. Vyner, 630, 631 Berry, ex parte, 709' V. Alderman, 169' Besch V. Frolich, 579. 583 Besley's case, or Besley, ex parte, 24 Betts V. Gibbins, 370, 377, 378. Bevan, ex parte, 743, 744 V. Attorney-General, 619 V. Lewis, 190* 359, 461, 542: r. Nunn, 631, 665 Beveridge v. Beveridge, 315 Biddlecombe v. Bond, 425 B\Mu\Y)h, ex parte, 153*, 717 Bielby, ex parte, 746- Bigg, ex parte, 747 Biggs V. Lawrence, 93, 103, 268- Biguold, ex parte, 390 V. Waterho.use, 141, 143% 172* Bilborough v. Holmes, 250, 251, 252, 706, 707 Billiter v. Young, 338, 486, 574, 653 Binford v. Dommett, 348. Bingham, ex parte, 208, 706 Binney v. Mutrie, 402, 403, 421, 517 Birch, ex parte, 573 Birley, ex jMrte, 732, 733 v. Kennedy, 505- Birmingham Land Co. v. L. & N. AV. Rail. Co., 265 Bischoffsheim, ex parte, 754 Bishop, ex parte, 719" r. Church, 194*, 195, 596 V. The Countess of Jersev, 153, 158=^ Bittleston v. Cooke, 629 Blackburn, ex jyarte, 630 Blackburn Building Soc. v. CunlifFe, Brookes & Co., 132, 191 Blackburn, Low & Co. v. Vigors, 141, and Add. to p. 141 Blackett v. Weir, 86 Blades v. Free, 211 Blain, ex parte, 265, 300, 624, 625, 633 V. Agar, 492 Blair v. Bromlev, 146, 153*, 162, 165, 260, 596 Blake, ex parte,, 72& AUTHORITIES KEFEERED TO. XXVll *Page Blake v. Shaw, 439, 443, 447 Blakeley's (executor's) case, 212 Blakeney v. Dufaur, 551, 553 Bland, ex parte, 627 Blannin v. Taylor, 718 Bleadon v. Hancock, 279 Bleckley, re, 373 V. Rymer, 508 Blew V. Wyatt, 246*, 253 Blisset V. Daniel, 304, 315, 402, 407, 408, 421, 426*, 427, 430, 487, 498, 517, 540, 571, 575 Bloxam v. Metropolitan Railway Co., 394 Bloxhani, ex 2ycirte, 715 V. Pell, 16, 27*, 28, 29, 30 Bluck V. Capstick, 68 Blundell v. Winsor, 240 Blyth V. Lafone, 452 Blythe, ex parte, 722 Boardman, ex parte, 730 Boast V. Firth, 419 Bock r. Gorrisen, 656 Boddain v. Rvley, 392, 405 Boddiiigton v. Castelli, 290, 653 Bodenham v. Purchas, 230 Bolckow V. Fisher, 503 Bolitho, ex parte, 186, 703 Bolland, ex jmrte {Mont. &McAr.), 155 (7 Ch.), 629, 630 (8 Ch. D.), 628, 659 V. Nash, 657*, 662 Bolton, ex parte, 746, 747 V. Puller, 335*, 646, 647, 698 Bonbonus, ex parte, 131, 140, 171, 189, 703 Bond, ex parte, 743, 744, 746 V. Gibson, 144*, 169* V. Milbourn, 65 v. Pittard, 15 Bone V. Pollard, 51, 323 Bonfield v. Smith, 192, 280, 281, 295, 296 Bonnardet v. Taylor, 505 Bonscr v. Cox, 602 Bonville i\ Bonville, 479 Booth V. Bank of England, 96 V. Booth, 617 V. Hodgson, 97, 105 V. Leycester, 389 V. Parkcs, 132, 410, 521, 522, 527, 528, 616 Borries r. Imperial Ottoman Bank, 295 Borrodailes, ex parte, 746 Bosanquet v Woodford, 267 V. Wray, 116, 267, 568, 569 *Page Boswell V. Smith, 292 Bottomley v. Fisher, 188* V. Nuttall, 178, 180, 254, 257, 704, 718 Bouch V. Sproule, 321, 621 Boulter v. Peplow,. 566 Boulton, ex parte, 680 V. Jones, 186, 286 Bourdillon v. Roche, 151 Bourdin v. Greenwood, 260 Bourne, ex parte, 636 v. Freeth, 44* 89 Boussmaker,- ex parte, 72 Bovill V. Cowan, 503 V. Hammond, 566, 567 V. Wood, 718 Bow den, ex parte, 716 Bower v. Harris, 228 V. Swadlin, 237 Bowes, re, 656 v. Lucas, 228 V. City of Toronto, 524 Bowker v. Burdekin, 137, 631 Bowsher v. Watkins, 487, 613 Bowyear v. Pawson, 293 Boyce v. Douglas, 256 V. Green, 348 Boyd 1). Emerson, 129 V. Mangles, 659 Boydell v. Druramond, 222 V. McMichael, 678 Boyes v. Bluck, 238 Boyle, ex parte, 657 Boys, re, 235 Bradbur)^, ex parte, 707 V. Dickens, 440, 443, 541 Bradley v. Millar, 603, 743, 746 Bradshaw, ex parte, . 731 Braggiotti, ex parte, 75& Braham v. Beachim, 114: Braithwaite v. Britain, 250, 253, 260, 262, 596, 597, 613 V. Skafleld, 45 Brand v. Boulcott, 277 Brandao v. Barnett, 656 Brandon v. Hubbard, 277 V. Scott, 268, 269 Brasier B.Hudson, 134,284,342 Bray v. Fromout, 363, 460, 493 Bree v. Holbech, 259 Brenmer v. Chamberlayne, 206 Brett's case, or ex jmrte (6 Ch. & 8 Ch.^ 715, 717 Brett V. Beckwith, 11*, 91, 98, 103, 178, 192. 596, 600*, 688, 691 V. Marsh, 228 XXVlll AUTIIOKITIKS UEFEKRED TO. ♦Page Brettel v. Williams, 126, 138* Brewer v. Pocock, 594 Brewin v. Short, 681, 682 Brewster and West (Assignees of), ex parte, 689 Brice's case, 211 Brickland v. Newsome, 624 Brickwood v. Miller, 676 Bridges v. Mitchell, 508 Brierlev t: Cripps, 564 Brigg's^case (1 Eq.), 490 Briggs, €xi)arte (3 D. & Ch.), 16 Bright, ex parte, 688 «. Hutton, 24 Brinsmead v. Harrison, 256 Bristol, Corporation of, r. West- cott, 336 Bristow «. James, 280 V. Maxwell, 261 «. Taylor, 184 V. Wiiitmore, 355 Britain v. llossiter, 81 British and American Telegraph Co. V. Albion Bank, 149 British Linen Co. r. Drummond, 259 Mutual Bank Co. v. Charn- wood Forest Rail. Co., 163 Wagon Co. v. Lea, 287 Broad, re, 710 Broadbent, ex jjarte, 650 Brockbank ^^ Anderson, 88* ^TO^GY\c\i, ex parte, 715 Brodie v. Howard, 147 Bromley «. Williams, 51, 98, 464, 495 Brook, ex parte, 708 V. Enderby, 229 V. Garrod, 424, 433 Brooks, ex parte, 677 T. Sutton,' 516 Broom v. Broom, 344* Broome, ex pjarte, 42, 65, 482, 491, 551, 739* Brojjhy v. Holmes, 64 Broughton v. Broughton, 268, 270 V. Manchester and Salford Waterworks Co., 96 Brown, ex parte (1 Atk.), 721 (1 V. & B. and 1 Ro.), 639, 747 (3 M. & A.), 653, 683 (2 M. D. & D.), 724* (3 DeG. & S.), 740 (9 Ch. D.), 651, 687 T. Adams, 162, 228 X. Boorman, 199 V. Brown, 88 *Page Brown v. Byers, 130, 133 T. Carbery, 046 V. Dale, 342 V. De Tastet, 364, 381, 460, 493, 519, 524, 527*, 528, 616 v. Douglas, 603*, 604 v. Duncan, 95*, 99 V. Gellatly, 592 V. Gordon, 211, 250, 251, 252% 254, 260, 262, 597 V. Hall, 370 13. Jodrell, 76 V. Kidger, 130, 131 V. Leonard, 41, 175, 214, 217* 4). Litton, 526 V. Oakshot, 332* 1). Perkins, 515, 516*. 538 V. Tapscott, 15, 563, 564, 566 V. Vidler, 526 v. Weatherby, 604 V. Wootton, 256 , Shipley & Co. v. Rough, 711 Browne, ex parte (1 Rose), 636 (6 Yes.), 681 r. Collins, 394, 620, 621 V. Gibbins, 386 «. Monmouthshire Railway and Canal Co., 393 V. Savage, 680 Brownell v. Brownell, 513 Browning v. Browning, 406, 430 Brownlie v. Russell, 12 Brownrigg v. Rae, 140, 269 Brunswick v. Slowman, 149 Brutton v. Burton, 112, 137, 272 Bryant z'. Herbert, 199 Brydges v. Branfill, 151*, 162, 200 Brj^on r. The Metropolitan Saloon Omnibus Co., 133 Buchanan v. Findlay, 656 Buck, ex p)arte, 683 Buckingham, ex parte, 731 Buckland r. Johnson, 256 r. Newsame, 624, 634 Buckley, ex parte, 189* 192, 702 r. Barber, 146, 288, 342*, 568, 569, 672 Buddie V. Willson, 280 Bugg's case. 584 BulU-. O'SuUivan, 133 BuUen t. Sharp, 32*, 34, 171 Bullock v. Caird, 265 1'. Chapman, 446, 544 V. Crockett, 69 «. Dodds, 73 AUTHORITIES REFERRED TO. XXIX *Pafre Bunn r. Guy, 9^ Burbidge v. Robinson, 504 Burbriflge, ex parte, 608, 683 Burdekiu, ex pane (1 Deac), 641 (2 M. D. & D.), T&2 Burden v. Burden, 881, 382, 52.8 Burdikin, ex parte, 639, 640, 642 Burdon v. Barkus, 66, 81, 121, 826, 828. 330, 384*, 385, 555, 557 Burfield v. Rouch', 447 Burgess v. Burgess, 114 V. Merrill, 74, 281 Burgue v. De Tastet, 90 Burland v. Nash, 228, 231* Burls V. Smith, 45, 50, 51 Burlton, ex parte, 641 r. Wall, 641 Burmesterw. Norris, 132, 183, 190 Burn, ex parte, 678 V. Burn, 137, 194, 195*, 596, 598 ». Carvalho, 652, 681 Burnaby, ex parte, 694 Burnand v. Rodocanachi, 325 Biu-ncU V. Hunt, 22*, 28, 328, 358 Burnett, ex p>arte, 731 Burns v. Poulsom, 148 Burnside v. Dayrell, 85 Burrell, ex parte, 721 Burroughs v. Elton, 613 Burstall «. Bey f us, 501 Burt V. Moult, 667 Burton ex p>arte (1 Gl. & J.), 680, 685* (3 M. D. & D.), 161, 162, 702, 717 (13 Ch. D.), 628 V. Green, 856 V. Issitt, 215* V. Wigley, 454 V. Wookey, 309* Bury V. Allen, 65, 66, 68, 69, 367, 387,492, 519, 739 V. Bedford, 447 Bush c. Martin, ' 260 Bushell, ex parte, 169, 172, 702 Butchart v. Dresser, 140, 218, 219*, 220* Butcher, ex parte, 688, 699 V. Pooler, 518 11. Stead, 630 Butler r. Butler, 78 Butliii, ex parte, 746 Butt r. Bilke, 642 V. Monteaux, 107, 463 Buttertield, ex parte, 608, 722* *Page Buxton V. Lister, 476 Bjers V. Dobey, 280 Bygrave, ex parte, 641 Cabell v. Vaughan, 273, 280, 282 Caddick v. Skidmore, 82* Cahen, ex 2)arte, 624 Caldecott, re. 739 Calder v. Dobell, 177 V. Rutherford, 288 Caldicott, ex parte. 716 V. Griffiths, 50, 567 Caledonian Lodge of Freemasons, 50 Cakhrop, re, 633 Calton V. Bragg, 389 Cambefort v. Chapman, 255, 256, and Add. to p. 193 Camden v. Anderson, 324 Cameron, re, 610, 620 Campanari v. Woodburn, 211 Campbell i). Campbell, 378*, 388 V. Flemings, 490 V. Mullett, 54, 325, 335 Candler V. Candler, 100, 549 Cannan v. South East Railway Co., 665 Capper's case, 24 Carew's case, 369, 386 Carlisle Canal Co., ex parte, 702 Carmichael v. Carmichael, 512 Carne, ex parte, 719, 745 V. Legh, 282 Carpenter, ex parte, 573, 698, 741, 752 v. Marnell, 653 Carr v. L. & N. W. Railway Co., 40 V. Smith, 565 Carralli and Haggard's claim, 657 Carrick, ex parte, 653 Carrington v. Cantillon, 272 Carruthers I'. Sheddon, 112 Carter, ex parte (2 GI. & J.), 737, 742 (1 M. & A.), 753 V. Home, 59, 307* V. Southall, 273 V. Whalley, 44, 212*, 214 Caruthers, ex parte, 729 Carver v. Pinto Leite, 508 Cassels v. Stewart, 803, 313*, 364, 423* Castell, ex parte, 726, 736 Castelli v. Boddington, 289, 653 Catling T. Skoulding, 509 Catskill Bank r. Gray, 79 XXX AUTHORITIES REFERRED TO. €att T. Howard, Caughey, ex parte, Cavander v. Bulteel, Cavendish v. Geaves, Cawthorn v. Chalie, Cawthron v. Trickett, Cet'n Cilcen Mining Co., *Page 128 639 353, 364 293, 296* 460, 591 277 132 Central Railway of Venezuela v. Kisch, 480 Cescna Sulphur Co. v. Nicholson, 394 Chambers, ex parte (2 M. & A.), 637, 638 (3 M. & A.), 639 V. Howell, 488 Chancellor, re, 615, 620 Chancev v. May, 464 Chandler, f,r ;?rt?-^c (9Ves.), 733 (13 Q. B. 1).), 745, 747 v. Danks, 281 v. Dorsett, 304, 486* v. Parkes, 74 Chapleo t. Brunswick Build. Soc, 45 Chapman t. Beach, 552 i\ Beckington, 118 i\ Derby, 654 v. Koops, 357 Chaplin, ex parte, 631 Chappie V. Cadell, 407*, 497* Charles v. Branker, 90 Charlton v. Poulter, 404, 542, 580 Chase v. Cox, 227 Chavanj^ v. Van Sommer, 571 Chavasse, ex farte, 92 Cheap t. Craraond, 28, 36 Cheeseman v. Price, 581 Cheetham v. Crook, 292, 294, 596 v. Ward, 224, 237 Child?;. Morley, 370, 371, 373 V. Stenning, 501 Childs, re, 6J)1 Chippendale, ex parte, 126, 191, 374, 382, 389, 390 Chissum t. Dewes, 439 Cholmondeley 'e. Clinton, 439 Christian v. Taylor, 502* Christie, ex ^xtrfe (M. & Bl.), 256, 636, 701, 703, 704 (lOVes.), 661 (3 M. D. & D.), 189, 702 V. Commissioners of Inland Revenue, 450 Christophers r. White, 268 Chuck, ex parte, 13, 28, 328, 690, 732 T. Freen, 119 *Pase Churton v. Douglas, 437, 440, 441*, 445, 543 City Bank v. Luckie, 712, 714 City Discount Co. v. Maclean, 230, 235 City of London Gas Co. v. Nicholls, 144, 178 Clancarty v. Latouche, 513 Clark, re (3 D. & R.), 100 (De Gex), 189, 192, 702 V. Alexander, 510 V. Cort, 291 V. Cullen, 300 V. Leach, 411, 429 Clarke, ex parte (4 Ves.), 730 (1 D. & C), 637 V. Bickers, 196*. 595 V. Blackstock, 187 V. Clement, 298 v. Dickson, 481. 482, 490 V. Hart, 428, 472, 574 V. Lord Abingdon. 455 V. Tipping, 513 Clarkes, re, 256, 704 Clarkson, ex parte, 334, 335, 336, 698, 699* V. Edge, 438, 455 Claveriug v. Westley, 596 Claxton, ex parte, 636, 643 V. Kyuaston, 237 Clav. ex parte (6 Ves.), 730 " (1 Mont. Part), 733 T. Langslow, 87, 89 Clayton's case, 199, 226*, 228*, 229, 230, 236, 250, 253 Cleather v. Twisden, 151, 156* Clegg r. Cleig. 57, 59, 310, 323 V. Edmonson, 308*, 469*, 470, 473, 475, 508, 571 V. Fishwick, 303, 307*, 496, 552, 611 Clements «. Bowes, 463, 491, 499, 500, 512 V. Hall, 303, 307, 472, 473*, 475, 527, 528 V. Norris, 309, 314, 315, 412, 540* Clcmontson r. Blessig, 72 Clifford V. Brook, 458, 482, 492 Clive V. Clive, 621 Ciough, re, 140, 218, 219, 341 V. London and North Western Railway Co. 490 Clowes, ex parte, 160, 208, 706, 721 Coates T. Coates, 478 Cobham, ex pierte, 729 Coburn v. CoUins, 593 AUTHORITIES REFERRED TO. XXXl ♦Page •Cockburn v. Thompson, 462, 463 Cockerell v. Aucomte, 50, 51 v. Barber, 381 Cockle v. AFhiting, 339, 485 Cockrill V. Sparkes, 263 Cocks V. Nash, 224, 237 Coffee V. Brian, 566 Cofton v. Horner, 466, 543 Colien, e.v parte, 627 Colbeck, re. 28, 641, 642 Colburn v. Patmore, 377 Cold well V. Gregory, 689* Coletjrave v. Manlev 439 Coleman, ex pan 641 «. Riches, 148 V. Mellersh, 513 Colemere. re, 629 Coles V. Guruey, 272 V. Sims, 455 Colien V. Wright, 163, 168 Collett 'V. Foster, 148 Colley V. Smith, 567 Collinge, ex parte, 692, 737 Colli ngwoocl V. Berkeley, 42, 45 Collins, ex parte, 638 V. Blantern, 106, 370 V. Carey, 268 V. Collins, 433 V. Evans, 370 V. Forbes, 683 V. Jackson, 331*, 414 V. Prosser, 238 r. Young, 548 Collinson v. Lister, 141 Collyer «. Isaacs, 708 Colonial Bank v. Whinney, 680 Colquhoun v. Brooks, 394 Colson V. Selby, . 281 Columbian Government v. Roth- schild, 501 Colyear v. Countess of Mulgrave, 434 Combe's case, 177 Commercial Bank Corp. of India and the East, 248 Conuell, ex parte, 324, 716, 740 Const w. Harris, 304, 314, 315, 316*, 319*, 409, 410, 544, 545*, 551 Cooch «. Goodman, 115 ■Cook, ex parte (2 P. W.), 646, 692* (Mont), 726* V. Catchpole, 453 V. Collingridge, 429, 488, 489,517, 519, 528*, 555*, 557, 573, 017, 019* V. Rhodes, 4S8 *Page Cooke V. Batchellor, 278 V. Benbow, 389, 391, 417% 418 V. Cooke, 452 V. Eshelby, 295 v. Seeley, 276-^ Cookson V. Cookson, 343*, 346, 347 Coomer v. Bromley, 153, 156, 159* Coope V. Eyre, 15*, 18, 53* Cooper, ex 2)a.rte,' (I M. D. & D.) 334, 337, 087*, 699, 700 (2 M D. & D.), 740 ' (10 Ch.), 628 T. Chitty, 675 V. Hood,- 479 1). Met. Board of Works, 439 V. Pritchard, 752 V. Wandsworth Board of Works, 427 V. Watlingtou, 442 V. Watson. 442* V. Webb, 463, 499 Cope V. Rowlands, 95, 97 Copeland, ex parte, 140, 087 Copeman v. Gallant, 087 Copeland, ex jjarte, 729 «. Toulmin, 228, 230, 234, 349, 350 Coplestone, e.i' p'f'^^j 718 Coppard v. Allen, 284 Corb&ii, ex parte, 111,748 Corbridge, ex parte, 37, 722 Corcoran v. Witt, 453 Cork and Brandon Railway Co.. v. Cazenove, 76 Cork and Youghal Railway Co., 191 Cornelius v. Harrison, 43 Cornill v. Hudson, 258 Corpc V. Overton, 75 Corporation of Bristol y.Westcott, 336 Corry v. Londonderry and Ennis-191 killen Railway Co., 393 Corsellis, re, 268 Cossart, ex2^arte, 752 Costeker b. Horrox, 505, 506 Cothay v. Fennell, 276. 277 Cottam V. Partridge, 259, 510 Cotton, ex Jjarte, 078 Couldery v. Bartrum, 714, 746 Coulson, ex parte, 624, and Add. • to pp. 78 and 626 Courtenay v. Wagstaff, 21 Coui'tivron v. Meunier, 753 Cousins V. Smith, 104 Coventry v. Barclay, 409, 421*, 429, 430, 432 Covi-ell V. Edwards, 376 xxxu AUTHOKITIES KEFERRED TO. Cowell V. Sikes, V. Watts, Cowslud V. C'ely, Cox's Trusts, re, Cox r. Hickman, ♦Page 698, 599 82, 83, 468* 283 621 26, 30*, 31*, 33, 35, 36, 39, 126 276 460 411 268 388* 239 463 629, 630 668* 729 363, 583, 590 138 218, 323, 340, 387^ V. Hul)bard, V. Stephens, V. Willoughby, Cradock v. Piper. Cragg V. Ford, Cragoe v. Jones, Cramer v. Bird, Craven, ex parte, v. Edmondson, V. Widdows, Crawford v. Hamilton, V. Stirling, Crawshav v. Collins, '381, 402, 410, 517, 519, 520, 525. 526% 555, 574, 588, 592, 647, 648, 649 V. Maule, 55, 56, 57, 121*, 122, 218, 331, 333*, 363, 366, 555, 557, 558, 559, 571, 583, 587, 590 Creak v. Capell, 506 Crellin v. Brook, 125 Cresswell v. Hedges, 59 Creuze v. Hunter, 389 Crew, ex parte. 639, 640 Cridland, ex parte, 640, 642 Crispin, ex parte, 624 Croft V. xVllison, 148 V. Pike, 339, 354, 599 Crofts, ex parte. 723, 734 Cropper v. Knapman, 613 Crosbie v. Guion, 590 Crosby v. Crouch, 630 Crosfleld, ex parte, 731 Cross V. Cheshire, 564 V. Williams, 50 Crosse v. Smith, 224 Crossfield v. Such, 51 Grossman v. The Queen, 594 Crowder, ex parte, 692 Croxton's case 382, 386 Cruikshank v. McVicar, 377, 480, 492, 520* Cruse V. Paine, 375 Cruttwell V. Lye, 440 Cubit t V. Porter, 562 Cuffe V. Murtagh, 122 Cullen 'c. Thomson's Trustees and Kerr, 482 ♦Page- Cumberledge v. Lawson, 137 Cummins v. Cummins, 240 Currie, ex parte, 753 Curry, re, 690 Curtis's case, 75 Curtis V. Barclay, 370, 372 v. Perry, 324 Cust, ex parte, 734 Custance v. Bradshaw, 348 Cutbush V. Cutbush, 609 Cutteu ex parte, 640, 642 V. Sanger, 425 Dacie v. John, 654* Dadswell v. Jacobs 504 Daintry, re, 645 Dale V. Hamilton, 63, 81*, 82, 85, 129, 304, 434, 477* Dally V. Wolverston, 752 Dance t\ Girdler 118 Daniel r. Cross 247, 251, 596 Daniell v. Roy. Brit. Bank, 491 V. Sinclair, Dann, ex pjarte. Darby v. Boucher, ». Darby, Darwent ». Walton, Davenport, ex parte, David v.. Ellice, Davidson, ex parte, V. Napier, TuUoch, 514 629 191 340, 345*, 346 194, 283, 59& 716 242*, 243, 253 739, 740 439, 542, 669*, 670 482, 595 Davies r. Davies (2 Keen), 487*, 494, 613, 614 V. Davies (36 Ch. D.), 437, 442 V. Games, 333 V. Hawkins, 316 V. Hodgson, 437, 440, 442, 444 1'. London and Prov. Marine Ins. Co., 480 V. Makuna 98, 99 Davis's case (12 Eq.), 715 Davis, ex parte (4 De G. J. & S .), 21, 727, 741 V. Amer, 448, 479, 543, 550* V. Fisk, 462 «. Jones, 412 V. Johnston, 60, 470* V. Morris, 300 Davison, re, 256, 257, 704, 745, 747 v. Donaldson, 249 V. Farmer, 637 V. Gillies, 394 V. Robertson, 130, 184 Davys v. Douglas, 101 AUTHOKITIES REFERRED TO. XXXlll Dawe V. Vergara, ♦Page 625 Devaynes v. Noble, *Page Dawkins v. Antrobus, 466 Johnes's case, 211 605 Dawsoii, ex parte 645 Palmer's case. 250 596 V. Beeson i37, 440 Sleech's case. 161, 194, 200, i\ Dawson, 514 250, 596 597 602 V. Fitzgerald, 452 Warde's case, 596 Dean v. Allen, 594 Dever, ex parte (No. 1) 710 , 711 V. Macdowell, 312,419 (No. 2), 710 713 V. Newhall, 225, 237 Dewdney, ex parte. 638 V. Wilson, 55S Dewhurst, ex parte (7 Ch.), 639 Dear, ex 2)arte, 699 (8 Ch.), 713 Deare v. Soutten, 191 Dickenson v. Lockyer, 240 De Bognis v. Armistead > 101, 105* Dickin, ex parte. 675 De Bercnger v. Hamel, 581 Dickinson v. Yalpy, 20 , 42* , 85, De Berkom v. Smith, 40, 49, 88 125, 127, 129* 130 203 De Bussche v. Alt, 306 307, 467 Dickson v. Cass, 663 668 Decks i\ Stanhope, 460 , 461, 499 Digby, ex parte, 28, 640 641 642 Deeze, ex jmrte, 655, 658 Diggle V. Higgs, 106 Defries v. Creed, 554 Dimes v. Scott, 620 De Gendre v. Kent, 621 Dimsdale v. Robertson, 452 De la Rosa v. Prieto, 99 Dinham v. Bradford, 390, 433 De la Rue v. Dickinson , 508 Dixon, ex parte. 746 Delauney v. Strickland y 50, 51 V. Clark, 226 Delhasse, ex parte, 11, 35, 38* V. Cooper, 29 Deloraine v. Browne, 475 V. Hammond, 288, 341 De Mattos v. Saunders, 654 V. Holden, 544 De Mautort v. Saunders, 192 ,281, 295 V. Wilkinson, 152 De Mazar v. Pybus, 114 Dobbin v. Foster, 286 Dent V. London Tramways Co., 394 Dobell V. Stevens, 481 V. Turpin, 62 Dobinson, ex parte. 702 Denton v. Great Northern Rail- Dobson, ex parte. 681 way Co., 482 Docker y. Somes, 523, 536, 615, 617 V. Macneil, 490 Dockway v. Dickenson, 279 V. Peters, 565 Doddington v. Hallet, 61, 339, 352 V. Rodie, 131, 390 Dodgson, ex parte, 565, 741 Denys v. Schuckburg, 55 Doe V. Baker, 280 De Ribeyre v. Barclay, 131, 153*, 160, 165 V. Bluck, V. Horn, 328, 562 562 Dering i\ Winchelsea, 368, 376 V. Hulme, 139 Derry v. Mazarine, 77 V. Ingelb}'-, 634 De Tastet, ex parte. 734 V. Miles, 328, 572 V. Bordenave 217, 541 T. Prosser, 58 v. Bordieu, 551 V. Roe, 273 V. Carroll, 145 v. Summersett, 139 V. Shaw, 111 115, 568, 569 Dolman n. Orchard, 214, 215, 216 Deux V. Jeffries, 145 Doinville v. Solly, 506 Devaynes v. Noble, 194, 517, 595, Donaldson v. Williams, 147 596, 597, 601, 005* V. Williamson, 314 Devaynes v. Noble, Doo V. Chippendeu, 281 Baring's case, 152*, 161, 165, Doran v. Simpson, 613 200, 596 Dore r. Wilkinson, 146 Br3'^ce's case. 211, 605 Dorman, ex parte. 685 Clayton's case, 152*, 250, 596, 597 Doubleday v. Muskett, Douglas v. Patrick, 45 136 Houlton's case, 47 211, 605 Dover v. Opey, 104 XXXIV AUTHORITIES REFERRED TO. ♦Page Downam v. Matthews, 2'Ji Downs V. Collius, 433, 434, 476, 479, 555, 573 Drake v. Mitchell, 256, 704 V. Symes, 502*, 503 Draper v. Manchester and Sheffield Railway Co., 504 Dronncn r. Loudon Ass. Co., 20 Dresser v. Norwood, 141 Drcwr. Drew, 507 V. Nunn, 7G, 213 Driver v. Burton, 274 Drouet v. Taylor, 85 Drury v. Drury, 59 Dry V. Boswell, 12, 29* V. Davey, 118 Dublin and Wicklow Railway Co. V. Black, 75 Dubois V. Ludert, 281, 295 Ducarry v. Gill, 180 Duckworth, i-e, 657 Dudgeon v. O'Connell, 135, 137 Duff r. East India Co., 134 Duignan v. Walker, 437 Duke of Brunswick i\ Slowman, 149 Duke of Northumberland «. Todd, 117 Duncan, ex jMrte, 639, 642 V. Chamberlayne, 680 V. Hill, 89 V. Lowndes, 138, 179 V. Luntley, 458, 492 Dundonald v. Masterman, 151 Dunlop, ex fctrte^ 704 Dunn V. Campbell, 505 Dunne v. English, 306* DunniclifE v. Mallett, 62 Durham's case, 201 Dutch West India Co. ■». Moses, 115 Dutton V. Morrison, 357, 359, 632, 671, 675, 695 Duvergier x\ Fellowes, 99, 102* Dyke ». Brewer, 207* Dyster, ex parte, 690 Eager v. Barnes, 153 Eason v. Henderson, 560 Easterbrook v. Barker, 30 Eastern Union Railway Co. v. Cockrane, 118 East India Co. v. Blake, 383, 384, 455 Eastwood V. Bain, 180 Easum v. Cato, 655, 656* Ebbett's case, 76 Ebbs V. Boulnois, 752, 756 Eberle's Hotels Co. v. Jonas, 658 *Page Eckhardt v. Wilson, 289 Eddie v. Davidson, 357 Edgingtou v. Fitzmam'ice, 481 Edmiston v. Wright, 373* Edmonds, ex2)arte, 722, 723* V. Bushell, 181* Edmonson v. Davis, lOl Edmunds v. Robinson, 69 V. Wallingford, 369, 373 Edmundson v. Thompson, 43, 85, 202 Edwards, ex parte (1 Atk.), 660 (13 Q. B. D ), 665 (14 Q. B. D.), 703 «. Aberayron Mutual Soc, 98, 452 V. Cooper, 666 V. Glyn, 630, 653 v. Hooper, 666 v. Martin, 678, 680 «. Scarsbrook, 709 Eggiugton V. Cumberledge, 272 Ekins V. Brown, 340 Elbinger Actien, &c. v. Claye, 275 Electric Telegraph Co. of Ireland, 575 Elgie V. Webster, 564 Elliot v. Brown, 328, 341, 541 V. Davis, 130, 137 Elliott T. Turquand, 663 Ellis, exjxirte (Mon. & Bl.), 673 (2 Gl. & J.), 737, 742 V. Kelly, 99 V. Schmceck, 42 V. Walker, 620 Ellis V. Ward, 22 V. Watson, 90 Eilston, V. Deacon, 171 Elmer «. Creasy, 507 Elphinstone v. Monkland Iron and Coal Co., 455 Elton, ex f arte, 692, 730 Emly, ex f arte, 325, 329, 703, 731 «. Lye, 186, 189* Emma Silver Mining Co. vs. Grant, 707, 752 Emmet %. Butler, 216 Empress Engineering Co., re, 434 Empson's case, 88 Enderby, ex parte, 690 Endo v. Caleham, 512 England t. Curling, 312, 409, 413, 476*, 517, 539* English and American Bank, ex parte, 716 English and Irish Church and Univ. Insur. Soc, 32* Erichsen v. Last, 394 AUTHOKITIES KEFEKEED TO. XXXV *Page Ernest V. NichoUs, 189 Essell V. Hay ward, 582* Essex V. Essex, 81, 333, 345*, 411, 429, 479 Estwick V. Conningsby, 551 European Bank, ex j^arte, 719 Evans, re, . 604, 606, 607* V. Buck, 501 V. Coventry, 391, 517, 539, 546*, 551 V. Curtis, 112 V. Druinmond, 213, 214, 243, 244, 247*, 253, 255 V. Hooper, 458 V. Richardson, 72, 92, 104 V. Smallcombe, 467 V. Stokes, 460, 461 V. Yeatherd, 386 Everet v. Williams, 93* Everett v. Backhouse, 671, 729 Evereth v. Blackburne, 97 Evvart v. Williams, 537 Ewer V. Ambrose, 86 Ewing, re. 340 V. Ewing, 390, 430 «. Osbaldiston. 101, 102*, 355 Eyre, ex inirte, 148, 153, 158*, 179 105 659, 663 552 704, 706 177 Faikney v. Reynous, Pair V. Mclver, Eairburn v. Pearson, Fairiie, ex 2^(trte, ,v. Fcntou, v. Quin, i;(Z Fairthorne v. Weston, 465, 497*, 540, 575, 582 Faith V. Richmond, • 184*, 185* Falcke ». Scottish Imp. Ins. Co., 372 Faldo V. Griiln, 213 Falkland v. Cheney, 420 Fannin v. Anderson, 258 Farhall v. Farhall, 47, 606 Farlow, ex parte, 753 Farquharv. Hadden, 340, 619 Farr t. Pearce, 437, 444 Farrar v. Beswick, 349, 568 v. Deflime, 214 V. Hutchinson, 135, 270 Earrington v. Chute, 515 Fauntleroy's case, 155 Fa.vcett v. Whirehouse, 303, 313*, 391, 494, 496 Featherstoue v. Hunt, 244, 249 Featherstouhaugh v. Fenwick, 121, 122, 307*, 340, 410, 413, 527, 555, 571, 574, 592 *Page Featherstonhaugh v. Turner, 66, 381, 423*, 424, 479, 525, 527, 528, 536*, 616 Fell, ex parte, 334, 336, 687, 688, 698 Fennings ». Grenville, 19, 61, 316, 562 Fereday «. Hordern, 16, 30 ^^ Wightwick, 55, 57, 333, 517, 728 Fergusson «. Fyfie, 128, 139, 247, 390 Ferns v. Carr, 65, 66, 67 Ferrar, re, 703 Fevvings, ex parte, 255 Ffooks V. South Western Railway Co., 410 Field, ex parte, 73 1 V. Carr, 230 Fife, ex forte, 624 Banking Co., ea;^ar<6, 322 Figes B. Cutler, 80, 559 Figgins V. Ward, 273 Finch, ex parte, 588, 652, 669 Findlay, ex parte, 599, 720, 728, 730 Finkle v. Stacey, 18 Firbanks Ex. «. Humphreys, 45, 163, 481 Fisher, ex parte, 628, 629 V. Bridges, 105 V. Farrington, 601 r. Keaue, 466 V. Liverpool Marine Insur. Co., 98 V. Taylor, 132, 133, 190, 203 Fitzgibbon v. Scanlan, . 308 Fitzherbert v. Mather, 141 Fleet V. Murtou, 177 Fleming v. Manchester, Sheffield & Lincolnshire Railway Co., 199 Flemyug v. Hector, 50 Fletcher, ex parte, 678, 685 v. Dyche, 291 ■V. Stevenson, 594 Flint, ex parte, 656, 661 Fl in toff, ex parte, 702, 703 Flintum, ex jyai'te, 729 Flitcroft's case, 394 Flocktou X. Running, 522, 524, 530*, 535, 615, 617, 618 Flood V. Patterson, 263 Flower, ex jjarte, 711 V. Young, 85 Flyn, ex parte, 683, 687 Foley, ex parte, 101 V. Hill, 508 Forbes v. Skelton, 259 i\ Steven, 348 Ford, re (8 Dowl.), 152 XXXVl AUTHORITIES REFERRED TO. ♦PaRe Ford, ex parte (1 Ch. D.), 639 (3 M. D. & D.), 715 (18 Q. B. D.), 626 V. Tynte, 538 v. Whitraarsh, 42 Fordyce's case, 634*, 635 Fore Street Warehouse Co. v. Duirunt & Co., 266 Forinan v. Homfray, 494, 497 Forrester v. Bell, 24 Forshaw, re, 120 Forster, ex parte, 651 V. Hale, 81* 82, 324 V. Lawson, 278 V. Mackreth, 133 V. Smith, 659* V. Wilson, 663 Foss, ex parte, 678, 681 V. Ilarbottle, 466 Foster v. AUanson, 564, 668 V. Crabb, 562 V. Donald, 505, 506 V. Hodgson, 509 Fowler v. Coster, 639 ■». Raynal, 113 V. Wyatt, 514 Fox V. Clifton, 12, 25, 43, 83, 85, 90, 365 «. Frith, 565 V. Hanbury, 146, 212, 218, 562, 568, 569*, 583, 647, 648. 649, 606, 671*, 672 Foxlev, ex parte, 627 France v. White, 292 Francis v. Doe, 562 Frankland v. ]McGusty, 171 Franklyn, ex parte, 730 V. Thomas, 309 Franks, ex parte, 77 Fraser v. Hill, 99 T. Kershaw, 542, 549* 668, 588, 671, 673 V. Miirdock, 374 Freeland r. Stansfiekl, 67, 69, 542, 549, 670 Freeman, ex f arte (Buckj, 208, 705 706, 745 (Cooke's B. L.), 725 V. Cooke, 40 v. Fairhe, 404, 504, 537 V. Gainsford, 348 r. Lomas, 291 V. Pope, 62 i Freen, ex parte, 119 French v. Andrade, 291, 341 French v. Fenn, V. French, V. Macale, V. Styring, 14, Freshney v. Carrick, Frietas v. Dos Santos, Frith V. Cartland, V. Forbes, Fromont v. Coupland, Frost V. Moulton, Frowde ». Williams, see Fry, ex parte, 208, Fryer v. Ward, Fuller, ex parte, Furnival v. Weston, *Pagc 665* 20^ 455 18*, 51, 54, 564 677, 682 492 162 711 13*, 328, 565, 567 121, 122 Add. to p. 38 705, 706, 745 619 695 145* Gabriel v. Evill, 21*, 202 Gadd v. Houghton, 179 Gainsborough v. Stork, 430 Gainsford v. Griffith, 455 Gale V. Leckie, 14, 559, 563 V. Lewis, 680 Gallimore, ex parte, 636 Galway v. Matthew, 170* 174*, 175*, 188*, 190, 210, 370 Games, ex parte, 631 Garbett «. Veale, 361, 676 Garden Gully Co. v. McLister, 470, 472, 475, 498 Gardiner «. Childs, 14, 144, l79, 203 Gardner, ex parte, 639 «. London, Chat. & Do. Ry. Co., 545 V. McCutcheoD, 309* V. Rowe, ' 630 Gardom, ex pjarte, 138 Garland, ex parte, 28. 593, 604, 608*, 609, 722, 724 «. Jacomb, 131, 171, 216 Garrand v. Hardey, 93 Garratt v. Haudley, 275* Garstin i\ Asplin, 359 Gaskell v. Chambers, 506 Geaves, ex parte, 151, 161, 683, 702, 716 Geddes v. Wallace, 10, 13, 15, 64 385, 393, 409 Gedge v. Trail. 487, 613 Gellar, re (1 Rose). 28, 140 Geller, ex parte (2 Madd.), 733* Gemmel, ex ptarte, 353 General Co. of Land Credit, 91 AUTHORITIES REFEKEED TO. XXXVU ♦Page Creneral South American Co., ex parte, 712 George v. Clagett, 295 Gerhard v. Bates, 482 German Mining Co.'s case, 191, 383 Gething v. Keighley, 513 Gibblett «. Read, 413 Gibbons v. Wilcox, 90 Gibbs, ex parte, 753 V. Guild, 260 V. Merrill, 74, 281 Gibson, ex i^arte (2 Mou. & Ayr.), 337, 699 (4Ch.), 248 V. Goldsmid, 479 V. Lupton, 18*, 54 Gilchrist, ex parte , 78 Gill, ex parte. 741 r. Manchester, Sheffield , &c., Railway Co., 78 Gillain, ex farte, Gillan v. Morrison, Gillett, ex parte, t. Thornton, Gillow t. Lillie, Gilpin «. Enderby, Ginesi v. Cooper & Co., Glassington v.. ■ Thwaites Gleadon «. Tinkler, Gleadow «. Hull Glass Co., 642 369, 374, 385 683 41!, 453 130 13, 16, 30 440 , 312, 316, 4->3-, 540* 109 382, 383, ■ 386 Gled.stanes, ex parte, 653 Glengall (Earl of) v. Eraser, 503 Glenny v. Smith, 446 Gliddou, exparte. 111, 721, 725, 737* Glossop «. Colman, 74 Gloucester, Aberystwith, &c.. Rail- way Co., re, 133 Glyn, ex parte, 653 v. Cauliield, 504 V. Hood, 364, 584 Goddard ®. Cox, 228 T. Hodges, 28, 227, 567, 584 v. Mansfield, 454 Godfrey, ex parte, 755 «. Macaulay, 222 •c. Turnbull, 222 Gold v. Canham, 543 Goldiiig r. Yaughan, 291 Goldsmid t. Cazenove, 748 Goldsmith r. Levy, 271 ■Good, ex farte (5 Ch. D.), 239 (21 Ch. D.), 669 v. Blewitt, 403 Goodall, ex parte, V. Skerratt, Goode V. Harrison, Goodman, ex parte, V. De Beauvoir, V. Whitcombe, Goodtitle v. Tombs, V. Woodward, Goodwin «. Parton, Gordon, ex parte. *Page 753 259 74, 76* 715 271 301, 404, 546, 548, 551, 580 58 139 263 599, 649, 722, 723 V. Ellis, 131, 140, 269, 292, 293*, 294*, 296=^ V. Howden, 99 V. Rutherford, 519 Gorham r. Thompson, 222 Gorrie v. Woodley, 112 Gothenburg Commercial Co., re, 710 Gough V. Davies, 246*, 253 Gould, ex parte, 152 re, ex parte OflBcial Receiver, Add. to p. 62S r. Shoyer, 643 Goulding and Davies, ex ^jarie, 173, 703 Gouthwaite v. Duckworth, 204, 205* Gover's case, 480 Gow V. Forster, 621 Gowan v. Forster, 261 Gowar, re, 644 Grace v. Smith, 26, 27* 28, 29, 30 Graham, ex farte, 706 «. Chapman, 629 T. Furber, 677, 681 V. Hope, 222, 223 V. McCulloch, 687, 689*, 700 t). Mulcaster, 638, 646 t. Robertson, 289, 565 T. Wichelo, 240 Grain's case, S47 Grammar v. Nixon, 148 Grant v. Jackson, 85, 89, 128 V. Norway, 148 V. Prosser, 272 Graves v. Cook, 565 «. Sawcer, 568 Graj^ ex parte, 635* V. Chi-swell, 598, 599 V. Haigh, 405, 538 V. Pearson, 51, 458 Gray burn v. Clarkson, 612 Grazcbrook, ex parte, 741* Great Luxembourg Railway Co. t. Magnay, 508 XXXVlll AUTHORITIES REFERRED TO. *Page Great Western Colliery Co. r. Tucker, 508 Western Insurance Co. t\ Cun- li'flpe. 307, 458, 492 AVestern Railway Co. v. Rush- out, 315 Greatrex ». Greatrex, 404, 420, 542 Green ^3 De G. & J.), 644 (1 D. & C), Bceslej', V. Brijrffs. G93 11* 54, 61, 62, 355 171 74 260 454 97 11, 12, 14, 563 679 650 131, 132, 203 V. Deakin, V. (xicenbank, V. Iliiniphreys, V. Waring, V. Weaver, Greenham v. Gray, Greening t;. Clarke, GrecnshielcVs ca.se, Greenslade v. Dewer, Greenwood's ca.se, 175 Gregory i\ Hurrill, 259 r. Patchett, 314, 394 Grellier v. Neale, 89 Greville v. Greville, 113 GrifRn, ex parte, 636 V. Ashby, 262 Griffith, re (12 Ch. D.), 621 e.c parte (23 Ch. D.), 623, 629 T. Paget, 395 Griffiths, re, 257 r. Griffiths, 120, 439 Grill, ex parte, 736 Grisewood's case for ex parte), 93 Grissell, ex parte, 624 Griswold v. Waddington, 72, 585 Groom, ex parte, 716,750 Gross V. Dufresnay, 647 Groux's Soap Co. rs. Cooper, 118 Grugeon v. Gerrard, 714 Grylls, ex parte, 644 Guidon V. Robson, 89, 274, 277 Guion V. Trask, 364 Gurney, ex parte, 336, 698, 699, 705, 706 89, 181 T. Evans, Guthrie v. Fisk, Gv7yn V. Godby, 633 389 HABER.snoN V. Blurton, 358, 359, 360, 493 Hackwell v. Eustman, 493 Haddon i). Ayers, 563 Iladley, ex parte, Y52 V. Macdougall, 504 Hagell V. Currie, Hague V. Rollcston, ♦Pagfr 506- 646, 649, G67*, 668. Haig ■». Gray, 284, 342 Haines, ex parte, 644 Hale V. Allnutt, 630 V. Hale, 108, 520, 552*, 555 Hales V. Petit, 340 Halfhide v. Penning, 452 Halket v. Merchant Traders' Loan and lusur. Assoc, 201 Hall, ex parte (3 Deac.), 741 (UeGex), 638 (Mon. & Ch.) 633, 636 (9 Ves.), 731 (17 Ves.), 624 V. Bainbridge, 177, 281 1). Barrows, 447 V. Curzon, 86 V. Fennell, 608 V. Frankhn, 71 V. Hall (12 Beav. and 3 Mac. & G.), 539, 540*, 545*, 546, 547, 549, 572 (20 Beav.), V. Huffam, V. Lanning, V. Noyes, V. Rougham, V. Smith, V. West, Hallett V. Dowdall, Hallett's estate, re, Halliday, ex parte, Hambridge «. De la Croupe, Hambro v. Hull and London Insurance Co., Hamer, ex parte, V. Giles, Haulers' Devisees Hamil ti. Stokes, Hamilton v. Bell, T. Smith, Hammersley e. Knowlys Hammond, ex parte, V. Douglas, V. Ward, Hampden v. Walsh, Hamper, ex jxirte, ur 341 271 508 341 188 183* 201 162, 228, 234 628 272 Fire 184 644 517, 518 case, 212 66, 67, 69, 482, 739 677, 682 24. 34^ Hancock v. Bewley, V. Haywood, V. Hodgson, Hankej'- v. Garratt, V. Hammock, 385 227 752 344, 526 543 106 28, 29*, 30, 328, 359, 633, 637, 640 62 647 177 671 609' 289, AUTHORITIES REFERRED TO. XXXIX *Pa{re Hankey v. Smith, 657 Hanslip v. Kitton, 350 Hanson, ex farte^ 661 Harconrt, ex parte, 636 Hardcastle, ex fcirte, 640* Harding, ex parte (15 Eq.), 682 (12 Ch. D.), 138 , 179, 192 V. Glover, 548, 551 v. Williams, 537 Harclinge v. Webster, 543 Harclman v. Booth, 41 Hare, ex parte. 325, 328, 684* V. London and North -Western Railway Co., 507 Hargreaves. ex parte, 721, 722*, 726, 736 V. Hall, 559 Hargrove, ex parte, 98 Harkness v. Steward, 482 Harley v. Greenwood, 718 Harman, ex parte, 721 'D. Johnson, 131, 151, 156* Harper, ex parte (1 De G. & J.), 435*, 436 (20 Ch. D.), 636 r. Godsell, 140, 569 Harrington v. Churchward, 35, 493 Harris, exparte(\ JMad.), 187, 686*, 700, 732 (1 Ro. and 2 V. & B.), 721, 725, 734 t. Farwell, 247, 250, 251*, 596, 600, 644 «. Fergusson, 51 ■». Harris, 507 «. Hill, 89 i'. Nicker son, 480 v. Rickett, 629 Harrison, ex parte (2 Rose), 54, 61 (2 Gl. & J.), 641 (28 Ch. D.), 652 Id. Armitage, 496, 546 'c. Barton, 51 t. Bevington, 278, 279 X. Brown, 463 V. Gardner, 440, 442* x. Jackson, 1S7, 271 V. Millar, 97 «. Tennant, 575, 580, 581*, 582 Hart«. Alexander, 223, 284*, 254 X. Clarke, 390, 391,428, 470, 472*, 473, 475, 572, 574 Hartley v. Manton, 238* Hartop, ex parte, 177, 190, 703 Hartz V. Schrader, 542, 547 *Page Harve)^ «. Beckwith, 51, 464, 517 V. Bignold, 460, 461 V. Collett, 105, 106, 463 x. Crickett, 218, 569, 667, 672*, 674 «. Kay, 87, 89 V. Towers, 169 flarwood t. Edwards, 271* Hasleham r. Young, 138 Plassol V. Simpson, 631 V. Merchant Traders' Loan and Insurance Assoc, 201 Hassells v. Simpson, 631 Hatchard x. Mgge, 595 Hatton 'c. Royle, 129, 272 Hawken v. Bourne, 124, 133, 176 Hawker, ex parte, 627 Hawkins v. Hawkins, 328, 334, 337, 541 x. Parsons, 517 V. Penfold, 663 X. Ramsbottom, 290 X. Whitten, 663 Hawk.shaw x. Parkins, 135, 137, 145, 359 Hawtayne x. Bourne, 126, 132, 190 Hawtrey, ex parte, ' 685 Hay, ex parte, 254, 704, 743 X. Fairbairn, 678 X. Mair, 213 Ilayden, ex parte, 731 Haydon, ex p>arte, 729 Hayman, ex parte, 688, 690*, 700 Haythorne x. Lawson, 278 Hayward, e,cpa?'ie (Cooke's B. L.), 694 Healey x. Story, 188* Heap X. Dobson, 203 Heath, ex p)arte, 688 X. Hall, 718 V. Hubbard, 61 X. Percival, 243*, 253. 602 X. Sansom, 121. 169, 213*,' 363, 583 Heathcote x. Hulme, 522, 531, 615, 616, 617 X. Livesley, 675 Heaton, ex jxtrte, 143, 160*, 161, 191 Hedley «. Bainbridge, 131 Heilbutt'. Nevill. 131, 172,269*, 289, 486, 667 Helen, The, 92 Hellier, ex parte, 714 Helme x. Smith, 54, 124, 566 Ilelmore x. Smith (No. 1), 323, 358, 359, 860, 361 xl AUTHOKITIES REFERRED TO. ♦Page Helmore v. Smith (No. 2), 539, 554 Helsby v. Mears, 207 Hemings v. Pugh, 458 Henderson, ex parte, 75, 281 V. Eason, 59, 560 V. Royal British Bank, 103, 491 «. Wild, 135,270 Hendriks z\ Montagu, 114 Hendry v. Turner, Henley v. Soper, Henniker i\ Wigg, Hercy «. Birch, Herkuner, The, Herman v. Jeuchner, Hermann Loog v. Bean, Hern v. JSTichols, Hernaman, ex parte, Herries v. Jamison, Herring v. Walround, Hesham, ex parte, Hesketh v. Blanchard, Heslin v. Hay, Heslop, re, Heydon v. Heydon, 214, 426, 588 564 235 476 63 106 542, 543 148 255, 703 299 92 726, 736 28, 563 321 677 357* Heyhoe v. Burge, 12, 28, 29*, 49, 89 Heyne v. Middlemore, 498 Heywood ». Watson, 565 Hichinsf. Congreve, 303, 313, 464, 496, 506 Hickie & Co.'s case, 713 Hickin, ex jmrte, 22, 727 Hickman v. Cox, 30* Higgen's case, 255, 250 Higgius, ex parte, 255, 703 -y. Sargent, 389 «. Senior, 192, 281 Hill, ex parte (3 M. & A. and 2 Deac), 723, 745, 750* ex parte (2 Bos. & P. N. R), 733 (23 Ch. D.), 629 V. King, 390, 538 V. Smith, 656 Hill & Ilymans, ex parte, 638 Hill's case (20 Eq.), 595 Hills V. McRae, 193, 284. 596, 597, 598, 599, 600 V. Nash, 460 Hindmarsh, re, 260 Hinds, ex parte, 324, 734 Hirsch v. Im Thurn, 453 Hirst r. Tolson, 66 Hitchcock, ex parte, 706 Hoare v. Contencin, 193 V. Dawes, 18 *Page Hoare ';. Oriental Bank Corporation, 111, 701 1-. Peck, 509 Hobbs ®. AVayet, 374, 375 Hobson, re, 675 V. Bass, 228 Hoby V. Roebuck, 240 Hodges V. London Trams Omni- bus Co., 446 Hodgkin, exp)arte, 629, 630 Hodgkinson, ex parte, 254, 624, 702, 704, 732 •p. Ma3'er, 101 «. Travers, 642 Hodgson, re (3 A. & E.), 100 re, (31 Ch. D.), 193, 195, 257, 284, 460, 596, 597, 598, 603 ex parte (2 Bro. C. C), 729 Hogarth v. Latham, 128, 130 'c. Wherley, 136 Hogg «. Bridges, 632 T. Skene, 169 Hoggard v. Mackenzie, 679, 682, 684* Holden «. AVebber, 309 Holderness is. Rankin, 682 n. Shackels, 352, 355, 047, 728 Holdsworth, ex parte, 169, 170, 593, 604. 702 Hole «. Bradbury, 114,288 V. Harrison, 376 Holford, ex parte, ' 645, 646 Holgate V. Shutt, 513, 514, 520 Holidfiy, re, 272 Holland v. King, 433 r. Teed. 118 Holliday r. Camsell, 562 Holly ford Mining Co., 403 Holman v. Johnson, 104 Holme «. Hammond, 32*, 34, 36, 125, 593, 604 Holmes, ex parte, 753 t\ Bell, 256 V. Blogg, 75 V. Higgins, 23*, 24, 380, 567 v. Mentze, 358 V. Old Colony R. R. Co., 79 Holroyd v. Griffiths, 355 «. Holroyd, 34G Holyland «. De Mendez, 436* Homfray v. Fothergill, 423*, 424, 479, 541* Honduras, »fcc., Co. v. Lefevre, 501 Honduras Rail. Co. v. Tucker, 280, 282 AUTHORITIES REFERRED TO. xli s Page *Page Honey, ex parte, 745, 748 Hunter v. Belcher, 512 513 Hood V. Aston, 542 V. Gibbons, 259 Hookham «. Pottage, 440 543 Husbands, ex parte, 747 Hookins, ex parte, 709 Hutcheson v. Smith, 380, 382, 383, Hooman, ex parte, 678 391 537 Hooper, ex parte. 120 Hutchinson v. Sturges 1 290 V. Keay, 229 V. Sydney, 290 V. Lusby, 139 V. Whitfield, 426, 454, 572 Hope V. Oust, 138 V. Wright, 495 V. Meek, 634 635 Hutton V. Bullock, 204 275 Hopkinson v. Smith, 100 , 101 275 V. Crutw-ell, 6 29 Horn V. Baker, 677, 678, 683, 688* V. Eyre, 237 v. Gilpin, 80 V. Rossiter, 594 Hornblower v. Proud, 678 V. Thompson, 24 Hornsby v. Miller, 679, 682 V. UpfiU, 23 Horrell v. Witts, 549 Hyatt r. Hare, 144 Horsfall, ex jmrte, 438 Hybart v. Parker, 458 Ilorsley v. Bell, 206 Hyde v. Johnson, 261 «. Knighton's Patent, 62 Hort's case, 247 Ibbetson, ex parte. G78 Hough V. Manzanos, 180 Ibbotson 13. Elam, 620, 621 Houghton, ex parte, 324 Ide, re, 626 V. Houghton, 345 Imbert, ex parte. 711 Houldsworth v. City of Glasgow Imperial Gas Co. v. Londoi 1 Gas Bank, 163, 480 Co., 259 Houlton's case, 47 ,211, 605 Imperial Mercantile Credit Associ - Houriet v. Morris, 73 ation V. Coleman, 161, 306 Hovenden r. Annesley, 508 Indian Chief, The, 73 Howard t\ Shaw, 491 Inglis v. Haigh, 250, 510 V. Tucker, 370 luman v. Clare, 656, 712 Howarth v. Brearley, 99 Inues V. Stephenson, 268 Howbeach Coal Co. v. Teague, 315 Ireland v. Livingstone 370 Howden, ex parte, 140 ,147, 324 Iretou V. Lewis, 460, 461 IJowe V. Lord Dartmouth, 620 Irvine v. Young, 502 Howell T. Brodie, 22* Irving V. Veitch, 261 Huber v. Steiner, .259 Isaac, ex parte. 718 Huckej'', ex parte. 657 Isitt t'.Beeston, 627, 681 Huddleston's case. 578 Izard, ex parte, 627, 629 Hudson r. Forster, 651 f. Robinson, 187, 282 J.A.CAUD V. French, 134, 141, 508, 569 Hue V. Richards, 537 Juckey ®. Butler, 357 Hughes, re (2 Hem. & M.), 678 Jackson, ex parte (De Gex), 631 ex parte (4 Ch. D.), 255 (2 M. D. & D.), 254, 705 V. Statham, 100 (1 Yes. J.), 206*, 208, 705 V. Sutherland, 324 (5 Yes.), 715 v. Thorpe, 97 re (1 B. «& C), 100 Hughes-Hallett v. Indian Mam- V. Jackson, 332* 333 , 341 , moth Gold Mines Co., 374, 375 346, 432 Hume V. Bolland, 155, 165 V. Litchfield, 266 Hunt V. Jessel, 291 T. Ogg, 510 v. Roj^al Ex. Assurance Co., 139 v. Sedgwick, 409, 432, 543 Hunter, ex parte {1 Atk.), 703, 721* ». Stanhope, 359 (Buck), 741 V. Stopherd, 563, 564 (2 Rose), 646, 684*, 701 «. Wooley 263, 597 <6 Yes.), 715 Jacobs V. Seward, 58, 59, 61, 568 xlii AUTHORITIES REFERRED TO. ♦Page Jacobscn v. Hennekinius, 84 Jacomb v. Harwood, 195, 250, 253 257, 596. 602, 603 Jacques v. Chambers, 620 Jaffray v. Frebian, T4, 281 Jaggers v. Binnings, 128 James, re, 624 V. Kynnier, 631* Jameson, ex parte, 709 Janes v. Wliitbread, 30 Janson, ex parte, , 732 Jardine x. McFarlane, 179 Jauncy v. Knowles, 482, 484 Jebsen v. East and West India Dock Co., 292 Jefferson, The, 669 Jetferys v. Agra and Masterman's Bank, 296, 656 V. Small, 341, 342 v. Smith (3 Russ.), 21, 363, 365, 366, 423, 491, 501, 583, 584 (1 J. (!c W.), 55, 56, 121, 553 Jekyl V. Gilbert, 470* Jenkins v. Blizard, 222, 223 v. Morris, 186 ■i: Tucker, 373 Jenner v. Morris, 191 Jennings, ex parte, 690 V. Baddeley, 576* V. Broughton, 484 T. Hammond, 102, 103 Jepson, ex parte, 644 Jervis v. White, 506, 542 Jessopp T. Lutwyche, 97 Jestons V. Brooke, 27, 564 Johnes's case (1 Mer.), 211, 605 Johns, ex piarte, 725, 736 Johnson, re (15 Ch. D.), 606, 607*, 609 (3 De G. M. & G.), 653, 715 (2 M. D. & D.), 636 V. Evans, 340, 357, 858 'c. Fesenmeyer, 630 V. Helleley, 440, 558 V. Hudson, 95 v. Peck, 139 «. Perens, 360 ^^ Pye, 74 Johnston t. Curtis, 514 i". ]\Ioore, 621 Joll t. Lord Curzou, 280 Jombart %\ Woolett, 673 Jones's case (15 Jur.), 704 Jones, ex parte (18 Cb. D.), 75, 624 (10 Ch.), 709 (4 M. & S.), 324 Jones v. Beach, *Page 193, 196 V. Broadhurst, V. Charlemont, 226 491 V. Clayton, V. Corbett, 299 169 V. Dwyer, 681 V. Foxall, 523 531, 615 V. Gibbons, 651, 678 i\ Harber, 628, 631 1). Herbert, 145 V. Lloyd, 426, 572, 577. 579 «. Maund, 233* V. Noy, 77, 520, 577* V. Ogle, 621 V. Pengree, 508 V. Peppercorne, V. Shears, 656 113 V. Walker, 607 i\ Welch, 579 V. Yates, 269 Jordan v. Money, Josephs V. Pebrer, 480 370 Joy V. Campbell, 108, 652, 677, 682, 683 Joyce, ex parte, 100 Juggeewundas Keeka Shah t\ Ram- das Brijbooken Das, 139 Kaltenbach v. Lewis, 140 Kay V. Johnston, 51, 60, 180, 355 Keating ». Marsh, 155 Kcay 'c. Fenwick, 248, 254, 257, 704 718 Keble v. Thompson, 161 Kedie, ex 2yarte, 254, 704 Kell V. Nainby, 276 Kellock's case, 602 Kellock V. Enthoven, 708 Kellv & Co., ex parte, 630' "v. Hutton, 364 Kemble «. Mills, 417* Kemp, ex parte, 678 V. Andrews, 288, 341 r. Balls, 226 Keraptner, re, 338, 574, 698, 699 Kendal r. Wood, 136, 166, 172, 269 Kendall, ex parte, 250, 254, 603, 732 «. Hamilton, 193*, 255, 598, 703, 732, and Add. to p. 193 Kennedy, ex parte, 733 v. Lee, 440, 447, 549' Kensington, ex parte (2 V. & B.), 119, 120 (14 Yes.), 731 Kent v. Jackson, 314, 512, AUTHORITIES KEFERKED TO. di *Page Kerridge v. Hesse, ' 206 Kerrison v. Reddington, 113 Kershaw v. Matthews, 420, 434, 548, 555, 573 Kewney v. Attrill, 300, 554 Key V. Flint, 656 Kibble, ex 2)arte, 704 Kiffin V. Evans, 237 Kilgour V. Finlyson, 190, 215, 218 Kiilock V. Greg, 284, 460, 493 Kiluer, ex 2ynrte, 628 Kilshaw v. Jukes, 31*, 203, 204, 205 King, ex jyarte, " 728, 742 t'. i\ccumulative Assurance Co., 121 V. Chuck, 410*, 430, 479 V. Hoare, 255, 256 V. Smith, 134 Kingsbridge Flour Mill Co. v. Plymouth Grinding and Baking- Co., 189, 100 Kingston, ex parte, 659 Kinnaird v. Webster, 227, 230 Kinnerley «. Hossack, 292, 294, 661 Kinsman v. Barker, 514 Kipliug c. Turner, 117 Kirby, ex parte, 254, 705 V. Carr, 578, 57 '^^ V. Duke of Mailborough, 227 V. Wilson, 2G8 Kirk, ex parte, 113 V. Blurton, 115, 184, 185* Kirkman r. Booth, 612, 015 Kirkwood v. Cheetham, 41 Kirwan v. Kirwan, 246*, 253 Kitchin v. Wilson, 272 Kitson i\ Hardwick, 652 Kuapmau, re, 364 Knebell i\ White, 494, 497 Knight V. Majoribanks, 485* Knowles v. Haughton, 97, 105, 498 Knox V. BushelC 191 V. Gye, 508, 510*, 617 Knudson v. Pybus, 114 Krehl v. Great Central Gas Co., 675 Kynaston i\ Crouch, 663, 665 Labodcheke r. T upper, 28, 604, 606 «. Dawson, 440 V. Wharnclifte, 4GG Lacey t\ Hill, 143, 236, 375, 590, 734, and Add. to p. 143 Lackington ';. Combes, 663 Lacy «. Kynaston, 225, 237 1}. McNeile, 136 ♦Page- Lacy V. Woolcott, 212, 667* Ladbrooke, ex parte, 750* Laing t. Campbell, 228, 421, 490, 513 Laird t\ Chisholm, 523. 524 Lake v. Argvle, 44* 89, 90 V. Craddock, 341, 342, 471* V. Gibson, 51, 341, 342 Lambert's case, 146 Lambert v. Rendle, 615 Lampon v. Corke, 238 Lancaster Canal Co., ex p>((i'te, 683 Lane, ex parte, 119, 706 v. Sterne, 554 '0. Williams, 131, 169, 188, 194, 596 Lanesborough v. Jones, 658, 660^ Lanfear, ex parte, 729, 742* Langdale, ex p)arte, 12, 30 Langley v. Oxford, 494 Langmead's Trusts, re, 140, 354*, 355, 451* Langmead, re, 679 Lascaridi z. Gurney, 137 Last V. London Ass. Corp., 394 Latch v. Wedlake, 137 Latouche v. Waley, 112 Law, ex pa-rte (3 Deac. and Mon. & Ch. Ill), 182, 702, 747 (Mon. & Ch. 590), 739 V. Garrett, 453^ V. Law, 613. V. Parnell, 274 Lawes r. Lawes, 402, 409, 432* Lawless r. Sullivan, 394 Lawrence, re, 152 r. Bowie, 162 Laws xi. Rand, 133 Lawson v. Morgan, 466, 543, 544,^ 549 Leaf, ex parte (1 Deac), 685 (Mon. & Ch.), 688- (4 Deac), 700 V. Coles, 557*, 577 Leak «. McDowell, 113 Leake ■«. Young, 628 Leary v. Shout, 581 Lee, re, 624 v. Haley, 114 V. Hart, 629 ®. Page, 66, 68- Lees, ex parte (1 Deac), ' 75 (16 Ves.), 642 V. Jones, 55, 56, 553, 557, 571 v. Laforest, 303, 449, o9i xliv AUTHORITIES EEFERRED TO. Lees V. Smith, Lcese v. Martin, Lesson v. Holt, Le Fanu v. Malcolmson, Lefovre r. Boyle, *Page 97, 105 272 222 279 277 Lefroy v. Gore, 367, 368, 382, 385, 386 Legg'.jtt V. Barrett, 440 Leicestershire Banking Co., ex parte, 717 Leideu v. Lawrence, 90, 134 Leigh's estate, re, 508 Leigh V. Birch, 613 V. Dickesou, 60 Leiirhton v. AYales, 563 Lemerc v. Elliott, 209 Lempriere v. Lange, 75 Le Neve v. Le Neve, 141 Lennox, ex parte, 708 Leslie, re, 60, 355, 372 Letts and Steer, ex j^arte, 386*, 387 Leveck v. Shafto, 276 Leverson v. Lane, 171, 172 Levett, ex parte, 670 Levey, re, 742 Levi »fc Go's, case, 714 Levy r. Pyne, 131 «. Walker, 445, 446, 447 Lewis V. Armstrong, 99 V. Bright, ' 71 V. Edwards, 449, 567, 5G9 V. Langdon, 93, 217, 443, 44.'5* t. Nicholson. 103, 2S2 t. Reilly, ' 129, 131, 169, 215, 216% 220 V. White, 672 Liardet «. Adams, 580 Lickbarrow v. Mason, 652 Liddel, ex pyarte, 746 Limpus r. London General Omni- bus Co., 148, 150 Lindo V. Lindo, 238 Lindon v. Sharp, 627 Lindsay v. Gibbs, 61, 355, 364 Lingard v. Bromley, 377, 3S7 Xingen t. Simpson, 339, 355, 451, 479 Lingood v. Eade, 454 Xister, ex parte, 642, G44 Littledale, ex parte, 681 Littles, re, 322, 706 Littlewood r. Caldwell, 544 Liverpool Adelphi Loan Associa- tion r. Fairhurst, 77 Xiverpool Borough Bank «. Turner, 324 c. Walker, 195, 257, 603, 604 Livingston v. Ralli, Llevvellen, exparte, Lloyd, exparte (1 G. & J.), (1 Mon. & Ayr.), (3 Mon. & Ayr.), V. Archbowle, ♦Page 451 754 119 140 717 276 V. Ashby, 180, 186 V. Banks, 680 V. Blackburue, 117 1). Dimmack, Add. to p. 375 V. Freshfield, 131, 168, 190, 721 V. Loaring, 5, 50, 301, 463 Lobb, exparte, 254, 704 Lock V. Lynam, 311* V. Venables, 621 Lockett T. Lockett, 502, 508 Loder's case, 713 Lodge and Fendal, ex 2}arte, 633, 725, 734, 735*, 739 Lodge V. Dicas, 242*, 243, 253 i\ Prichard, 536, 537, 599, 692 Lomas, ex parte, 754 Lomax r. Buxton, 029 London Assurance Co. v. Bold, j 18 Birmingham and Bucks Eail- way Co., re, 538 Bombay and Med. Bank x. Narraway, 054 Brighton & S. C. Pvy. r. Good- win, 118 Financial Association v. Kelk, 54, 421 India Rubber Co., 402 & N. W. Ry. Co. T. Mc- Michael, 75, 76 & Southern Counties Freehold Land Co., re, 315 Syndicate v. Lord, 506 Long t'. Yonge, 460, 461 Longman v. Pole, 279 V. Tripp, 678 LcDgworth's Executor's case, 91, 104, 109, 379* Loring v. Davies, 371 Loscomb V. Russell, 494, 497 Lovegrove v. Nelson, 13, 365* Love 11 V. Hicks, 49, 164* 167 Levering, ex jiarte, 680 Low V. Routledge, 115 Lowe V. Copestake, 274 Loyd, ex pjorte, 120 Lucas V. Beach, 23*, 24, 567 V. De la Cour, 277 V. Wilkinson, 226 t. Williams, 604 AUTHORITIES REFERRED TO. xlv Luckie v. Bushby, *Pape 290 V. Forsyth, Luckombe v. Ashton, 486 50, 51 Luff V. Horner, 338 Luke V. South Kensington Co., Hotel 267 Lury V. Pearson, 453 Lyon V. Haynes, 218*, 219, 565, 569, 589 V. Kuowles, 18, 54 V. Tweddell, 69, 583 Lysaght v. Walker, 234 Lyster v. Dolland, 341 Lyth v. Ault, 241 Maberly, ex parte, 635 McBirney v. Harran, 274 Macbride v. Lindsay, McClean v. Kennard, 491 19, 559 McConnell v. Hector, 73, 634 McCrae, re, 193, 597, 598 MacDonald v. Richardson, 461, 524, 530*, 612, 617 McGae, ex parte, * 673* McGillivray v. Sinison, 292 McGregor v. Bainbridge, ' 49, 83, 84, 348, 350 Machel, ex j^arte, 732 V. Kinnear, 274 Macllreath r. Margctson, 382, 387 Mclntyre v. Belcher, 436 V. Millrr, 225, 226 Mclver v. Humble, 85, 222 Mackay, re, 454 V. Conunerciul Bank of New Brunswick, 163 McKay v. Rutherford, 81 Mackenna, ex parte (3 De G. F. & J.), 119 (7 Jur. N. S.), 715 V. Parkes, 67, 492 Mackenzie, ex parte, 640, 644 McKewan's case, 376 Mackey, ex parte, 653 Maclae V. Sutherland, 130, 187 Maclaren v. Stainton, 394 Maclean «. Dawson, 611 McLure v. Ripley, 304, 471, 485 SIcMahon v. Burchcll, 59 V. Ujitou, 463 McManus r. Crickett, 148 M'Nair » Fleming, 184 McNeill's case, 490 M'Neill c. Reid, 559 McNeillie v. Acton, 609, GlO *Page McOwen v. Hunter, 386 McRae, re, 613 Maddeford v. Austwick, 303, 304, 486 Maddick v. Marshall, 42, 45 Madgwick v. Wimble, 433, 434, 553, 555, 573 Magdalena Steam Navigation Co. V. Martin, 72, 191, 390 Mahony v. East Holyford Mining Co., 166 Mainwaring v. Newman, 116, 567, 568, 569 Mair v. Glennie, 10, 19, 29* Malcolmson v: Malcolmson, 186' Manchester Bank, ex parte, 337, 688,, 699 and County Bank, ex parte, 716, 740 and Liverpool District Bank- ing Co., ex parte, 716 and Milford Rail. Co., 545 , Shef. , and Lincoln Railway Co. V. Brooks, ' 294 Manderston v. Robertson, 261 Mann's case, 75 Manning v. Westerne, 227 Mansell v. Feeney, 507, 508 Mant V. Mainwaring, 88- March t\ Ward, 187 Mardall v. Thelusson, 290 Mare v. Charles, 186- Mariott v. Shaw, 357 Marks, ex 2)arte, 433 V. Feldman, 629, 631 Marlin, ex parte, 695 Marlow v. Pitfield, 191 Marquand v. New York Manufac- tory Co., 584 Marsden v. Moore, 417 Marsh, ex parte, 120 V. Keating, 151, 155*, 157, 159, 165 Marshall ». Colraan, 301,413, 466, 543, 580 V. Maclure, 368 V. Marshall, 571 ■ V. Button, 77 11. Watson, 542 Marshfield, re, 537 Marston, ex parte, 739 Martin's case, 98 Martin, ex parte, 688, 687 V. Crompe, 288, 341 V. Heathcote, 509 V. 0"Hara, 03& xlvi AUTHORITIES KEFEKRED TO. Martineau ■». Cox, 503 3Iartyn v. Gray, 42, 44, 45 V. Knovvllys, 59, 562 Mason or Rawson, ex parte (1 Rose, 428), 641 Massam v. Thorley's Cattle Food Co., 114 Masson, ex parte (1 Rose, 159), 040, 74G t\ Bogg, 602 V. Iladdan, 452 V. Rumsey, 1^6 Master v. Kirton, 49 1 Masterman ex parte, 681 Mather, ex parte, 108 V. Fraser, 629, 678 V. Lay, 677 j\Iatbers v. Green, 62 Mathewman's case, T8 Mathews t. Aland, 729 Matson v.. Swift, Add. to p. 347 ]\Iatthews, ex parte, 40, 89, 637 Matthison v. Clark, 268 Maturin v. Trediuuick, 490 Maude, exvarte (2 Ch.), 721, 727, 738, 742 (6 Ch.), 403 Maudslay i\ Le Blanc, 87, 89 Maughan i\ Sharpe, 93, 112 Maund v. x\Uies, 413 Mavor, ex parte, 633 Mawman x. Gillctt, 276 Maxwell v. Greig, 284 «. Ilogi?, 114 IB. Jameson, oY* ■«. Port Teunant Co., 476 May, ex parte, 737 v. Smith, 223 Mayberry v. Brooking, 113 Mayhew's case, 366 Mayhew v. Fames, 141 V. Herrick, 61, 358, 562, 568*, 569, 676 Mayou, ex parte, 338, 698 Medewe's trust, 230 Megarey, ex parte, 738 Meggy «. Imperial Discount Co., 756 3Iegrath v. Gray, 238 ^leinhertzhagen, ex parte, 254, 704 Melbourne, ex parte, 646 Mtdiorucchi v. Royal Exchange Assurance Co., 354 Mellersh v. Keen, 381, 440, 443, 444, 527, 528, 571, 572, 579 Melliss V. Shirley Local Board, 95 ♦Page Mellors v. Shaw, 149 Mercantile Mutual Marine Insur- ance Co., re, 708 Mercer, ex parte, 627, 629, 654 Meredith, The, 380 Merriman v. Ward, 229, 230, 235, 597 Merryweather v. Nixan, 370, 377 Mersey Steel and Iron Cb. v. Naylor«&Co., 658 Mertens v. Ilaigh, 505 Metcalf V. Bruin, 117 «. Rycroft, 112, 273 Metropolitan Saloon Omnibus Co. V. Hawkins, 278 Meyer, ea; pa?'/*;, 169 V. Sharpe, 15, 328, 671 Meyraott t. Meymott, 391 Michell «. Harris, 514 Middleton v. Pollock, 292, 662 Milburn «. Codd, 567 Miles' claim (9 Ch.), 180, 182, 183* ex parte (2 Rose), 645 V. Thcmas, 540, 571 Milford T. Milford, 514, 520 Millar v. Craig, 389, 489*, 513, 514, 516, 517, 537 Miller v. Douglas, 171 V. Mackay, 309, 311, 380 V. Miller, 510 V. Mynn, 299 Milliken v. 3Iilliken, 433 mWs, ex parte {arte{\%N^?,.), 624 V. Cockburn, 97, 105 V. Cullen, 226 v. Lapage, 186, 286 V. Reynolds, 437 T. Tarbutt, 198, 2S3 Moffiitt V. Farquharson, 309, 326, 460, 461 V. Van Millingen, 568, 569 MoUer ». Lambert, 112 Molten '0. Camroux, 76, 213 ADTHOBITIES REFERRED TO. Ixvii ♦Page llollwo, March & Co. v. The Court of Wards, 2, 10, 17, 33*, 34, 35, 36, 38 Monkhouse v. Hay, 678 Monro, ex parte, 679 jSIontefiore v. Lloyd, 118 Moody V. King, 741 Moon, ex parte, 755 Moore, ex parte, 738, 741 V. Barthrop, 653 V. Davis, 10, 11 Moor v. Hill, 287 Morans v. Armstrong, 124, 135, 169 Moravia i\ Levy, 564 Morehouse v. Newton, 537 Moreton t. Ilardern, 149 Morgan's case, or Morgan, ex parte, 314 Morgan v. Hardy, 708, 751 %\ Knight, 639 V. Marquis, 61, 212, 218, 568, 569, 672*, 676 v. Rowlands, 260 Morier, ex f arte, 659, 660 Morison v. Moat, 415, 479, 543 «. Thompson, 307 Morley, ex parte, 327, 337, 353, 699 V. Baker, 564 1). Newman, 454 V. Strombom. 271, 357 V. White, ' 599, 649 Morris, ex f arte (10 Jur.), 642 (Mon.), 753 v. Barrett, 322, 323, 331*, 341 V. Colman, 541*, 546 V. Harrison, 512 11. Kearslej^, 344* 479 V. Livie, 364 v. Morris, 490 Morrison, ex parte, 315 Morrow v. Saunders, 559 Morse V. Wilson, 16 Moss, ex parte, 715 Mosse v. Salt, 513 Motion, re, 649, 652 Mouflet V. Cole, 437 Moulston V. Wire, 272 Mowatt and Elliott's case, or Mowatt, cxparte, 386 Moxou v. Bright, 458 Mulford V. Griffin, 213 Mullett V. Hook, 281 Mullins V. Collins, 149 Runnings v. Burj-, 495 -Munster v. Cox, 266, 272 Munster v. Railton, Munton, ex parte, Murray v. Flavell, 85, «. Moore, V. Pinkett, V. Somerville, V. Walter, Murtagh v. Costello, Murton, ex p)arte, 328, Musgrave t. Drake, Musson v. JMay, Mutton, re, Mycock «. Beatson, Myers v. Edge, ■ V. Willis, ♦Page 266 639 434, 435, 479 272 584 187 503*, 504* 346 633, 684, 700 169 451, 591 751 484* 118 147 Nanson v. Gordon, 692, 722 Nash, ex parte, 636 V. Hodgson, 227 National Bank, ex parte, 140 Bolivian Navigation Co. v. Wilson, 576 Funds Assurance Co., re, 200 Permanent Benefit Building Soc, - 191 Natusch V. Irving, 316*, 317*, 318*, 319 Navulshaw v. Brownrigg, 140 Naylor v. Mortimore, 645 Neale v. Turton, 116, 565, 567, 569 Neave «. Avery, 562 Neilson v. Mossend Iron Co., 122. 410, 411, 413, 429, 571 Nelson v. Bealby, 340, 406 V. Cherrell, 639 Nerot V. Buruand, 84, 323, 326*, 327, 353, 583, 588 Nesbit V. Smith, 375 Nesbitt V. Howe, 282 Nettleship, ex jmrte, 119 Newbigging v. Adam, 369, 481, 484* New Brunswick Piailway Co. v. Muggeridge, 480 Newell «. Townsend, 359, 542 Newen v. Wetten, 514, 520 Newland v. Champion, 613 Newman v. Jones, 149 Newmarch v. Clay, 229, 234 Newry and Enniskillen Railway Co. V. Coombe, 75 V. Moss, 584 New Sombrero Phosphate Co. ■;;. Erlanger, 480, 595, 596 Newsome v. Coles, 43*, 45. 46, 217, ' 222, 588 xlviii AUTHORITIES REFERKED TO. Newton v. Belcher, 88, 207 V. Chantler, 628 V. Liddiard, 88 V. Taylor, 518 New York Life Insurance Co. v. Statham, '*2 Nicholas, ex parte, 740 Nicholls ?'. Diamond, 186 V. Dovvding, 84, 86*, 128 Nicholson v. Revill, 224 V. Ricivetts, 125, 131, 182 Noke V. Ingham, 224 Nokes, ex jjarte, 571, 635 Nolan V. Fritzgerald, 272 Nolte, ex parte, 732 Norfolk, ex parte, 702, 732 Norris v. Cottle, 24 North British Insurance Co. v. llallett, 680 Northumberland v. Todd, 117 Norton, ex parte, 628, 629 r. Cooper, 152 V. Russell, 517 V. Seymour, 86*, 89, 185*. Norway r. Rowe, 469*, 475, 553* Norwich & Lowestoft Co. i\ Theobald, 222 Yarn Co.'s case, The, 875 Noteley, ex jwrte, 16, 564, 635* Nottidge V. Pricliard, 225, 228, 236, 294 Nottingham, ex farte, 78, 701, 730 Nottingham Bank, ex parte, 680 Nowcll V. Nowell, 403 Noyes-y. Crawley, 509, 510*, 511 Nutting, ex parte, 680 Oakeley v. Pasheller, 248, 251*, 254> 450, 597 Oakes v. Turquand, 480 Oakford v. Eui'opean and American Steam Ship Co., 244*, 252, 253 O'Brien v. Cooke, 541 Ockcnden, ex parte, 658 Odcll V. Cormack, Add. to p. 180 Ofhcial Receiver, ex parte, re Gould, Add. to p. 028 Ogilvj'-, ex jyarte, 737 Ogle, ex piarte, 720 Oidakcr v. Lavender, 377, 407, 421 Oidficld r. Preston, 594 Olive v. Smith, 656 Oliver v. Hamilton, 546 Olknow, e.;;;x(r^ 729 O'Mealey v. Wilson, 73 Omychund v. Barker, Ord, ex parte, V. Portal, O'Reardon, ex parte, O'Reilly r. Richardson, Page 890 683 274, 285 640* 641 180 Oriental Banking Co. v. Coleman, 627 Oriental & Commercial Bank, re, 374, 375 Financial Corporation, ex jyarte, 255 Orr V. Chase, 137, 194, 283, 596 Osborne v. JuUion, 20 V. Harper, 564 "V. Ilavpur, 56& Oswald r. Thompson, 631 Others. Iveson, 193, 196 Ottlcy V. Browne, 108* Owen, ex parte (4 De G. & Sm.), 328, 329*, 334, 337*, 700 (13 Q. B. D.), 620, 634, 669, 670 v. Body, 30 v. Delamere, 47, 606, 609 11. Homan, 255 V. Van Uster, 87, 186* V. Wilkinson, 294 Owston V. Ogle, 563 Oxford Benefit Building Society, o-e, 161, 199 Pachelok, ex parte, 640, 645 Paddon v. Richardson, 618- Padstow Total Loss Association, 102 Page, ex parte, 635, 729 V. Cox, 85, 43 3, 434*, 435, 479 t\ Newman, Paice V Walker, Palcy V. Field, Palliser v. Gurney, Palmer's case (1 Mer.), 389 177, 180 227 78- 250, 253, 596 101 Palmer, re (2 A. & E.), V. Justice Assurance Societj^ 137 V. Mallet, 437, and Add. to p. 207 V. Mitchell, 523, 015, 617 Panama and South Pacific Tel. Co. V. India Rubber Co., 481 Pannell v. Hurley, 162 Pardo V. Bingham, 258^ Pare??. Clegg, 92,260,464 Pariente ■!;. Lubbock, 113, 117 Parker, ex parte (Cooke's B. L.), 695, 721 (2 M. D. & D.), 208, 706 V. Bloxham, 514, 018- AUTHORITIES REFEKKED TO. XllX ♦Page Parker v. Gossage, 425 V. Hills, 30r, 329 v. McKenna, 200, 306 V. Morrell, 129 V. Pistor, 357, 359 V. Ramsbottom, 573, 741 ». Wells, 508 Pai-kes, ex parte, 630 Parkin v. Carruthers, 214, 221 Parkinson v. Hanbury, 514 Parr, ex parte (4 D. & Ch.), 120 (18 Yes.), 644 (1 Rose), 715 Parry, ex parte, 681 Parsons v. Hay ward, 517, 527> 571 Part, ex j}arte, 695 Pascoe 11. Swan, 59 Patent File Co., 140 Paterson v. Gandasequi, 177 V. Zachanah, 215 Patten v. Rea, 148 Pawsey v. Armstrong, 10, 14, 330, 385*, 443, 555, 558 Payler v. Homersbam, 238 Pavne, ex 2)nrte (De Gex), 635 ' (11 Cb. D.), 627 V. Hornby, 326, 353, 588, 6;!2 Payntcr v. Houston, 601, 612 Peaceable v. Read, 502 Peacock, ex parte, 710 V. Peacock, 84, 217, 301, 348, 349, 540, 551, 552, 571 Peake, ex parte (1 Mad.), 335, 336, 485, 486, 573, 098 (2 Rose), 732 Pearcc v. Cliamberlain, 363, 433, 590, 591 V. Lindsay, 572 V. Slocombe, 720 Pearl v. Deacon, 228 Pearson, ex parte, 629 i\ Pearson, 440 V. Scott, 136 V. Skelton, 878, 560 Pease v. Hewitt, 68, 69, 581 V. Hirst, 117, 227, 274 Peat, ex parte, 642 V. Jones, 658 Pedder v. Mayor of Preston, 290 Pedgrift v. Cbevallier. 99 Peek V. Gurney, ' 410, 480, 595 Peel V. Thomas, 90 Peele, ex parte, 190, 208, 703, 7o5 Peirse v. Bowles, 1;;0 Pelly V. Wathen, 120 *Page Pemberton, ex parte (1 M. D. & D.), 640 ex parte (1 Deac), 687 V. Oakes, 118, 230, 234 Penkivil v. Connell, 188* Pennell v. Dawson, 629 V. Deffell, 162, 228 V. Reynolds, 629 V. Walker, 453 Penney r. Goode, 504 Penny i\ Pickwick, 475 Penoyer v. Brace, 298 Perens v. Jobnson, 303, 304, 360*, 391, 493 Perfect, ex parte, 713 Perring v. Hone, 130, 567, 568, 569 Perrott v. Bryant, 19 Perry v. Barnett, 370, 372 V. Jackson, 258 V. Walker, 636 Peter v. Rich, 376 Peters v. Anderson, 226, 227 Petre v. Petre, 260 Petri e -v. Hannuy, 105 Petlman v. Keble, 372 Petty V. Smith, 272 Pettyt V. Janeson, 408, 409, 429, 430* 573 Pharmaceutical Soc. v. The Lon- don and Provincial Supply Assoc, 0, 98, %9 Phelps V. Lyle, 274, 276 V. Prothero, 275 V. Sproule, 516 Phelps, Stokes & Co. i\ Comber, 711 Phene v. Gillan, 374 Philips v. Atkinson, 542, 549 V. Knightley, 454 V. Philips, 284, 342 Phillips, ex parte, 681, 682 «. Clagett, 145*, 140 V. The Commissioners of In- land Revenue, 450 ■y. Homfray, 595 V. Hopwood, 639 V Hunter, 676 V. Phillips (IM. &K.), 331, 3&2* 344*, 347 v. Phillips (Finch.), 610 V. Phillips (3 Hare), 134 «. Ward, 255 Phillpotts r. Jones, 227 Philps V. Hornstedt, 629 Pliipps, ex parte, 630 Phoenix Life Insurance Co., The, 163 1 AUTHORITIES REFEERED TO. ♦Page Phosphate of Lime Co. v. Green, 149 Phosphate Sewage Co. v. Haitmout, 490 Pickard v. Sears, 40 Pickering's case, ITV Pickering v. Pickering, 502, 537 V. Kigby, 503 Pidgeon v. Burslem, 97 Piercy r. Fynney, 136, 267, 270, 294 V. Young, 453 Pigott V. Bagley, 433 Pile v. Pile, 439 Piilans V. Harkness, 369, 482*, 517 Pilley v. llobinson. Add. to p. 264 Pilling V. Pilling, 329, 334, 390, 409 Pim v. Harris, 389 V. Wilson, 636 Pinckney v. Hall, 129 Pinder v. Wilks, 218 Pine, ex pai'te, 721 Pinkerton, ex parte, 732 Piukett V. Wright, 584, 652, 680 Pitt «. Cholmondeley, 513 Plows v. Baker, 453 Plowden, ex jjarte, 741 Pluraer v. Gregory, 132, 151, 156=^, 250, 284 Pluinmer, re, 716 Pointou V. Pointon, 612 PollexEen v. Sibson, 266 Ponton V. Dunn, 434*, 435 Poole, ex parte, 642 Pooley V. Driver, 4, 10, 11, 12, 16, 17, 33, 34, 35, 36, 38* Pope V. Haman, 357 Popple V. Sylvester, 255 Poppleton, ex parte, 102 Pordage v. Cole, 416* Porter v. Lopes, 59 V. Taylor, 134 Porthouse v. Parker, 141 Portland, The, 73 Pott t. Ejton, 28, 30*, 43, 89 Potter «.' Commissioners of Inland Revenue, 439, 450 V. Jackson, 402, 518 Potts V. Pell, 72 Poulson, ex jHirte, 161, 162, 702 Powdrell v. Jones, 419* Powell, ex ]xirte, 753 V. Head, 62 V. Lay ton, 280 Powis T. Harding, 491 Powles r. Page, 141 V. Hargreaves, 713 ♦Page Prance v. Sympson, 260, 509, 511 Prendergast v. Turton, 469*, 470, 475 Prentice v. Prentice, 557 Prescot, ex parte (1 Atk.), 658 Prescott, ex parte (Mon. & Ch.), 739 (4 D. & C), 714 Preston v. Strutton, 543, 564, 565 Price, ex parte, 659 V. Barker, 237 V. Groom, 21*, 30, 681 V. Hewitt, 74 V. Moulton, 255 Prickett v. Down, 668 Priestly v. Pratt, 677, 679, 682 Primrose v. Bromley, 194 Pritchard v. Draper, 128, 225 Pritt V. Clay, 513, 516 Professional Life Assurance Co., 377 Prole V. Masterman, 382, 495* Proudfoot, ex parte, 639 Puller V. Roe, 296 Pulling V. Tucker, 631 Pulsford V. Richards, 480, 481 Punuett, ex jmrte, 439 QuAKTEKMAiNE V. Bittlcston, 677 Quincey c. Sharp, 260 Quintin, ex parte, 655, 660 Raba v. Ryland, 140 Rackstraw v. luiber, 564 RadcliHe v. Rush worth, 13, 88 Radenhurst v. Bates, 285, 457, 563 Raikes v. Todd, 228 Raleigh, ex parte, 254, 704, 706 Ralph «. Harvey, 87, 89 Ramazotti v. Bowring, 295 Ramsbotham v. Cator, 673 Ramsbottom v. Duck, 673 V. Lewis, 667, 673 V. Parker, 485, 486 Ramskill v. Edwards, 377, 707 Randall v. Randall, 343*, 346, 317 t>. Raper, 374 Randegger v. Holmes, 453 Randell, Saunders & Co. v. Thomp- son 452 Randleson, ex parte, 228 Ranelagh v. Hayes, 375 and Add. to p. 375 T. Melton, 424 Ransford v. Copeland 96 Rapp v. Latham, 146, 164*, 165 Rasbothani v. Shropshire Union Railway Co. 503 AUTH0KITIE8 KEFEKKED TO. *I'age Rathbonc v. Drakeford 272 Kavenscroft, ex parte, 641, 642 Rawbone, re, 679 Rawlings v. Lambert, 5'J2 Rawlins v. Wickham, 257, 869, 483* Rawlinsou v. Clarke, 13, 563 V. Moss, 120 Rawson, ex parte (1 V. & B.), 640 (1 Rose), 641 (Jac), 721, 724, 737 V. Samuel, 291, 543 Ravvstoiie v. Parr, 193, 196 •Ray V. Davies, 289, 647 Raymond's case, 450, 493 Raynard v. Chase, 95 Read, e.v parte, 718 t\ Anderson, 371 V. Bailey, 734 and Add. to p. 143 V. Bowers, 542, 547 Reade v. Bentley, 14, 122* V. Woodrooffe, 508 Redgrave v. Hurd, 163, 481 Kedmayne v. Forster, 364, 366, 461, 494, 498 Redpath r. Wigg, 30 Redway r.. Sweeting, 51 Reed and Bowen, ex parte, 754 and Steele, ex parte, 629 v. White, 243, 248*, 253, 255 Reese River Mining Co. v. Smith, 491 Reeve, ex parte, 720, 721, 728, 742 T. Whitmore, 537 Reid's case (24 Beav.), 12 Reid, ex parte (2 Rose), 695, 728 v. Hollinshead, 13, 49, 53, 140 V. Langlois, 504 Reilly v. Walsh, 304, 341, 471* Renuick, ex parte, 640 Rensburg, ex yarte, 678 Revcll, ex parte, 703 R. «. Arnaud, 325 «. Atkinson, 457 V. Bren, 457 V. Burgess, 457 ■?;. Collector of Customs, 342 V. Essex, 372 ■». Evans, 457 Id. Fox, ' 100 V. Frankland, 103 V. Gaby, 288 v. Hodge, 340 v. Leech, 147 V. Loose, 457 V. Macdonald, 13, 495 ■». Manning, 147 *Page R. t. Marsh, 457 r. Proud, 457 V. Robson, 2, 50, 457 T. Rock, 340 v. St. Martin's, 117 v. Sanderson, 340 \\ Scott, 288 T. Smith, 457 v. Staiuer, 91 V. Strany forth, 149 ■». Warburton, 457 t\ Webster, 457 «. Whitmarsh, 50, 93 Reynell v. Lewis, 44, 89 Reynolds ». Bowley, 690*, 691 «. Bridge, 438, 455 Rheam v. Smith, 501, 543 Rhodes r. Forwood, 436 «. Rhodes, 391* ». Smethurst, 259 Rice V. Gordon, 488, 489*, 597, 600, 601 Richards w. Davies, 497 •0. Heather, 288 Richardson, ex parte (3 Deac. & Ch.), 635* (Buck, 202, 3 Madd.), 609, 707 (Mon. & Ch.), 689 (Buck, 480), 682 ■B. Bank of England, 111, 115,401, 402, 505, 568 v. Gooding, 647 «. Hastings, 460, 461, 462, 463, 499 V. Horton, 198 V. Liarpent, 462 Riches, re, 129, 171, 172 Richmond v. Heapy, 268, 269 Ricketts v. Bennett, 127, 132, 133, 190 Ridgway v. Clare, 599, 601* V. Philip, 49, 88* Ridler, re, 654 Ridley v. Taylor, 169, 172 Ridout V. Brough, 659 Rigden y. Pierce, 429, 555 Right ». Cuthell, 139 Ring, ex parte, 725 Ripley v. Waterworth, 344* Rishton v. Grissell, 390, 393, 493, 555 Roberts, ex parte, 6-iO I". Eberhardt, 56, 57, 331, 545*, 550, 552, 580 r. Hardy, 73 v. KufHn, 614 Robertson «. Lockie, 425, 572, 579 Hi AUTHORITIES REFERRED TO. ♦Page Robertson v. Quiddington, 439, 445, 61!) V. Southgate, 388, 459 Robey & Co.'s Perseverance Iron Works t). Oilier, 711 Robinson (executors') case (6 De G. Mc. & G.), b67, 377, 385, 386 ex parte (3 D. & 0. and 1 M. & A.), 667, 668, G73* (4 D. & C), 737 V. Alexander, 259, 508, 509, 591 V. Anderson, 49, 84, 349, 350*, 380, 478 V. Ashton, 329 V. Davison, 4X9 V. Field, 508 V. Hadley, 549 V. Hofman, 1^7 V. Kitchin, 97 V. MacDonnell, 678 V. Marchant, 279 V. Preston, 51 1). Thompson, 314, 512 V. Wilkinson, 178, 245, 253, 281 Robley v. Brooke, 323, 350 Robson V. Curtis, 567 V. Drummond, 276, 287* V. M'Creight, 495 Rock V. Lazarus, H'^ V. Mathews, 552 Rodgers v. Maw, 240, 252, 450 Roe V. Galliers, 678 Rogers v. Harvey, 348 V. Mackenzie, 695 V. Price. 373 Rolfe V. Flower, 208, 249, 706 Roope V. D'Avigdor, 457, 492 Rooth V. Quin, 170, 210, 222, 702 Rose, ex parte, 680 V. Hart, 658* Ross, ex parte, 658, 660 V. Parky ns. 10, 13 RothwcU v. Humphries, 131 Routh V. Peach, 454, 515 V. Webster, 446, 544 Rowe V. Wood, 56, 301, 404, 518, 550. 553* Rowland and Crankshaw, re, 690, 700 Rowlands v. Evans, 425, 552, 553*, 555, 556, 558*, 578* 591 Rowlandson, ex parte (I Rose, 89), 28, 30, 640, 642 (1 Rose, 416, and 2 V. & R. 172), 334, 338, 698 (3 P. & W. 405), 743, 744, 746 ♦Page Rowley v. Adams, 328, 347, 488, 537, 612 V. Home, 222 Roxburghe v. Cox, 297 Royal Bank of Scotland v. Com- mercial Bank of Scotland, 712 Ruffin, ex parte, 334, 335, 336*, 352, 587, 697* 69& Rule V. Jewell, 470*, 472, 473, 475 Rumboll, ex parte, 649 Ruppell «. Roberts, 144, 178 Russell, ex parte (19 Cb. D. 588), 654 re (19 Ch. D. 432), 620 V. Austwick, 310*, 311 V. Pellegrini, 453 ■p. Reece 177 V. Russell, 426, 453, 487, 575 Russell's Patent, 62 Rutherford, ex parte, 695, 720 Ryall V. Larkin, 65& V. Rowles, 354, 655, 677, 678, 679, 682, 684 Ryan, re, 341 V. Mackmath, 214 Ryhope Coal Co. v. Foyer, 5 Sadler, ex parte, 731 V. Lee, 77*, 153*, 161, 577, 596 V. Nixon, 566 Saftery, ex parte, 629, 630, 632 St. Aubyn«. Smart, 151, 152, 159 St. Barbe, ex parte, 726, 736 St. James's Club, 50- Saiuter v. Ferguson, 455 Salomons v. Nissen, 141, 26T Salting, ex parte, 661, 718=^ Saltoun V. Houstoun, 451 vSammon, ex parte, 715 Sander v. Sander, 578 Sanders v. King, 607 Sanderson v. Brooksbank, 169- Sandford v. Ballard, 58, 59 Sandilands v. Marsh, 138* Sangster v. Mazarredo, 87, 89, 128 Sargant v. Read, 548, 550, 553 Saull V. Browne, 507, 508 Saunders v. Druce, 611 Saville v. Robertson, 204*, 205 Savin, re, 720 Sawver v. Goodwin, Add. to p. 163 Sayer v. Benuet, 577, 578, 579 Scarf V. Jardine, 40, 42, 46*, 47, 197*, 211, 221, 256, 286, 702, 706 Scarth, ex parte, 678 Schofield, ex parte, 714, 7ia AUTHORITIES KEFEBRED TO. liii ♦Page Scholefield v. Heolield, 591 Scholey v. Central Rail. Co. of Venezuela, 490 Scott V. Avery, 452 V. Beale, 209, 230, 2-31 V. Franklin, 289 V. Godwin, 278 V. Izon, 609, 723 T. Mcintosh, 567 V. Miller, 100 V. Milne, 467 V. Rayment, 476 V. Surman, 162 Scuderaore v. White, 509 Sculthorpe v. Tipper, 612 Seddon, ex parte, 254, 704 V. Connell, 462, 463, 501 Sedgwick's case (ok, e.c jmrte) , 382, 386 i\ Daniell, 566 Sedgworth v. Overend, 278, 279 Seeley v. Boehra, 494, 502 Seligmann r. Le Boutillier, 453 Selkrig v. Davies, 719 Sehvyn v. Harrison, 374 Senhouse v. Christian, 468*. 469, 473, 475 Seioka v. Kattenburg, 78 Sewell V. Bridge, 516 Seymour t\ Bridge, 371 Shack T. Anthony, 255 Shackell v. Rosier, 370 Shackle ®. Baker, 440 Shakeshast and others, ex parte, 722* Shakespear, re, 78 Shallcross «. Oldham, 309 Shanks v. Klein, 341 Sharon Coal Corp. v. Fulton Bank, 79 Sharp, ex parte, 041, 642 V. Milligan, 139 V. Taylor, 91, 107*, 108 V. Warren, 568 Sharpe v. Cummings, 52, 349 V. Gibbs, 255 Sharpley v. Louth and East Coast Railway Co., 490 Shaw, ex jxirte, 707 ®. Benson, 102, 103 «. Ching, 508 T. Gait, 13, 32* V. Harvej'', 87 V. Picton, 389 Sneeham v. Great East. Rail. Co., 62 Sheen, ex parte, 690, 742 Sheffield Gas, &c. Co. v. Harrison, 476 Shell, ex x>ciTte, 37 ♦Page Shelley, re, 680 Sheldon i\ Rothschild, 657 Shepherd, ex parte, 716 V. Allen, 579 Sheppard, ex paite (19 Q. B. D.), 200, 745, 749 (Mon. & Bl.), 695 V. Baillie, 280 V. Oxenford, 107*, 463, 499*, 500, 546*, 521, '552 Sheriff of Middlesex, ex parte, 649 Sherman v. Sherman, 467* Sherry, re, 227, 230 Shipton V. Thornton,. 187* Shirreff t. Wilks, 173*, 209 Showier t. Stoakes, 135, 272 Shrubsole ^^ Sussams, 629, 679 Sibley V. Mintou, 463 Sibson ?.'. Edgeworth, 463 Sichel V: Mosenthal, 476 Siddall, re. 50 Siebert f>. Spooner, 627 Siffkin ». Walker, 187 Sillitoe, ex parte, 721*, 725, 726, 727, 734, 736 Silver v. Barnes, 50 Sim t\ Sim, 512 Simmons, re, 644 «. Leonard, 409, 429, 431*, 573 V. Swaine, 454 Simms n. Barry, 195 Simons v. Johnson, 238 Simpson, re (9 Ch.), 337, 698, 699 ex parte (De Gex), 631 claim (36 Ch. D.), Add. to pp. 126, 138 V. Chapman, 461, 524, 532*, 617, 619* V. Henning, 238, 251, 748 v. Vaughan, 194, 596 %\ Westminster Palace Hotel Co., 314 Sims V. Bond, 275 n. Britain, 275 t\ Brutton, 151, 156*, 157, 159, 165 Simson v. Cooke, 118 V. Ingham, 227, 232* Sinclair, re, 665 r. Wilson, 630, 681 Singer's Man. Co. «. Wilson, 114 r. Loog, 114 Skaife r. Jackson, 270 Skeet r. Lindsa)^ 511 Skinner r. Stocks, 276, 277 liv AUTHORITIES KEFERRED TO. Skipp v. Ilurwood, Skirving c. Williams, Slater, ex parte, V. Lawson, V. Willis, 3-40, 352, 359 G15 22.4, 703 263 324 Sleech's case, 161, 194, 200, 250, 253, 596, 59-7, 602, 752 Slee, re, 682 Slim r. Crouchcr, 481 Slip'p^'i' »• Stidstone, 291, 341 Small V. Attwood. 162, 404, 480 Smallcombe v. Olivier, 643 SiiKirt, ex jjnrte, 71-'i Smith's case (4 Ch.), 98 Smith, ex parte (Buck), 081, 741 (4Deac. & Ch.), 683 (1 Gl. & J. 74, and 6 Madd. 2), 734, 738 (1 Gl. & J. 256), 640, 747* (3 Madd.), 328, 681 (2 Mod. & A.), • 69.1 (1 M. D. & D.), 706 (2 Rose), 733 (14 Q. B. D.), 725 (5 Ves.), 583, 637, 648 V. Anderson, 5, 101, 102 V. Ayres, 607 V. Baily, 129, 188 V. Ball, 112 V. Barrow, 564, 567 V. Braine, 169 V. Cannan, 628 V. Chadwick, 480, 481, 482 V. Craven, 190, 203 V. De Silva, 352, 354, 648 V. Duke of Chandos, 408, 536 V. Everett, 440, 443, 444, 488, 527, 614, 616 V. Fromont, 544 V. Goddart, 672 v. Harrison, 360 V. Howth, 562 V. Jameson, 161, 240 V. Jar ves, 188 v. Jeyes, 406*, 466, 542, 543, 546, 551, 580 T. Johnson, 131 V. Leveaux, 458 V. Lindo, 97 V. Mawhood, 95 V. jMules. 331, 415, 428*, 558 V. Oriell, 218, 569, 671, 072 V. Parkes, 292* 304 V. Plummer, 355 V. Smith (3 Giflf.), 194, 620* ♦Page- Smith (5 Ves.), 323, 325, 329 «. Snow, 460 V. Stokes, 218, 340, 569, 671, 672 V. Timms, 627 V. Topping-, 681, 682 V. Watson, 15, 28, 36, 49, 135, 328 v. Wigley, 229 V. Winter, 215*, 219, 220 Smout n. Ilbury, 211 Smyth, ex parte, 716, 750 Snaith v. Burridge, 172 Sna))c, ex parte, 739 Sneyds, ex parte, 633 Snook r. Watts, 76 Snowball, ex parte, 632, 604, 665 Snowdon, ex j^arte, 375 Soames, ex parte, 660 Soci6te Generale de !Paris v. Green, 714 X. Tramways Union Co., 080 Society of Practical Knowledge x. Abbott, 49 & Solly r. Forbes, 237* Solomon, ex parte, 714, 746 V. Medex, 279 Solvency Mutual Guarantee Co. v. Freeman, 113 Somerville v. Mackay, 311, 508- Somes T. Currie, 409 South Carolina Bank v. Case, 182 South Sea Co. t. Wymondsell, 260 South Wales Atlantic Steamship Co., 103 Southwell V. Bowditch, 180 Spackman v. Miller, 682 Spark t. Heslop, 374 vSparrow, ex parte, 629, 631 Spears v. The Lord Advocate, 340' Spenceley «. Greenwood, 215, 244 Spencer x. Billing, 89 v. Harrison, 348- X. Spencer, 515* Spittal X. Smith, 486* Spottiswoode's and Amsink's case, 367^ 369 Sprague, expmrte, 336, 337, 680, 686*,. 700- Spurr X. Cass, 27& Stables v. Eley, 47* 89, 149, 214 Stackwood v. Dunn, 29G Staddon, ex jiarte, 657, 662* Stahlschmidt x. Lett, 38T Staiubank x. Fernlev, 482 Stainton x. Carron Co., 384, 488, 511*, 513, 537, Oil* 6ia AUTHOKITIES REFERRED TO. iv Stanborough, ex parte, Stanger v. Wilkins, Stauiforth v. Fellowes, Stansfield v. Cubitt, V. Levy, Stanton, ex 2xii'ie, Iron Co., re, Staples, re, Stavers v. Curling, Stead V. Salt, Stedman «. Smith, Steel V. Lester, Steele v. Stuart, Steer v. Crowley, Steiglitz «. Eggington, Stephens, ex parte, V. Brown, V. Reynolds, Stephenson v. Chiswell, Sterndale v. Hankinson, Sterry v. Clifton, Steuart v. Gladstone, *P:lge 704 627, 628 G59 679, 081 281 718 30 208 19, 416, 563 129 562 14, 34, 149 141 450 137 654, 661*, 662 729 181* 597 228, 229 92, 100 402, 421, 426 129. 428, 430, 4-i4, 448, 575 Stevens «. Benning, 114, 288* «. Cook, 390, 391 V. South Devon Railway Co., 314, 352, 893 Steward v. Blakeway, 55, 56, 331, 334, 343, 846*, 347 V. Harkness, Stewart v. Forbes, V. Gibson, Stewart's case Stockteu V. Dawson, 482 349, 350 93, 106 536 352, 353, 381, 384, 489*, 528, 617, 688 Stocker -y. Brocklebank, 13, 14, 563 V. Wedderburn, 476 Stokes V. Lewis, 370, 373 Stone, ex parte (8 Ch.), 748 re (33 Ch. D.), 36, 37 V. Marsh, 155*, 157 Stonehouse v. De Silva, 289, 638 Stoveld, ex parte, 670 V. Bade, 234 Stracey v. Deey, 295* Strachan v. Barton, 630 Strang, ex parte, 657 Strange v. Lee, 118 Strangford v. Green, 129 Streatfield, Lawrence & Co. , re, 330* Street v. Rigby, 451 Strelley v. Winson. 60, 62 Strickland v. Symons, Strong V. Harvey, 606, 607*, 609, 610 51 *Pa^e Strother v. Willan, 85 Stroud V. Gwyer, 162, 521, 524, 531, 618 Strutt, ex parte, 695 Stuart V. Lord Bute, 404, 503, 504 ». Ferguson, 698 Stubbs V. Sargon, 112, 118 Studdy V. Saunders, 87, 89 Stupart V. Arrowsmith, 467, 512 Sturgis V. Darell, 259 Sturt V. Hellish, 467 Sturton v. Richardson, 560 Styan, ex parte, 681 Sully, ex parte, 680 V. A. G., 394 Sumner?). Powell, 196*, 595 Sutton «. Clarke, 283 V. Gregory, 129, 169 -y. Tatham, 371, 372 Swan V. Bank of Scotland, 95 V. Steele, 169, 181* Swift v. Jewsbury, 138, 165, 179 ®. Winterbotham, 139, 165, 179 Swindell v. Bulkeley, 259 Swire v. Francis, 168 ®. Redman, 244, 251, 252 Syers v. Syers, 14, 22, 38, 555, 556*, 557 572 Sykes «. Beadon, 102, 104, 105*,'l06, 107, 108 Symes v. Hughes, 107 Taitt, ex parte, 692, 729, 730, 733 Tallis V. Tallis, 438* Tamplin v. Diggins, 063 Tanner's case, 24 Tanner v. Smart, 260 Tasker». Shepherd, 113*, 114 Tatam «. AVilliams, ' 363, 509* Tate, ex parte, 094 Tatlock ». Harris, 239 Tattersall ». Groote, 66, 454 Taunton v. Royal Insurance Co., 128 Taylor, ex parte (5 De G. M. & G.), 631 (12 Ch. D.), 37 (18 Q. B. D.). 629, 630 (8 De G. M. & G.), 74, 75 (Mon.), 679, 687, 688, 689* (2 M. D. & D.), G85, 700, 707, 732 (2 Rose), 737 n. Best, 72 V. Bowers, 106, 107 AUTHOEITIES REFERRED TO. ♦Page Taylor v. Crowland Gas and Coke Co., 95 V. Davis, 404, 420, 542 V. Dean, 495 V. Fields, 340, 359, 647 V. Hare, 65 D. Ilaylin, 514 V. Kymer, 234 v. Lcudey, 106 V. Midland Railway Co., 267, 270 t. Plurner., 162 V. Rundell (11 Sim. & Cr. & Ph.)i 503 (1 Y. & C. C. C. & 1 Ph.), 404, 503 «. Salmon, 464 V. Shaw, 512 (L. J. James, 7th March, 1873), 342 Teague v. Hubbard, 567, 569 Teasdalo v. Sander.son. 5 ), 60 Teed v. Elworthy, 295 Telet^raph Despatch Co. v. McLean 436 Telford v. Ruskin, 502, 503 Tempest, ex 2)arte. 629, 630 Tenant t\ Elliott, 107*, 108 Tench v. Roberts, 100 Tennant, ex parte, 13, 34, 38 Terrell, ex parte, 647, 728, 742 Terry v. Tcrrj', 619 Tew T. Earl of Winterton, 389 Thacker t\ Shepherd, 277 Thicknesse r. Bromilow, 130, 169 Thomas, ex parte, 631 V. Athertou, 129, 367, 378, 379, 387 V. Clarke, 147 v. Da Costa, 656 V. Edwards, 51 V. Frazer, 194 596 v. Shillibeer, 242 V. Thomas, 59, 567 Thomason v. Frere, 289, 659, 667% 668 Thompson, ex parte (1 Rose), 642 (3 Deac. & Ch.)," 726 (2 M. D. & D.), 723 t\ Andrews, 609 v. Brown, 225, 228, 234, 236 f. Charnock, 514 f. Cohen, 752 t}. Davenport, 177 %. Dunn, 508 i. Hudson, 228 «. Lack, 237 ■». Nat. Bank of Toledo, 43 Thompson ®. Percival, 242*, 243, 247*, 253 V. Ryan, 325 «. Speirs, 680 t. Waithman, 263, 597 x. "Williamson, 349, 380 Thomson t. Anderson, 548 V. Thomson, 104, 109 Thoinbury v. Bcvill, 93 Thorne v. Smith, 224 Thornton, ex pjarie, 716, 749 «. Dixon, 343*, 346, 347 T. Howe, 92 x. McKewan, 228 V. Proctei-, 383*, 467 Thorp V. Iloldsworth, 491 Thorpe, ex ptarte, 171, 703 V. Jackson, 596, 597 Thwaites t. Richardson, 128 Tibaldi v. Ellerman, 565, 567 Till V. Wilson, 639 Tinkler v. Walpole, 85 Titner, ex pjarte, 698 Tittenson 'c. Peat, 515 Tobin, ex ptarte, 642 Todd, ex imrte (De Gex), 738 (19 Q. B. D.), 654 T. Eraly, 50 V. Studholme, 151 ToUemache, re, 703 Tomkins ». Saffery, 629 Tomlins v. Lawrence, 136 Toovey v. Milne, 653 Tophan., ex pjarte (1 Madd.), 715 (8 Ch.), 629, 630 Topping, ex parte, 599 Torkington, ex farte, 633 Tosh T. North British Build. Soc, 12 ^o\\\m\x\, ex furte, 405 V. Copeland, 230, 404, 405, 417* 506, 518, 528, 537 Townend v. Townend, 528*, 615, 616, 617 Towns v. Mead, 258 Townsend r. Ash, 492 T. Crowdy, 566, 567 V. Neale, 276 Towushcnd «. Devavnes, 344* Travis v. Milne, 488, 494, 517, 522, 531, 610, 613, 618 Tredwen x. Bourne, 87, 90, 133 Troughton v. Hunter, 215, 426, 446, 544, 588 Troup's case, 390 Trueman, ex parte, 588, 670 AUTHORITIES REFEEEED TO. Ivii 'Trueman v. Loder, Tunley «. Evans, Tupper V. Foulkes, V. Haythorne, Turner, ex parte, V. Borlase, v. Burkinshaw, V. Corney, V. Dodwell, V. Hardcastle, *Puge 275 128 137 140, 673 734, 738 475 391 537 261 627 V. Major, 443, 448*, 478. 479, 527, 64J, 550 V. Morgan, 59 V. Key D all, 98 Turnev, ex 2^arte, 7 17* t'.' Bay ley, 404, 493, 504 Turquand, ex j)arte (2 M. D. & D.), 21, 65, 727*, 738 (14 Q. B. D.), G77 V. Vanderplank, 631, 665 «. Wilson, 501 'Twiss «. Massey, 692 Twogood, ex j)ai'te, G60 V. Swanston, 513 Twort V. Twort, 59 Twycross v. Grant, 595 Twyford v. Trail, 161 Tyrrell v. Hope, 574 Undekwood v. Nicholls, 136 ■Union Bank of Manchester, ex jyarte, 678 Unity Banking Association, ex parte, 75, 702 University of Cambridge v. Bald- win, 118 Upfill, ex parte, 636 Upton, ex parte, 729 V. Brown, 621 Urquhart v. Macpherson, 260, 490 Usborne, ex parte, 680, 685 Usher «. Dauncey, 187, 211* Yalpy v. Oakeley, 652 Van Sandau v. Moore, 462, 463, 571 Vardon, ex parte, 687 Varley v. Coppard, 336 Yarney v. Hickman, 106 Yaughan, ex parte, 745 V. Halliday, 712 10. Vanderstegen, 120, 439 Yaux, ex parte, 677 Yenables c. Wood, 14, 179 Yenning t. Leckie, 568 Yere v. Ashby, 89, 208, 285, 413 Yernon v. Hallam, v. Hankey, f. Jeffreys, V. Yawdry, Yice V. Anson, 440 668, 668 273 513 42, 87* 348 V. Fleming, 170, 171, 174, 210 Yickers v. Yickers, 432, 433 Yillars, ex parte, 358 Yiney v. Chaplin, 151 Yining, ex parte, 695 Yivers v. Tuck, 476 Yoguel, ex parte, 694 Yulliamy «. Noble, 47, 152, 199, 211, 292, 294, 461, 590, 596, 605, 006, 661, 662 Yyse V. Foster, 102, 200, 461, 504, 521, 523, 524,* 53 1,534*, 615, 617, 618 Wade v. Jenkins, 402, 421, 444, 448* Wadeson v. Richardson, 376* Wadmore v. Dear, 348 Wagner v. Imbrie, 753 Wagstaffe, ex jmrte, 657 Waimvright, ex ptarte, 756 i\ Waterman, 433 Wait, re, 340, 357, 359, 675, 695 Wakeham, re, 737* AValburn v. Ingilby, 504 Walker, ex jmrte (3 Deac), 715 r4 D. G. F. & J.), 336, 338, 698 T. Broadhurst, 418 V. Consett, 512 V. Harris, 64, 559 v. Hirsch, 10, 11, 14, 541, 544, 555 V. Jeffreys. 468 V. Mottram, 440, 052 V. Rooke, 267 Wallace i;. Kelsall, 136, 224, 269, 294 Waller «. Barrett, 594 V. Lacy, 227 Wallis, ex parte, 740 t. Hirsch, 453 V. Smith, 455 Wallworth «. Holt, 462, 463*, 498*, 499, 500 Walmsley ■;;. Cooper, 145, 2'^5, 237, 270 r. Walmsley, 405, 538 Walsham v. Stainton, 503 Walstab r. Spottiswoode, 24 Walter ». Lavater, 62 Walton V. Butler, 325, 329 Wanklyn v. Wilson, 505 Want i. Reece, 663 Iviii AUTHORITIES KEFEKRED TO. Ward, ex parte, V. ApiJrice, v. Ward, Wardc's case, Wardeu r. Jones, *Pftge 682 404 012 152, 199, 596 486 Warder v. Stilwell, 424, 466, 539, 543 Waring, ex parte, 653, Y12=^ V. Knight, 670 Warner v. Barber, 639 V. Cuuniueham, 575 V. Smith, "^ 351, 517 Warrant Finance Go's case, 228 Warwick v. Slade, 870, 371 Waterer v. Waterer, 331, 332, 333*, 340* Waterfall, &« parte, 255, 704* Waterlow v. Sharp, 132 Waters v. Paynter, 285 V. Taylor, 357, 452, 466, 544, 546, 558, 577, 580 V. Towers, 2fi7 Watkins, exjx-irte (Mont. & McA.), 734 (2 M. & A.), 680, 083 (4 D. & C), 683 (8 Ch.), 677 Watney i\ Wells, 390, 518, 521, 581 Watson, ex parte (Buck, and 4 Madd.), 728, 741, 742 (12 Ch. D.), 639 (16 Ves.), 40, 75 (19 Ves.), 31 (2V. &B.), 161 V. Black, 848 V. Charlemont, 86, 482 V. Bales, • 426 V. Mid- Wales Railway Co., 296 V. Spratley, 848 V. Woodman, 263 Watters v. Smith, 224, 225 Watts V. Brookes, 97, 104, 388 v.. Christie, 293, 659, 660* V. Rees, 290 Waugh V. Carver, 25, 27*, 31, 35, 36, 40*, 42, 197 Way V. Bassett, 262*, 510 Weaver v. Prentice, 85 Webb, re, 382, 387 T. Ledsam, 218 Webber v. Tivill, , 259, 288, 509 Webster, ex parte, 703 V. Bray, 84, 349, 350, 380, 391, 477* . v. Webster, 47, 211, 217, 445* 005 *Page- Wedderburn v. Wedderbiirn, 443, 444, 489*, 512, 516, 517, 5l9, 533*, 614% 017 Wcikersheim's case, 112, 141 Weir V. Bell, 163- Weldon t\ Dicks. 113 Welford v. Liddel, 508 Wellcome's Trade Mark, re, 447 Wells V. Masterman, 171 t\ Wells, 564 v. Williams, 73 Welsh, ex parte, 039 Wenlock (Baroness) v. River Dee Co. 191, and see Addenda Werderman v. Societe Gfinerale d'Electricite, 436 West i\ Baker, 643 V. Skip, 340, 352, 353, 382, 518, 647, 682, 088 Western Bank of Scotland v. Nee- dell, 213 West of England Bank, re, 102 West of England, itc. Bank v. Murch, 341 West Riding Union Banking Co., ex parte, 715, 71 7 Westcott, ex parte, 724, 738 Weston n. Barton, 118 Weymouth t. Boyer, 400 Wharton r. ]\[ay, 513 Whately r. Menheim, 90 Wheatley, ex parte, . 190, 703 V. Westminster, &c., Coal Co., 453 Wheeler, ex parte, 334, 337* 699* V. Home, 59, 01 V. Van Wart, 122* 400, 461, 571 Whetham v. Davey, 364, 461, 493, 517 Whincup V. Hughes, 65, 66, 67 Whinuey i'. Colonial Bank, 678 Whitcomb v. Whiting, 200, 201 White, ex parte, 100, 702 V. Ansdell, 503 V. Barker, 502 V. Barton, 505 V. Williams, 136 Whitehead v. Barron, 207 t. Hughes, 271, 289, 670 Whitley v. Lowe, 508, 511, 554 Whitmore, ex parte, 208*, 249, 254, 704* V. Empson, 078 n. Gilmour, 052 "0. Mason, 433, 648* Whittaker v. Howe, 430. 478, 479, 54 i AUTHORITIES REFERRED TO. lix *Pagre Whittingstall v. Grover, 599 Whittle V. McFarlane, 380 Whitwell v. Arthur, 578 V. Perrin, 178, 25-i, 257 Whitworth, ex- j)arte^ 230 V. Davis, 493 Whyte V. Ahrens, 508, 5J4 Wickham i\ Wickham, 128, 146, 227, 235* Wieland, ea;par^e, 634 Wier V. Tucker, 508 Wightman v. Townroe, 28, 593, 604 Wilbeam, or Wilbran, ex parte, 636 Wild V. Milue, 55, 555, 550, 557, 558 Wilde V. Keep, 185 Wiles «. Woodward, 563 Wilkinson, e^l^ar^e (18 Sim.), 680 (22 Ch. D.), 629 V. Frazier, 19, 29* V. Haygarth, 59, 60 V. Henderson, 460, 494, 596, 597 V. Page, 454 V. Torki;i2;to;i, 476 Wilks V. Back, 177 Willesford v. Watson, 458 Willett V. Chambers, 151*, 156 I V. Blandford, 521, 525, 617 Williams, re (36 Ch. D.), 709 ex parte (Buck), 208, 705 (3 M. 'D. & D.), 721, 727*, 730 (11 Ves.), 217, 334, 337*, 352, 583, 587, 588, 087, 698, 700 V. Barton, 61, 5G2, 568 v. Beaumont, 278 i\ Bingley, 542 i\ Griffiths, 227, 509 V. Jones, 81, 100, 102*, 202, 412 V. Keats, 89, 214, 210*, 217 «. Mudie, 85 V. P%e, 467 V. Powell, 531, 615 V. Prince of Wales's Life Co., 504 i\ Rawlinson, 227 230 i\ Rowlands, 425, 552, 553*, 555, 557, 558, 578* ■?'. Salmond, 463 V. Thomas, 186 V. Williams (2 Swanst.), 437* (1 Wils. Ch.), 478 (2 Ch.), 81, 85, 331 Williamson v. Barbour, 142, 143, 267, 513 V. Johnson, 185* Willis V. Bank of England, 141 *Page Willis v. De Castro, 237 V. Dyson 170, 175, 210 V. Jeruegan, 512 Willison V. Patterson, 72, 73 Willmott V. London Celluloid Co., 628 Willock, ex parte, 733 Wilmer v. Currev, 197*. 595 Wilsford «. Wood, 88', 285' Wilson, ex parte (7 Ch.), 719, 748 (2 Deac. and 3 M. & A.), 670 (4 Deac. & Ch.), 678 (2 Jur.), 716 (1 M. D. & D.), 645 (3 ib.), 192, 702 V. Bailey, 173 V. Barthrop, 181 v. Church, 576- V. Cuttmg, 566 V. Greenwood, 218,429, 433, 493, 517, 551, 553, 554, 555*, 556, 557, 559, 587, 647 'i\ Hurst, 234 V. Johnstone, 66, 68*, 69 V. Lewis, 22, 173 V. Lloyd, 239, 248, 251, 254, 597 ■v. Moore, 162, 200, 617 V. Northampton, &c., Railway Co., 503 v. Stanhope, 463, 499' V. Tumman, 148, 206 T. Wliitehead, 14, 144, 179, 203*, 328 Winch v. Keeley, 289, 652 Windham v. Paterson, 635 Wiugtield, ex parte, 677, 683 Winter v. Innes, 250, 253, 262*, 510, 596, 597 Winterbottora, ex parte, 626 Wintle V. Crowther, 169, 181 Wish «. Small, 29 Withington ». Herring, 13, 28 WoK'e V. Ilorncastle, 372 Wood, re (7 Ch.), 627, 628 , ex parte (De Gex), 691* (1 M. D. & D.), . 637 (2z6.), 730- (4 De G. M. & G.), 677 (10 Ch. p.), 337, 629, 699 V. Argyll, 24, 44*, 89, 90 «. Braddick, 128, 240 V. Dodgson, 741, 752* V. Finch, 50 v. Scoles, 402, 403, 421 V. Wilson, 454 «. Woad, 408, 420, 487, 575. ]x AUTHORITIES REFERRED TO. *Page "Woodbridge v. Swann, 672, 674 "Woodford, e.r p. Cilley, 105 Bancker ®. Harrington, 325 Bank v. Carrolton Railroad, 624 «. Donaldson, 881 f. Towle, 625 Bank of Alexadria «. Mandeville, 165 Bank of Commerce v. Selden, 266 Bank of Commonwealth v. M udgell. 366 , 368 Bank of Kentucky v. Brookir S' 181 V. Herndon, 571 , 602 Bank of Louisville v. Hall, 610 Bank of Mobile v. Anderson, 994 Bank of N. Y. t. Yanderhorst, 147 Bank of Port Gibson v. Paugh, 355, 999 Bank of Rochester «. Monteath, 146, 210, 296 Bank of St. Albans v. Gilliland, 182 Bank of S. C. v. Humphreys, 255, 356 Bank of Yergennes v. Cameron, 62 Bank of Wilmington v. Almond, 891 Bankhead v. AUoway, 223 Banks x. Mitchell, 946 AMERICAN AUTHORITIES CITED. Ixvii Page Page Barber v. Mann, 280 Beardsley v. Tuttle, 216 V. Smith, 432 Beaston v. Harris, 225 Barclay's Appeal, 1036 Beatty v. Ambs, 310 Barcroft v. Ilaworth, 120 V. Wray, 648 V. Snodgrass, 222, 1023 Beauregard v. Case, 16, 497 Barfield v. Longborough, 665 Beaver v. Lewis, 646 Baring v. Crafts, 285 Beck V. Martin, 171 V. Lyman, 171 , 664 , 932 Becker v: Boon, 176, 354 Barker v. Blake, 199 Beckham v. Peay, 196, 199, 355 BarloAV v. Coggan, 1009 Beckley v. Munson, 625 V. Reno, 445 Beckwith v. Talbot, 14 t\ Wiley, 469 Bedford v. Deakin,, 403 Barnard v. Lapeer, 220 Beebe v. Rogers, 296 Barnes v. Elmbinger, 455 Beecham i\ Todd, 103 Barnet v. Watson, 471 Beecher v. Bush, 2, 23 Barnett v. State, 233 Beeves i\ Ayers, 574 Barney v. Currier, 218 Belcher v. Conner, 81, 138 Barnstead v. Empire Mining Co, 814 Bell V. Crosby, 453 Barrett, ex parte, 1081 V. Donohoe, 779 Barrett, re, 209 V. Faber, 167 V. Russell, 280 ®. Hare, 20 V. Swann, 179 V. Hudson, 785 Barringer v. Sneed, 355 V. Locke, 746 Barry v. Barry, 171 , 881 , 941 V. Massey, 318 V. Briggs, 586 V. Morrison, 354 v. Foyles, 308 v. Newman, 338 Bart's Appeal, 515 Bellis, ex farte. 1202 Bartles v. His Creditors, 397 Bellows, ex parte. 1200 Bartlett v. Parks, 821 Belt V. Mehen, 850 Barton «. AVilliams, 185 Belton «. Fisher, 490 Bascom v. Young, 179 Bemis 'c. Becker, 226 Bass V. Estill, 1015 Benedict v. Davis, 55, 56 V. Taylor, 358 , 618 «. Hettrick, 20 Basset v. Miller, 586 ■y. Thompson, 188 Bassett «. Shepardson, 337 Benjamin v. Covert, 106, 344 Bataille v. Bataille, 927 Bennet, exfarte. 733 Bates V. Ualliday, 200 Bennett, re^ 1070 Battle V. Street, 241 v. Buchan, 360 Baxter, re, 1195 V. Cadwell, 757 V. Clark, 222 , 285 V. Marshall, 358, 445 v. Rodman, 20 V. Russell, 644 Bays V. Con over, 258 ». Scott, 461 Beacaunon v. Liebe, 946 V. Snyder, 621 Beacb «. Haysvard, 487. 1004 V. Stickne}', 443, 444 v. Hotchkiss, ' 918 , 929 , 942 V. Woolfolk, 818 V. Ollendorf, 209 Benniger v. Gall, 818 V. State Bank, 296 Benninger v. Hess, 261 V. Vandewater, 109 Benson ?\ Ela, 1017 Beacham v. Eckford, 666, 669, 6P1, V. Kincaid, 390 693 r. McBee, 29, CO Beal V. Snedicor, 448 Bentley v. Harris, 820 Bcall V. Poole, 109 V. Smith, 150, 432 Beaman i\ Whitney, 223 Benton «. Chamberlain, 3-12 Beau V. Gregg, 929 V. Roberts, 102, 188 Beurdsley, ex parte, 1088 Bentrin v. Zicrllen, 206 Ixviii AMERICAN AUTHORITIES CITED. Pa^e Berkshire "Woolen Co. v. Juillard, 146, 2S2 Bernard v. Parvin, l^l, 453 V. Torance, 107, 341, 340. 399, 405 V. Wilcox, 480 Bernie v. Vandever, 854 Bernstein ex parte, ' 1200 Berry v. Folkes, 229 r. Jones, 648 V. Kelly, 580 V. McLean, 756 V. Powell, 497, 859 Berryhill v. McKee, 181, 355 Berthokl v. Goldsmith, 44 Beste V. Creditors, 229 Bethel r. Franklin, 924 Bethell )■. Wilson, " 819 Betts V. June, 1000 Be van v. Allee, 1015 Bevans v. Sullivan, 644, 805 Bewley v. Tarns, 283 Biddle v. Moore, 605 Bieman v. Braches, 928 Bigelow, ex parte, 1176 r. Elliott, 28, 40 Billings V. Meigs, 276 Billingslea v. Ware, 850 Billingsley v. Dawson, 148 Bininger v. Clark, 744, 746, 747 Binney v. Legal, 446 V. Yoimg, 319 Birchett v. Boiling, 796 Bird V. Hamilton, 694 V. Lanius, 2T6 V Morrison, 561, 563 Birddall v. Colie, 902 Birdsall v. Bemiss, 237 Birks V. French, 227 Bischoffsheim v. Baltzer, 998 Bisel r. Ilobbs, 118, 222, 285 Bishop V. Austin 476 v. Breckles, 157, 958, 962 V. Georgeson, 107 T. Hall. 114, 462 Bispliam v. Patterson, 355 Bissell V. Ames, 819 V. Carville, 446 V. Harrington, 102 Bitzer v. Shunk, 446 Bjornstad, re, 1204 Blachlev v. Coles, 522 Black's ^appeal, 562, 1015 Black r. Black, 566 V. Bush, 275, 571, 1024 Page Black 1). Seipt, 561, 568 T. Struthers, 488 Blackburn v. McCallister, 203, 206 Black well v. Dibrell, 532 T. Rankin, 1017 V. Beid, 432 Blair «. Johnston, 189,661 V. Snover, 401 Blake v. Dorgan, 815, 974 V. Sweeting, 336 Blaker v. Sands, 228 Blanchard v. Coolidge, 19 Blin V. Pierce, 459, 473 Blinn v. Evans, 191 Bliss V. Swartz, 321 Bloch r. Price, 365 Blodgett V. xVmerican Bank, 1040 V. Weed, 179, 261 Blue V. Leathers, 29 Blumenthal, re, 35 Boardman r. Close, 644, 693 T. Gore, 101, 179, 180, 234, 243 Bodenham v. Purchas, 382 Bodwell r. Eastman, 229 Bogereau v. Gucringer, 318, 357 Bohrer v. Drake, 14 Boisgerard v. Wall, 7, 436, 715 Boling V. Anderson, 218 Bolton, ex parte, 1157 Bonbonus, ex parte, 270 Bond V. Aitkin, 205, 206, 207 V. Hays, 937 V. Nave, 117, 171, 1015 T. Pittard, 4 Bonis V. Louvnier, 660 Bonnaffee v. Fenner, 108 Bonne v. Kay, 490 Bonnell v. Chamberlain, 113 Bonner v. Campbell, 103 Bonney v. Stuughton, 918 Book, ex parte, 1200 Bookout V. Anderson, 909 Boolt). Caldwell, 111 Boone v. Sirrine, 372, 990 Booth V. Farmers*, &c. Bank, 652 Boothroyd, re, 1204 Boro V. Harris. 1026 Bosanquet, ex parte, 207 Boston & Colorado Smelting Co. V. Smith, 25 Boswell V. Dunning, 453 V. Green, 162 Bourne v. Freeth, 327 V. Woodbridge, 269 Bowen v. Crow, 46& AMERICAN AUTHORITIES CITED. Ixix PilgO Bowen d. Sutlierlin, 448 Bower v. Douglass, 356 Bowker v. Bradford, 97 Bowler v. Huston, 444, 449 Bowling V. Dobyns, 608 Bowman v. Bailey, 29 V. Cecil Bank, 181 V. Floyd, 124, 748, 1035 V. O'Reilly, 850 V. Spalding, 397 Bowns V. Pioneer Tow Line, 42 Bowyer v. Knapp, 405 Boyce v. Brady, 23 V. Burchard, 904 V. Coster, 680 V. Watson, 171 449 Boyd V. Brown, 927 ti. Emerson, 176 V. Foot, 839 V. McCann, 853, 370 V. Mynatt, 838 V. Plumb, 211 v. Webster, 382 Boyers v. Elliott, 108 541 503 Boylan, ex jxtrte, 1202 Boyle V. Hardy, 851 Bracken v. Kennedy, 810 942 943 V. JNIarch, 221 Bradbury v. Barnes, 520 624 Bradford v. Kimberly, 644 Bradle}^ v. Camp, 341 V. Chamberlin, 705 V. Linn, 179 V. AVhite, 19 Bradner v. Strang, 254 Bradshaw v. Apperson, 28 Brady i\ Hill, 355 Braithwaite v. Britain, 404 Braley v. Goddard, 48 Brandon v. Robinson, 738 Brasfield v. French, 415 Brazee v. Poyntz. 208 , 418 Breckenridge v. Shrieve, 188 Bredow v. Mut. Savings Institution, 354 Breen r. Richardson, 209 Breneman, ex parte, 1061 Brent v. Davis* 264 Brewer v. Worthington, 759 Brewster v. Ilamett, 609 V. Hardeman, 162, 355 V. iMott, 272, 848 Brickhouso r. Hunter, 686, 833 Bridge v. Gray, 173 i\ McCullough, 1015 Bridge v. Swain, Brien v. Herriman, Briggs V. Smith, Brigham v. Clark, V. Dana, Bright V. Sampson, Page 585 964 230 21 14, 15, 651 448 Brink v. New Amsterdam Fire Ins. Co., 32, 100, 175 Brinley v. Kupfer, 856 Brisban v. Boyd, 348 Bristol V. Sprague, 347 Bris waiter v. Long, 1074 Broaddus v. Evans, 229, 1025 Brock V. Bateman, . 1018 Brockenbrough v. Hackley, 426 Brock way v. Burnap, 19 Broda v. Greenwald, 850 Brooke v. Evans, 304 V. Washington, 286, 506 Brooks «. Martin, 138, 511 Brown's appeal, 647, 670 Brown, ex parte, 1200 Brown, Matter of, 905 V. Agnew, 939 V. Birdsall, 472 'c. Broach, ,848 «. Chancellor, 361 V. Clark, 844 V. Crandall, 106 V. Fitch, 285 V. Haven, 436 «. Haynes, 265, 715 v. Higginbotham, 41, 354, 986 ■y. Jewett, 97 V. Lang, 1013 V. Lawrence, 200 «. Litton, 671 V. Marsh, 890 V. McFarland, , 648 V. Rains, 116 ®. Schackleford, 675 Brown son v. Metcalfe, 151, 434 Bruen v. Marquand, 209 Brush V. Mandrell, 920 Bry V. Cook, 884 Bryan r. Tooke, 255 Bryany v. Hawkins, 373 Bryce v. Jovnt, 112 Bryden-y. Taylor, 110 Bryor v. Weston, 108 Buchan v. Sumner, 559, 563, 1016, 1168 Buchanan v. Cheeseborough, 760, 956 V. Curry, 176 Ixx AMERICAN AUTHORITIES CITED. Pasjo Page Buchoz V. Grand jean, 175 Burtus v. Tisdall, 572, 988 Buck V. Mosley, 209 Burwell v. Mandeville, 337, 838, V. Smith, V05 994 i\ Winn, 1022 v. Springfield, 20» Buckhasfic, re, 1167 Busby V. Chenault, 652, 1018 Buckingham r. Burgess 55, 490 Bush t\ Cooper, 1200 V. Ilanna, 621 V. Guion, 691 V. Ludlum, 660, 670, 1017 V. Sinthicum, 94 Buckley v. Buckley, 566 Bushfield v. Wheeler, 564 V. Carlisle, 943 Butcher v. Auld, 881 Bucklin v. Bucklin, 395 Butler V. Barleson, 893 Buckiier v. Calcote, 488 V. Finck, 20, 103 V. Lee, 41 '0. Henry, 68 V. Keis, 693, 931 T. Lemley, 644 Buffalo City Bank v. Howard, 341, t\ Stocking, 211 304 Butterfield v. Hemsley, 206 Buftum V. Buffiim, 2, 108, 563 Button V. Hampson, 203, 206 i\ Searer, 1025 Buxton V. Edwards, 399, 479 Bufkin V. Boyce, 900 f. Sister, 703 Buford V. Neeley, 644, 822 Bybee v. Hawkett, 73 Bulfinch V. Winchenback, 06 Byers p. Bourret, 432 Bull V. Harris, 185 Byingtou v. Gaff, 223 v. Schubert, 19 Byrd r. Fox, 917, 929 Bullock V. Hubbard, 1026 Bja-ne, ex jxirte, 1175 Bull's Head Bank v. McFeeters, 126 1). Schwing, 436 Bumpuss v. Webb, 938 Bum son v. Morgan, 205 C. M. Ixs. Co. V. Ligon, 415 Burbank v. Haas, 55 Cabaniss v. Clark, 601 Burcharcl i\ Boyce, 774, 832 Cadwallader t\ Krolsen, 201 Burckle v. Eckhart, 19 Cady 1). Sheperd, 205 Burdilt T. Grau, 935 v. Smith, 433 Burgcn v. Dwinal, 468 Cahoon v. Hobart, 345 Burgess t\ Lane, 53, 112 Caldwell v. Davis, 806 Burgwin v. Hastier, 488 t\ Leiber, 557, 644 Burleigh v. Partou, 219, 265 V. Scott, 228, loir Burley v. Harris, 437, 941 «. Sithens, 301 Burnell r. Weld, 480 V. Stileman, 338, 995, 1011 Burnett t\ Snyder, 44, 63, 64 Calk V. Orear, 418 v. Sullivan, 450 Callender v. Swett, 111 Burney v. Boone, 932 Calloway v. Tate, 836 Burnhara v. Hopkinson, 944 Calvin v. Markman, 437, 946 T. Whittier, 198 Camblat t\ Tupery, 884 Burnley «. Rice, 188, 285 Cameron v. Blackman, 224 Burns V. Hall, 150, 432 V. Carrilo, 1007 V. McKenzie, 355 V. Francisco, 644, 647, 048 V. Nottingham, 929 T. Watson, 688, 708, 883 Burnside v. Savier, 1000 Cammack r. Johnson, 1020 Burpee r,. Bvmn, 506, 1016 Camp r. Eraser, 415, 1008 Bun- v. De La Vergne, 522 v. Page, 200 V. JVIorrison, 454 Campbell, e.v j)arte, 1200 V. Williams, 850 V. Bowen, 264, 535 Burrill v. Acker, 614 v. Dent, 19 Burt V. Lathrop, 07 T. Hastings, 55, 58, 00, 106, 113 Burton v. Ferris, 287 V. Lacock, 757 Burton v. Goodspeed, 19 r. Matheus, 375 AMERICAN AUTHORITIES CITED. Ixxi Page Page Campbell v. Steward, 657 Chamberlain v. Bancroft 356 V. Traders' Bank, 1058 V. Chamberlain, 525, 562, 563 v. Whitley, 115 V. Dow, 350 Canada v. Barksdale, 15 V. Walker, 927 Candler v. Stange, 864 Chamberlin v. Prior, 251 Canfield v. Hard, 836 Chambers v. Grout, 105 Cannon v. Copeland, 776 Chambus v. Clearwater, 233 Capeile v. Hall, 2C0 Champlin v. Tilley, lis Capen v. Barrows, 920 Chance r. Chambers, 434 Cargill v. Corby, 280 Chandler v. Sherman, 166, 859 Carillon v. Thomas, 610 Channel v. Fassitt, 621 Carithcrs r. Jarrell, 509 Chapin v. Clemitson, 515 Carlin v. Doneiian, 661 857 Chapman v. Beach, 977 Carlisle v. Mulhern, 559 V. Devereux, 4, 287 V. Tenbrook, 657 v. Forsyth, 1200 Carlton v. Cummings, 951 V. Lipscomb, 13 V. Ludlow Woolen Mills 106 V. Wilson, 4 Carmicbael r. Grier, 5.' ), 58 366 Chardon v. Oliphant, 355 Carroll v. Evans, 981 Charles v. Estleman, 171 Carper i\ Hawkins, 354 857 Charman v. Henshaw, 120 Carr v. Gale, 1200 V. McLane, 209 Carrier r. Cameron, 179 Chase v. Bean, 268 Carroll v. Gayarre, 173, 426 11. Deming, 471 Carter v. Adanison, Y58 940 V. Garvin, 806, 941 V. Allen, 1024 «. Kendall, 354 V. Beaman, 271 V. Scott, 580 V. Christie, 935 V. Steel, 506, 1016 V. Currie, 485 V. Vaughan, 395 V. Douglass, 106 Chazournes v. Edwards, 268 v. Pomeroy, 219 Cheeseman v. Sturges, 862 V. Whalley, 365 Chemung Bank r. Ingrah am, 293 Carthaus v. Ferres, 175 Cheney, ex parte, 1200 Casco Bank v. Coles 351 Chenowith v. Chamberlin 181 Case V. Beauregard, 247 574 Chester v. Dickerson, 102, 103, 123, V. Cushraan, 399, 757 234, 306 V. Maxey, 935 Chidsey «. Porter, 113 Casey v. Carver, 200 Child V. WofFord, 286 Cash V. Tozer, 446 Childress v. Emory, 145 Cassidy v. Hall, 34 Child s V. Hyde, 488 i\ Metcalf, 738 Chippendale, ex parte, 665 Castle V. Bullard, 237 Chisholm v. Cowles, 68 V. Reynolds, 358 999 Chittenden v. German American Castly 1). Towles, 816 Bank, 214 Caswell V. Cooper, 923 Chopin V. Wilson, 607, 618 Casy «. Williams, 922 Christian v. Crocker, 19 Catlin 1). Gilders, 168 V. Ellis, 209, 1016, 1022 Catskill Bank v. Messenger, 391 Christy v. Sherman, 445 V. State, 182 Church®. First National Bank, 194 Causter v. Burke, 944 V. Sparrow, 190, 191 Cayton v. Hardy, 167 Cilley V. Huse, 503 V. Walker, 847 Cirkel v. Ellis 55, 58 Chadsey v. Harrison, 941 Citizens' Bank «. Cass, 1072 Chaffin V. ChafBn, 409 Citizens' Mutual Ins. Co. V. Ligoo, 413 Chaffraix v. Laffitte, 42 City Bank of Brooklyn v. McChes- V. Price, 19 ney, 367 Ixxii AMERICAN AUTH0KITIE8 CITED. I'age City Bank of New Haven's Appeal, 471 Cladwell v. Palmer, 559 Claflin V. Hirsh, 82 Clagett V. Kilbourne, 7, 506, 609 Clancy v. Craine, 102 Clapp r. Rogers, 368 V. Upson, 345 Clark V. Billings, 398 V. Clark, 926 V. Dearborn, 260 V. Dibble, 929 V. Gilbert, 19 V. Gridley, 859 V. Holmes, 287 V. Houghton, 283 V. Howe, 487, 584 V. Hyman, 211 V. Lyman, 611 V. McClelland, 177 V. Miller, 459 «. Rives, 162 V. Stoddard, 175, 448, 450 V. Warden, 665 Clarke's appeal, 937 Clarke v. Hogeman, 198 v. Holmes, 470 V. Mills, 938 Clarkson v. Carter, 459 Clay V. Cottrell. 266 Cleghorn v. Johnson, 119 Clement v. Brush, 205, 208 V. Clement, ' 345 Clements v. Jessup, 565 1). Mitchell, 114, 651, 883, 992 Cleveland v. Woodward, 459, 473 Cline V. Wilson, 586 Clough i\ Iluffmau, 756, 924 Cobble V. Tomlinson, 583 Cochran t. Cunningham, 436 V. Perry, 979 Cochrane v. AUen, 930 V. Quackenbush, 466 Cocke v. Branch Bank. 1 Cockroft V. Clafliu, 211 Coder «. Huling, 516 Codding, re, 567 Coddington v. Hunt, 342. 368 T. Idell, 516, 644, 666 Cody V. Cody, 979 CofiBn V. Jenkins, 20 V. McCullough, 604 Coffing ;•. Taylor, 631 Cogswell V. Davis, 349 Page Cogswell V. Wilson, 105 Colby V. Ledden, 1200 Cole V. Pennell, 469 V. Reynolds, 849 Colehour v. Coolbaugh, 863 Coleman v. Coleman, 940 V. Lansing, 757 V. Marble, 786 V. O'Neil, 251 Coles 1). Coles, 559 , 566 Colgin t\ Cummins, 67C , 672 Colgrove v. Tallman, 375 Collamer v. Foster, 945 Collier, re, 1175, 1178 V. Cross, 112 , 179 Collins v. Barrett, 464 ». Butler, 506 , 546, 1016 V. Decker, 561 V. Hood. 1024, 1065, 1173 Collomb V. Caldwell, 1023 Collum V. Read, 560 Collyer v. Collyer, 856 i\ Moulton, 397 Combs V. Boswell, 201 Commercial Bank v. Lewis, 60, 181, 817 1). Warren, 220 T. Wilkins, . 49, 339 Commonwealth v. Bennett, 19 Como T. Port Henry Iron Co., 366 Comstock V. Buchanan, 519 v. White, 722 Conant «. Frary, 625, 1016 Condrey v. Gilliam, 842 Conery v. Hayes, 63, 355 Couklin V. Barton, 107 V. Osborn, 356 Conkling i\ Washington Univer- sity, 1016, 1168 Conley v. Good, 468 Connor v. Allen Harr, 999 Conroy v. Woods, 570 Consolidated Bank v. State, 24, 82 Const v. Harris, 166 Converse v. McKee, 1016 V. Shambaugh, 117 Cony V. Wheelock, 6, 357 Cook, ex parte, 1200 t: Beech, 461, 532 V. Bloodgood, 200 r. Carson, 1001 V. Castner, 226 T. Frederick, 120 v. Jenkins, 632, 890 Cook r. Penrhyn, 113 AMERICAN AUTHORITIES CITED, Ixxiii Page Cooke, ex parte, 733 V. Allison, 192 V. Batchellor, 464 Cookingham v. Lasher, 287 , 470 Cooley V. Sears, 467 Coonlev V. Wood, 391 Coons V. Renick, 229 Coope V. Bowles, 181 Cooper's aiipcal. 1026 Cooper V. Burns, 62 V. Frederick, 650 , 859 V. McClurkan, 260 V. Merriherr, 647 , 648 i\ Reid, 647 , 648 Coorci's appeal, 1026 Copcutt V. Merchant, 1011 Cope's appeal. 1026 Corbett, re^ 1204 Corbin v. McChesuey, 200 Corey v. Perry, 1201 Coruwell v. Sandidge, 332 , 602 Corps V. Robinson, 170 , 172 Corwin v. Suydam, 229 Coster V. Tank of Georgia, 505 507 «. Clarke, 1025 Cothran v. Marmaduke, 20 Cottle V. Harrold, 214 V. Leitch, 819 , 976 Cotton V. Evans, 265 Couillard ?'. Eaton, 920 Course v. Prince, 945 Coursen's appeal, 515 Coursen v. Hamlin, 644 Coursey v. Baker, 179 Cowan V. Iowa State Ins. Co., 581 Cowell V. Sikes, 404 Cowles, exjmrte, 1058 V. Garrett, 69 Cox V. Bodfish, 6 V. Delano, 15 ■». Harris, 433 ■)}. Peters, 902 V. Russell, 943, 1024 Cragiu v. Carleton, 112 Craig V. Alvcrson, 173 V. Henderson, 498 V. Smith, 450 Cram v. Cad well, 196 Cramer v. Bachmau, 645 Crandall v. Denny, 150, 432 Crane v. Morrison, 1203 « French, 445 Crary v. Williams, 33 Crawford v. AustiD, 10 Crawford r. Baum^ 1026 Crawford v. Collins, Crawshay v. Collins, v. Maule, Creel v. Bell, Cregler i). Durham, Creswell «. Blank, Crites «. Wilkinson, Crocker v. Colwell, Crockett, ex parte, V. Grain, Croit, re, Crompton v. Conkling, Cronkhite v. Herrin, Crook V. Davis, Crooker v. Crooker, Croone v. Bireus, Cropper v. Coburn, Crosby «. McDermitt, V. Nichols, 145 587, 671, 684, 1002 159, 337, 958 443 345, 952 489, 1011 228 297 1054 1016 1203 1072 990 60 597, 1016 604, 605 506 922 190, 565 Cross V. Burlington Nat. Bank, 331 V. Langley, 117 Crossley v. Taylor, 939 Crosthwait v. Ross, 188 Crottes V. Frigerio, 942, 943 Croughton v. Forrest, 275, 516 Crow t\ Green, 917 V. Weidner, 1000 Crowell V. Western Reserve Bank, 119 Crum V. Abbott, 331 Crumless v. Sturgess, 173 Crutwell V. DeRossett, 209 Cuille V. Gasseu, 94 Culberston v. Tovvrnsend, 491 Culley «. Edwards, 25 CuUum «. Bloodgood, 162,216 Cummings v. Carsily, 203 V. Mills, , 18 Cunhff V. Dyerville, &c. Co., 644, 646 Cunningham v. Bragg, 356 V. Gushee, 988 V. Littltfield, 815 V. Smith, 882 'V. Smithson, 296 V. Sublette, 226 Currier i\ Hale, 933 •v. Rowe,. 929 v. Silloway, 116 V. Webster, 925 Curry v. Fowler, 45 V. White, 348 Curtis V. Belknap, 459 Curtiss V. Hoyt, 605, 790 V. Woodward, 1201 Ixxiv AMERICAN AUTHORITIES CITED. Pai^e Gushing v. Marston, 461 V Smith, 290 Cutler V. Iloke, 214 Cutts V. Gordon, 4G9 Dait.y t. Coons, 55, 58 Dakin v. Graves, 930 Daltou City Co. v. Dalton Manuf. Co., 24, 98 V. Hawes, 41 Daly V. Ericson, 584 Dana v. Couant, 269 Daniel v. Daniel, 255 V. Nelson, 355 Daniels, ex pai'te, 166 Darling v. March, 259, 358 Darlington ^•. Gai-rett, 194 Davenport v. Gear, 941 V. Runlett, 266 David V. Ellis, 403 Davidson v. Kelly, 180, 418 V. Knox, 450 V. Wilson, 884, 885 Davis, ex parte, 1058 v. Abbott, 467 v. Allen, 345 V. Berger, 175 V. Blackwell, 168, 211 V. Briggs, 860, 512, 933 V. Buchanan, 433 V. Christian, 337, 566, 994 V. Church, 486, 487 V. Cook, 179, 223 V. Hubbard, 151, 432 T. Keyes, 371 V. Merrill, 934 •0. Richardson, 191, 2.55 T. Smith, 258, 566 V. Willis, 366 Davis' Estate v. Desauque, 405 Davison ^^ Holden, 7 Day t\ Lafierty, 206 V. Lockwood, 660 V. Perkins, 566 T. Stevens, 23 V. Wetherly, 409 Dayton v. Wilkes, 738, 821 Dean v. McFaul, 373 V. Savage, 468 Deardorf v. Thacher, 188 DeBeronger v. Hammel, 978 DeBerkon v. Smith, 270 DeCacessey «. Bailey, 1018 Decker v. Howell, 15 Deckert v. Filbert, 360 Deere v. Plant, Deeter v. Sellers, Deford v. Reynolds, DeGreiff v. Wilson, DeGrott t. Darby, Deitz V. Rcgnier, DeJarnette v. McQueen, DeLeon v. Trevins, Delmonica v. Guillarae, Deming v. Colt, Demoss v. Brewster, Demott 1). Swain, Denis v Saunders, Denithoru v. Hook, Denman v. Dosson, Denny v. Cabot, v. Metcalf, Page 332, 736- 269 340, 345 477 460 192 939 124 564 177, 216, 56^ 448 359, 448 43 109 364, 366 20 437 Densmore Oil Co. v. Densmore, 519, 520 Dent V. Slough, 247, 823 Denton v. Brown, 94 V. Erwin, 855, 882 Denver r. Roane, 647, 648 Derby v. Gage, 911 V. Gallup, 227 Desha v. Holland, 459, 471 V. Smith, 664, 665 Dethlefs v. Samson, 586 Deval V. Mcintosh, 757 Devall V. Burbridge, 513 Devaynes v. Noble, 474 Deveau «. Fowler, 902 Devenney «. Mahoney, 561, 564 Devin v. Harris, 280 Devine v. Mitchum, 559, 566 Devoss i\ Gray, 67 Dewey v. Dewey, 564 Dewit V. Stauiford, 942 Dexter v. Arnold, 665, 672 De Zeng «. Bailey, 391 Dial V. NeuSer, 97 Dibblee, ex parte, 1057, 1063 Dickinson v. Bold, 158, 700 V. Dickinson, 341, 366, 910 V. Granger 932 V. Lcgare, 183, 207 V. Valpy, 327 Dickson v. Alexander, 222 Diggs T. Brown, 568 Dillon t\ Brown, 207 Dils V. Bridge, 13 Dilworth V. Mayfield, 568, 776 Dimond v. Henderson, 670, 672, 691 Dinham v. Bradford, 066 D'Invilliers' Estate, lOia AMERICAN AUTHORITIES CITED. Ixxv Piio;e Dishou V. Schorr, 222 Ditts i'. Lonsdale, 179 Dix V. Otis, 17, 108, 832 Dixon V. Barclay, 173 V. Hood, 108 Doak V. Swan, 70 Doau V. Compton, 1058 Doane v. Adams, 651, 675 Dob V. Ilalsey, 259, 266, 267, 269, 274, 436 Dodd r. Bishop, 418 t. Dreyfus, 411 Dodge v. M'Kay, 206 Dodson V. Chambers, 111 Doe V. Tupper, 206, 209 Doggett ■v. Dill, 1019 V. Emerson, 1200 V. Jordan, 103 Dole, ex parte. 1179 Dommett v. Bedford, 733 Donaldson v. Bank of Cape Fear, 229, 559 V. Kendall, 202, 206 Donelson v. Posey, 597 Dongelot v. Rawlings, 173 Doniphan v. Gill, 208, 284 Donnelly v. Ryan, 198 Doremus v. McCormick, 173, 199, 234 Dortie v. Dugas, 172, 800 Doty V. Bates, 299 Dougal V. Cowles, ISO Dougherty v. Van Nostrand, 644, 746, 913, 1002 Douglass r. Wiuslow, 580 Doughty V. Doughty, 532, 971 Dounee v. Parsons, 259 Dow v. Phillips, V. Sayward, Dowdall V. Lenox, Dower r. Stan If er, Dowling V. Clarke, V. Clift, Downer v. Brackett, Downing, ex parte, Matter of. 192, i\ Linville, Downs v. Jackson, Dowry v. Roberts, Doyle V. Thomas, Drake v. Blount, V. Elwj'n, V. Thyng, Draper v. Bissell, Drayer v. Sander, Drenncn r. House, 179 607 802 506 919, 931 327 1200 1176 1160 199 632 354 931 1014 103 258 356 281 100, 116 Drew V. Person, Drewry r. Montgomery, Drumright v. Philpot, Du Bois V. Samson, Dudley v. Littlefield, Dumont v. Rueprecht, Dunbar v. BuUard, Duncan v. Clark, V. Lewis, V. Lowndes, V. Tombeckbee Bank, Dundass i\ Gallagher, Dunham v. Gillis, V. Hanna, V. Murdock, V. Presby V. Rogers, Dunkerson, re, Dunlap V. Limes, V. Watson, Dunlop V. Richards, Dunnell r. Henderson, Dupre «. Bods, Dupuy V. Leavenw6rth, Durant v. Rogers, Durbin v. Barber, Durham v. Hartlett, Duryea v. Burt, V. Witcomb, Dutton V. INIorrison, V. Woodman, Dwight r. Simon, Dyas v. Dinkgrave, Dyer v. Drew, 209, Page 644 561, 564. 118, 205 188 223 957 102, 693 179 333 212 448 342 924 1019 1026 123 20 1167 359 669 516, 800 714 318 564, 568 233, 234 864, 867 758' 15, 597 16 979 112 156 436 818 Eads v. Mason, • 1012 Eager v. Crawford, 45, 109 Eagle Mfg. Co. v. Jennings, 399 Eakin v. Feuton, 850 V. Shumaker, 523 Eames, ex parte, 1200 Earbee v. Evans, 450 Earl V. Hurd, 106 Early v. Durborow, 688 V. Reed, 181 Eason v. Cherry, 515 , 521 Eastman v. Clark, 40 t). Wright, 437 Eaton V. Taylor, 361 Ebbert's appeal. 562 Ebbinghousen v. Worth Club, 67 Eekerly v. Alcorn, 371 Edens v. Williams, 979 Edgar v. Cook, 705, 1033 V. Donally, 553 Ixxvi AMERICAX AUTHORITIES CITED. Page Page EfFring v. Aikin, fel5 Everit v. Strong, 207 Edwards v. Pitzer, 445 Everitt v. Watts, 841 Egberts v. Wood, 183, 184, 21G, 360, Everson v. Gehrman, 445 707 Ewing V. Tripe, 347 Ege r. Kyle, 453 Exchange Bank v. Ford, 474 Einstein v. Gourdin, 42 r. Traccy, 1000 Elancy v. French, 463 Elder v. Hood, 927 Fabian v. Callahan, 109 Elkin r. Green, 277 Fagin v. Long, 332 Elkintoii r. Booth, 367 Fagg V. Hauibel, 391 Ellicott r. Nichols, 305 Fail v. McKce, 30 Elliott r. Dudley, 182 Fairbank v. Lear}', 695, 738 t\ Stevens, 552 Fairchild r. Fairchild, 102, 561, 563 Ellis V. Allen, 227 , 228 V. Valentine, 825 V. Bronson, 343 ;352 Faler r. Jordan, 1024 V. Commander, 903 Falkland v. St. Nicholas Nat. V. Ellis, 209 Bank, 1201 v. Jameson, 112 FallPiiver, &c. Bank t\ Sturtevant, 265 Ellison T. Chapman, 925 Fall Pviver Whaling Co. V. Borden, V. Smoller, 126 102, 554, 561, 564 Ellsworth V. Tartt, 43 Fanchon v. Bibb Furnace Co 175 Ely V. Hair, 205 Fanning v. Chadwick, 517, 929 Emanuel v. Bird, 485 Fant V. West, 284 Emerson v. Durandj 645 Farber v. Levi, 823 V. Harmon, 182 Farmen v. Brooks, 513 V. Parsons, 955 Farmer, In re. 561, 1163 Emery v. Canal Nat. Bank, 1195 V. Samuel, 520 v. Wilson, 81 Farmers', &c. Bank v. Green 343 Emmons v. Westfield Bank, 22 Farmers' Ins. Co. i\ Ross, 41 England r. Burt, 117 Farnuni, ex j)arte, 1197 V. Curling, 696 V. Patch, 7 t\ England, 23 Farr v. Johnson, 594 Englis i\ Furniss, 437 V. Wheeler, 111 Ennis v. Williams, 366 Farrar y. Haselden, 585 Ensign v. Briggs, 554 559 Farrer v. Farrer, 644 Epps V. Dillaye, 366 Farwell v. Davis, 472, 473 Erwin's appeal. 564 v. Tyler, 938 Espy V. Comer, 426 Faulds «. Yates, 564 Estabrook v. Messersmith, 234 Faulkner «. Whitaker, 432, 433 V. Smith, 461 Faver v. Briggs, 448 Estes V. Whipple, 941 Fay V. Davidson, 17, 42 Etheridge v. Binney, 294 472 V. Duggan, 443 Eusininger v. Marvin, 179 v. Finlcy, 937 Evans v. Carey, 390 481 V. Noble, 7 V. Clapp, 652 Featherstonhaugh v. Fenwick 698, 991 V. Cornell, 172 Feigley v. Sponeberger, 224 v. Evans, 902 Felbretch v. Armstrong, 366 V. Fisher, 432 Felder v. Wall, 857 V. Gibson, 516 Felichy v. Hamilton, 4, 13, 65 V. Hansen, 542 Fellows 1). Greenleaf, 625 V. Montgommery, 884 V. Wyman, 357 Everett v. Chapman, 103, 280, 285 Felton i\ Reid, 585 V. Stone, 1200 Fenn v. Bowles, 748, 1005 Everingham v. Ensworth, 196, 199, V. Harrison, 270 274 V. Simpson, 118 AMERICAN AUTHORITIES CITED. Ixxvir Fenton v. Folger, Page 506, 1024 Ferero v. Bulilmeyer, Ferguson v. Gordon, V. Hasz, 963 219 566 V. Hite, 848 V. King. 452 Ferris v. Shaw, 67 Fessler v. Hickernell, 860 Fick «. Mulholland, 116 Field v. Chapman, V. Tenncy, Fieldeu v. Lahens, 574 108 182 Filley v. McHenry, 116, 269, 586, 609, 994, 1016, 1021 V. Phelps, 994 Filly all Laverty, 1011 Findlay v. Stevenson, 222 Finlay v. Fay, 625 V. Stewart, 918, 931 Finney v. Allen, 468 V. Turner, 944 First Nat. Bank v. Breeze, 220 V, Carpenter, 211 •u. Morgan, 179 V. Newton, 346 Fish V. Gates, 479 V. Herrick, 506, 609, 1016, 1024 V. Miller, 181 Fisher v. Currier, 1065 v. Murray, 182 V. Pender, 208 V. Sweet, 943 risk v. Copoland, 170 Fiske «. Hunt, 1200 Fitch V. Hall, 18 V. Harrington, 56, 64, 110 V. Stamps, 218 Fitchbuvn v. Boyer, 206 Fithian v. Jones, 1036 Fitz V. Reichard, 515 Fitzgerald v. Christt, 577 Flagg V. Stowe, 6, 594, 601 Flammer v. Green, 975 Flannagan v. Alexander, 275 Flannigan v. Maddin, 991 Flanuery v. Anderson, 449 Fleming i). Billings, 1016 V. Dunbar, 206 Flemming v. Prescott, 181, 259 V. Lawhorn, 207 Fleshmau v. Collier, 107 Fletcher v. Anderson, 265, 564 V. Morey, 1083 V. Pollard, 686, 883 Page Fletcher v. Reed, 336, 705' Flint V. Eureka Marble Co., 29 Florance v. Bridge, 359 Florida Territory v. Redding, 999 Flournoy ?). Williams, 116 Floyd V. Miller, 34S V. Wallace, 287 Foerster v. Kirkpatrick, 434 Fogarty v. Cullen, 413, 485 Fogerty v. Jordan, 117 Fogg r. Greene, 112 V. Johnstone, 95T Folk V. Wilson, 405 Foltz V. Powrie, ' 356 Fontaine v. Lee, 348 Foot, re, 1172 V. Sabin, 259, 267 V. Tabir, 211 Forbes v. Davison, 108 t\ Scannell, 177 Ford V. Smith, 45 Fordyce v. Shriver, 662 Forkner'ji. Stuart, 184, 207 Forney v. Adams, 276 Forrer v. Forrer, 522 Forrester c. Oliver, 586 Forsyth, re, 1172 V. Merritt, 1091, 1109 Forster «. Lawsou, 464 Fortune v. Brazier, 443, 717 Fosdick V. Van Horn, 472 Foster, ex parte, 1054, 1200 v. Andrew, 266 v. Barnes, 566- V. Donald, 684 V. Fifield, 175 ■V. Goddard, 650, 714 V. Hall, 963, 1016 V. Rison, 843, 846 Fourth Nat. Bank v. Atheimer, 40^ V. Caroltou Railroad, 625, 775 Fowler v. Bailley, 564 V. Harrington, 584 Fox, Appeal of, 1020' V. Clifton, 103, 327 V. Hanbury, 612, G13, 980 r. Norton, 205, 206 Francis, re, 45 Francis, The, 146, 529 Francis v. Uickel, 467 V. Smith, 332 Francklyn v. Sprague, 604 Frank r. Peters, 602 Frankland v. McGusty, 27 Franklin v. Robinson, 644 IXXVlll i^MERICAN AUTHORITIES CITED. Pase Frazier r. Frazier, 644 Frederick t. Cooper, 628, 815 Freeman v. Bloomfield, 31, 021 V. Carhart, 1T2, 448 V. Falconer 352 V. Finnall, 815 V. Freeman, 872 r. Ross, 181, 259 Frelighr. Miller, 621 French r. Chase, 1020 ■». Lovejoy, 275, 1022 V. Price, 72 V. Rowe, 225 Frentress t. Markle, 395 Frigerio v. Crottes, 686 Frink v. Ryan, 930 Frith V. Lawrence, 599 Fromme v. Jones, 162 Fronebarger v. Henry, 209 Frost V. Hanford, 255 V. Shackleford, 460 V. Walker, 110 Frothingham v. Seymour 1 82 Froun r. Davis, 229 Fuller V. Benjamin, 780 V. Percival, 268 Fulton v. Williams, 418 532 Funk V. Leachman, 826 Furnival v. Weston, 176 Gaab v. Higgins. 367 Gadsen «. Carson, 1016 Gage V. Parmele, 665, 670, 691 ,807 V. Rollins, 436 456 Gaines t\ Catron, 568 Gaither v. Caldwell, 443 Galbraith, ex 2yarte, 1061, 1066 «i. Gedge, 209, 559 566 Gale V. Miller, 195 348 Gallagher's appeal. 1018 Gallicott V. Planters' and Mechan- ics' Bank, 356 , 369 Gallop V. Newman, 25 Gallot «. McCluskey, 436 Galloway v. Hughes, Gait V. Calland, 105, 161 , 697 283 Gal way r.Fullerton, 574 V. Mathew, 262 Gammon v. Huse, 398 Gannett v. Cunningham, 353 Gano V. Samuel, 190 Gansevoort v. Kennedy, 951 V. Williams, 266 Ganson v. Lathrop, 1016 Gantt T. Gantt, 102 Page Gard V. Clark, 359 Gardenir v. Bataille, 955 Gardenhire v. Smith, 20 Gardom, ex parte, 211 Garner r. Tilliiny, 433 Garretson «. Weaver, 899 Garrett v. Handley, 458 Gasset v. Morse, 1059 Gaston v. Kello^, 514 Gates V. Bennett, 214 T. Pollock, 210 Ganger v. Pantz, 924 Gaut V. Reed, 721 Gay, ex parte. 1202 V. Bowen, 355 V. Johnston, 299, 469, 1017 v. Siebolrl, 126 V. Waltman, 176 Gaylor v. Peterson, 855 Geddes' appeal, 807 Geery v. Cockroft, 228 Geheebe v. Stanley, 469 Genese v. Cooper, 740 George v. Tate, 283 Geortner v. Trustees, 903 Gerard v. Busse, 203, 206 i\ Gateau, 974 German Mining Co., In re. 665 Getty V. Devlin, 102 Gibson v. Moore, 930 ■». Stevens, 609 t\ Wardon, 205 Gilbert, ex parte, 1076 X. Whidden, 108, 110 Gilchrist v. Brande, 113, 366, 439 Gildersleeve v. Mahony, 182 Gilhooly v. Hart, 644, 645, 666, 667 Gill V. Ferris, 24, 397 V. Geyer, 675 Gillapsy «. Peck, 1024 Gillbank v. Stevenson, 22 Gillet v. Hall, 814 GiUies v. Cone, 1058 Gilman i\ Cosgrove, 151, 433 V. Vaughan, 665, 670 Gilmore v. Merritt, 28 V. North American Land Co., 506 Gilpin V. Temple, 103, 105 Girdley v. Connor, 909 Given \'. Albert 222, 285 Givin V. Selbey, 574 Glasscock v. Smith, 998 Glassington v. Thwaites, 530 Gleason v. Clark, 355 AMEBIC AN AUXnOKlTJES CITED. Ixxix Page Crleason ». White, 942 Glenn v. Gill, 820, 1016 V. Hebb, 856 Glover v. Tuck, 919 Goble i\ Howard, 931 Goddard v. Pratt, 106, 353 Goell V. Morse, 71 Goepper «. Kingsinger, 552 Golden, ex parte, 274 Goldsborough v. Mc Williams, 941 Goldsmith v. Sachs, 917 Gomersall v. Gomersall, 944 Good v. McCartney, 20 Goodburn v. Stevens, 837, 994, 1004 Goode V. McCarty, 269 Goodeu 1-. Morrow, 372, 481 Goodeuough v. DuflBeld, 172 Goodenow v. Jones, 325 Goodman v. Einstein, 530 i\ Whitcomb, 976, 977 V. W^hite, 167 Goodwin V. Richardson, 515, 547, 1016, 1024 Gordon v. Bankard, 116 v. Coolidge, 237 V. Freeman, 196 V. Gordon, 551 V. Janney, 151, 433 1). Joslin, 406 «. Tyler, 522 Gorman v. Russell, 6, 509, 604, 962 Gossett V. Weatherly, 884 Gould V. Gould, 462 Gouldiug V. Bain, 899 Gouthwaite «. Duckworth, 324 Gover v. Hall, 957 Gowan v. Jeffries, 906 Grady, ex parte, 1075 Grady v. Robinson, 33, 205, 341, 398 Grafton Bank v. Moore, 106, 110 Graham v. Harris, 437 V. Holt, 941 V. Meger, 232 V. Stark, 1055 Gram v. Seton, 203 Granger v. McGilvra, 353 Grants. Bryant, 674, 713 V. Holmes, 391 Grasser v. Stellwagen, 228 Gratz V. Bayard, 337, 994 Graves v. Kellenberger, 188 V. Merry, 356, 369 ■Gray «. Brown, 225, 390 V. Cropper, 252 V. Gibson, 455 Page Grayi-. Palmer, 62, 102, 104, 286, 583, 990 V. Portland Bank, 515, 920 V. Ward, 179 Grazebrook r. McCreedie, 446 Great Western Tel. Co., re, 532 Greeley i\ Wyeth, 277 Green v. Burton, 255 i\ Buslcj', 4 t\ Caulk, 113 V. Chapman, 437 V. Deakin, 274 v. Pyne, 468, 476 V. Ross, 507, 609 Greene v. Breck, 506 Greenleaf r. Quincy, 420 Greenwald v. Raster, 391 Greenwood v. Brink, 126 V. Sias, 117 Gregg V. Fisher, 179, 190, 191 V. James, 195 Greggs V. Clark, 594 Gregory v. Dodge, 4 V. Harmon, 448 V. Martin, 119 Gribbin v. Thompson, 467 Gridley v. Conner, 359, 669, 774, 795, 855, 896 V. Dole, 942, 943 Griefft'. Kirk. 450 Grier v. Hood, 447 Griffin v. Orman, 756, 943 V. Samuel, 467 Griffith V. Buck, 604, 756. 925 V. Buffum, 222, 285 V. Chew, 437 Griggs V. Clark, 855, 1005 Grigsby v. Nance, 932 Grinman ?j. Baton Rouge Co., 364 Grissom v. Moore, 585 Griswold v. Haven, 251 V. Waddington, 963, 982, 983 Grobb's appeal, 560 Groesbeck v. Brown, 446 Grooves i\ Tollman, 31 Grove v. Fresh, 856, 884 V. Miles, 658 Gruud V. Van Vleck, 232 Guidon v. Robson, 453 Guilbeau f. Melancon, 562 Guild 1). Leonard, 573 Gulick V. Gulick, 172, 929 Gulke V. Uhlig, 107 GuUat V. Tucker, 276 Gullion V. Peterson, 245 Ixxx AMERICAN AUTHORITIES CITED. Guniiell V. Bird, Gunter v. Jarvis, Gurler v. Wood, Gurr V. Martin, Guytou V. Flack, Guzzam t\ Bebee, Guinn v. Rooker, Gygor's appeal, Haas v. Roat, Hackley v. Hastie, Haddock v. Crocheron, Hafer, ex parte, Hagar v. Stone, Hagendobler v. Lyon, Haggerty v. Granger, Haight V. Burr, Halle V. York, Haines v. Hollister, Haldeman v. Bank of M Halderman v. Halderman, Hale V. Brennan, V. Heuric, V. Van Saun, V. Wilson, Halfhide v. Fenning, Hall, ex parte, V. Clagett, V. Cook, V. Edson, V. Green, V. Jones, V. Lanning, V. Leigh, V. Logan, Hal lack x. March, Haller v. Williamowicz, Halliday v. Bridewell, t\ Sl'Dougal, Halls V. Coe, Halsey v. Whitney, Halstead v. Schmelzel, r. Sliepard, Hamill r. Hamill, r. Purviss, V. Willett, Hamilton ?'. Buxton, «. Hamilton, V. Hodges, V. Seauuui, Hamilton v. Somers, Hamersley v. Lambert, Hamlin, re, P.ijre Pago- 859 Hammond r. Aiken, 344 488, 585 r. Coolidge, 1202 2;«2 V. Douglas, 687, 1003 23 V. St. John, 491, 585 571, 823, 906 Hamper's appeal, 645 467 Hancock v. Hintrager, 55, 58 205, 206 Hanks r. Barber, 937 666, 670 Hanna v. Flint, 19 V. Wray, 1001 42 Hansmith v. Espy, 433 355 Hanway v. Robertshaw, 586 348 Hapgood V. Coruevell, 604 1203 Hardy v. Mitchell, 1010 459 Harman v. Fishar, 441 360, 482 Harp V. Tom 11 n son, 332. 183 Harper v. Fox, 507 899 V. Wrigley, 199 32 V. Lamping, 882 775 Harrick v. Ames, 815 ddletown. Harris v Harris, 939- 179,191 V. Hillegass, 22, 785 1, 942 ti. Lindsay, 398, 399 113 V. Miller, 284 562 r. Fcaroe, 156- 449 T. Schultz, 315 929 V. Sessler, 58. 761, 763, 764 Harrison v. Clare, 391 1065 V. Farrington, 809, 847, 848- 354, 691 V. Jackson, 176, 203, 207 161 «. Righter, 823 19 i\ Story, 1084 161 Hart i\ Clark, ' 604 371, 394, 408 t. Finigaii, 841 359 V. Tomlinson, 736 71 V. Withers, 203, 206- 945 V. Woodruff, 991 175 Hartley v. Kirlin, 357 660, 716, 817 V. White, 276 44 Hartman v. Woehr, 33, 827, 975 106, 310 Hartness v. Thompson, 469 199 Hartough, ex parte, 1067, 1070 162 Hartung v. Siccardi, 498 940 Harvey v. Childs, 18 267, 357 V. Mc At lams, 231 905 T. Varney, 654, 820, 896 210 Harwood v. Edwards, 176 572 Hasbrouck v. Childs, 687 468 Haskell v. Adams, 939 919, 932 Haskins v. Aleott, 150, 433 266 V. Burr, 33 356 Haskinson r. Elliott, 191, 222 179, 306, 355 Haslet T. Street, 359, 444, 452 414, 485 Haslett «. Wothcrspoon 6 1202 Hasley v. Whitney, 22& AMERICAN AUTHORITIES CITED. Ixxxi Page Page Hastings v. Hopkinson, 108, 309 Hennegin v. Wilcoxon, 942 943 Hatch V. Foster, 565 Henry, re, 1079 ■V. Wood, 472 V. Henry, 1023 Hatchett v. Blanton, 394 Henry County v. Gates, 203 Hatheway's appeal, 169 Henshaw i\ Root, 107 Hatton V. Stewart, 219 Herbert v. Kanrick, 205 Hatzenbuhler v. Lewis, 460 V. Odlin. 218 HaufFv. Howard, 561 563 Hermanns V. Duvigneaud, 72 181 Haughey v. Strickler, 117 Heroy v. Van Pelt, 341 Haughton v. Eustis, 1200 Herrick v. Ames, 827 Hauser v. Smith, 453 V. Conant, 858 446 Havana, &c. R. R. Co. i K Walsh, Heshion v. Julian, 29 285 Hester v. Baldwin, 1185 Haven v. "Wakefield, 946 V. Lumkin, 265 V. White, 437 Hewitt V. Kuhl, 889 Havens v. Hussey, 184 V. Northrup, 1091 Hawes v. Dunton, 179 v. Patrick, 447 Hawley v. Hurd, 471 V. Rankin, 561 , 564 Hawkins v. Appleby, 234 243 Heydon v. Heydon, 612 V. Hastings Bank, 214 Heye v. Bolles, 186 «. Waller, 243 Hibbler v. DeForrest, 188 Hawks V. Hinchcliff, 420 Hickerson v. McFaddin, 754 Hayes v. Baxter, 220 Hickman v. Kunkle, 265 V. Heyer, 822 V. Reineking, 175 , 265 Haynes v. Carter, 369 Hicks V. Bronton, 468 V. Seachrest, 205 V. Crain, 60 Hayward v. French, 191 •V. Maness, 468 Haywood v. Harmon, 218 V. Wyatt, 383 Hazard v. Caswell, 125 ,363 Hier v. Odell, 368 V. Hazard, 12, 18, 820 High, ex parte, 1156 Hazelhurst v. Pope, 392, 933 Higinbotham v. Holme, 733 Head v. Sleeper, 180 470 Hill, ex parte, 73:5 Heaston v. Cincinnati, &c. R. R. V. Beach, 566, 610, 1016 Co., 151 434 V. Clarke, 936 Heartt v. Corning, 170 883 V. King, 665 V. Walsh, 196 363 v. Marcy, 405 Heath v. Gregory, 284 V. Marsh, 436 «. Waters, 644, 646, 999 V. Matta, 645 , 881 Heavilon n. Heavilon, 943 V. M'Neil, 490 Eeckert v. Fegely, 42 V. Packard, 459 Hedge's appeal. 12 V. Palmer, 917 Heenaa ■;;. Nash, 296 Hilliker v. Loop, 459 Heflferman v. Brenhan, 448, 449 Hillisberg v. Burthe, 669 Heflfron v. Hanaford, 171, 259 Hills T. Bailey, 285 Hegeman v. Hegeman, 126 V. Ross, 452 Heinsheimer v. Shea, 1058 Hine v. Bowe, 463 Heirn v. McCaughan, 232 Hinman v. Little, 60 Hemtz V. Cahn, 454 Hinton, ex parte, 733 Hellmen v. Mendel, 647 V. bdenheimer. 632 Henderson v. Barbee, 206 Hirsch v. Adler, 781 V. Haddon, 617 Hiscock 1). Phelps, 561 , 564 Hendrie v. Berkowitz. 259 Hitchcock V. St. John, 185 Henecy, ex parte. 733 Hite V. Hite, 648 669 Henessy v. Western Bank, 177 Hoard v. Clum, 994 Henn v. Walsh, 815, 962 Hobart v. Ballard, 906 F Ixxxii AMERICAN AUTIIOKITIES CITED. Page Hobart v. Howard, 926 v. Lemon, 97 Hobbs r. Wilson, 758 Hodges V. Daws, 19 V. Harris, 162, 207, 216 V. Holeman. 597. 005 V. Parker, 665, 666, 918 Hodgmaii v. Smith, 19 Hodgson, ex parte, 733 V. Baldwin, 640 Kodson V. Porter, 206 Hogau V. Reynolds, 197 i>. Calvert, 923 Hogendobler v. Lyon, 492 Hogg V. Orgill, 179 Hogle V. Lowe, 564 Holande ^^ Butterworth, 346 Holbrook «. St. Paul F. & M. Ins. Co., 145 V. Wight, 222 Holbrooke v. Oberne, 19 Holden v. Bloxum, 301 V. French, 20 V. M'Makin, 550, 746 V. Peace, 522, 668 Holderness v. Schackle, 581 Holifield V. White, 15, .610 Holladay v. Elliot, 820, 964 Holland v. Butler, 432, 433 V. Fuller, 586, 999 «. Long, 366 Hollenback «. Moore, 247, 248 HoUis, ex parte. 1058 HoUister v. Barkley, 659 Holloway v. Briukley, 15 V. Turner, 1017 Holman v. Carhart, 467 V. Nance, 930 Holmes v. Burton, 300 t\ Caldwell. 373 V. De Camp, 437, 584 V. Huwe, 665, 815 «. Hubbard, 760 «. Kortlander, 219 V. McCray, 955 v. McDowell, 909 V. Old Colony R. R. Co., 98 V. Self, 561 f. Shards, 355 V. United States Ins. Co., 72 Holt V. Kernodle, 436 V. Simmons, 188, 347 Holtgreve v. Wilkner, 368 Holton V. Holton, 1016 Holyoke v. Mayo, 929 Page 776 199 512, 594, 665, 58, 674, 691, 908 755 181 363, 1000, 1036 399, 411 211 1072 394 72 121 806 361. 532 Homer v. Abbe, v. Wood, Honore v. Colmesnil, 6 Hood V. Spencer, Hook V. Stone, Hooley v. Gieve, Hoopers i\ McCan, Hope V. Cust, Hopkins, re, V. Carr, V. Forsythe, V. Smith, V. Watt, Horbach v. Huey, Horn V. Newton City Bank, 188 Horsey v. Heath, 182, 1012 Horton v. Child, 207, 418 Horton's appeal, 979 Hosack V. Rogers, 419 Hosmer v. Burke, 468 Hotchin ^■. Kent, 167 Hotchkiss «. Ladd, 300 V. Lyon, 175 Ilouseal's appeal, 1016 Houser v. Irvine, 427 How V. Kane, 421, 473 Howard v. Jones, 609 V. Patrick, 113 Howe V. Howe, 17 V. Learing, 747 V. Thayer, 342 Howell v. Adams, 341 11. Brodie, 327 V. Harvey, 658, 776, 951, 961, 964, 974 V. Reynolds, 486, 520 v. Wilcox & Gibbs S. M. Co., 265 Hoxie v. Carr, 533, 561, 506 Hoyt, ex j^ai'te, 1061 V. McLaughlin, 851 V. ]\Iurphy, 497 V. Sprague, 511 Hubbard v. Curtis, 1024 V. Guild, 354 V. Matthews, 703 Hubbell V. Skiles, 490 V. Wood, 31 V. Woolf, 33 Hubble V. Perrin, 1016 Huckabee r. Nelson, 33 Hudgins v. Lane, 480 Hudson v. McKenzie, 169 Hudson V. Simon. 105 AMERICAN AUTHORITIES CITED. Ixxxiii Page Page Huff «. Lutz 1001 Ingraham v. Foster 804 Hughes, re, 1204 Irby V. Brigham, 107 V. Boring 463 V. Graham, 1024 V. Ellison, 181 V. Vining, 350 V. Waldo, 331 Irvin V. Forbes, 535 V. Walker, 151, 432 V. Nashville, &c. Ry . Co., 13 Hughuley v. Morris, 13 Irwin V. Bidwell, 33 Hulett V. Fairbanks, 15 t\ Williar, 168 Human v. Cuniffe. 282 Isaacs, re, 1172 Humes v. O'Bryan, 118, 108 Isler V. Baker, 341, 356, 970 Humphries v. Chastien, 357 Ives V. Miller, 942 -Hunt V. Chapin, 188 V. Gookin, 818 Jackson v. Alexander, 471, 472 V. Hall, 341, 346 V. Clymer, 1023 V. Pooke, 1067 V. Geese, 914, 962 V. Rogers, 938 V. Hollowaj^ 269 V. Semonin, 437 V. Johnson, 666 V. Thibbets, . 740 V. King, 1012 Hunter v. Little, 645 V. Robinson, 72 V. Wayrick, 166 V. Standford, 208 V. Whitehead, 102, 800 Jackey v. Butler, 612 Huntington v. Lymun, 265 Jacobs V. M'Bee, 207 v. Potter, 344 Jacquin v. Buisson, 903, 994 Hupp V. Hupp, 498 Jacques v. Greenwood, 1025 Hurd V. Haggerty 191 V. Marquand, 245 Hurlbut V. Post, 472 James v. Bostwick, 206, 693 Hurst V. Hill, 355 V. Stratton, 607 Hust V. Clark, 276 January v. Pontz, 1029 Husted V. Ingraham, 283 Jarman v. Ellis, 201 Hutchins v. Bank of Tenn., 369 Jarvis-y. Brooks, 565, 1016 V. Childress, 172, 174 V. Hyer, 615 V. Gilman, 198 Jefferys «. Smith, 532 V. Hudson, 191, 366 Jeffreys v. Coleman, 205 t\ Turner, 191 Jenkins v. Peckinpaugh, 659 Hutchinson v. Onderdonk, 654 Jenness v. Carleton, 994, 999 V. Smith, . 245, 321, 360, 1000 V. Smith, 485 Hutton «. Laws, 1004 Jennings v. Chandler, 903, 994 Hyams v. Rogers, 169 V. Estes, 172 Hyde v. Easter, 820 i\ Rickard, 827 Hyer v. Burdett, 824 Jessup V. Cook, 881, 920 V. Norton, 333 Jewett, ex parte, 1176, 1185 Hynes v. Stewart, 804 re, 60, 437, 1073 Hyrschfelder v. Keyser, 228 V. Brooks, 928 Johns V. Rattin, 205, 206 Iddings v. Pierson, 342, 860 Johnson's appeal. 525 Ihmseu v. Lathrop, 958 Johnson, ex parte, 1057 V. Negley, 260 V. Berlizheimer, 999 Iliff V. Brazil, 72 V. Bernheim, 224, 255 HHnois, &c. R. R. Co. v. Owens, 37, i V. Byrd, 468 285 V. Clark, 565 Inbusch V. Farwell, 505 1016, V. Crichton, 276 1019 V. Hartshorne, 666, 670, 994 Indiana, &c. Co. v. Bates, 564 V. Robinson, 177 Ingalls, ex parte. 1173 v. Rogers, 609 Inglebright v. Hammond, 106 V. Smith, 150, 433 Ixxxiv AMERICAN AUTHORITIES CITED. Pa<;e Johnson v. Totten, 3(56 Johnston's appeal, r.2 Johnston, re, 1202 V. Brown, 147 V. Dntton, 189, 264, 535 r. Freer, 777 V. Warden, 113 Jones' appeal. 562 Jones' Case, 196, 199 Jones V. Bailey. 175 V. Blair, 497 V. Booth, 268 V. Call, 13 V. Caperton, 318 V. Clark, 693 V. Dexter, 991 0. Fegely, 27 V. Hardesty, 488, 1000 V. Hurst, 444 V. Jones, 594, 650, 665, 674, 841, 8G1 t\ Lusk, 269, 1017 V. Neale, 208 V. Noy, 966 i\ Sleeper, 1059 «. Thompson, 507, 609 Jordan, hi re. 245 V. Miller, 900 V. Wilkin s, 24, 461 Joseph V. Fisher, 106 Joslyn V. Taylor, 490 Judd r. Hubbell, 470 Judge V. Braswell, 188 Judson V. Adams, 20 Junck i\ Hezeau, 857 Justices V. McLaren, 999, 1006 Kahn v. Smelting Company, 622 Kaskaskia Bridge Co. v. Shannon, 174 Kasson v. Brocker, 206 Kauffman v. Fisher, 426, 446 Kayser v. Maughan, 15, 65 Kean v. Johnson, 796 Kearney v. Fenner, 448 V. Snodgrass, 327 Keeley v. Greenleaf, 516 Keith V. Fink, 395 V. Pratt, 490 Kelleher v. Tisdale, 105 Keller v. Ilicks, 470 V. West, 207 Kelley v. Foot, 235 V. Greenleaf, 275 V. Ilurlbert, 346 Kellogg V. Fancher, 275 Kellogg V. Totten, Kelly V. Baker, V. Devlin, V. Eckford, V. Greenleaf, V. Kauffman, V. Murphy, Kelsey v. Hobby, Kelton V. Leonard, Kemeys v. Richards, Kemp V. Carnley, V. Coffin, Kenan v. Starke, Kendall v. Rider, Kendrick v. Campbell, V. Tarbell, Kennebeck Co. Co. Kennedy v. Bohannon, V. Kennedy, V. Lee, V. McFadon, V. Richey, V. Shiltou, Kennej' v. Atwater, Kenniston i). Avery, Kent V. Majoiner, V. Wells, Kerr v. Potter, V. Sharp, Kerrick v. Stevens, Kershaw v. Matthews, Ketcham v. Clarke, Ketchum, /?i re, V. Durkee, Kidd V. Brown, Kidder v. McHlhenny, V. Page, Kill V. HoUister, Killam v. Preston, Kimball v. Gearhart, V. Hamilton, &c. Ins Pago 550, 73{> 183 104, 123 835, 885 691 632 343 753 259 272 177 356 455 561, 1023 355 299, 674, 853 Augusta Ins. &c. 213 341 961 550 942 491 847 73, 366 V. Lincoln, V. Thompson, Kimble v. Seal, Kimbro v. Bullitt, Kimmins v. Wilson, King V. Barbour, V. Faber, V. Haines, V. Hamilton, V. Leighton, V. Wartelle, V. Weeks, 428 126 468 19 245 702 700 341, 346, 623 233 603, 817 447 934 1017 763 929 604 Co., 182, 228 532, 644, 647, 999 572 839 163, 188 81, 801 116 266 467 644, 645 339 686 505 553, AMEKICAN AUTHORITIES CITED. Ixxxv Page Kin^ V. Whiton, . 516, 862 Kingman i\ Spurr, 621, 625, 627 Kinlock v. Hamlin, 920 Kinney v. Robinson, 821 Kinsler v. McCauts 585 Kinsman v. Dallham, 298 ». Parkhurst, 521 Kirk V. Hiatt, 173, 359 ■». Hodgson, 535 Kirkby v. lugersoll. 899 Kirkman v. Snodgrass, 366 Kirkpatrick v. Turnbull, 179 Kiiby V. Carpenter, 1016 V. Common, 469 «. Hewitt, 352 v. Ingersoll, 183 Kituer v. Whitlock, 146, 220 Klock V. Beckman, 174 Knapp V. Edwards, 885 V. McBride, 179, 337, 858, 994 Knight, re, 1177 V. Ogden, 611 Knott V. Knott, 561 Knowlton v. Reed, 1033 Knox V. Schepler, 486, 506, 586 Kockler v. Brown, 931 Koenig v. Adams, 705 Koningsburg v. Launitz, 577 Kountz V. Holthouse, 332 Kramer v. Arthurs, 7 610 Kratzer v. Lyon, 163 438 Kull V. Thompson, 198 Kyle V. Roberts, 304 Lact«. Hall, 565 V. Le Bruce, 946 Ladd v. Billings, 606 V. Griswold, 604 Ladue v. Hart, 497 Laflfan v. Naglee, 522 Lafferty v. Wheeler, 126 Lafon V. Chinn, 42 Lafond v. Deems, 67 Lahey «. Kingon, 445 Laird v. Ivens, 342 Lale V. Dishman, 815 Laler v. Jordan, 179 , 280 Lamalere v. Caze, 847, 929 941 , 942 Lamar v. Russel, 168 Lamb v. Durant, 162 , 227 i\ Grover, 18 V. Salters, 359 V. Singleton, 341 Lambden v. Sharp, 202 , 206 Xamkin v. Phillips, 196 , 564 Page La Mont v. Fullara, 29 Landolfo v. Appleton, 405 Lancaster Bank v. Myerley, 565, 566 Lane, re, V. Arnold, «. Carpenter, ■». Roche, V. Tyler, Lang V. Fiske, «. Oppenheira, V. Waring, Langan i\ Hewett, Lange v. Kennedy, Langford v. Patton Lanier v. McCabe, V. The Mayor, Lannon v. Clavin, Lansing v. Gaine, 259, 266, 355, 356, 369 Lararus v. Long, Larkins v. Rhodes, Lash V. Arnold, Lastrapes v. Blanc, Lathrop v. Atwood, Lauffer v. Cavett, Laughlin v. Lorenz, Laverty v. Burr, Law V. Ford, Lawrence v. Clark, V. Dale, V. Kinsting, V. Taylor, V. Trustees, Layton v. Hastings, Lea V. Guice, Leabo v. Goode, Leach v. Leach, V. Milburn Wagon Co., Leaf's appeal, Leather Bank v. Herz, Leavitt v. Peck, Ledden v. Colby, Lee V. Bullard, V. Craig, V. Dolan, V. Lashbrooke, V. Onstott, Lefavour i\ Yandes, LeFavre v. Cassagnio, Lefevre's appeal, Lefever r. Underwood, Leffier T. Rice, Leftwich v. Clinton, Leftwitch v. Leftwitch, 1185 125, 1040 515, 516 917 561, 929 175 943 181, 259, 566, 568 211, 264 356 432 266 143 841, 857 174 102 151, 433 1059 758 560 1033 181, 258 905 939 169 280 219, 229 1011 206, 208 28, 172, 697 405 687 1017 569 367 263 490 615 ' 663 1005 644, 665, 667 206 173 19 562 660, 922 191 124 1004 44, Ixxxvi AMERICAN AUl Page Leggett v. Hyde, 25 Leland, re, 1177 Lemitte v. Starr, 258 Lemon v. Fox, 297 Leonard v. Leonard, 918 V. Wildes, 361 V. Winslow, 269 Le Page v. McCrae, 939 Le Roy v. Johnson, 145 163, 350 V. Muthewson, 82 Lessiter v. Jackman, 045 Lester v. Pollock, 572 Lesure v. Norris, 498 Letzer v. Beale, 63 Leva 11 y «. Ellis, 433 Levi V. Karrick, 644 714 V. Lutham, 188 Levine v. Michel, Y95 893 Levy V. Bush,- 102 0. Cowan, 610 T. Ley, 905 V. McDowell, 104 Lewis, ex farte. 1054 T. Allen, 174 V. Conrad, 1016 V. Langdon, 586 V. jMoffet, 644 V. Post, 110 111 Liadert v. Adams, 977 Liagre v. Peacock, 336, 855 962 Lilly V. Kroesen, 991 Lime Rock Bank v. Phetteplace, 565 Limelock, &c. Ins. Co. v. Treat, 265 Lindell v. Lee, 934 Lindley v. Davis, 563 Lindmeir v. Monahan, 870 Lindsey v. Edmiston, 28 Linford v. Linford, 1019 Lintner v. Millikin, 25 Linton v. Hurlev, 231, 476 Littell V. Fitch, ~ 179 Little V. Clark, 366 r. Hamilton, 285 r. Hazard, 206 V. Snedcor, 565 V. Stanton, 849, 683 Liverpool, &c. Nav. Co. v. Agar, 467 Livingston v. Cox, 155, 163 V. Harvey, 432, 433 t. Hastie, 259, 266 V. Lynch, 163, 535 V. Pittsburgh, &c. R. R. Co., 169 AUTHORITIES CITED. Page Livingston v. Roosevelt, 169, 259, 266, 268,270, 274 Lloyd, re, 1172, 1177 Lloyd V. Carrier, 666, 667 Locke V. Lewis, 275, 574 «. Stearns, 234 Lockhart v. Hanell, 774 Lockridge v. Wilson, 106 Lockwood V. Beckwith, 515, 516 V. Comstock, 356 ■V. Mitchell, 586, 824 Lockj-er v. Savage, 733 Lodge V. Dicas, 403 Lodiker v. Applegate, 20 Loeb v. Pierpoint, 177 Loeschigk v. Hatfield, 1000 Logan V. Bond, 245 Logie V. Black, 20 London, etc., Society v. Hagerstown, &c. Bank, 162 Long V. Carter, 169 V. Majestre, 821 V. Story, 356 Loomis V. Barker, 233 1-. iMarshall, 19 T. Pierson, 356, 359, 444 Lord i: Baldwin, 472, 1019 V. Parker, 97 V. Proctor, 26 Lothrop V. Adams, 234 Love.«. VanEvery, 532 Lovejoy v. Bowers, 228 V. Spafford, 342, 370 Lovne}' v. Giilenwaters, 660 Lowe T. Penn}^, 366 Lowenstein, Matter of, 185, 447 Lower v. Denton, 942 Lowery v. Drew, 205, 206 Lowry v. Brooks, 18 T. Cobb, 515, 521 Lucas V. Atwood, 1016 t\ Bank of Darien, 171, 369 V. Cole, 33 V. Coulter, 831 V. Sanders, 206 Luce V. Hartshorn, 686 Ludington r. Bell, 391 V. Taft, 819 Ludlow V. Cooper, 30, 566, 567, 785, 1007 Lumbermen's Bank v. Pratt, 357 Lunt V. Lunt, 125 t\ Stevens, 196, 391 Lusk r. Smith, 350 L3^man v. Lyman, 65, 644, 648, 910 AMERICAN AUTUOBITIES CITED. Ixxxvii Lynch v. Bitting, V. Thompson, Lyndon v. Gorham, Lyon V. Johnson, Mabbett v. White, Machinists' Bank v. Krum, Mackay v. Bloodgood, Mackey v. Auer, Mackintosh v. Tatinan, Machn v. Crotcher, Macon Bank v. Ells, Macy V. Combs, V. DeWolf, 840 16 506, 609 368, 388 216 468 206 929 757 300 363 12 72 McAdam v. Hayes, 981, 983 McAllister v. Montgomery, 568 McArthur v. Ladd, 15 McBain v. Austin, 227 M'Bride v. Hagan, 203 McCabe v. Franks, 884 McCall V. Moschovwitz, 747 V. Moss, 308 V. Oliver, 929 McCament r. Gray, 818 McCandless v. Hadden, 487 McCart v. Lewis, 206 McCarthy v. Fitts, 482 V. Nash, 55 M'Carty v. Emlen, 506 McCaskey v. Pollock, 58 McChesney v. Kipp, * 933 M'Clelland i\ Lindsay, 112 McClelland v. Remsen, 162 McCollough V. Judd, 468 V. Sommerville, 216 McCoon V. Galbraith, 373 McCormick's appeal, 568, 860, 1018 McCormick v. McCormick, 600, 670 McCorrin v. Cubbinson, 348 McCotter v. McCotter, 462 M'Coy V. Lightuer, 450 McCrae v. Robeson. 659 McCrary v. Slaughter, 16, 188, 281 McCulioch V. Judd, 467 McCullough V. Sommerville, 282 McDonald c. Beach, 1019 V. Eggleston, 208, 207 V. Matney, 13 V. Parker. 287 McDonnell v. Battle House Co., 23 McDougal V. Banks, 564 McDuffie V. Bartlett, 103, 1025 McElroy v. Ludlam, 174 V. Melear, ' 348 McElvey v. Lewis, 157 McEncroe v. Decker, McFadgen v. Harrington, M'Farland v. Lewis, McGaun v. Hanlin, McGehee v. Dougherty, McGill V. Dowdle, Page 887 172 117 138 929 14 V. McGill, 337, 1014 McGlensey -i'. Cox, 621,721 McGowan Bros. Pump and Ma- chine Co. V. McGowan, 746 V. Sprague, 604, 806 McGrath v. Sinclair, 568 McGregor v. Bainbridge, 103 V. Cleveland, 145, 189, 436 V. Ellis. 604 McGrew v. Walker, 103 McGuire v. Blanton, 211 :p. O'Hallaran, 106 V. Ramsey, 565, 778, 7!i0 Mcllvaine v. Armfield, 69 McKee v. Griffin, 562 McKenzie v. Dickinson, 515 McKeown v. Guild, 842, 845 McKinney v. Brights, 269 V. Peck, 467 «. Smith, 220 McKowen v. McGuire, 586, 999 McKnight v. McCutchen, 942 M'Lain v. Carson, 485 McLanahan v. Ellery, 753 McLaughlin v. Simpson, 818 McLean v. Eastman, 1105 V. Ihmsen, 1059, 1084 V. Johnson, 1059 V. Meline, 1059 McLellan v. Penuell, 172 McMahon v. McCleman, 516 V. Shorenton, 780 McMichael v. Raoul, 855, 884, 1005 McMullen «. McKenzie, 110 McNair v. Piatt, 196. 199 V. Rayland, 659, 843 v. Rewey, 522 McNally ';. Kerswell, 485, 584 McNamara v. Draft, 107, 120 McNeill V. Reynolds, 120, 219 McNeish v. Hulless Oat Co., 995 McNutt^j.King, 968 V. Strayhorn, 507 McPherson v. Pemberton, 135 V. Rathbone, 117 McQueWans v. Hamlin, 211 McRae v. McKenzie, 659, 856, 945 McSherry v. Brooks, 930 McWhorter v. Mahan, 229 Ixxxviii AMEKICAN AUTHORITIES CITED. ^McWilliams Manuf. Co. v. Blun- dell, 551 Maddock v. Astbury, 729 Magill V. Merrie, 159, 179, 345 Maginnis v. Crosby, 652 !Magorem v. Robertson, 83 Maier y. Canavan, 397 Major V. Hawkes, 196 Maltby v. Northwestern, &c. R. R. Co. 280 Manhattan Co. v. Led yard, 181 Manhattan Manf. Co. v. Sears 109 Mann v. Etna Ins. Co., 206 V. Flannigau, 644 v. Higgins, 500 V. Locke, 355 Manning, re, 1072 V. Gasharie, 6, 308 V. Hayes, 181 Manufacturer's, &c. Bank v. Gire, 161, 234, 248 «. Winship, 293 Manville v. Parks, 189 Maples V. Geller, 488 Marble v. Lypes, 56 Mardis v. Shackleford, 156 Maret v. Wood, 467 Marine Co. v. Carver, 219 Markham v. Hazen, 331 Markraan v. Buckingham, 433 Marks v. Hill, 673 V. Sigler, 112 V. Stein, 14 Marlett ». Scaatland, 999 v. Jackman, 994, 995 Marquand v. New York Manufac- toring Co., 622, 979 Marsh's appeal, 647 Marsh v. Bennett, 756 «. Gold, 211 V. Northwestern Ins. Co., 66 ■y. Russell, 124, 717 V. Thompson, 259 V. Thompson National Bank, 179, 219 Marshall v. Colman, 703, 977 V. Hull, 150, 432 V. Johnson, 530, 890 Marston v. Dewbarry, 607, 610 Martin v. Blanchin, 899 v. Davis, 420 V. Ehrenfels, 107 V. Fewell, 6 V. Johnson, 145 V. Kaffroth, 226 Page Martin «. Kelly, 151, 434 V. Kirk, 358 V. Searles, 345 V. Smith, 790 V. Solomons, 929 V. Thrasher, 175 «. Van Schaack, 746, 905 1). Walter, 369 V. Walton, 255, 369 Marvin v. Buchanan, 288 1). Dutcher, 110 Marwick, ex parte, 1179 Marwick, Matter of, 491 Marye ®. Jones, 951 Mason r. Conneli, 472, 621 V. Denuison, 469 v. Eld red, 420, 449 V. Hackett, 19 «. Tipton, 922 V. Wickersham, 405 Mass V. IMessick, 227 Massey v. Pike, 206 Master «. Kirton, 978 Mathers v. Patterson, 542 Matherson v. Wilkinson, 487 Mathewson D. Allen, 513 V. Clarke, 777 Matlack «. James, 565,1016 Matlock V. Matlock, 566 Matot, re, 1057, 1067 Matteson v. Nathanson, 994 Matthews v. Colbaru, 934 Mauck V. Mauck, 566 Maude v. Rodes, 776, 800 Maudlin v. Branch Bank, 182, 210, 265, 342, 368, 369 Mauney v. Coit, 358 Maupin v. Daniel, 884 Maxey ». Averill, 1011 V. Strong, 348 Maxwell v. Evans, 1203 May, re, 1156 Mayberry v. Barniton, 210 Mayer v. Clark, 505, 574 Maynard t. Fellows, 299 Mayor v. Hawkes, 353 Mayraut v. Marston, 24 Meachem v. Batchelder, 180 Mead v. Bank of Fayetteville, 1195 V. Shepherd, 222 Meader v. Hughes, 318, 332 V. Malcolm, 266 Meaghan, Matter of, 733 Meatier v. Cox, 736 Mechanics' Bank, &c. v. Foster, 268 AMEEICAN AUTHORITIES CITED. Ixxxix Page Mechanics' Bank v. Livingston, 188, 367 Mechanics' & Farmers' Bank v. Dakin, 148, 195 Mechanics' & Traders' Ins. Co. v. Richardson, 266 Mecutchen «. Kennady, 272 Meehan v. Valentine, 18, 2(5 Meggett V. Finney, 355 Melick, ex parte, 1071 Melliuger v. Parsons, 351 Melvin, re, 1203 Menagt v. Whitwell, 609, 1024, 1026 Mercantile Bank v. Cox, 293 Mercer v. Sayre, 355 Merchant v. Belding, 169 Mergansteen v. Thrift, 606 IMeridan Nat. Bank v. Brant, 602 Merrick v. Brainard, 621 Merrill v. Bartlett, 72 V. Green, 757, 934 V. Rinker, 506, 609 Merrit «, Pollys, 341, 346 Memwether v. Hardeman, 686, 851, 940, 942 Mervin v. Playford, 20 Meserve ?;. Andrews, 17, 19, 675 Messer v. Messer, 568 Metcalf V. Fonts, 753, 883 v. Officer, 27, 106, 1079 V. Redman, 33 Metting v. Colt, ' 19 Meyberg v. Steagall, 607 Meyer v. Atkins, 348 V. Kohn 22 Meyers v. Bennett, 886 Mick V. Howard, 110, 260 Mickle V. Peet, 942 Miech V. Allen, 1018 Mifflin V. Smith, 158, 285 Miles V. VonDeyn, 468 ■p. Wann, 58 Millar v. Craig, . 665 Millard v. Ramsdell, 'l004 Millaudon v. Sylvestre, 6(35 M.Wlav, ex parte, 13,1172 V. Andres, 932 V. Bartlett, 20 v. Brigham, 625, 981 i), Cappel, 485. V. Chandler, 19 V. Dow, 201 V. Estill, 004 «. His Creditors, 1018 Page Miller v. Hines, 179 V. Hughes, 179 V. Jones, 820, 999 v. Keys, 1055, 1061 D. Lord, 669, 714 V. Manice, 265 1). Miller, 1026 V. Northern Bank, 309, 474 V. Price, 22, 194, 461, 574 «. Sims, 730 V. Sullivan, 216 Millerd v. Thorn, 399 Milliken v. Loring, 358 Mills V. Barber, 162, 184 r. Fellows, 644, 839 Milne r. Douglass, 489 Miner v. Downer, 291 T. Pierce, 014 Miner's Iron Works v. Davidson, 449 Minor t. Gaw, 269 M\tchc\\, ex 2)arte, 1054 V Dale, 47] V. Darmond, 318 ■?>. Dobson, 396 t\ O'Neale, 82 V. Read, 739 V. Rich, 358, 446 V. Wells, 933 V. Winslow, 1083 Mitchum ». Bank of Ky., 343 Mittnight «. Smith, 1020 Moale V. Hollins, 420 Moderwell v. Mullison, 566, 567 Modisett v. Lindley, 207 IMoffat V. Thomson, 1001 Moister's appeal, 229 Moline, &c. Manuf. Co. v. Webster, 1016 Moline Wagon Co. v. Rummell, 269 352 Monroe v. Ezzell, 459 ®. Hamilton, 981 Montague v. Reakert, 348 Moutanye v. Hatch, 885, 886 Montgomery v. Boon, 206, 207 Moutjoys v. Holden, 922 Moody V. Payne, 894 Moon V. Story, 542, 669 Moore's appeal, 104, 489 Moore t\ Bare, 594 i\ Brink, 6 V. Burns, 433 V. Gano, 946 V. Huntington, 775 V. Lack man, 348 xc AMEKIOAN AUTHORITIES CITED. Page Moore r. Smith, 29 r. Thieber, 675 1). Walton, 45 Moorehead v. Gilmore, 181 Moran v. LeBlauc, 927, 931 t). Prather, 211 Mords V. Gleason, 625 Morean v. Edwards, 227 Morean r. Saffarans, 518 Morehcad r. Wiiston, 333 Mores v. See. for Dest itute Chil- dren, 480 Morgan i\ OInoy, 566 V. Richarsou, 358, 446 V. Roberts, 372 V. Skidmore, 1020 V. Stearns, 20 V. Watmough, 615 Moriarty v. Baily, 272 Morin v. Matin, 939 Moritz ?'. Peebles, 924 V. Phelps, 516 Morrill v. Spurr, 31 Morris v. Allen, 666, 667 V. Hillery, 437 V. Jones, 202, 207 V. Morris, 652, 1019 V. Neel, 632 Morrison v. Cole, 23 V. Krutz, 1016 V. Perry, 356 V. Smith, 658 V. Stockwell, 938 Morrow v. Riley, 931 Morse, re, 1178 V. Bellows, 206, 207, 209 11. Haijenah, 191 t\ Hafl, 124, 586 Morton v. Ostrom, 560 Mosely y. Garrett, 625 Mosgrove i\ Golden, 461 Moss V. McCall, 665 V. Riddle, 163 Mosseau r. Thebens, 325 Mourain r. Delarare, 667 Mowatt i\ Rowland, 348, 368, 370 Mowbray v. Lawrence, 894 Moyes v. Brumeaux, 113 Mudd V. Bast, 994 Muir p. Leitch, 1016 Mullamy v. Keenan, 927 Mullendore v. Scott, 759 Mum ford v. Murray, 393, 654 Munroe t\ Cooper, 266, 268 Murdock, ex jxirte, 1202 Page Murdock v. Martin, 930 V. Mehlhop, 626, 720 Murphy, Matter of 733 Murphy v. Camden, 194 V. Crafts, 661 Murray v. Bogert, 621, 942 V. Fox, 392, 413 i\ Johnson, 32, 712 V. Mumford, 999 MurrcU v. Murrell, 210, 530 MurriU B.Neil, 1016 Musier ?). Trumpbour, 30 Mutual Bank v. Richardson, 266 Myatts V. Bell, 357 Myer v. Krohn, 371 Myers v. Huggins, 361 V. Moulton, 228 Mygatt V. McClure, 360' Mynderse v. Snook, 463 Myrick v. Dame, 925 Naglee v. Minturn, 951 Nail V. Mclntyre, 269 Napier v. Catrou, 202, 203, 207 V. M'Leod, 359 National Bank v. Norton, 356, 369 i\ Sackett, 177 V. Thomas, 287 Nat. Bank of Commonweath v. Law, 264 National Bank of Jacksonville v. Mapes, . 1 94 Nat. Exchange Bank v. White, 188, 288-- National Union Bank v. London, 6, 179, 280- Nave V. Sturges, 707 Neal V. Hassan, 354, 426 Neil r. Greenleaf, 924 Nelson, ex parte, 469' Nelson v. Connor, * 616 r. PLiyner, 519 V. Hill, 488, 1011 i\ Lloyd, 116, 470- Newbiggin v. Pillans, 97 Newbran r. Snieder, 25 Newcouiet i\ Brontzman, 341 Newell V. Humphrey, 546, 918 V. Smith, 179 Newland v. Tate, 645 Newman, expurte, 1202 V. Bagley, 177 V. Bean, 18 Newmarket Bank v. Locke, 1012 New Orleans v. Gauthreauz, 2 AMERICAN AUTHORITIES CITED. xer Pai,'e New York Fire Ins. Co. v. Bennett, 259, 269 Niagara County Bank v. Lord, 552 Nichol V. Stewart, Nicholaus r. Thielges, Nichols V. Cheairs, V. Hughes, V. Ogden, V. Prince, V. Sober, V. White, Nicholson v. Janeway, ■i\ Moog, Nickels v. Mooring, NicoU V. Mumford, Niday v. Harvey, Niehoff 11. Dudley, Niles V. Williams, Nimis, re, V. Bigelow, Nims «. Niras, Nixdorf v. Smith, Nixon V. Downey, V. Nash, Noble V. M'Clinton, Noel V. Bowman, Noonan, re, V. McNab, V. Or ton, Norcross, Matter of, V. Clark, Norman v. Huddleston, Normeut v. Johnson, Norris v. Ploward, ®. Vernon, North V. BIoss, v. Mudge, North Pa. Coal Co. 's appeal. North River Bank v. Stewart, Northrup v. Phillips, Norton ■». Thatcher, Norway v. Rowe, Norwent v. Hull, Noyes v. New Haven Co., Nugent V. Locke, Nusstaumer i\ Packer, Nutt V. Hunt, Oakley v. Aspiuwall, Oakey v. Rabla, Oates V. Brown, O'Bannon ■;;. Miller, V. Simrall, Ober V. Indianapolis R. R. Co , 354 603 20 280 167 566 759 275 118 851 364 353 1016 419 12 814 1172, 1176, 1177 292 855 394, 479 172 607 220 601 1070 721 721 967 479 847 196, 199 740 573 473 445 283 1016 784 285 977 20 R. 199 814 345 182 170 1016 449 571 209 &c., R. Page- O'Bryan 'o. Gibbons, 904 Ochmingcr, re, 1067 Odiorne v. Maxcy, 172, 510 V. Woodman, 944 Odgeen v. Arnot, 339 Odgen V. Gillingham, 1104 Oflfut r. Scott, 998 Ogden V. Astor, 999, 1002 Oicott V. Wing, 656, 914 Oliphant v. Mathews, 146, 293 Oliver v. Gray, 80 Olleman i\ Regan, 631, 933 Olmsted v. Hotailing, 226, 443 Onondaga Bank v. De Puy, 190, 191 Ontario Bank v. Hennessey, 145 Oppenheimer v. Clemons, 656 Oreilly v. Brady, 861, 1005 Ormsbee v. Davis, 216 Osborn v. McBride, 567 Osborne v. Barge, 215- V. Stone, 211 Osgood V. Glover, 213 Ostrom V. Jacobs, 173 Otis V. Sill, 525 O'Toole V. Gaivin, 126. Ottoman Cahvcy Company ■». Dane, 149 Overton v. Tozer, 446 Owens V. Collins, 565 Owings V. Low, 173- V. Trotter, 300 Oxley, ex. farte, 733 w WiUis, 358- Ozeas V. Tolman, 942 Pagan v. Sparks, 483 Page V. Brant, 366, 369, 471 V. Morse, 94 v. Vaukirk, 767, 963 Pahlman r. Graves, 1018 V. Taylor, 212, 255 Pahlmian v. Cranes, IOI9 Paige V. Paige, 554 Paine v. Moore, 928 V. Thatcher, 924 Palmer v. Dodge, 354 V Elliott, 300 v. Myers, 177, 182 V. Pinkham, 119 V. Scott, 241 v. Stephens, 146, 296 V. Tyler, 816 Parchen v. Anderson, 40 Pardee «. Markle, 380, 937 IJCll AMERICAN AUTHORITIES CITED. Page Parish v. Lewis, 477, 604, 10J2 Park i\ Wooten, 345 Parker, In re, 405 V. Bowles, 568 V. Canfield, 19,! J8, 44 ,405 V. Cousins, 357 V. Gregg, 455 V. Jahnson, 475 T. Jonte, 689 883 v. IMuggridge, 1173 Parkhurst v. Kinsman, 72 , 979 V. Muier, 861 Parkin v. Carruthers, 365 Parmalee f. Wiggenhorn, 382 Parmenter v. Kingsley, 760 Parsley v. Ramsey, 145 Partiu V. Leitenloh, 179 Partridge v. Kingman, 20 Patch V. Wheatland, 214 Pate V. Bacon, 150, 151, 432, 434 V. First Nat. Bank, 255 Paterson v. Camden, 405 V. Silliman, 560 Paton V. Baker, 229 V. AVright, 183 Patten v. Cunningham, 449 V. Gunney, 465 V. Karaugh, 207 V. Whitehead, 454 Patterson r. Martin, 840 V. Silliman, 605 V. Ware, 676 Pattison v. Blanchard, 18 v. Norris, 349 Patton V. Calhoun, 649 Payne v. Able, 1201 T. Matthews, 1018 t. Slate, 357 Peacey t. Peacey, 756 Peacock v. Cummings, 535 V. Peacock, 953 Pearce v. Bruce, 485 V. Chamberlain, 984 v. Pearce, 666, 859 Pearpoint ?>. Graham, 184, 336, 951, 958 Pearson t. Keedy, 597, 1012 v. Post, 101 Tease, re, 1176 V. Cole, 188 V. Rush, 672, 991 Peck V. Fisher, 1022 r. Jenness, 1200 V. Schullze, 609 Pecker v. Hall, 356 Page Pecot V. Armelin, 562 Pemberton v. Oakes, 382 Pendleton r. Wambersie, 777, 822 Penn, Matter of, 1070 V. Kearney, 213 D. Stone, 942 t\ Whitehead, 94 Penninian v. Jones, 781 Pennrock v. Swayne, 946 Penny v. Martin, 420, 472 Peoples' Bank v. Shock, 607 People V. Croton Acqueduct Board, 145 V. Judges of Dutchess, 209 V. Till. 597 Pepper v. Thomas, 554 Perkins v. Perkins, 841 Perley v. Brown, 936 Perman v. Tunno, 1026 Perrin v. Keene, 354 Perrine i\ Hankinson, 23 Perry v. Butt, 4, 111 V. Holloway, 580 V. Randolph, 114, 280 V. Spencer, 756 Person v. Carter, 206, 207 V. Nelson, 575 Peters v. Davis, 479 V. Horbach, 245 r. IMcWilliams, 334, 661 Peterson v. Poignard, 816 V. Roach, 304 Petit V. Chevelier 906 Pettee v. Appleton, 40, 41 V. Orser, 181, 182 Pettes V. Bloomer, 207 Petteugill V. Jcnes, 927 Pettis V. Atkins, 6 Peyton v. Lewis, 332 " V. Stratton, 201 Pfeiffer v. Maltby, 138 Pfirrman 1\ Koch, 574 Phelan v. Hutchinson, 686 Phelps, re, 1081 V. Brewer, 444 Philips V. Bridge, 1016, 1024, 1037 Phillips V. Cork, 615 v. Goldtrce, 126, 434 V. Lockhart, 940 V. Nash, 32, 340 V. Parington, 72, 110, 172, 174 V. Reeder, 360, 512, 828, 860 V. Turner, 044 Piatt V. Oliver, 203, 338, 566, 604, 631 AMEKIOAN AUTHORITIES CITED. XClll Page Pickels V. McPherson, 197 Pickerell v. Fisk, 2, 69 Pickney v. Kerney, 224 Pierce v. Cameron, 419 T. Covert, 914 V. Cul)l)erly, 839, 881 V. Daniels, 662 V. Ham, 827 V. Hickenburg, 196, 199 V. Jackson, 182, 243, 461, 506, 611, 612, 1016, 1024 V. McClellan, 512 V. Pass, 196, 199, 269 V. Tiernan, 651 V. Nelson, 602 Pierson v. Hooker, 203, 207, 209 V. Steiumyer, 111, 123 pike r. Bacon, 205 V. Douglas, 219 Pillsbury v. Pillsbury, 69 Pirn V. Harris, 666 Pine V. Ormsbee, 157, 512 Pinkney v. Hall, 270 Pio Pico V. Cuyas, 935 Piper V. Smith, 568, 666 Pitcher v. Barrows, 342 Pitkin V. Pitkin, 1013 Pitt, re, 1072 Pitts V. Hall, 72 V. Waugh, 165, 515, 547 Place V. Sweetzer, 607, 609 Piatt V. Halen, 462, 501 V. Piatt, 836 Pleasants v. Fant, 13 Ploss v. Thomas, 610 Plumb, re, 1080 Plumer v. Lord, 97 Plummer v. Trout, 22 Plunkett v. Dillon, 15 Poillon V. Secor, 60 Polk V. Buchanan, 45 V. Oliver, 866, 369 Pollard V. Stanton, 24 Pollock v. Williams, 281 Pomeroy v. Benton, 691 V. Sigerson, 29, 42 Pond V. Clark, 650, 665, 667, 674 V. Cummins, 19 v. Starkweather, 304 Ponton V. Dunn, 700 Pool V. McDonald, 1205 Poole V. Delancy, 933 V. Gist, 236 V. Hintrager, 397 V. Lewis, 285 Page Pope V. Hays 757 V. Randolph, 929 ■0. Risley, 355, 364, 366 V. Salsman, 818 Popper V. Schieder, 907 Porter t. Cresson, 150, 432 v. Gunnison, 265 V. Wheeler, 754 V. Wilson, 118 Portland Bank v. Hyde, 437 Portsmouth v. Donaldson, 817 Posey v. Bullitt, 207 Pose V. Kimberly, 229 Postlewaitv. Howes, 439, 1011 Pote V. Phillips, 941 Potter V. Dillon, 179 V. Greene, 58 r. McCoy, 208 V. Moset, 994 V. Price, 191 Potts V. Blackwell, 573, 574 Powell «. Graves, 851, 931, 934 V. Hopson, 337, 994 V. Maguire, 917 V. Messer, 266 V. North, 337, 994 Powers V. Powers, 1024 Powrie v. Fletcher, 497 Pratt V. McHatton, 123, 651, 669, 856, 858, 899, 991 V. Willard, 453, 463 Pray v. Morse, 512 Prentiss v. Foster, 180 V. Kelly, 112 V. Sinclair, 366, 369 Presser v. Henshaw, 331 Preston n. Foelinger, 370 Price V. Alexander, 19, 207 V. Gavins, 93& V. Hicks, 562, 565 V. Hunt, 616 V. Towset, 342, 346 V. Williams, 762 Priest V. Chouteau, 13 Prince v. Crawford, 187 Princeton, &c. Turnpike v. Gulick, 341. 346 Pringle v. Leverich, 58, 350 Priutup V. Turner, 214 Providence v. Bullock, 562 Prudhomme v. Henry, 354 Pruyn i\ Black, 470 Pugh V. Carrie, 561, 566 Purdy V. Lacock, 447, 1018 V. Powers, 269 XCIV AMEKICAN AUTHORITIES CITED. Page Pursley v. Ramsey, 107, 317, 367 Purviance v. Sutherland, 282 Pur vines v. Champion, 929 'Puvvls, e.v pai'te, 1081 Putnam v. Dobbins, 567 V. Parker, 586 QuiNCEY V. White, Quine v. Quine, Quiiicr V. Marblehctid, Quinliran v. English, 107 594 102 889 Raborg v. Bank of Columbia, 491 Radcliffe p. Yarner, 281 Raiuey v. Nance, 1016 Ramey v. McBride, 229 Rammelsberg v. Mitchell, 565, 566, 586, 748 Ramson r. Pomeroy, 485 Ramsy v. Deas, 247 Randall v. Morrell, 890, 905 Randell ». Yates, 108 Randolph v. Peck, 348 Randolph Bank v. Armstrong, 162 Rank v. Grote, 567 Rankin v, Jones, 574 Ransom v. Loyless, 368 Ransom v. Yan Deventer, 572 Ratzer v. Ratzer, 594 Ray V. Bogart, 785, 842 Raymond v. Caine, 856 1). Putnam, 686, 859 Read v. Nevitt, 722 Reber v. Columbus, &c. Co., 473 Reboul V. Chalker, 33 Redfield v. Middleton, 804 Redlon v. Churchill, 261 Reece v. Hoyt, 354, 512 Reed, ex parte, 1200 «. Girty, 420 V. Johnson, 436, 826 V. Murphy, 19 V. She])ardson, 612, 1024 r. Wessel, 513 Rees V. Simons, 453 Reese v. Bradford, 505, 532, 574 Reeves v. Ayres, 569 V. Denicke, 148 Regester v. Dody, 400 Rcid V. Frazer, ' 344 r. Vidal, 795 Rcilly V. Smith, 366 Reimsdyk v. Kane, 296 Reis V. Hellman, 662 Reiter v. Morton, 921 Page Remick v. Ewing, 994 Remington v. Cummings, 445 Renfrow v. Pearce, 915 Reno V. Crane, 551 Renton v. Chaplain, 507, 616, 618, 902 Reppert v. Colvin, 426 Reubiu v. Cohen, 220 Reybold v. Dodd, 107, 644 Reynold v. Austin, 970 Reynolds v. Cleveland, 221, 285 V. Mardis, 664, 665 V. Pool, 24 V. Toppan, 20 V. Waller, 234, 243 Rhea v. Vannoy, 535 Rhiner v. S«'eet, 856 Rhodes v. Williams, 776, 911 Riarl v. Willhelm, 944 Rice V. Austin, 18, 20, 1016, 1024 V. Barnard, 1020 V. Barrett, 55, 58 V. Doniphan, 448 ■V. Richards, 486, 1006 V. Shumau, 510 Rich V. Davis, 179 Richards r. Baurman, 900, 963 V. Butler, 352, 366 V. Grinnell, 15 «. Hunt, 352 V. Todd, 804 Richardson v. Bank of England, 683 V. Farmer, 165 T. French, 241 «. Fuller, 446 V. Hewitt, 20 T. Lester, 214 V. Moies, 356 V. Wyatt, 690 Richmond v. Judy, 67 Richter v. Poppenhausen, 1009 V. Sehn, 113 Rick V. Neitzy, 884 Rickey v. Bowns, 918 Riddle v. Etting. 354 Rider v. Gilbert, 594, 1016, 1025 Ridge V. Alter, 449 Ridgeley v. Carey, 1022 V. Dodson, 67 Ridgway's appeal, 562 Ridgeway v. Grant, 713, 926 Ridley v. Taylor, 266, 271, 273 Riggs V. Stewart, 941 Rimel v. Hayes, 273 Ring V. Ham, 108 AMERICAN AUTHORITIES CITED. XCV I?ingo V. Wing, Kipley v. Colby, Hippey V. Evans, Hishton V. Grissell, Risley v. Pope, Rizer v. James, Roach V. Periy, Roache r. Pondergast, Robb V. Mudge, V. Stevens, Robbins v. Fuller, V. Laswell, Robert v. McCarty, Roberts v. At wood, t\ Johnson, V. Kelsey, V. Law, V. McKee, V. Oldham, V. Ripley, V. Strang, V. Totten, Robertshaw v. Hanway, Robertson v. Baker, V. Miller, t\ Read, Robinson v. Aldridge, V. Crowder, i\ Davidson, V. GilfiUan, V. Green,', V. Gregory, V. Magarity, V. Thompson, Hobius «. Warde, Rochester v. Trotter, Rockwell v. Wilder, Roddin, re, Rodes V. Rodes, Roe V. Galliers, Roger V. Nichols, Rogers, e.v parte, r. Batclielor, V. Kichline, V. Merander, V. Nichols, V. Ressiuer, r. Rogers, Rohr «. Pearson, Rolfe V. Dudley, Rollins i\ Stevens, Rolston V. Click, Roney v. Buckland, Roop V. Rogers, Roosvelt T. McDowell, Page 327, 331 Root T. Stevenson, Page 943 105 Rootes r. Wellford, 360 105 Rose V. Baker, 192 666 T. Roberts, 759 366 Rosenberg v. Block, 105 106 Rosenfield v. Haight, 45 594, 644, 645 Ross V. Cornell, 729 956 V. Everitt, 450 348, 574 V. Henderson, 560 1023 v. Howell, 447 353 ®. West, 926 158 V. Wigg, 126 563 Roth V. Colvin, 179 454 V. Moore, 221, 285 233 Rothell V. Grimes, 1025 817, 994 Rothwell i\ Dewees, 488, 774 1000 Rouillicr v. Wernicki, 97 512, 870 Rowand r. Eraser, 565 1029 Rowland v. Boozer, 935 945 V. Miller, 860 393 Rowley v. Stoddard, 391 255, 661 Royster r. Johnson, 648 488, 586 Ruckle, ex jxirte. 1157 560, 605 Ruckmau v. Decker, 546 706 Ruddick v. Otis, 22 683 RuflBu, ex 2)arte, 597 265 Ruffner v. Hewitt, 353 184 V. McConnell, 209 799 708, 947 Rugely V. Gill, Ruhe V. Burnell, 455 111 104, 923, 942 177 Rush V. Thompson, Russel V. Leland, 226 216 146 Russell, ex imrte, 1155 486, 1009 V. Annable, 209 112 V. Byron, 818 163 v. Green, 199, 670 933 V. Grimes, 936 1143 V. Leland, 387, 981 650 V. Miller, 562 733 979 V. Minnesota Outfit, V. Swan, 944 443 1059 Rust V. Chisolm, 561 269, 272 'V. Hauslet, 266 459 Rut ledge v. Squires, 170, 266 1018 Ryersou v. Heudrie, 468 70, 894 Ryhiner v. Feickert, 147 326 437, 946 Sage v. Chollar, 754 860, 862 195 Sager v. Tupper, 111, 117, 309, 497 210 Salemon v. Shinner, 645 211 Salmon v. Davis, 195 192, 232 Saloy V. Albrecht, 605, 981 1025 Salter v. Ham, 12, 841 485 Saltmarsh v. Bower, 168, 190 XCVl AMERICAN AUTHORITIES CITED. Page Sampson v. Shaw, 123, 485 Sanborn v. Stark, 182 Sanders v. Ruddle, 222 V. Ward, 197 Sanderson v. Milton Stage Co., 336, 953 Saiidilands v. Marsh, 212 Sanger v. Overmier, 480 Sangford v. Mickles, 357 Sangston v. Hack, 19 Sankey v. Columbus Iron Works, 19 San Jos6 Indiano, The, 146, 529 Sanquoit Silk Manuf. Co.'s appeal, 62 Sauthoir, re, 988 Sargent v. Collins, 106, 290 SaulTey v. Howard, 280 Saul V. Kruger, 443 Saunders v. Bartlett, 607 V. Duval, 882, 883 V. Wilder, 488 Sauntry v. Dunlap, 269, 626 Savage t. Carter, 650 V. Putman, 398, 631 Savery v. Thurston, 657 Saxton V. Lamb, 710 Sayer v. Bennet, 965, 970, 984 Saylor v. Mockbee, 897 Sayre v. Peck, 849 Schackel ford V. Clark, 1012 Schackleford v. Schackleford, 571 SchaefEer v. Fithian, 1019 V. Fowler, 69 Schallenberger r. Seldowridge, 66 Schalter v. AVinpenny, 343 Schatzell v. Bolton, 611 Scheuke v. Dana, 648 Schermerhorn v. Schermerhorn, 211 Schieffelin v. Stevens, 366 Schields v. Fuller, 585 ^chink, ex parte, 105b Schlater v. Winpenny, 148 Schmidlapp v. Currie, 574 Schneider v. Sausom, 228 Schu(i\)f, ex parte, 1200 Schofield, ex parte, 1202 Scholefield v. Eichelberger, 337, 994 Schonenian v. Fegley, 360 Schuchardt, //i. re, 251 Schurren r. Davis, 342 Schwabacker v. Riddle, 232, 251, 277 Schwindler v. Euell, 394 Scott t\ Bandy. 167 «. Blood, 106 V. Bogart, 448 V. Bryan, 652 V. BuflForn, 1000 Scott V. Campbell, V. Colmesnil, - Page- 14, 932 845, 420 V. Lalor, 826 V. McKinney, V. Pinkerton, 54r 856 V. Scott, 774 T. Searles, 823 V. Shepard, 224 V. Shipherd, V. Trent, 356 195 V. Tupper, Scovill V. Kinsley, 1000- 627 Scroggs V. Cunningham, Scruggs i\ Blair, 668 566, 567 V. Russell, 102, 515 Scudder v. Delashmut, 1026 Scull's appeal. Seaman v. Johnson, 62 928 V. Waddington, 982 Seawell v. Payne, 214, 813 Secor V. Keller, 459 Sedan v. Williams, 419, 604, 756 Seekell v. Fletcher, 105. Seeley r. Scheuck, 150, 432 Seegel v. Chidsey, 304 Seighortner v. Weissenborn, 942, 964 Sailer v. Brenner, 568^ Seitz V. buffum, 434 Selden v. Bank of Commerce, 169, 210 Seldner v. Mount Jackson Nat. Bank, 182 Sellers v. Streator, 497 Sells v. Hubbell, 631 Sewell V. Humphrey, 817^ Sexton V. Sexton, 520 Seymour, ex parte, 1200 Shaaber v. Bushong, 211 Shackleford v. Shackleford, 883 V. Smith, 55 Shad «. Fuller, 896 Shafer v. Randolph, 65.' Shaffer v. Snyder, 342 Schalck V. Harmon, 580 Shalter r. Caldwell, 948 Shamburg v. Ruggles, 366 Shanahau. re, 1108 Shannon v. Wright, 887 Shapard v. Lightfoot, 448- Sharp V. Hibbirs, 255 Sharpe v. Johnson, 158' Shattuck r. Lawson, 939 Shaw V. Knowles 1012. V. McDonald, 270' V. Pratt, 39 L AMERICAN AUTHORITIES CITED. XCVU Shearer v. Shearer, Page 914, 999 Shearman v. Hart, 739 Shedd V. Bank, 445 V. Wilson, 1018 Sheiffer, ex parte, 1081 Sheldon v. Smith, 177 Shelly v. Hiatt, 648 Shelton v. Cocke, 355 Shenk's appeal, Shepard, ex parte, Shepard, Matter of. 396 1084, 1091 1071 V. Pratt, 19 V. Ward, 196, 455 Shepherd, Matter of, v. Boggs, V. Frys, SherriflFv. Wilks, 981 747, 817 453 211 Sherman v. Kelton, 117 Sherwood v. Marwick, 243 V. Snow, 299 V. St. Paul, &c. R. R. Co., 561 Shiddell v. Messick, 676 Shields V. Fuller, 1001 Shipley v. Kenton, * 229 Shipwith V. Lea, 586 Shirley v. Fearne, 206 ShirreffB. Wilks, 270, 273 Shoemaker Piano Co. v. Bernard, 333, 883 Shorter v. Highlower, 332 Shotwell V. Miller, 390 Shouse, ex parte, 1064 Shropshire v. Russell, 522, 580 V. Shepperd, 19 Shufeldt V. Seymour. 467 Shulte V. Hoffman, 905 Shurlds «. Tilson, 369 Shutts «. Chaffee, 436 Skannel v. Taylor, 306, 405 Skinner v. Bedell, 583 V. Dayton, 7, 716 V. Tinker, 157 Skipp V. Harwood, 612, 614 Skipwith V. Lea, 999 Sibley v. Young, 284 Siegel V. Chisdey, 339, 966 Siegfried v. Ludwig, 358 Sigler V. Knox Co. Bank, 574 Sigourney v. Munn, 565, 912 Sigsby V. Willis, 1070 Sikes V. Work, 68, 931 Silvers v. Foster, 469 Silverthorn v. Brands, 654 Simmons v. Curtis, 339, 981 Simonds v. Strong, 345 G Simonton v. Poucher, Simonton v. McLain, Simpson v. Seltz, V. Geddes, v. Leech, V. Schulte, Simrall v. O'Bannons, Sims V. Brutton, V. Smith, Simson v. Ingham, Sinclair v. Wood, Sindh V. Crowle}', Sinklen v. Lambert, Sitler D. Walker, Slade V. Paschal, Slatter v. Caroll, Slee V. Bloom, Page 855 822 665 452 581 474 650 243 199, 264, 360 383 106 191 222 607, 617 25, 118 1011 163 Sleech's Case,in Devaynes v. Noble, 404 Slenimer's appeal, 567 Sloan V. Moore, 183, 886 Slocum V. Hooker, 469 Sloo V. State Bank, 446 Smith v. Andrews, 27 V. Babcock, 1200 «. Baker, 1016, 1024 V. Black, 420, 447 V. Blatchford, 434 V. Bodine, 20 v. Bryson, 775 V. Canfield, 150, 432 V. Collins, 188, 190 V. Cooper, 744 V. Crooker, 464 V. Danvers, 676 ■B. Davis, 453 v. Edwards, . 604 v. Gregg, 434 V. Griffith, 106 V. Hall, 218 V. Hill, 168, 509 V. Hoffman, 287 V. Hollister, 104 V. Hunt, 453 V. Jackman, 369 V. Jackson, 369, 554, 566 v. Kerr, 205, 206 V. Loring, 659 V. Lowe, 899, 903 V. Ludlow, 426 V. Lusher, 260 v. Mallory, 1016 v. Mulock, 157, 953 V. Perry, 19 V. Peters, 409 V. Ramsey, 516 XCVlll AMERICAN AUTHORITIES CITED. Page Smith V. Reddell, 925 V. Riddle, 713 v. Sheldon, 348 V. Sloan, 187 V. Smith, 809, 926, 942 V. Stone, 209 v. Summerlin, 15 V. Tarlcton, 102, 108, 565, 693 V. Vanderburg, 342, 724 V. Wilson, 78 V. Wright, 14 Smyth ^1. Harvie, 156, 236, 372 V. Strader, 269 Snead v. Barringer, 287 Sneed v. Kelly, 171 Snell V. Atlantic, &c. Co 285 V. Crowe, 614 V. DeLand, 15, 66 Sniffer v. Lass, 1016 Snodgrass's appeal. 1026 V. Broadwell, 106, 436 Snow V. Howard, 474 Snyder v. Burnham, 15 «. May, 202, 207 Solom V. Kirk wood, 369 Soloman, ex parte, 1202 Solomon V. Fitzgerald, ICOl «. Solomon, 4, 123, 276, 515 Soule V. Hayward, 14 Southard v. Lewis, - 488 V. Steele, 175 Southern «. Grim, 342 Southern White Lead Co. V. Haas, 33 South Fork Canal v. Gerdon, 225 Southmayd's appeal, 514 Southwick V. Allen, 957 V. McGovern, 342 Spann v. Fox, 842, 1003 V. Nance, 748, 895 Spearman v. Keim, 94 Speake v. Barrett, 343 V. Prewitt, 459 V. White, 355 Spear «. Crawford, 110 V. Newell, 817 Spears v. Toland, 37, 342 Speer v. Bishop, 352 Sprague v. Ainsworth, 180 Springer v. Cabell, 942 V. Shirley, 405 Sproat V. Porter, 67 Sprout V. Crowley, 924 Spurck ». Leonard, 212 Staats v. Bristow, 581 Page Staats V. Hewlett, 748 Stafford v. Fargo, 542, 934 V. Gold, 584, 946 Stage «. Gorich, 886 Stainer v. Tysen, 265 Stalhert v. Knox, 941 Stall v. Catskill Bank, 182 Stanhope v. Seeplee, 1001 Stannard v. Smith, 287 Stanton v. Lewis, 990 Stauwood V. Owen, 1033 Stapleton v. King, 15 Stark V. Corey, 192 ■y. Noble, 740 Starke v. Kenan, 479 Starr v. Case, 709, 999 Star Wagon Co. v. Sweeze, 363 State ». Baldwin, 847, 881 V. Brown. 394 V. Donnelly, 20 V. Quick, 979 V. Thomas, 574 V. Wiggiu, 111 State, &c. Bank v. Thompson, 181 Stead V. Salt, 176 Stearns v. Burnham, 349 Stebbins v. Harmon, 835 Steel V. Jennings, 190, 191 Stegall V. Coney, 167, 228, 258 Stein V. La Dow, 177 V. Robertson, 94, 594 838 Steinhart v. Fyhrie, 269 Stenburh v. Callanan, 332, 480 Stephens «. Orman, 512, 850 Stephenson v. Cornell, 55 Sterne v. Goep, 363 Stettheimer v. Stettheimer, 470 Stevens, re, 1057 V. Baker, 943 V. Bank of Central New York, 446, 1024 V. Faucet, 12, 233 V. Lunt, 455 v. Rollins, 490 t>. Yeatman, 686, 858, 986 Stevenson v. Jackson, 1193 V. Mathers, 820 Stewart v. Burkholter, 817 V. Caldwell, 304 V. Rogers, 395 V. Ruggles, 366 V. Slater, 573 v. Sonneborn, 366, 368 Stidger 0. Reynolds, 659, 716 Stiernermann v. Cowing, 360 AMERICAN AUTHOEITIES CITED. XCIX Stiles V. Meyer, Stillwell V. Gray, Stimpson v. Green, Stimson v. Lewis, Stitt V. Cass, St. John V. Holmes, Page 321 28-i 21 720, 956 392, 756 446 St. Louis Type Foundry Co. v. Wis- doD, 384 St. Nicholas Nat. Bank v. Savery, 257 Stoallings v. Baker. 29 Stockdale v. UUery, 890 Stockton V. Frey, 231 Stockwell V. Dillingham, 251 V. United States, 232 Stoddard «. Wood, 934 Stoddart v. Key, 126 Stokes V. Stevens, 229, 506 Stone V. Chamberlain, 399 V. Fouse, 924, 942 Stever©. Hinkley, 161, 179, 413, 815, 1012 Story V. Moon, 905 «. Barrel!, 174 Stoughton V. Lynch, 615, 522, 565, 632, 669, 670, 715 Stout V. Fortner, 776, 887 V. Seabrook, 842 V. Zulick, 7 Stoutenburgh v. Vandenburugh, 447 Stowers, re, 1070 Strange v. Graham, 586 Strangford r. Green, 176 Strauss v. Waldo, 467 Strecher i\ Iron, 347 Street v. Rigby. 761 Straffin v. Newell, 209 Stroman v. Yarn, 214 Strong V. Laker, 883 V. Clawson, 814 V. Fish, 201 V. nines, 450 V. Niles, 308 v. Place, 33 Studwell V. Shapter, 94 Stumpt V. Boaur, 545 Sturges V. Swift, 933 Succession of Arick, 223 Succession of Beer, 1017 Succession of Harris, 657 Succession of Powell, 944 Sullivan v. Smith, 177 Summay v . Patton, 568 Surtell V. Brailsford, 97 Sutton V. Dillaye, 355 V. Irwine, 210 Sutton V. Mandeville, Swaiis V. Coverdill, Swallow, The, Swan v. Stedman, Swann v. Sanborn, Sweeney v. Neeley, V. Stanford, Sweet V. Bradley, V. Morrison, V. Taylor, Sweetser v. French, Swift V. Dean, Switzer v. Smith, Swords V. Owen, Sylverstein v. Atkinson, Sylvester v. Smith, Page 883 461, 532 7, 15 205, 206 45, 60 861 432 226 509 943 210 520 1017 125 149, 280 222, 443, 459 Tabb v. Gist, 110, 254, 342, 621 Taft V. Buffum, 979 V. Schwamb, 559 Taggart v. Phelps, 345 Tait V. Murphy, 608 Tallmadge t. Penoyer, , 245 Tarns V. Hitner, 55 Tanner v. Hall, 259 Tapley v. Butterfield, 214, 216, 282 Tappan v. Blaisdell, 506, 609, 1025 Tapping v. Paddock, 665 Tarleton v. Herbert, 432 Tassey i\ Church, 173, 438 Tay V. Ladd, 276 Tayloe v. Bush, 23 Taylor v. Bass, 497 V. Bennis, 910 V. Bothin, 990 V. Castle, 994 V. Cawthorne, 662, 975 V. Coffing, 708 V. Coryell, 176 V. Fields, 612, 613 V. Hancock, 318 V. Henderson, 470 V. Herring, 883 V. Hill, 348 V. Hillyer, 265, 355 V. Hutchinson, 866 V. Jones, 232 V. Penny. 31, 621 V. Smith, 912, 944 V. Sotolingo, 19 V. Taylor, 222, 344, 585, 708 V. Young, 343, 666, 668 Tebbetts, e.v parte, 1200 «. Dearborn, 522 Teller v. Muir, 468 AMERICAN AUTHORITIES CITED. Teller v. Patten, V. Wetherell, Temple, re, V. Seaver, Tenney v. Foote, V. Johson, V. Simpson, Terry v. Butler, V. Carter, Terrell v. Goddard, Terrill r. Richards, Thayer v. Augustine, V. Barney, V. Lane, V. Smith, Theall v. Lacey, Third Bank v. Snyder, Thomas, In re, V. Lusk, v. Miles, V. Moore, V. Pennich, V. Stetson, V. Wolcott, Thompson's Estate, Thompson v. Egbert. V. First Nat. Bank, V. Faist, V. Hale, V. Howard, V. Lewis, V. Lowe, V. Mylne, V. Percival, V. Steamboat Morton, V. Walker, Thomson v. Thomson, Thorn r. Smith, Thorndike t. De Wolf, Thorne v. Fox, Thornton r. Kerr, t\ Bussey, Thrall v. Seward, Thurston v. Fairman, D. Lloyd, V. Perkins, Tibbatts v. Tibbatts, Tick r. Mulholland, Tiernan v. Doran, Tiffany v. Crawford, Tilford V. Ramsey, Tillier v. Whitehead, Tilliughast v. Chaniplin, Tilotson V. Tilotson, Tindall v. Bright, Page Page- 117 Tindall v. Mclntyre, 881 487, 584 Tipton V. Nance, 934 1070, 1079 Todd V. Lorah, 199 357 v. Rafferty, 515, 843 234 Tolan V. Can-, 516 573 Tom V. Goodrich, 282, 584, 937 517, 821 Tombeckbee Bank «. Dumell, 356 1016 Tomlin v. Goldsmith, 120 920 Tomlinson v. Burke, 150 904 V. Hammond, 626 103 V. Ward, 511, 855 23 Tompkins v. Lee, 102 518 v. Tompkins, 413, 1036 567 V. Woryard, 266 300 Tonkin, ex f'tTte, 1156 689 Toof V. Duncan, 163 188 Toombs V. Hill, 1016 299 Topliff «. Jackson, 759 616 Torrey v. Baxter, 356 740 Touue, re, 1204 119, 120 Tower, ex parte, 1061 199 Towle V. Meserve, 936 269 V. Pierce, 818 117 Town V. Hendee, 169 169 Towne v. Leach, 612 561 Townsend v. Bogart, 234 56 Townsends i;. Stevenson 405- 617 Tracy v. McManus, 111 269 Traphagen v. Burt, 102 168, 474 Traverse. Crane, 147 610 Travis v. Tobias, 486 817 Treadwell v. Brown, 610, 1016 694 V. Wells, 369 404 V. Williams, 208, 568 945 Trimble v. Coons, 202, 207 847 Troat, ex parte, 1150 775 Trott V. Irish, 462 172 Trowbridge v. Sanger, 468 72 V. Scudder, 78 470 Troy, «fcc. Factory v. Corning, 715, 108 926 1016 Troy Iron and Nail Factory n. 283 Winslow, 585, 1012 124 Truesdell o. Baker, 724, 955 179 Trump I'. Baltzell, 646 842, 346 Tucker?;. Oxley, 310, 1163. 1176 24 V. Peaslee, 221, 285, 934 173 Tudarman v. Newball, 390 455 Tudor v. White 866 1029 Turbeville v. Ryan, 206, 207, 209 182, 301 Turk V. Nicholson, 373 171, 280 Turnbow v. Broach, 403 571, 573 Turner v. Bisscll, 19 999 -0. Burkinshaw, 666 437 v. Mcllhaney, 106 AMERICAN AUTHOEITIES CITED. CI Turner v. Ross, V. Turner, Turnipseed v. Goodwin, Tutt V. Adams V. Land, Tuttle v. Cooper, V. Eskridge, Tweed v. Lowe, Tynberg v. Cohen, Tyner v. Stoops, Tyng V. Thayer, Tyrell v. Washburn, Page 428 664 594, 673, 925, 9T4 181, 259 667, 675 469 213 109 472 405, 512 856, 866 110 Uhl v. Biugaman, 364 V. Harvey, 120, 364 Uhler V. Browning, 272 v. Sample, 511, 565, 603 TJlerg V. Ginrich, 188 Umburger v. Plume, 395 Union, &c. Bank of Memphis v. Day, 304 Union Bank v. Eaton, 266 V. Hall, 857 Union Nat. Bank v. Bank of Com- merce, 1016 Union Nat. Bank of Hahway v. Underbill, 258 United States v. Astley, 207, 225 V. Duncan, 1022 V. Hack, 581 V. King, 1200 V. Lewis, 1157 V. McGinnis, 233 f}. Thomason, 233 V. Thompson, 390 V. Williams 506, 609, 616 United States Bank v. Binney, 27, 162, 293, 698, 883 United States Express Co. v. Bed- bury, UpdegrafE t. Rowland, 433 572 Updike V. Doyle, Upham V. Hewitt, Upson v. Arnold, Urquhart v. Powell, Utley V. Smith, 331 , 824 42 570 264 648 Vaccaro y. Toof, 348 Vallandingham r. Duval, 469 Valentine v. Hickle, 546 Taiice t. Blair, 917 T. Campbell, V. Cowing, 489, 258 1012 i). Funk, 118 Page 188 490 195 18 1070 247 355 16 1026 352 616 746, 862 470 426 611 Van Brunt v. Mather, Vandenheuvil v. Storrs, Vauderburg v. Bassett, V. Hull, Vanderhoef, re, Vanderwick v. Summerl, Vandes v. Lefavor, Vandewater v. Mills, Vandike's appeal. Van Doren v. Ilorton, Vanduzer v. McMillan, Van Dyke v. Jackson, Van Eps v. Dillaye, Van Keuren «. Parmalee, Van Kuren v. Trenton, &c. Co., 889, 906 Van Nees v. Fisher, 707, 967 Van Ness v. Forrest, 933 V. Van Ness, 691 Van Reimsdyke v. Kane, 489 Van Rensselaer v. Emery, 902 Van Rossum v. Walker, 1017 Van Scoter v. Lefferts, 228 Vansyckle v. Rorback, 95 Van Valen v. Russell, 507 Van Valkenburg v. Bradley, 356 Van Wagner v. Chapman, 101.6 Varnell «. Anderson, 405 Varnum «. Campbell, 467 Vassar v. Camp, 17 Venable -». Levick, 167, 222 Vere, exiiarte^ 733 Vernon r. Manhattan Co, 366 Veyer v. Thornburgh, 1012 Vienne «. Harris, 169 Viles t. Bangs, 276 Villa ®. Joute, 108 Vinal ■». Burrill, 355 V. West Virginia Oil Co., 460 Voorhees v. Jones, 19 Voorhis v. Child, 1011 Vosper «. Kramer, 604 Vuillamy v. Noble, 995 Waddwell t. Haight, 366 Wade v. Rusher, 781, 931 Wadley t. Jones, 855 Wadsworth v. Manning, 17, 924 Waggoner t. Gray, 665, 780 Wagner ». Fresche, 191 «. Simmons, 188 t. Wagner, 847 Wagnor v. Clay, 179, 266 Wait, Matter of, 613 Wait r. Brewster, 351, 370 Cll AMERICAN AUTHORITIES CITED. Waite V. Dodge, 27, 459 V. Foster, 357 Wakeman v. Hoyt, 1061 Walcott V. Carfield, 168 "Waldeck v. Brande, 367 Walden v. Sherburne, 172 Waldo Bank v. Greeley, 179 V. Lumbert, 179 Waldron v. Simmons, 485 Walgamood v. Kandolph, 453 Walkcnshaw r. Perzel, 779 Walker v. Clark, 448 V. Galbrath, 486 V. Goodrich, loo 372 V. McCulloch, 390 V. Wait, 945, 994 V. Whipple, 159 Wallace, re, 437 V. Berger, 118 V. Fitzsimmons, 486, 1006 V. Hull, 923 V. Rippon, 97 V. Robinson, 817 V. Yeager, 258 Waller v. Davis, 398 V. Keyes, 301 Wall is V. Wheelock, 124 Walmsley v. Mendelsohn, 817 Walpole V Renfroe, 659 Walsh V. Cane, 426 V. Lennon, 284 Walstrom «. Hopkins, 398 Walton V. Fosten, 206 V. Walton, 1160 Walworth «. Henderson, 179 . 187 Wamsley v. Lindenberger, 469 Warbritton v. Cameron, 923 Ward, re, 45 V. Barber, 354 ,444 V. Bodeman, 72 V. Brigham, 8 V. Gore, 945 V. Howell, 355 426 V. Leviston, 500 V. Thompson, 16, 32 v. Woodburn, 572 Warder v. Newdigate, 497 Wardwell v. Haight, 366 Ware v. Owens, 562 Waring v. Waring, 836 , 909 Warner, re, 66, 1073 Warren, re. 65, 1016 V. Ball, 345 V. Chambers, 467 V. Farmer, 626, 1018 Page Warreu t>. French, 275- T. Schainwald, 522. WaiYen v. Wheelock, 918 Warren Davies, ex parte, 1173 Washburn v. Bank of Bellows Falls, 1016 v. Goodman, 309, 995 v. Washburn, 518, 815 Wass V. Atwater, 20 Waterbury v. Express Co., 535 Waterman v. Dutton, 219' V. Hunt, 1168 Waters v. Taylor, Watkindon v. Bank of Pa., Watney v. Wells, Watson V. Fletcher, V. Miller, Watt V. Kirby, Waugh v. Mitchell, Wayde v. Rusher, AVeaver r. Ashcroft, V. Tapscott, V. Upton, V. Weaver, Webb, re, Webb V. Helion, V. Leggett, Weber v. Defor, Webster v. Webster, Weddle v. Stone, AVeed «. Richardson, Weeks t. Mascoma Rake Co., Weiman v. Anderson, AVeld «. Peters, Weldon v. Beckel, AYelkei" v. Wallace, Welles V. March, Wellington v. Mcintosh, Wells V. Atwater, «. Babcock, V. Carpenter, V. Evans, V. Mitchell, V. Strange, «. AYilson, Welsh r. Speakman, Wentworth v. Raignel, AVescott V. Price, West V. Chosten, V. Hickory Mining Assoc «. Randall, V. Skipp, Westcott V. Tyson, AVestern Stage Co. AA'eston v. Barton, • 612, 964, 977 69 665 138, 643 486 222 477, 569, 777 602 574, 607 283 646 438, 1019 1176, ll7r 776 19 760 996^ 999 265 214 97 22&' 82, 710 245 167, 181 763, 764 66 22 923 182, 209 229 780, 894 981 IIT 245, 946 934 604 666 489 613- 518 Walker, 355, 535. 48a AMERICAN AUTHORITIES CITED. cm Page Page "Weston V. Ketcham, 522 Whittemore v. Elliott, 469 Westphall v. Ilcnney, 774 Whittle V. McFarlane, 514 West Point Foundry Assoc. V. Whitworth v. Ballard, 348 Brown, 7 V. Harris, 796 Wetter v. Schliepisr, 183 WicklifFe v. Eve, 777 Whaley v. Moody, 182 Widdifield tJ.Widdifield, 108 Wharton v. Clements, 234 Wiegand v. Copeland, 553 Wheatley v. Tutt, 444 Wiesenfeld v. Byrd, 488 Wheatly v. Calhoun, 616, 560 Wiggins 1). Cummings, 944 Wheeler v. Arnold, 631, 934 Wilbey v. Phinney, 929 1. Bullard, 467 Wilcox V. Dodge, 17 V. Rice, 268 V. Jackson, 185 V. Sage, 517, 529 V. Kelogg, 574 Whigham's appeal. 625 V. Matthews, 105 Whipple V. Parker, 6 V. Wilcox, 583 599 Whitaker v. Brown, 120 190, 191 Wild V. Davenport, 40, 1039 Whitcomb v. Converse, 687. 688 Wilder v. Keeler, 1016 White V. Dougherty, 506, 609 V. Morris, 354 V. Gibson, 226 Wildes V. Fessenden, 396 V. Ilackett, 1018 Wiles V. Maddox, 507 616 «. Harlow, 939 Wilkins v. Davis, 967, 1084 ■p. Jones, 195, 487, 607, 739 V. Pearce, 212 V. Kearney, 163, 355 Wilkinson v. Griswold, 373 V. Kirney, 990 V. Henderson, 404 489 V. Murphy, 366 ». Jett, 30 V. Parish, 574, 894 V. Yale, 569 V. Savery, 436 Willet V. Chambers, 270 V. Smith, 315, 476 Willett V. Stringer, 214 245 V. Tudor, 468 Wille> V. Carter, 229 559 V. Union Ins. Co., 355, 1016 William v. Roberts, 228 V. Warde, 942 V. Waugh, 426 V. White, 822, 841 Williams, ex parte, 1176 V. Woodward, 507 Williams, re, 145, 1020, 1065 White Mountain Bank v . West, 564 V. Barnett, 228 Whitehall v. Shickle, 19 V. Birch, 366 Whitehead v. Bank of Pittsburgh, V. Bowers, 366 355 V. Boyd, 397 V. Darling, 862 V. Brimhall, 276 Whitesides v. Collier, 943 V. Gage, 609, 1024 ■V. Lafferty, 522, 909 V. Gdchrist, 266 Whitewright v. Stimpson, 492 V. Gillies, 146 Whiting V. Furranet, 372 V. Henshaw, 930 Whitlock V. McKechnie, 146 V. Hitchings, 390 Whitman v. Boston, &c. Railroad, v. Hodgson, 208 487 v. Love, 602 606 «. Leonard, 342 , 349, 976 V. Mathews, 350 V. Porter, 640 V. More, 280 V. Robinson, 900 V. Nicholson, 774 Whitmore v. Adams, 182 V. Rogers, 420 468 V. Parks, 512, 757 V. Soutter, 109 «. Shiverick, 586 V. Walbridge, 265 , 266 Whitney v. Cotton, 565, 566 V. Wilson, 746 V. Ludington, 42 Williamson i\ Fontain, 568 V. Sterling, 119 V. Fox, 370 Whittaker v. Brown, 179 V, Haycock, 818 CIV AMERICAN AUTHORITIES CITED. Page Williamson v. McGinnis, 390 V. Munroe, 906 T. Wilsou, 837, 994 Willings T. Consequa, 390 Willis V. Freeman, 1016 r. Hill, 284 Willson T. Fitcher, 902 Wilson, re, 1070, 1199 V. Bowden, 573 V. Coleman, 106 t\ Connie, 1016, 1024 V. Dargan, 200 V. Greenwood, 732 V. Hunter, 205, 206 V. Lovelace, 108 1). McConnell, 1016 V. Richards, 182 V. Soper, 491, 584, 586, 683, 1017 e. Stewart, 147 V. Stillwell, 757 V. Strobach, 607 V. Torbet, 355 V. Wallace, 459, 461 V. Williams, 266 V. Wilson, 127 Wilt t). Bird, 943 Wiltram v. Van Wormer, 189 Wimpee v. Mitchell, 1013 Windham County Bank v. Kendall, 182 Winliens, ex parte, 1199 Winship v. Bank of United States, 161, 164, 261 Winslow V. Cheffelle, 105 Winsor «. Kendall, 1083 V. McLellan, 1083, 1091 V. Savage, 665 Winston r. Taylor, 336 Winter r. lunes, 403 Wintersmith v. Pointer, 1016, 1024 Wise V. Copley, v. Williams, Wisenficld r. Byrd, Wisham v. Lippincott, Witcher v. Brewer, "Withers t. Withers, Witler V. Richards, AVitter r. M'Xeil, Woddsop V. Ward, Wolbett V. Harris, Wolf T. Mills, Wolfe r. Gilmer, Wolff r. Shelton, WoUe V. Brown, 394 498 453 375 1017 233 714 609 288 1016 906 234 . 594 ' 859 172 Pasre Wood V. Connell, 227 Wood V. CuUen, 55, 472 V. Deutchman, 930 v. Erie Ry. Co., 125 V. Fox, 848 V. Gault, 955 V. Goss, 225 V. Johnson, 626 V. Merrow, 918 V. Montgomery, 559 V. O'Kelly, 459 V. Peunell, 56 v. Scoles, 665 V. Shepard, 255 V. Shepherd, 175 V. Wood, 1005 Woodbury v. Sackrider, 218 Woodruffs. King, 214, 342 Woods V. Quarles, 118 Woodward v. Clark, 55 «. Francis, 882 V. Horst, 200 V. Newhall, 469 V. Winship, 166 Woodworth v. Downer, 356 V. Fuller, 455 V. Spaflford, 308 Wray v. Hutchinson, 977 Wright r. Ames, 163 V. Brosseau, 332 V. Cumpsty, 932 V. Eastman, 925 V. Harris, 450 V. Hooker, 145, 289, 933 V. Michie, 922 V. Storrs, 489 V. Ward, 609, 781 V. Williamson, 436 Wycoff T. Purnell, 929 Wyman v. Chicago & Alton R. Co.. 42 Yale v. Eames, V. Yale, Yancey v. Mariott, Yandef v. Lefavour, Yates v. Watson, Yeager r. Wallace, Yeatman v. Woods, Yocum V. Benson, Yoke T. Barrett, York T. Clemens, York Bank's appeal, Young, ex ]jartc, V. Brick, 357 275 117 195 468 263, 535 568 106 688, 881, 937 108, 955 446, 708 684, 733 942 AMERICAN AUTH0K1TIE8 CITED. ev Young V. Clute, V. Pearson, V. Smith, V. Tibbitts, ^ALLAB V. Janvrin, Paffp 687 Zane v. Thomas, 138 832 Zarega, ex 2> require the others to be made defendants : Pilley v. Eob- " 280, note {d) ) inson, 20 Q. B. D. 155. " 267, notes (*) ) As to contracts with partnei's, which although joint in form,, and (y) > are in point of law joint and several owing to the separate " 273, note {h) ) interests of the partners, see Palmer v. Mallet, 36 Oh. D. 411, a case of a contract by an assistant not to carry on business without the consent of the partners. " 347, note (a) The decision of the Court of Appeal in A. G. v. Marquis ofAileslury, 16 Q. B. D. 408, was reversed by the House of Lords, 12 App. Ca. 672, which restored the judgment of the Divisional Court in 14 Q. B. D. 895. Matson v. Swift, 8 Beav. 368, must be taken as now overruled : see Lord Macnaghten's judgment, 12 App. Ca. 696. " 362 (7) See a suggested form of order inSeton on Decrees 1214, n, (ed. 4), referred to in Whetham v. Davey, 30 Ch. D. 579. " 375, note (w) See Lloyd v. Dimmach, 7 Ch. D. 398, where Ranelagh v. Hayes was disapproved, and the Court declined to decree specific performance of a covenant to indemnify w th liberty to apply in the event of future breaches which might or might not occur. Lloyd v. Dimmack is, how- ever, not opposed to the statements in the text nor to the cases cited in p. 375, notes (li), {%) and (Z). See the last direction in the order, 7 Ch. D. 402. THK Law of Partnership. INTRODUCTORY. 1. Meaning of the word ^^partnership '' *1. 2. Distinction between partnerships, corporations and companies, *4. 1. Meaning of the word ^^partnership" To frame a definition of any legal term which shall be both posi- tively and negatively accurate is possible only to those who, having legislative authority, can adapt the law to their own definition. Other persons have to take the law as they find it ; and rarely indeed is it in their power to frame any definition to which exception may not justly be taken. All that they can usefully attempt is to analyze the mean- ings of the words they use, and to take care not to employ the same word in different senses, where so to do can possibly lead to confusion. Without attempting, then, to define the terms "partners" and "part- nership," it will suffice to point out as accurately as possible the leading ideas involved in those words. The terms in question are evidently derived from to part, in the sense of to divide amongst or share, and this at once limits their application, although not very precisely — for persons may share almost anything imaginable, and may do so either by agreement amongst themselves or otherwise. But, in order that persons may be partners in the legal acceptation of the word, it is requisite that they shall share something by virtue of an agreement to that effect, and that that which they have agreed to share shall be the 1 2* PARTNERSHIPS. [INTRODUCTORY. profit arising from some predctermiued business engaged in for their ^ -. common benefit. An agreement that something shall be at- ^ tempted with a view to gain, and *that the gain shall be shared by the parties to the agreement, is the grand characteristic of every partnership, and is the leading feature of nearly every definition of the term, (a) Partnershij), though often called a contract, is in truth the result of a contract ; the relation which subsists between persons who have agreed to slvare the profits of some business rather than the agreement to share such profits. 1 By some writers associations which have not gain for their object are occasionally termed partnerships, and even in the Companies act, 1862, partnerships having gain for their object are referred to, and the reader is thereby led to suppose that there may be partnerships of some other kind, (b) But to use the word ''partnership" to denote a society not formed for gain is to destroy the value of the word, and can lead only to confusion, (c) Nor is it consistent with modern usage. Lord Hale and older writers use copartnership in the sense of co-owner- ship, but this is no longer customary ; and, as will be shown here- after, there are many important differences between the two. (d) Although, for the reasons already stated, the writer has not at- tempted to give a definition of the term "partnership," he appends for the consideration of the reader the following definitions taken from works of celebrity : Civil Code of Neiv York. — Partnership is the association of two or more persons for the purpose of carrying on business together, and dividing its profits between them, (e) (a) Mollow, March & Co. v. Court of created by construction of law, though not Wards, L. R., 4 P. C. 436 ; R. v. Robson, intended, and not actually existing as be- 16 Q. B. D. 187. * tween the parties. New Orleans v. Gauth- 1. Thus, it is held that a partnership, reauz, 32 La. Ann. 1126; Baldy t;. Brack- with all its incidents, may be created with- enridge (La.), 2 So. Rep. 410 ; but not so out articles in writing. Buffum v. BuflFum, unless the third persons have been misled 49 Me. 108. by concealment of facts, or by deceptive In Louisiana, partnership and commu- appearances. Beecher v. Bush, 45 Mich, nity are not to be confounded. The first 188; S. C, 40 Am. Rep. 465. is based on the contract of the parties, (6) See section 4 of the act. which thus creates the community; the (c) See as to clubs, infra, ch. 1, § 5. last may exist independently of any con- (d) See infra, ch. 1,^6. tract whatsoever. Pickerell r. Fisk, 11 La. (e) Civil Code of the State of New Ann. 277. And it is well settled that as York, § 1283. to third persons a partnership may be 2 INTRODUCTORY.] DEFINITIONS. 9* Code Civil.— La. societe est un contrat, par leqiiel deux ou plusieiirs personnes con- viennent de mettre quelque chose en cominnn, dans la vue de partager le b^n^fice qui pourra en resiilter. (/) Dixon. — A partnership is a voluntary unincorporated association of individuals standing to one another in the relation of principals for carrying out a joint opera- tion or undertaking for the purpose of joint profit, [g) Domat. — La societe est une convention entre deux ou plusieurspersonnes, parlaquelle ils mettent en coiniuun entre eux ou tons leurs biens ou une partie, ou quelque com- merce, quelque ouvrage, ou quelque autre aflTaire, pour *partager tons ce qu'ils pourront avoir de gain ou soufirir de perte de ce qu'ils auront mis en soci^td. {h) Xent. — Partnership is a contract between two or more competent persons to place their money, effects, labor and skill, or some or all of them, in lawful commerce or business, and to divide the profit and bear the loss in certain proportions, (i) Indian Contract .4c^.— Partnership is the relation which subsists between persons who have agreed to combine their property, labor or skill in some business, and to share the profits thereof between them, {k) Parsons. — Partnership is the combination by two or more persons of capital, or labor or skill, for the purpose of business for their common benefit. {I) Pollock. — Partnership is the relation which subsists between persons who have agreed to share the profits of a business carried on by all or any of them on behalf of all of them, (m) Pothier (1).— Le contrat de societe est un contrat par lequel deux ou plusieurs per- sonnes mettent, ou s'obligent de mettre, en commun quelque chose, pour faire en com- mun un profit iionnete, dont ils s'obligent reciproquement de se rendre compte. (?i) Pothier (2). — Societas est contractus de conferendis bona fide rebus aut operis, animo lucri quod honestum sit ac lictum in commune faciendi. (o) Prussian Code. — Ein Vertrag durch welchen mehrere Personen ihr Vermogen oder Gewerbe oder auch ihr Arbeiten und Bemiihungen ganz oder zum Theil zur Erlang- ung eines gemeinschaftlichen Endzwecks vereinigen, wird ein Gesellschaftsvertrag gennant. (p) Pufendorf: — Le contrat de society se fait lorsque deux ou plusieurs personnes met- tent en commun leur argent, leurs biens, ou leur travail, a la charge de partager entr'eux le gain et de supporter les pertes qui en arriveront, chacun a proportion de ce qu'il contribue du sien. (q) Rutherford.— When two or more persons join money, or goods, or labor, or all of these together, and agree to give each other a common claim upon such joint stock, this is partnership, (r) (/) Code Civil, | 1832. nership (3d ed.), ? 4. (g) Dixon's Law .of Partnership 1. (n) Pothier, Traits du Contrat de So- {h) Domat, les Lois Civiles, liv. i., tit. 8, ciet^, § 1. There is a useful English edi- ^ 1. tion of this work by O. D. Tudor, Esq. (0 3 Kent's Com. 23. (o) Pothier, Pand., lib. xvii., tit. 2, art. 1, {k) Indian Contract act, § 239. ? 1. [l) Parsons on Part., ch. 2, 'i 1. This de- (p) Allgem. Landsrecht fiir die Preuss. finition is inaccurate. The word denotes Staat., th. i., tit. 3, ^ 169. a combination of persons, not a combina- (q) Pufendorf, Le Droit de la Nat. et tion of capital. des Gens (ed. Barbeyrac), liv. v., ch. 8, § 1. (?n) Pollock's Digest of the law of Part- (r j Inst, of JSTat. Law, book i., c. 13, § 9. 3* PARTNERSHIPS. [INTRODUCTORY. Story. — Partnership, often called copartnership, is usually defined to be a volun- tary contract between two or more competent persons to place their money, effects, labor and skill, or some or all of them, in lawful commerce or business, with the understanding that there shall be a communion of the profits thereof between them, (.s) Thibaut. — Verbinden sich mehrere zur Erreichung eines ihnen gemeinschaftlichen *Endzwecks so wird diesz ein Gesellschaftsvertrag {socieias, Mascopei, Mageu- J schaft) gennant. Geschieht diese Verbindung zu eigenniitzigen Zwecken so nennt man sie socieias qucestuaria, oder negotiatoria, sonst aber non qucestuaria. [t) Vinnius. — Societas est contractus, quo inter aliquos res aut operse communicantur, lucri in commune faciendi gratia, (u) Voet. — Societas est contractus jurisgentium, bonse fidei, consensu constans, semper re honesta, de lucri et damni communione. (x) Watson. — Partnership is a voluntary contract between two or more persons for joining together their money, goods, labor and skill, or either or all of them, upon an agreement that the gain or loss shall be divided proportionably between them, and having for its object the advancement and protection of fair and open trade, (y) All the above definitions, however, with the exception of Mr. Dixon'.s, are, with reference to the law of England, too wide ; for they include not only partnership.s in the proper sense of the word, but also many corporations and companies which differ from partnerships in several important respects, and which it is better, therefore, not to denote by the same word. Mr. Dixon's definition avoids this error, but the re- lation of principals to which he refers is not altogether free from ob- jection. (2) 2 If partnership is defined so widely as to include mcorporated and (s) Story on Part., § 2. Busley, 2 Bing. N. C. 108. See, also, (t) Thibaut, System des Pandekten definition by Patterson, J., in Bond v. Kechts (9th ed.), § 467. This division of PiUard, 3 M. & W. 357. partnerships into partnerships having gain A partnership arises when two or more for their object, and other partnerships, is persons agree to combine property or noticed by most German writers on the labor, or both, in a common undertaking, civil law. sharing profit and loss. Perry i'. Butt, 14 (m) Vinn. Inst. iii. 26. Ga. 699; Solomon v. Solomon, 2 Ga. 18; (x) Voet Comm. ad Pand., lib. xvii., tit. Gregory v. Dodge, 14 Wend. (N. Y.) 593. 2, Pro Socio, § 1. See, also. Chapman v. Wilson, 1 Rob. (Va.) (y) Watson on Part. 1. This definition 267. It is a joint interest in the net is copied by Gow in his work on Partner- profits of an adventure or business, or in ship. the profits as affected by the losses. Chap- (z) See the observations of the Master man v. Devereux, 32 Vt. 616. It is the of the Rolls on the above definitions, in existing community of interest and par- Pooley V. Driver, 5 Ch. D. 471 et seq. ticipation in profit and loss that constitutes 2. Partnerships have been variously a partnership. Felichy v. Hamilton, 1 defined. "A mutual participation in Wash. (U. S.) 491. profit and loss." Tindal, C. .J , in Green v. INTRODUCTORY.] CORPORATIONS AND COMPANIES. 4* other companies, partnerships must be subdivided into (1) ordinary and (2) extraordinary partnerships, as in the Indian Contract act. (a) But it is more in accordance with ordinary usage to confine the word to unincorporated societies not governed by any special statute or custom. 2. Distinction between partnerships, corporations and companies. Corporations. — A corporation is a fictitious person, created by special authority (by the law of England by the crown or by p^. par*liament), and endowed by that authority with a capacity '- to acquire rights and incur obligations, as a means to the end for the attainment of which the corporation is created. A corporation, it is true, consists of a number of individuals, but the rights and obliga- tions of these individuals are not the rights and obligations of the fic- titous person composed of those individuals ; nor are the rights and obligations of the- body corporate exercisable by or enforceable against the individual members thereof, either jointly or separately, but only collectively, as one fictitious whole. As the civilians neatly express it — Si quid imi versitati debetur singulis non debetur, nee quod debet uni- versitas singuli debent. With partnerships the case is otherwise ; the members of these do not form a collective whole, distinct from the individuals composing it ; nor are they collectively endowed with any capacity of acquiring rights or incurring obligations. The rights and liabilities of a partner- ship are the rights and liabilities of the partners, and are enforceable by and against them individually : Si quid societati debetur singulis debetur et quod debet societas singuli debent. (6) Companies. 1. Unincoi^porated. — The fundamental distinction between partnerships and unincorporated companies is that a partner- ship consists of a few individuals known to each other, bound together by ties of friendship and mutual confidence, and who, therefore, are not at liberty, without the consent of all, to retire from the firm and substitute other persons in their places ; whilst a company consists of a large number of individuals not necessarily nor, indeed, usually, ac- quainted with each other at all, so that it is a matter of comparative indifference whether changes amongst them are effected or not. (c) (a) See section 266. • Ryhope Coal Co. v. Foyer, 7 Q B. D. 498. [b] See Lloyd v. Loaring, 6 Ves. 773; (c) See per James, L. J., in Smith v. Beaumont v. Meredith, 3 Ves. & B. 180 ; Anderson, 15 Ch. D. 273. 5 5* COMPANIES. [introductory. Nearly all the differences which exist between ordinary partnerships and unincorporated companies will be found traceable to the above distinction. Indeed, it may be said that the law of unincorporated companies is composed of little else than the law of partnership modi- lied and adapted to the wants of a large and fluctuating number of members. 3 3. Unincorporated associations or persons agree to form a corporation, some companies, when partnerships — Asso- putting in machinery and patents, and ciales in business ventures not purporting others money and labor ; hut no corpora- on their face to be partnership transac- tion is formed by reason of a failure to tions, have often been held to be partners, comply with the statute, if the parties are at least as to third persons. Thus, the in- entitled to share in the profits and losses, dividual members of a voluntary associa- it will constitute a quasi partnership, tion organized to relieve its members in although the title to the property put in, case of sickness or distress, are partners, whether real or personal, may not be Gorman t;. Russell, 14 Cal. 531. changed. Flagg i;. Stowe, 85 111. 164. Although it appears that persons sued So, also, where stockliolders in a manu- as purchasers of goods were organized as facturing corporation, whose charter has- a joint stock company, yet, if they were exi)ired, agree to continue the business in not incorporated, they constitute a part- the corporate name, appointing one of nership, and, though an extensive one, aie, their numher as managing agent to carry in the main, subject to the rules and lia- on the business, and agree to furnish bilities governing that relation. Manning money when called for by him, in pro- t'. Gasharie, 27 Ind. 399. portion to the number of shares held by While joint stock associations are not each, they are liable to third persons as in all cases copartnerships (Cox v. Bodfish, partners, upon commercial paper made by 35 Me. 302), yet where the organization such agent for the benefit of the firm, and of a manufacturing company is so defective signed with the name of the former cor- as to fail to create a corporation, the asso- poration by iiim as agent. JSfational, &c.^ ciates become, in legal effect, partners, with Bank i'. Landon, 45 N. Y. 410. the rights of partners to the property In New York it is held that, except as acquired by the company, Whipple v. otherwise provided by statute, all joint Parker, 29 Mich. 369. So persons who stock associations are partnerships, and a enter into articles of association for bank- creditor must proceed agains* the surviv- ing purposes, and without any charter, ing shareholders before an action can be assume a name, open a stock book, sub- maintained against the representatives of scribe for shares of stock (a portion pay- a deceased shareholder. Moore v. Brink^ ing small sums thereon), hold meetings, 6 Thomp. e^' C. (N. Y.) 22; S. C, 4 Hun elect directors, publish the names of such 402. directors (none of whom take any steps to So, where partners, intending to form a inform the public that tliey do not belong corporation, subscribe for stock, establish to the association), enter into and transact the business and appoint a superintend- business as a bank, are all liable as part- ent, they continue liable as partners until ners. Pettis v. Atkins, 60 111. 454. See, the articles of association are signed, also, Haslett v. Wotherspoon, 2 Rich. (S. Martin r. Fewell, 79 Mo. 401. C.) Eq. 395. And wliere two or more And in Connecticut, where persons, de- 6 INTRODUCTORY.] COMPANIES. 6* 2. Incorporated Companies. — Incorporated companies are societies consisting usually of *many persons, having transferable shares ^6] in a common fund, but incorporated by royal charter or by siring to secure provisions for themselves without the costs of middlemen, associate themselves together without incorpora- tion, open a store under a distinguishing associate name, viz.: "Bridgeport Co- operative Association," and conduct the business through their own managers, who are authorized to go into the market and buy provisions in the associate name, which are resold at cost to the members and the public generally, the members of such association are liable, as individuals, for goods so bought by the managers, although they never held themselves out as partners, and credit was not given to them as such, or as individuals. Davison V. Holden, 10 At!. Rep. 515. The following combinations or associations have been held to constitute partnerships and not corporations : A joint stock company, formed for the purpose of dealing in lands. Clagett v. Kilbourne, 1 Black (U. S.) 346 ; Kramer V. Arthurs, 7 Pa. St. 165. An association of separate owners of several steamboats into a joint concern, to run their vessels upon a certain river, and to collect and receive the earnings of the boats in a common fund, out of which the expenses of all the boats are to be paid. The Swallow, 01c. (U. S.) Adm. 334. , An unincorporated body of men, asso- ciated for the purpose of banking. Bois- gerard v. Wall, 1 Sm. & M. (Miss.) Ch. 404. A voluntary unincorporated association for manufacturing purposes, the articles of agreement providing that each stock- holder should pay a certain sum per share, at the time of subscribing, and all subse- quent assessments, or forfeit his stock. Skinner v. Dayton, 19 Johns. (N. Y.) 513. Members of an unincorporated associa- tion described as " stockholders " in their written agreement, agreeing to take a cer- tain number of "shares" at a certain price per share for the purpose of starting a grocery store, supposing that their losses were limited to the amount of their shares. Farnum v. Patch, 60 N. H. 294 ; S. C, 49 Am. Rep. 313. When not deemed partners. — On the other hand, it was held in the New York Court of Chancery, that where persons held meetings and subscribed for stock in a proposed corporation for running a par- ticular steamboat, but failing to obtain a charter it was finally agreed to form a limited partnership, but the provisions of the act in relation to such partnership had not been complied with, that such persons were not liable, as general part- ners, for debts contracted in the mean- time by the owner of the boat for repairs. West Point Foundry Assoc, v. Brown, 3 Edw. (N. Y.) Ch. 284. In New Jersey, in the absence of a statutory provision making shareholders liable in case of failure to comply with the requirements of the charter, or with the requirements of the act under which the company is incorporated, persons who have contracted with a de facto corpora- tion cannot deny its corporate existence, in order to charge its shareholders indi- vidually as partners. Stout v. Zulick, 7 Atl. Rep. 362. And in Massachusetts, stockliolders in a corporation, doing business under a de- fective organization, do not thereby become partners, general or special, in such busi- ness. Fay V. Noble, 7 Cush. (Mass.) 189. Nor are corporate stockholders liable as i:)artners on commercial paper given by the treasurer, merely because no corporate business is transacted after organization, nor because the paper was given for debts 6* COMPANIES. [introductory. act of parliament. They are not pure partnerships, for their members are recognized as an aggregate body ; nor are they pure corporations, for their members are more or less liable to contribute to the debts of the collective whole. Incorporated companies are intermediate be- tween corporations known to the common law and ordinary partner- ships, and partake of the nature of both ; and the law relating to these companies depends as well on the principles which govern ordinary partnerships as on those which are applicable to corporations strictly so called, (d) The present volume is confined to partnerships in the ordinary sense. Incorporated companies and companies which, although unin- corporated, consist of numerous members and are governed by special statutes or by special customs, e. g., Cost Book Mining Companies, will be dealt with in another volume. wtiich the company was not authorized to 493 ; S. C, 39 Am. Eep. 818. contract. Trowbridge v. Scudder, 11 Cush. {d ) See the judgments in 5 Ch. 431, 732. (Mass.) 83. See, also. Ward v. Brigham, As to when corporations are persons within 127 Mass. 24; and Mass. Dig., tit. "Vol- the meaning of acts of parliament, see The untary Association." So, also, the mem- Pharmaceutical Soc. v. The London and bers of a masonic lodge are presumptively Provincial Supply Assoc, 5 Q. B. D. 310 ; not partners. Ash v. Guie, 97 Pa. St. affirmed, 5 A pp. Cas. 857. 7*] BOOK I. OF CONTRACTS OF PARTNERSHIP. CHAPTER I. THE NATURE OF THE CONTRACT DETERMINED. Preliminary Observations, *7. Section I. — Of True Partnerships, *10. Section II. — Of Quasi Partnerships, *25. Section III. — Op Sub-Partnerships, *48. Section IV. — Of General and Particular Partnerships, *49. Section V.— Of Clubs and Societies Not Having Gain for Their Object, *50. Section VI. — Of Co-Ownership, *51. PEELIMINARY 0B3ERVATI0XS. Agreement to share profits the essence of a partnership. — The basis of all partnerships is an agreement to share the profits arising from some business or undertaking. Usually, but not necessarily, partners have a joint capital or stock, by the employment of which the profits to be shared are expected to arise ; and in ordinary partnerships, but not in companies, each partner usually takes an active part in the prosecution of the partnership business. Nothing, perhaps, can be said to be absolutely essential to the existence of a partnership except a community of interest in profits resulting from an agreement to share them. But, although this is so, the usual characteristics of an ordinary partnership are a community of interest in profits and losses, a com- munity of interest in the capital to be employed, and a community of power in the management of the business engaged in. Profits and losses. — Profits (or net profits) are the excess of returns over advances ; the excess of what is obtained over the cost of obtain- ing it. Losses, on the other hand, are the excess of advances over re- turns ; the excess of the cost of obtaining over what is obtained. 9 7* SHARING riiOFlTS. [bOOK I., Gross profits. Mt profits. — Profits and net profits are, for all legal purposes, synonymous expressions ; but the returns themselves are often called gross profits ; hence it becomes necessary to call profits net profits in order to avoid confusion. In the *present treatise, -I however, the word "profits" will be used in the sense of net profits, and the expression "gross profits" will be avoided as much as possible. Persons who share both advances and returns, and also persons who share the difference between them, whatever that difference maybe, necessarily share both profits and losses ; profits, if the returns exceed the advances ; losses, if the advances exceed the returns. But persons who share profits, i. e., the excess of returns over advances, do not necessarily share losses, for profits may be shared by those who make no advances; and persons may stipulate for a division of gain, if any, and yet some one or more of them may by agreement be entitled to be indemnified against losses by the others, so that whilst all share profits some only bear losses. Sharing gross returns. — The actual or gross returns obtained by advances obviously include profits, if profits have been made. But those returns do not include losses, if losses are incurred ; for losses are the excess of the advances over the returns, and come out of the advances and not out of the returns. Hence persons who share gross returns necessarily share profits, but they do not, by sharing the re- turns, share losses, for these fall entirely on those making the advances. Moreover, although a division of gross returns is a division of profits, if there are any, it is so only incidentally, and because such profits are included in what is divided; it is not a division of profits as such, and under an agreement for a division of gross returns, whatever is re- turned must be divided, whether there be profit or not. On the other hand, if the persons sharing gross returns also share the advances by means of which the returns are made, there is neces- sarily community both of profit and of loss ; community of profit if the returns exceed the advances, community of loss if the advances exceed the returns. Distinction between sharing profits and gross returns. — The above remarks have appeared necessary in order to explain the reasons for the distinction made by English lawyers between agreements to share profits {i. e., net profits and profits as such) on the one hand, and agreements to share gross returns (sometimes called gross profits) on 10 CHAP. I., § I.] CONTRACTS OF PART.VER.SHIP. 8*-9* the other; and in order to account for the rule that whilst an agree- ment to share profits creates a partnership, an agreement to share gross *returns does not. The reasonableness, however, of the above ^ distinction is very questionable, at least where there is any *- community of capital or common stock, and the rule itself is probably attributable less to the difference which exists between net profits and gross returns than to the doctrine which so long confused the whole law of partnership in this country, and according to which all" persons who shared profits incurred liability as if they were really partners. When this doctrine w^as rife, the distinction between sharing net profits and gross profits (i. e., returns) had considerable practical value, but^ as will be seen hereafter, the doctrine in question is now wholly ex- ploded, and the distinction alluded to is of little importance. Quasi partnerships. — The doctrine to which reference has been made renders it necessary to caution the reader against an ambigultvin the word "partnership" as used by English lawyers. Partnerships are by them divided into partnerships (properly so called) and partnerships as regards third persons, which are not in fact partnerships at all and should never be so styled. What is called a partnership as regards third persons {quasi partnership) is nothing more than a number of persons who, in consequence of certain acts done by them, are held liable for each other's conduct, as if they had entered into a contract of partnership amongst themselves. What these acts are will be con- sidered hereafter ; but the reader is requested to bear in mind that for the present partnerships properly so called, and not quasi partner- ships, are intended to be spoken of. Having made these preliminary observations, it is proposed to con- sider what agreements do and what do not result in a partnership in the proper sense of the word. ^^^-, ^SECTION I. OF TRUE PARTNERSHIPS. 1 . — Partnership is the result of an agreement to share profits and losses. Agreements to share profits and losses. — Whether an agreement creates a partnersnip or not depends on the ngal intention of the parties 11 10* COXTEACTS OF PARTNERSHIP. [bOOK I., to it. (a) 1 If the agreement is not in writing, the intention of the parties must be ascertained from their words and conduct. If the agreement is in writing, its true construction must be determined ; but, as will be more fully shown in a subsequent chapter, even a written contract may be departed from and modified by a new verbal agree- ment between all the partners proved by conduct inconsistent with the written document. (6) But an agreement to share profits and losses may be said to be the type of a partnership contract. Whatever difference of opinion there may be as to other matters, persons engaged in any trade, business or adventure, upon the terms of sharing the profits and losses arising therefrom, are necessarily to some extent partners in that trade, busi- ness or adventure ; nor is the writer aware of any case in which per- sons who have agreed to share profits and losses have been held not to be partners, (c) But it does not follow that each of several persons who share profits and losses has all the rights which partners usually have. For example, a person may share profits and losses and yet have no right actively to interfere with the management of the busi- ness ; (d) or he may have no such right to dissolve as an ordinary partner has ; (e) or he may have no right *to share the good will of the business on a dissolution ; and other instances of '- restricted rights may be suggested. What, in any given case, the rights of a particular partner are depends on the agreement into which he has entered ; but unless the word "partner" is to be deprived of all (a) Mollwo, March & Co. v. Court of (6) Infra, book III., c. 9. Wards, L. E., 4 P. C. 419 ; Pooley v. (c) In Mair v. Glennie, 4 M. & S. 240, Driver, 5 Ch. D. 460; Walker v. Hirsch, the expression "profit or loss" seems to 27 Ch. D. 460 ; Ross v. Parkyns, 20 Eq. have been used for gross returns. And 331, and other cases cited infra, p. 13, in Geddes v. Wallace, 2 Bligh 270, the note (r). arrangement as to profit and loss did not 1. Consent or intention essential.— apply to the person as to whom the ques- The relation cannot exist as between the tion of partnership or no partnership was parties without their voluntary consent raised. (Hedge's Appeal, 63 Pa. St. 273), and id) As in Walker v. Hirsch, 27 Ch. D. whether it so exists or not depends upon 460. their intentions, as legally ascertained. (e) See, as to this, Moore v. Davis, 11 Salter v. Ham, 31 N. Y. 321 ; Hazard v. Ch. D. 261; Pawsey v. Armstrong, 18 Ch. Hazard, 1 Story (U. S.) 371 ; Stevens v. D. 698, in both of which the right to dis- Faucet, 24 111. 483; Niehoff t). Dudley, solve was held to exist. But ^u. whether 40 III. 406 ; Macy v. Combs, 15 Ind. 469 ; Pawsey v. Armstrong did not go too far. Gray v. Gibson, 6 Mich. 300. 12 CHAP. I., § I.] CONTRACTS OP PARTNERSHIP. 11* definite meaning its proper application to persons who share profits and losses can hardly be questioned. (/) Accordingly, in Green v. Beesley, (g) a partnership was held to result from an agreement that the plaintiff should horse a mail cart and be paid by the defendant £9 per mile per annum for so doing, and that the plaintiff" and the defendant should share the expenses of repairing and replacing the carts, and the moneys received for the con- veyance of parcels, and the losses occasioned by their loss or damage. So, in Brett v. Beckwith, (h) a partnership was held to exist between underwriters, one of whom had agreed to take a joint share of the underwriting risks of the other, paying or receiving sums according to the result of the accounts. These authorities are sufficient to show that an agreement to share profit and loss is an agreement for a partnership, although the words "partners" or "partnership" do not occur in the agreement, (i) 2 (/) See, however, the judgment of Cot- ton, L. J., in Walker v. Hirsch, 27 Ch. D. 460. ig) 2 Bing. N. C. 108. (A) 3 Jur. (N. S.) 31, in the Rolls. (i) See, too, Greenham v. Gray, 4 Ir, Com. L. Rep. 501. 2. Community of profit and loss. — To constitute a partnership inter sese, there must be an existing community of inter- est and participation in profit and loss. Felichy v. Hamilton, 1 Wash. (U. S.) 491. And the proportion of the profits each partner is to have must be determined, Pleasants v. Fant, 22 Wall. (U. S.) 116. Community of profits and losses is the true test of partnership. Where neither element exists, there is no partnership. Chapman v. Lipscomb, 18 So. Car. 222 ; Dils V. Bridge, 23 W. Va. 20. A mere joint proprietorship or contract will not constitute a partnership, e. g., a joint and several undertaking between two persons, such as a guaranty of pay- ment of a bond ; there must be a mutual interest in profit and loss. Ex parte Miller, 1 N. Y. Leg. Obs. 38. When, however, an agreement provides for a division of profits and losses in a busi- 1; ness, and imposes upon the parties a mutual duty to account, it creates a part- nership. Priest V. Chouteau, 12 Mo. App. 252. But a mere agreement to share in profits and losses does not necessarily make the parties partners inter sese, Mc- Donald I'. Matney, 82 Mo. 358. Although it furnishes the usual test of a partner- ship. Jones V. Call, 93 N. C. 170. Where the elements of joint expense, joint property, joint fund, joint losses and joint profits are all absent, and there is no arrangement to share profit and loss, there is no partnership, A communion of profit is of the very essence of a part- nership, which relation cannot, in con- templation of law, exist without it. Irvin V. Nashville, &c., Ry. Co., 92 111. 103. In Georgia, however, before the passage of section 1890 of the code, there might be a partnership without a community of property, or agreement to share in the profits and losses. Hughuley u. Morris, 65 Ga, 666. It is not requisite to the constitution of a strict partnership that each partner should, as between themselves, be liable to share indefinitely in the losses of the concern. It is sufficient if they are to 11* SHARING I'lM^FITS AND LOSSES. BOOK I., Partnership not intended. — Cases which present most difficulty are those in which persons agree to share profits and losses and at the same time declare that they are not to be partners. The question then share in the profits and in the leases, so 33 Minn. 408) ; and also where A, the far as they affect the capital advanced, owner of goods in New York, sold one- Nor is it necessary that the partners half of his interest therein to B, who was should be proportionate joint owners of to go to San Francisco and there dispose the capital. It is enough that they are of the goods on joint account. Soule v. jointly interested in the profits and losses. Hayward, 1 Cal. 345. Brigham v. Dana, 29 Vt. 1. So, also, an agreement between two A contract, however obscurely or inar- partners, on the dissolution of their firm, tificially drawn, by which the parties that one should take all the goods on agree to contribute merchandise to " a hand, and the notes and accounts due the certain concern," one to be the salesman, firm, and, in consideration of the other's the other to pass as proprietor, and both interest, should pay all the outstanding to share equally in the expenses and debts and give the other, " from that time profits, constitutes a partnership. Marks forward, one-third interest in the profits V. Stein, 11 La. Ann. 509. arising from the sale of said goods," the Where, after they become partners, the latter " agreeing to share one-third of the parties have a common interest in the un- losses that might accrue fropi said sale of settled business of a former concern, or in said goods, and to act as clerk in the sale its profits and losses, they remain, inter of said goods " for the former — consti- sese, partners in that business. McGill v. tutes them partners inter sese. Scott v. Duwdle, 33 Ark. 311. Campbell, 30 Ala. 728. The joint purchase of a threshing ma- Instances. — Where certain cattle were chine by two persons, who give their delivered to plaintiif and two others, to be notes for the price, under an agreement kept for a time, and then to be sold by de- to work it together, each furnishing one- fendant, and, after deducting the first cost, half the labor, and to divide the profits defendant was to retain one-half of the re- and losses equally, makes them partners, mainderof the proceeds, the other half to be Aultman v. Fuller, 53 Iowa 60. equally divided between the plaintiflf and Wliere two firms agree to make con- the other persons — Held, no partnership, tracts, in the names of their respective because there was no community of profit firms, for the purchase and sale of goods, and loss, or of ownership in the subject of to be executed with their separate funds, the contract. Beckwith v. Talbot, 2 Colo, and to share profit and loss on sucli con- 639. tracts, they do not become copartners. Two firms in the wool trade agreed to either as between themselves or with furnish each a stated proportion of a respect to third persons. Smith d. Wright, quantity of wool to be sold to a certain 5 Sandf (N. Y.) 113. vendee, and to share the profit and loss Tlius, a partnership was held to exist of the transaction. The contract to fur- where a contract was entered into between nish the wool was made by one of the several persons to buy eggs for a certain firms, and the other was not originally a period, to pay for them with funds con- party to it, but the contracting firm after- tributed by all, to store them and sell wards applied to the other firm for a part them on joint account, sharing equally of the wool necessary to enable it to fill in the profit or loss (Bohrer v. Drake, the contract which was furnished under 14 "CHAP. I., § I.] SHARING PROFITS AXD LOSSES. 11* arises — AVliat do they really mean? If they have in fact stipulated for all the rights of partners, an agreement that they shall not be part- ners is a useless protest against the consequences of their real agree- the arrangement stated above. Held, that they were not partners inter sese in the transaction, and could not jointly sue the vendee for non-fulfillment of his contract. Snell V. De Land, 43 111. 323. Agreements relating to vessels. — An agreement between the owner of a vessel and the captain that each should pay cer- tain expenses, and divide the freight, with a power to the captain to invest it on joint account, constitutes a copartnership. Cox ■V. Delano, 3 Dev. (N. C.) L. 89. An association of separate owners of several steamboats into a joint concern, to collect and receive the earnings of the boats in a common fund, out of which the expenses of all the boats are to be paid, is no more than a private copart- nership. Each member of the association is responsible, individually, for his acts or contracts, in the business of the com- mon concern. The Swallaw, 01c. (U. S.) 334. Agreements relating to land or to crops. — Joint purchasers of land intended to be sold for joint profit, are partners. Hulett V. Fairbanks, 40 Ohio St. 233; Richards v. Grinnell, 63 Iowa 44 ; S. C, -50 Am. Eep. 727 ; Canada v. Barksdale, 76 Va. 890. So, an agreement between two for the joint purchase of land for improvement and sale, where the money was advanced by one who was to be repaid principal and interest with two-thirds of the profits, the loss to be borne equally, makes them part- ners. Plunkett V. Dillon, 3 Del. Ch. 496. A contract between the owner of land- warrants and a locator, to locate the war- rants for a certain portion of the lands, each party to contribute a share of the ex- penses, does not create a partnership be- tween them. M'Arthur v. Ladd, 5 Ohio 514. Where two persons agree that one shall furnish land and stock and the other labor, both to share the expenses and the crop equally, they are, inter sese, partners. Holi- field V. White, 52 Ga. 567. (Holioway v. Brinkley, 42 Ga. 226 ; and Smith v. Sum- merlin, 48 Ga. 425, distinguished.) Mining contracts or adventures. — Two persons jointly interested in a mining adventure are partners ; and this, whether they so agreed or not. Snyder v. Burn- ham, 77 Mo. 52. A written agreement, by which defend- ant was to and did receive of plaintiff $250, with which to go to California to engage in gold-digging, for two years, during which time his earnings were to be divided with plaintiff — Held to make the return of the money advanced dependent upon the result of the adventure, and thus to constitute the parties joint adven- turers, if not strictly partners. Brigham V. Dana, 29 Vt. 1. Where two agree to engage together in a mining adventure, under a firm name, and to share the profits and losses equally, and as a firm they purchase a mine, pay- ing a note given in the firm name for a portion of the price—Held, that the con- tract is one of partnership, in the ordin- ary sense as distinguished from what is known as a " mining partnership," and that either partner has the same authority to bind the firm as if it were an ordinary trading partnership. Decker v. Howell, 42 Cal. 636. Compare Dtiryea v. Burt, 28 Cal. 569 ; Stapletou v. King, 33 Iowa 28. Agreements for capital on the one side, and labor on the other. — Where two persons join together in an adventure in trade, one contributing a vessel and the other his skill, labor, experience, &c., and there is to be a communion of profits on a fixed ratio, the relation is a partnership. 15 11* CX)NTRACTS OF PARTNERSHIP. [bOOI^ I.^ ment. (A;) But a clause negativing a partnership may throw light on other clauses and rebut inferences which might be drawn from theiu alone. In practical life such questions do not arise in any abstract form. Some definite dispute has to be determined, e. g., liability to ^ creditors *or the right of one party to the agreement to some "^ particular thing or to some particular relief as to which the agreement itself is the true guide. 3 2. — Partnership is prima facie the result of an agreement to share profits, although nothing may he said about losses, and although there may be no common stock. Agreements to share profits only. — Except in cases specially provided for by statute, an agreement to share profits, nothing being said about losses, amounts prima facie to an agreement to share losses also ; (l) for it is but fair that the chance of gain and of loss should be taken by the same persons ; and it is natural to suppose that such was their Ward V. Thompson, 22 How. (U. S.) 330. (k) See Ex parte Delhasse, 7 Ch. D B. P., Vandewater v. Mills, 19 Id. 82. 511 ; Moore v. Davis, 11 Ch. D. 261. See, P. and L. agreed as follows: L. to fur- also, Pooley v. Driver, 5 Ch. D. 460. nish machinery to raise a sunken vessel, 3. Partnership without intention. — and P. the labor — the vessel, when raised, An agreement pursuant to which all the to be sold by L. for their joint account, L. parties interested furnish specified propor- to first refund to P. the sums paid by him tions of the capital, jointly own the prop- for labor. Held, a partnership, both inter erty purchased, which is to be sold for gese and as to outsiders. Lynch ?;. Thomp- their joint and mutual benefit; each to son, 61 Miss. 354. contribute his skill and assistance, and An agreement provided that the party share in specified proportions in the final of the first part should obtain in his own profit or loss of the business, which are to name, but for the joint account of himself be ascertained at the close thereof — will and the parties of the second part, a lease create a partnership, as between the par- of a railroad, and manage the same at a ties themselves, although they may not designated salary, for their mutual bene- have been aware that such was its legal fit ; and that the parties of the second efTect. Duryea v. Whitcomb, 31 Vt. 395. part should furnish the money necessary A joint undertaking and community of to carry out the enterprise, to be reim- profit and loss in the results of the busi- bursed, with interest, out of its annual ness will constitute a partnership, even profits ; and then declared that after the where each partner retains the exclusive- payment of the capital thus invested, and ownership of the separate property con- interest, the annual profits should be tributed by him to the use of the firm, equally divided between all the parties, McCrary v. Slaughter, 58 Ala 230. and that all losses should be equally borne {I) Greenham v. Gray, 4 Ir. Com. L. between them. Held, that the agreement Rep. 501 ; Dry v. Boswell, 1 Camp. 330 ; constituted a partnership. Beauregard v. Hevhoe v. Burge, 9 C. B. 440, per Parke, B. Case, 91 U. S. 134. 16 CHAP, I., § 1.] AGREEMENTS TO SHARE PROFITS. 12* intention if tiiey have said nothing to the contrary, (m) It follows from this that where no statute interferes, an agreement to share profits is prima facie an agreement for a partnership, and accordingly it has been held that unless an intention to the contrary can be shown per- sons engaged in any business or adventure and sharing the profits derived from it are partners as regards that business or adventure. (?i)4 Community of profit as a test of partnership. — Indeed, it has often been said that community of profit is the test of partnership, (o) This, however, is not accurate. Whether persons are really partners or not is a question of intention, to be decided by a consideration of the whole agreement into which they have entered, and ought not to be made to (m) This prima facie inference was held to be excluded by the rules of the build- ing societies which were considered in Brownlie v. Eussell, 8 App. Cas. 235, and Tosh V. North British Build. Soc, 11 App. Cas. 489. [n) See Puoley v. Driver, 5 Ch. D. 458. 4. Agreements to share profits — losses not mentioned. — Persons engaged in any trade, business or adventure, upon the terms of s-haring the profits and losses arising therefrom, are partners in that trade, business or adventure. An agree- ment to share the net profits necessarily implies a sharing of the losses. Wilcox V. Dodge, 12 III. App. 517. An agreement to share profits may, but does not necessarily, imply a joint inter- est in property held or used for the pur- poses of the business from which the profits are to arise. Howe v. Howe, 99 Mass. 71 ; Meserve v. Andrews, 104 Mass. 360. Where all the parties had, by a contract entered into, a right to share in the profits of a business, and to use the capital in- vested, and an inchoate title to it, a part- nership exists between them. Vassar v. Camp, 14 Barb. (N. Y.) 341. A pool arrangement between the own- ers of different steamboats, whereby the excess of net earnings of one boat over the other is to be divided at the end of the season, does not, alone, constitute a partnership so as to create a joint liability for the negligence of either. Fay v. Da- vidson, 13 Minn. 523. A, the owner of a zinc mine, agreed in writing with B to furnish him a certain quantity of ore per annum, for three years, for $10 per ton. B agreed to pro- vide suitable buildings and machinery for converting the ore into paints, &c., and to divide with A the profits in the propor- tion of one-fourth to himself and the re- mainder to A ; the cost of the buildings and machinery to be paid out of the profits after a specified ^time. Held, that this constituted a partnership between A and B. Wadsworth v. Manning, 4 Md. 59. Where two persons having goods con- signed to each one separately for sale on commission, entered into a copartnership for the purpose of receiving and selling goods on commission, and put the goods so consigned to each into a common stock, agreeing to share commissions jointly, they were held jointly liable as co- partners for the proceeds of the separate consignments received subsequently to the agreement of copartnership, in tlie ab- sence of satisfactory evidence that each transacted business separately in relation to his separate consignments. Dix v. Otis, 5 Pick. (Mass.) 38. (o) Heyhoev. Burge, 9 C. B. 446; Fox V. Clifton, 9 Bing. 115; Ex parte Lang- dale, 18 Ves. 300. 17 12^ CONTRACTS OF PARTNERSHIP. [book I., [*13 turn on one or two only of the clauses in it, (p) A good instance of this is aft'orded by the Irish case of Barklie v. Scott, (q) There a father paid a sum of money as his infant son's share of the capital of a partnership, and it was agreed *that during the sou's minority the profits should be accounted for to the father ; it was held that the father was not himself a partner, that clearly not being the intention of the parties to the agreement. 5 Servants, 'CLUDED AGREEMENTS. [bOOK I., Wages jMcyable by a share of prodace. — Again, in whaling voyages the sailors are usually paid a ^certain proportion of the pro- p^^Q duce of the oil obtained, but even Ixifore the act of 28 and 29 '- Vict., c. 86, they were not therefore partners, either with each other or with their employers, (.r) In such cases as this, partnership was clearly not intended ; and even when persons who shared profits were held to incur liabilities as if they were partners, it was held that per- sons who merely divided gross returns did not incur any such liabili- ties, (y) A fortiori it was impossible to regard them as partners interr se. The act of 28 and 29 Vict., c. 86, which will l^e noticed hereafter, renders this even clearer than before. 13 5. — Partnership is not the result of an agreement which is not concluded. Unconcluded agreements. — In order that partnership may result from any agreement, it is necessary that the parties to the agreement shall have mutually assented to the same propositions ; otherwise there is no contract at all, but merely a treaty from which each party is at liberty to retire. If, therefore, A proposes to B that a partner- ship shall be formed between them on certain terms, and B either does not accept the proposal or accepts it on other terms than those offered, A and B are not yet agreed and no partnership subsists between them. Nor is B bound by his qualified acceptance; for that is merely a counter offer on his part which lie is at liberty to retract until A has assented to all its terms without qualification. mail agreed with a subcontractor that he 355, where the captain was to be- paid a should perform one-half the service, and sum equal to twelve per cent, on the net be entitled to one-half the compensation, proceeds, after deducting certain ex- Wilkiuson v. Jett, 7 Leigh (Va.) 115. penses. He brought an action for what There are decisions, however, that hold was due to him, and recovered, but no the contrary doctrine, viz.: that sharing question of partnership arose. Some of in tlie gross proceeds of a business creates the customs established amongst whalers the partnership relation. Fail v. McKee, will be found in Fennings v. Grenville, 1 36 Ala. 61 ; Musierr.Trumpbour, 5 Wend. Taunt. 241, where it was held that one of (N. Y.) 275 ; Ludlow v. Cooper, 4 Ohio St. two tenants in common of a whale could 1. See, also, Mr. Parsons' remarks on this not maintain trover against his cotenant ^subject, and his very interesting note upon for half of the blubber, &c., yielded by it. Pars, on Part. *88, and note q. the whale. (x) Mair v. Glennie, 4 M. & S. 240 ; (y) Post ? 2. Wilkinson f. Frazier, 4 Esp. 182; and see 13. For cases relating to the lay or Parrott I). Bryant, 2 Y. & C. Ex. 61. Seei share of seamen in the proceeds of a also, Stavers v. Curling, 3 Bing. N. C. voyage, see supra, p. *13, note 6. 30 €HAP. I., § 1.] CONTRACTS OF PARTNERSHIP. 19* There are many decisions illustrating these principles, but they relate more particularly to agreements to take shares in comj^anies, and it is unnecessary to consider them here, {z) *Cases in which there is no contract, because there has *^^J never been a mutual assent to the same terms, must not be confounded with cases in which a valid contract has been entered into, but which, being conditional, and not having been performed on the one part, is not binding on the other. These will be considered hereafter. 14 6. Partnership is not the result of an agreement to share profits so long as anything remains to be done before the right to share them accrues. Contemplated partnerships.— It is important to distinguish between actual and contemplated partnerships. Persons who are only contem- (z) See the next page. In McClean v. the first. Taylor v. Penny, 5 La. Ann. 7. Kennard, 9 Ch. 336, an agreement to be- So, also, an advance of money to one en- come partners with executors was held to gaged in business, and which was used by create a partnership with those only who him for the purchase of goods, does not proved. create a partnership, although made in 14. Unconcluded agreements. — As anticipation of a future partnership, between the partners themselves, the ulti- which is never consummated. Hubbell mate facts whence a partnership is de- v. Woolf, 15 Ind. 204. Accordingly, duced are, first, the agreement, and, sec- where A advanced money to B, to be used ond, its execution; there can be no part- in his business, taking his notes therefor, nership between parties, so far as they under an agreement that A might become solely are concerned, without a consent an equal partner with B, considering the thereto and fulfillment thereof. Grooves sums advanced as contributions to the V. Tollman, 8 Nev. 178. capital of the firm, if on further exami- Inler sese, a partnership can commence nation A should so desire, and B carried only by the voluntary contract of the on the business as his own, drawing more parties ; and when once formed, no third than half the profits therefrom, and cred- person can be afterwards introduced into iting A on the books with interest on the the firm as a partner without the concur- notes, and A, seeing tiie interest credited, rence of all the parties who compose the claimed that he was a partner, and should original firm. Freeman v. Bloomfield, 43 receive half the profits, but no interest, Mo. 391. Therefore, where one buys a and B still continued to credit A with jn- stranded vessel, and agrees to give another terest, and to treat the business as entirely an interest therein, tlie latter has no inter- his own — in a suit on the notes, it was est he can transfer without the former's held, in Massachusetts, that no partner- consent. It is an agreement to take in a ship was ever formed. Morrill v. Spurr, partner, and gives the second party no 9 N. E. Eep. 580. right to impose an unknown partner on 31 20=*= CONTIIACTS OF PARTNERSHIP. [book I., plating a future partnership, or who have only entered into an agree- ment that they will at sonic future time become partners, cannot be considered as partners before the arrival of the time agreed upon, (a) It is not always easy to determine whether an agreement amounts to a contract of partnership or only to an agreement for a future partner- ship. The test, however, is to ascertain from the terms of the agree- ment itself whether any time has to elapse or any act remains to be done before the right to share profits accrues ; for if there is, the par- ties will not be partners until such time has elapsed or act has been performed. (6) The general principle that so long as an agreement to form a part- nership is executory no partnership is formed, applies as Avell to ordinary partnerships as to projected companies, and it Avill be useful to consider it with reference to each inturn.l5 (a) Per Parke, J., in Dickinson v. Valpy, 10 B. & C. 141, 142. (6) See, in addition to the cases cited below, Drennen v. London Ass. Co., 6 Davis Sup. Ct. Kep. 25 ; Osborne v. Jul- lion, 3 Drew. 596, where the partner- ship (?) depended on the result of experi- ments. 15. Contemplated partnerships; ex- ecutory agreements. — While a valid partnership may be contracted, to take effect at a future time, or on the happen- ing of a certain event, or t-he performance of certain conditions (Avery v. Lauve, 1 La. Ann. 457), yet, usually, the event must take place or the conditions be per- formed before the firm obtains a legal existence. Thus, proof of an agreement between two partners that upon tlie death of one of them his brother should become a partner in the firm, and be entitled to a share of the profits, is not sufficient to establish a partnership. Brink v. New Amsterdam Fire Ins. Co., 5 Eobt. (N. Y.) 104. So, also, where by an agreement be- tween the owners of a steamboat and a third person, the latter was to run the boat, and the proceeds were to be applied, first, to the expenses of the boat ; second, to the insurance ; third, in a certain sum to the owners ; and, lastly, the surplus to be divided among the parties — it was held that the partnership was not to commence until the first three claims were satisfied ; and that until then the third party was merely the bailee of the boat. Ward v, Thompson, Newb. (U. S.) Adm. 95. See- also, Haile v. York, 27 Wis. 209. But the condition upon which the rela- tion depends must be a precedent one to have this effect ; if subsequent, its non- fulfillment will not annul the partnership contract. Murray v. Johnson, 1 Head (Tenn.) 353. Thus, where a firm takes- in a new partner, by a written instrument signed by the old members and the new, which recites the payment of a certain sum by the incoming partner, and con- veys to him one-third interest in t'h& assets, and consents that he shall have a third interest in the profits, the new part- nership is complete on the execution of the instrument, notwithstanding it may be agreed that an accoimt of the stock shall be taken, and if it exceeds a certain sum^ the new partner shall pay one-half of that sum. Phillips v. Nash, 47 Ga. 218. And it may be said that the existence of a partnership does not depend upon the fact that each partner has in all things- 32 CHAP. I., § I.] CONTEMPLATED PARTNERSHIP. 20* (a) Application of the principle to ordinary partnerships. Option to become a partner. — It is not unusual for a person who con- templates joining another in business to agree that such business shall be carried on upon certain terms not themselves creating a partnership, ♦and to stipulate for an option to become a partner either at a ^^^ specified time, or at any time the person having the option may choose. Such agreements, if bona fide, and not mere colorable schemes for creating a partnership, and at the same time concealing it, (c) do not create a partnership until the person having the option has exercised it, and elected to become a partner.l6 complied with his agreement. If the contract has been made, property and labor contributed, and the partnership business commenced, there is a partner- ship until legally dissolved. Hartman v. Woehr, 3 C. E. Gr. (N. J.) 383. Still, there must be nothing inchoate about the partnership, or it will not be liable to creditors ; it must become com- plete before it has a legal existence even as to third persons. Irwin v. Bid well, 72 Pa. St. 244. To impose such a liability there must be, in addition to the agreement to share profits and losses, an entering upon some business thereunder. Lucas v. Cole, 57 Mo. 143. In other words, the partnership agree- ment must not be an executory contract. Thus, a mere promise to "go halves" in a purchase of land, if not carried into effect, does not make the promisor a part- ner, so as to bind him to pay a note exe- cuted by the grantee in both of their names, for improvements thereon. Huck- abee v. Nelson, 54 Ala. 12. And an ad- vance of money to one engaged in busi- ness, and which is used by him for the purchase of goods, does not create a part- nership, although it may be made in an- ticipation of a future partnership, which is never consummated. Hubbell v. Woolf, 15 Ind. 204. For further illustrations of this principle, see Reboul v. Chalker, 27 Conn. 114; Haskins v. Burr, 106 Mass. 48; Strong v. Place, 4 Robt. (N. Y.) 385. Where, however, it is clear from the articles that the parties contemplate an immediate commencement of business as a firm, the failure of one of them to pay in his part of the capital, as agreed, does not render him any the less a partner as of the date of the execution of the articles. Southern White Lead Co. v. Haas, 33 N. W. Rep. 657. S. P., Grady v. Robinson, 28 Ala. 289. See, also, Aspinwall v. Williams, 1 Ohio 84; Austin v. Williams, 2 Id. 64 ; Crary v. Williams, 2 Id. 65. (c) See Courtenay v. WagstafF. 16 C. B. (N. S.) 110. 16. Option to become a partner. — Where a proposed partnership, evidenced by a letter, contemplates in its terms but one transaction, at the conclusion of which the profits are to be divided, and the let- ter making the offer sets a limit on the quantity of stock to be purchased, pre- scribes that it be bought on a joint credit, and requires that when purchased it shall be sent by particular persons to be sold in a particular market, under the supervision of the party making the offer, and the party receiving the letter so acts as to ful- fill none of the requirements contained in it, there is no partnership, and in the event of loss, the party receiving the offer cannot maintain a bill for an accounting as partners and contribution. Metcalf v. Redman, 43 111. 264. Where A contracted with a company to assume control of its affairs when satisfied 33 21* CONTRACTS OF PARTNERSHIP. [bOOK I., A strong illustration of this is afforded by Ex parte Davis, (d) where a creditor had a right to nominate himself as a partner with his debtor but had not exercised the right. Again, in Gabriel v. Evill, (e) it was agreed between the defendant and two others that the defendant should enter into partnership with them, and bring in £1000 in cash and £1000 in goods, and that the partnership should date retrospectively from the 1st of January ; but the defendant reserved to himself the option of determining at any time within twelve months from that day whether he would become a partner or not. The defendant advanced the £2000, and several other acts w^ere done in execution of the agreement; but within the-twelve months the defendant declared his option not to become a partner, and it was held that he never did in fact become one, and that he had not incurred any liability as if he had. (/) In Price v. Groom, (^c) a debtor's business was carried on by hun under an inspectorship deed, which authorized the trustees to carry on the business themselves, and to take the profits, if they chose. Their interest in the profits, however, did not commence until the debtor's interest determined ; and it was held that whilst he carried on the business there was no part*nership between him and them, -I they and he not being entitled to the profits at the same tmie. Share not. yd taken.— In Howell v. Brodie, (A) the defendant, intend- ing to become a partner in a scheme for making and letting out a market place, advanced considerable sums of money, and ultimately, on the completion of the market, took one-seventh share in it. It was sought to make him liable for the expense of erecting the market, on that its business was profitable, and to ad- (e) 9 M. & W. 297, and Car. & Marsh, vance money to enable tlie company to fill 358. See, too. Ex parte Turqnand, 2 M., its orders, that it might be ascertained if D. & D. 339, which turned on the same the business was profitable, A to retain agreement. See, also, Re Hall, 15 Ir. Ch. from the proceeds of the onlers the money 287, a similar case. advanced and part of the profits, it was (/) Compare this case with Jefferys v. held that A did not become a partner Smith, 3 Russ. 158. There A agreed to upon the execution of the contract. Cas- purchase B's share in a firm ; A acted sidv V. Hall, 97 N. Y. 159. and was treated as a partner by the other (d) 4 De G., J. & Sm. 523. The agree- members, but afterwards rescinded the ment was in the form of a bond, and was, contract with B; it was held that a part- as Lord Westbury remarked, " an ingen- nership nevertheless subsisted between A ions piece of mechanism." Such an agree- ami B's copartners, ment, however, cannot be relietl upon as {g) 2 Ex. 542. aflfording protection against third parties. (A) 6 Bing N. C. 44. 34 CHAP. I., § I.] PROMOTEES OF COMPANIES. 22* the ground that he was a partner with those by whom the plaintiff had been employed ; but the court held that there was no partnership between them and the defendant until the share was taken by him. Share of profits expected in lieu of salary. — In Burnell v. Hunt, (i) an agreement was come to between A and B that A should take prem- ises and purchase machinery and materials to carry on the business of a silk lace-maker, and that B should manage the business and receive half the profits as soon as any accrued, and should, in the meantime, be paid £2 a week. It was held that so long as the £2 per week con- tinued payable, there was no partnership. (^) 17 Partnership articles to he drawn up. — Persons who agree to become partners may be partners although they contemplate signing a formal partnership deed and never sign it. (f) But if they are not to be part- ners until they sign formal articles of partnership, and if they do not so act as to waive the performance of such condition, they will not be partners until it has been performed. Where, however, two persons agreed to become partners from a subsequent day, upon certain terms to be embodied in a deed to be executed on that day, it was held that the partnership began on the day mentioned, although the deed was not executed until afterwards, and althougli alterations were made in it immediately before its execution, (in) In this case, however, the ^parties did in fact commence business as partners on the day named, and it was wholly immaterial (as regarded the ques- tion before the court) what the terms of the partnership were. (b) Application of the principle to promoters of companies. Promoters of companies not partners. — Promoters of companies are not partners ; they are, it is true, engaged in a common object, and that object is ultimately to share profits ; but their immediate object is the formation of a company, and they are only in the position of per- sons who intend to become partners after the company is formed. It (i) 5 Jur. 650, Q. B. The real point 555 ; and supra, p. *13, note 6. here was whether B had any interest in (/) As in Syersr. Syers, 1 App. Cas. 174. the goods, which he clearly had not, and {m) Battley v. Lewis, 1 Man. & Gr. 155 ; would not have had even if tliere had and see Wilson v. Lewis, 2 Id. 197. Gom- been profits to divide. pare Ellis v. Ward, 21 W. R. 100, where [k) See, too, Ex parte Hickin, 3 De G. the intended partners quarrelled before ■& S. 662. they signed the deed. 17. See Ee Blumenthal, 18 Bankr. Reg. 35 [*23 23* CONTRACTS OF PARTNERSHIP. [BOOK I., was indeed said, in Holmes v. Higgins, (/t) that the projectors of a railway were partners, they being associated for the purpose of procur- ing the act of parliament necessary to form the company and sub- scribing money for that purpose; and, in Lucas v. Beach, (o) the court iield that persons associated for the purpose of passing a turn- pike act, and who had subscribed for shares in the proposed road, were l)artners. But in each of these cases the real question was whether the plaintiff was entitled to recover from the defendants, by virtue of any implied contract, any remuneration for services rendered by him for the joint benefit of himself and them. It was held that he was not; and if the court had likened the case to one of partnership, instead of saying that the plaintiff and the defendants were partners, there would be no room for criticism. As it is, however, the cases are apt to be considered, and are sometimes cited, as authorities for the proposition that persons engaged in passing through parliament bills to authorize the establishment of a company are partners. In Lucas V. Beach it was asked in argument, " What is there to prevent a number of individuals from entering into a partnership with the limited object, in the first instance, of procuring an act of parliament, and with an ulterior object in view when the act has passed ?"(p) The answer is that to call persons so associated partners is to ignore the difference between a contract of partnership and an agreement to enter into such a contract, to confound an agreement with its result, and ta hold persons to be partners *although they have not yet -I acquired any right to share profits. It cannot be contended that the right to share profits would, under such an agreement as is supposed, accrue before the passing of the act, and if not, how can the parties to such an agreement be partners at an earlier period ? Later authorities. — For these reasons it is conceived that Holmes v. Higgins and Lucas v. Beach cannot be relied upon as authorities on the question of partnership or no partnership, {q) Nor are they on this point reconcilable with later decisions. In Keynell v. Lewis, (r> and Wyld v. Hopkins, (/•) in which the question was much discussed, (n) 1 B. & C. 71. actually decided, viz., that a person doing (o) 1 Man. & Gr. 417. Barnett v. Lam- work for the joint benefit of himself and bert, 15 M & W. 489, was a similar case, others cannot recover compensation from (p) See, too, per Lord Brougham in them by virtue of any implied promise to Hutton V. Upfill, 2 H. L. Cas. 691. pay him. {q) They are authorities for the point (>•) 15 M. & W. 517. 36 CHAP. I., § II.] QUASI PARTNERSHIP. 24* it was held that no partnership subsisted between persons who had subscribed for the purpose of forming a railway company and of pro- curing the necessary act of parliament ; and this, which is the correct doctrine, was also distinctly stated by Lord Cranworth, in Capper's Case, (s) and has been recognized on many other occasions, {t) Subscribers to inchoate companies not partners. — It is a necessary result of the principles established above that persons associated for the purpose of forming a joint stock company are not partners, {u) They clearly are not partners in the company to be formed ; and for reasons already given they cannot be considered as members of a part- nership formed to start the company. Conditional contract. — It also follows from the same principles that if persons enter into an agreement to take shares in a company formed for certain purposes and upon certain conditions, those persons are not bound to take shares in a company formed for different purposes or upon other conditions, and are not partners in such a company, unless they have accepted shares therein and *precluded themselves ^^^ from objecting to the variation of their agreement. A lead- ing case on this subject is Fox v. Clifton, (x) which, with other cases of the same class, will be found in the volume relating to companies and contributories. SECTION II. OP QUASI PARTNERSHIPS. Quasi jKirtnerships. — Having now examined the nature of those agreements which are, properly speaking, contracts of partnership, it is necessary to advert to the doctrines by virtue of which persons who are not partners at all are nevertheless made subject to liabilities as if they were partners. In other words, it is necessary to explain what (s) 1 Sim. (N. S.) 178. 2 H. L. Cas. 647 ; Besley's Case, 3 Macn. (0 E. g., Batard v. Hawes, and Batard & G. 287 ; Tanner's Case, 5 De G. &S. 182. t. Douglas, 2 E. & B. 287 ; Walstab v. (u) Wood v. Argyll, 6 Man. & Gr. 928 ; SpoUiswoode, 15 M. & W.oOl; Forrester Hamilton v. Smith, 5 Jur. (N. S.) 32; V. Bell, 10 Ir. Law R. 555; Hutton v. Hutton v. Thompson, 3 H. L. Cas. 161; Thompson, 3 H. L. Cas. 161 ; Bright v. Bright v. Hutton, Id. 368. Hutton, 3 H. L. Cas. 368 ; Hamilton v. (x) 6 Bing. 776. Emith, 5 Jur. (N. S.) 32 ; Norris v. Cottle, 37 25* BY SHARING PROFITS. [bOOK I.^ it is that creates a quasi partnership, or, as it is usually called, a part- nership as regards third persons. This will involve an examination of the liability which a person incurs : 1. By sharing ])rofits. 2. By holding himself out as a partner. 1. By sharinr/ jyrojits. In the year 1775, De Grey, C. J., laid down the proposition, in Grace v. Smith, (y) that " every man who has a share of the profits of a trade ought also to bear his share of the loss." Eighteen years afterwards, viz., in 1793, this doctrine was discussed and apjjroved in the celebrated case of Waugh v. Carver; (2;) and ever since that time until 1860 it was considered as clearly established that by the law of England all persons who shared the profits of a business incurred the liabilities of partners therein, although no partnership between them- selves might have been contemplated. Subtle distinctions were drawn between sharing net profits and gross returns ; and between sharing net profits and payments varying with them ; but it was taken for ,^ -. granted, both by judges and text-*writers, that where there -^ was no statutory enactment to the contrary, if net j^rofits were shared, it necessarily followed that liabilities were incurred. Moreover, there were many persons of ability who maintained that this rule was based upon principles which were satisfactory and morally just. Other persons, however, took a different view of the propriety of the rule, (a) and were unable to understand why a per- son lending money at a fixed rate of interest should be treated as a creditor, and be exposed to no risk beyond the loss of his advance ; whilst a person lending money at a rate of interest fluctuating with, and payable out of, the profits of the borrower should be treated as a partner, and be exposed, not only to the loss of his money, but also to the loss of whatever else he might have in the world. In the first edition of this work the writer expressed a hope that the rule in ques- tion would ere long cease to exist ; and he ventured to characterize it as arbitrary, unjust, and as productive cf the greatest confusion. Since those words were written the whole subject has been thoroughly (y) 2 Wm. Bl. 998. nership, printed by order of the House of (2) 2 H. Bl. 235. Commons, in 1851, and particularly the (a) See the rei)ori »n the Law of Part- evidence of the late Commissioner Fane. 38 CHAP. I., § II.] QUASI PARTNERSHIP. 26* discussed, both in the highest court of appeal, (6) and in parliament ; and the result has been that the rule, so far as it affords a conclusive test of liability, (c) has ceased to exist ; for the House of Lords, and subsequently other courts, have repudiated it, and parliament has excluded its application from many cases in which it has been found by experience to produce inconvenience and injustice. Some notice, however, of the old law is necessary in order to understand the modi- fications thus introduced. 1. State of the law anterior to Coo: v. Hickman. Origin of the rule that those who share profits are liable to losses. — As already stated, the rule that persons who share profits incur liabilities as if they were partners was laid down for the first time in Grace v. Smith, (d) The question there was whether the defendant was liable to a creditor of a firm ; and the material facts were that the defendant (who had *been a partner, but who had notoriously retired before r 27 the creditor's demand arose) had advanced to the firm £4000 upon the terms '- of being repaid the principal and of receiving, so long as it remained unpaid, interest at five per cent, and an annuity of £300 a year. The verdict was for the defendant, and the court refused a new trial. De Grey, C. J., gave his judgment as follows : Judgment in Orace v. Smith. — "The only question k, What constitutes a secret partner ? Every man who has a share of the profits of a trade ought also to bear his share of the loss. And if any one takes part of the profit, he takes a part of that fund on which the creditor of the trader relies for his payment. If any one advances or lends money to a trader, it is only lent on his general personal security'. It is no specific lien upon the profits of the trade, and yet the lender is generally interested in those profits ; he relies on them for repayment. And there is no difference whether that money be lent de novo, or left behind in trade by one of the partners who retires ; and whether the terms of that loan be kind or harsh makes ako no manner of difierence. I think the true criterion is to inquire whether Smith (the defendant) agreed to share the profits of the trade with Robinson (the continuing partner), or whether he only relied on those profits as a fund of payment, a distinc- tion not more nice than usually occurs in questions of trade or usury. The jury have said this is not payable out of the profits, and I think there is no foundation for granting a new trial." This judgment and not the decision in the case, has always been regarded as the great authority for the proposition that a person who shares profits is liable to ihird parties as if he were in fact a partner. The judgment itself appears to have been based upon a prior case of Bloxham v. Pell, (e) before Lord Mansfield, and in sub- stance undistinguishable from Grace v. Smith. In Bloxham v. Pell an outgoing partner became entitled to be paid by the continuing partner a certain sum of money, with interest at five per cent., and also an annuity of £200 a year for six years, in lieu (6) Cox V. Hickman, 8 H. L. Cas. 268. seen already, ante p. *12, et seq. (c) That participation in profits is still (d) 2 Wm. Bl. 998. a prima facie test of partnership has been (e) Cited in 2 Wm. Bl. 999. 39 27* BY SHARING PROFITS. [bOOK I.j of the profits of tlie trade. The plaintifT sued liim for a debt contracted after the dissolution, and Lord Mansfield held the defendant liable, on the ground that the agreement was a device to make more than legal interest of money, and if it was not a partnership it was a crime; and it should not lie in the defendant Pell's mouth to say it was usury and not a partnership. Lord Mansfield did not say a word in favor of the doctrine laid down in Grace v. Smith ; but seeing a contract which, on the ground of usury, was invalid as a contract of loan, he nevertheless upheld it as a contract of partnership, which it plainly was not, but which was the only alternative if the agreement was to be upheld at all. (/) Such was the origin of the rule in question, which was approved and applied in the well-known case of Waugli v. Carver, the leading old authority on this subject. In Waugh V. Carver, (g) two ship-agents, carrying on business at different ports, agreed to allow each other certain portions of each other's commissions and profits, but it was expressly agreed that neither of them should be prejudiced or aflected by the losses of the other, '''or be answerable for the acts of the other, but that -■ each should be answerable and accountable for his own losses and acts. It was admitted by the court that this agreement created no partnership as between the parties to it ; but it was nevertheless held, on the principle enunciated in Grace v. Smith, that both parties to the agreement were answerable for the business debts of each, and a creditor who sued both for goods supplied to one obtained judgment against both accordingly.^^ Application of the foregoing doctrines. — Other cases, in which the same principle was applied, need only be shortly referred to. It was held that a quasi partnership sub- sisted between merchpnts who divided the commissions received by each other on the sale of goods recommended or "influenced" by the one to the other; (A) so, between persons who agreed to share the profits of a single isolated adventure ; (i) and between persons, one of whom was in the position of a servant to the others, but was paid a (/) See Jestons v. Brooke, Cowp. 793, partner, cannot be held for debts incurred and ante p. *16. in the business as a dormant partner, un- {g) 2 H. Bl. 235, and 1 Smith's Lead, less in virtue of some contract, express or Gas. implied, on his part, in legal effect cre- 18. When sharing profits imposes ating, as between him and the persons liability for losses. — While participation actually carrying on the business, the re- in the profits of a firm is prima facie evi- lation of principal and agent. Wild v. dence of partnership, and becomes conclu- Davenport, 7 Atl. Kep. 295. S. P., East- sive, as to third persons, when not re- man v. Clark, 53 N. H. 276. butted by evidence showing such partici- But a contract that one party shall fur- pation to be in place of compensation for nish money and the other perform work services (Fourth Nat. Bank v. Altheimer, for a given business, and that its net 3 S. W. Rep. 858), still, merely sharing profits shall be equally divided between the profits does not, ipso facto, make one a them, makes, without reference to their partner as to third persons. Parchen v. intent, a partnership as to third persons. Anderson, 5 Mont. T. 438 ; S. C, 51 Am. Pettee v. Appleton, 114 Mass. 114 ; Bige- Rep. 65. Such participation, or the right low v. Elliott, 1 Cliff. (U. S.) 28. to participate, is not an invariable test of (A) Cheap v. Cramond, 4 B. & A. 663. partnership, even as to creditors. One (i) Heyhoe v. Burge, 9 C. B. 431 ; Ex not actually engaged in the business as a parte Gellar, 1 Rose 297 ; Hesketh v. principal, and not holding himself out as a Blanchard, 4 East 144. 40 CHAP. I., § II.] QUASI PARTXERSHIP. 28^ share of the profits instead of a salary ; (k) and between persons, one of whom was paid an annuity out of the profits made by the others ; (l) or an annuity in lieu of any share in those profits; (m) so, between the vendor and purchaser of a business, if the former guaranteed a clear profit of so much a year and was to have all profits beyond the amount guaranteed, (n) Moreover, the character in which a portion of the profits was received did not afTect the result. For a person who as executor or trustee merely employed money in trade or business, and shared the profits arising from it, incurred all the liabilities of a partner, although he, in fact, had personally no interest whatever in the mat- ter, (o) On the other hand, the cestuis que trustent were also liable ; the creditors having an option against which of the two they would proceed, {p) Again, persons who shared profits were quasi partners, although their community of interest was confined to the profits. In Smith v. Watson, [q) a broker, who was paid by a share of the profits arising from the sales made by him, and who was therefore a quasi partner with the person employing him, was nevertheless held to have no interest in the goods sold.^* {k) Ex parte Digby, 1 Deac. 341 ; Ex parte Kowlandson, 1 Rose 92 ; and see Withington v. Herring, 3 Moo. & P. 30. (Z) Re Colbeck, Buck. 48; Ex parte Hamper, 17 Ves. 412; Ex parte Chuck, 8 Bing. 469. {m) Bloxham v. Pell, 2 Wm. Bl. 999, ante p. *27. (ft) Barry v. Nesham, 3 C. B. 641. Compare Pott v. Eyton, Id. 32, infra, p. *30. (o) Wightman v. Townroe, 1 M. & S. 412 ; Ex parte Garland, 10 Ves. 119 ; La- bouchere v. Tupper, 11 Moore P. C. 198. (p) See Goddard v. Hodges, 1 Cr. & M. 33. In this case the court held that the cestui que trust was liable to creditors, and that therefore he could not sue the copart- ners of his own trustee. But surely this was wrong. There was no partnership between the plaintiff and defendants, no contract between them. iq) 2 B. & C. 401 ; and see Burnell v. Hunt, 5 Jur. 650, Q. B., and Cheap v. Cra- mond, 4 B. & A. 663. 19. Illustrations of the rule. — In the following instances, the element of commu- nity of profits was held to create the partner- ship liability as to third persons: Where A and B agreed that A should take certain negroes of B, and work them in a blacksmith's shop, furnish all sup- plies, pay all expenses, and give B one- half of the net proceeds of the shop for the use of the negroes. Buckner v. Lee, 8 Ga. 285. Where there was a lease of a steam-mill and appurtenances, reserving as rent one- half of the net profits of the business, and also providing that the lease should not be assignable, and should cease on the lessee's death, or his inability from any cause to give his personal attention there- to. Dalton City Co. v. Hawes, 37 Ga. 115. Where a father and son, both living on the same farm, worked it together under an agreement that the father was to furnish the land and the slock, and provisions for the stock, and the son to furnish the hands and to superintend the work, and the crop to be equally divided between them, and nothing more appeared. Adams v. Carter, 53 Ga. 160. S. P., Pettee v. Appleton, 114 Mass. 114; Brown v. Higginbotham, 5 Leigh (V:i.) 583. W^here there was a contract for one to furnish factory and materials, and another to manufacture, and either to sell the pro- duct, and the proceeds to be divided. Farmers' Ins. Co. v. Ross, 29 Ohio St. 429. Where the owner of a tug agreed with the owner of a barge that both vessels should be employed in a freighting busi- ness, the wages of the servants of the asso- 41 29* BY SHAKING PROFITS. [bOOK I., Distinction between sharing profits imd gross returyis.— But notwithstanding tlie extent to whicli the doctrine laid down in Grace *t). Smith was carried, it was long ago establislied that persons who shared only gross returns were not quasi partners ; and subtle distinctions were taken between a payment out of profits, and a payment varying with them, and between an agreement to share profits as such and an agree- ment to share profits, not as profits, but as something else. These subtleties were attributable, on the one hand, to the establishment of the rule that persons who shared {)rofits should be answerable for losses, and on the other to a disinclination to api)ly that principle to cases in which it was clear that those who shared the profits never intended to become partners inter se. First, as to gross returns. In Benjamin v. Porteus, (r) an agreement was made between the plaintiff' and a broker, by which the broker, instead of a commission on the sales effected by him for the phiintiff, was to have the whole proceeds of the sales elation and expenses, except for repairs, this does not constitute them all partners, to be paid out of the earnings, and the and make them all liable for expenses in- balance or profits to be divided between curred by either in the performance of his them in proportion to the stipulated value or their part of the contract. Heckert v. of the vessels. Bowns v. Pioneer Tow Fegeiy, 6 Watts & S. (Pa.) 139. So, also, Line 2 Sawy. (U. S.) 21. See, also, a pool arrangement between steamboat Whitney v. Ludington, 17 Wis. 140; Ap- owners, whereby the excess of net earn- pleton V. Smith, 24 Wis. 331 ; Upham v. ings of one boat over those of the other is Hewitt 42 Wis. 85. to be divided at the end of the season, does So, also, where several common car- not, alone, constitute a partnership so as to riers, each having its own line, associate create a joint liability for the negligence and form what, from the shipper's point of either. Fay ?;. Davidson, 13 xMinn. 523. of view, is a continuous line, and contract And where a non-resident commercial to carry goods through at an agreed price, firm agreed with two resident firms, which the shipper pays in one sum, and whereby one of the latter firms was to which the carriers divide among them- purchase certain merchandise, and ship it selves, they are jointly and severally Ha- in the name of the other, and the other ble to the shipper for a loss taking place resident firm, with the money of the non- on any part of the whole line. Wyman v. resident firm, was to pay for the same, Chicago and Alton R. Co., 4 Mo. App. 35. and each of the resident firms agreed to And where R. advanced |700 to M., a receive, instead of fixed sums in payment traveling showman, under the agreement for their services, certain proportions of that after payment of expenses R. was to the profits to arise from the sales of the receive back the $700, and one-half of the goods so bought, and to share in any net profits— /fe/rf. that R. and M. were losses resulting from said sales— it was partners as to third persons, irrespective held that this contract did not make the of any agreement to the contrary between said firms commercial partners even as to themselves. Haas v. Roat, 16 Hun (N. third persons, it appearing that they did y ) 526. not so intend, and that they had not held On the other hand, it has been held themselves out as partners. Chaflraix v. that where three persons agree, the one to Laffitte, 30 La. Ann. 631. See, also, Eiu- do certain things and the other two cer- stein v. Gourdin, 4 Woods (U. S.) 415; tain other things, each at his own expense, Lafon v. Chinn, 6 B. Mon. (Ky.) 305. each to be entitled to an equal share of ()) 2 H. Bl. 590. See, too, Dixon v. the profits arising out of the contract. Cooper, 3 Wils. 40. 42 CHAP. I., § II.] QUASI PARTNERSHIP. 29^ less 2.S. 6d. per lb., which was to be paid to the plaiirtiff. This was held not to give the broker such an interest in the goods sold by him as to render him an incompetent witness for the plaintiff, his piincipal, in an action for their priee. This decision seems to have paved the way to others which went far beyond it. In Dry v. Bos- well, (s) Lord Ellenborough held that no quasi partnership subsisted between the owner of a barge and the man who worked it, and who received for his wages half the gross earnings ; and in Mair v. Glennie, (<) where the captain of a ship was to be paid one-fifth of the profit or loss on an intended voyage, it was held that he and the owners of the ship were not quasi partners. It had previously been decided, in Wil- kinson V. Frazier, (w) tha-t the crew of a whaling ship wiio were to be paid by the owners a certain share of the oil brought home, were not partners with them. The distinction between gross returns and profiis (or, as they are sometimes called, gross profits and net profits), was acted upon by Mr. Baron Parke in Heyhoe v. Burge, {x) when he told the jury "a person who shares gross profits is not a partner j but a person who shares net profits is prima facie to be considered as a partner." {x) ^'^ Distinction between sharing profits and payments varying xvith them. — Next, as to the distinction between payments out of profits as such, and payments not out of them as such. The great enforcer of the distinction in question was Lord Eldon, who seems to "have been led to make it by the impossibility of otherwise reconciling Grace v. Smith and Bloxham v. Pell. In Ex parte Hamper (j?) his lordship is reported to have said : "It is clearly settled, though I regret it, that if a man stipulates that as the reward of his labor he shall not have a specific interest in the business, but a given sum of money even in proportion to a given quantum of the profits, that will not make iiim a partner ; but if he agrees for a part of the profits as such, giving him a right to an account, though having no property in the capital, he is, as to third persons, a partner, and in question with third persons no stipulation can protect him from loss." *Olher cases decided by his lordship contain dicta to the same effect, (a) J and the distinction must be considered as settled in point of law. The latest (s) 1 Camp. 330; and see Wish v. Small, ship expenses, nor is the business such a» in the note there. to authorize any necessary inference of (<) 4 M. & S. 240. The expression partnership. Denis «;. Saunders, 36 Mich. " profit or loss," in this case, must have 369. S. P., Braley v. Goddard, 49 Me. 115. been held equivalent to gross returns. Nor does the appointment, by the differ- (w) 4Esp. 182. Seea?iYep.*19, note(x). ent proprietors of several sections of a {%) Heyhoe v. Burge, 9 C. B. 431 ; see public line of travel, of a common agent Id. 440, 444. at each end of the route to receive fares 20. Effect of sharing gross returns. — and give thr®ugh tickets, of itself, consti- An agreement between two concerns to tute them partners as to passengers who share commissions on sales of goods to be purchase such tickets, so as to render each forwarded by one to the other, does not one liable for losses occurring on any por- create a partnership between the two firms, tion of the line. Ellsworth v. Tartt, 2& Pomeroy v. Sigerson, 22 Mo. 177. So, Ala. 733. where a land-owner arranges that another iy) 17 Ves. 412. shall cut posts on the lands at his own ex- (a) See Ex parte Rowlandson, 1 Rose pense, on shares, receiving lialf the posts 89 ; Ex parte Langdale, 18 Ves. 300 ; Ex and paying all the cutting expenses, these parte Watson, 19 Id. 461. expenses cannot be regarded as partner- 43 30* cox V. HICKMAN. [bOOK I., case upon this subject is Pott v. Eyton. (6) The defendant Eyton was concerned in a colliery, and the defendant Jones kept a shop for supplying the workmen at the colliery. Eyton built the shop ; licenses to sell tea, Ac, were taken in his name, and he paid for the goods supplied to the shop. Jones managed the shop business. Eyton received first seven and afterwards five per cent, on the amount of all sales to the workmen, and Jones had all the rest of the profits of the shop from whatever source derived. The question was whether Eyton and Jones were partners or quasi partners. The jury found that there was no agreement to share profit and loss, and the Court of Common Pleas acted on the distinction taken in Ex parte Hamper, and on the distinction between profits and gross returns, and held that no partnership or ^uasi partnership existed.^ ^ Loans. — A loan of money to be repaid with interest, however exorbitant, did not constitute a quasi partnership between the borrower and the lender (c) unless profits were expressly pointed at as the fund for payment, (d)'^^ 2. Modljkalions introduced by the House of Lords in Cox v. Hickman. Such was the state of the law when the case of Cox v. Hickman oanie before the House of Lords ; and that tribunal, in effect, decided (6) 3 C. B. 32. See further, as to this cause, when not so interested, liis condi- case infra, ? 2 (2). tion is not different from that of an ordin- 21. Distinction between sharing pro- ary creditor. Berthold ?;. Goldsmith, 24 fits, as such, and payments varying How. (U. S.) 536. with them.— The participation in the In Louisiana, however, it is held that profits of a business does not in all cases an employee whose compensation depends make the participant a partner as to third on the profits of the business, and who, if persons ; to have that effect the participa- there are no profits, is to receive nothing, tion must be in the profits as such, under and who on several occasions has held circumstances which give him a proprie- himself out as a partner, will be responsi- tary right as principal trader in such ble as such to third persons, though inter profits before division. Burnett i). Snyder, se the parties never intended a partner- 81 N. Y. 550. As we have already seen ship. Lee v. BuUard, 3 La. Ann. 462. in a former note (p. *13, note 6), a com- Compare Halliday v. Bridewell, 36 Id. pensation for services, in the form of a 238. commission on profits, creates no such in- (c) Grace v. Smith, 2 Wm. Bl. 998. terpst in the concern as constitutes a part- [d) Gilpin v. Enderby, 5 B & A. 954; nership. Fereday t. Hordern, Jac. 144 ; Bloxhamv. The rule we are considering has no Pell, an question. 41 40. Although a purchase be on separate of a paper-mill, for the more convenient and not on joint account, yet if the inter- management of their business, agreed ests of the purchasers are afterwards that one of them should be sole manager, mingled with a view to a joint sale, a part- foreman and bookkeeper, another should nership exists from the time that the perform general labor in the mill, another shares are so brought together. Rogers v. should be engineer, and the fourth should Nichols, 20 Tex. 719. "collect slock and market the paper," at ip) See m/V«. as to this. fixed compensations to each. This was- 41. In Doak v. Swan (8 Greenl. (Me.) held to constitute a partnership between 170), four of the five tenants in common those who signed the agreement in the- 70 CHAP. I., § VI.] CO-OWXERS. 53* Joint purchasers of goods for resale. — If several persons jointly purchase goods for resale with a view to divide profits arising from the tran.saction, a partnership is thereby created, (g) But persons who join in the purchase of goods, not for the purpose of selling them again and dividing the profits, but for the purpose of dividing the goods themselves, are not partners, and are not liable to third parties as if they were. Coope v. Eyre (/■) is a leading case in support of this proposition. There, an agreement was come to that one person should purchase oil and then divide it amongst himself and others, they pay- ing him their proportion of the price. The oil was bought accord- ingly, and the purchaser becoming bankrupt, the seller sought to make the other parties to the agreement pay for the oil. But it was held that the purchaser purchased as a principal and not as an agent, and that as there was no community of profit or loss, the persons amongst whom the oil was to be divided could not be *made liable as -^ partners or quasi partners. In Hoare v. Dawes (s) there was a similar agreement, and Lord Mansfield thought at first that there was a quasi partnership, but he and Willes, Ashhurst and BuUer, JJ., ultimatelv decided that there was not, there being no agreement to share profit or loss, and there being no pretence for holding the pur- chasers liable for the acts of each other by reason of their holding themselves out as partners. So, in Gibson v. Lupton, (t) two persons joined in the purchase of some wheat, with the intention of dividing and paying for it equally, and it was held that as there was no joint interest in profit or loss, they could not be considered partners, either as between themselves or as regarded third parties. 42 business of making and selling paper; separate and different instructions, each and a promissory note given for stock, in for his own share, their interests are sev- the name of the company, by the party ered ; and each may maintain an action appointed to the charge of that depart- in his own name against the consignee ment, was held binding on all the parties for a violation of his instructions. Hall to the agreement. v. Leigh, 8 Cranch (U. S.) 50. (g) Reid v. Hollinshead, 4 B. & C. 867. In Goell v. Morse (126 Mass. 480), two (r) 1 H. Bl. 37, persons bought a horse, each paying half (s) 1 Doug. 371. the price, under an agreement that when (t) 9 Bing. 297. either should have possession of the horse 42. Joint purchasers of goods for re- he should provide for his keeping without sale. — Where two joint owners of mer- cost to the other, and that each should try chandise consign it for sale, informing the to sell the horse and endeavor to procure consignee that each owns a moiety, giving a purchaser at a profit over his cost, but 71 54* CO-OWNERS. [book I., Part owners sharing the produce of their property. — Moreover, part owners who divide what is obtained by the use or employment of the thing owned are not thereby constituted partners. For example, if two tenants in common of a house let it and divide the rent equally amongst them, they are not partners, although they may pay for repairs out of the rent, before dividing it. (u) So, two persons who are tenants in common of a race-horse, and share his winnings on the one hand and the expenses of his keep on the other, are not partners, but co-owners only, (x) So, part owners of ships are not usually part- ners, (2/) although they may be partners as well as part owners, as was the case in Campbell v. Mullett. (2) 43 Co-owners of mines. — So, again, with respect to mines and quarries. Tenants in common or joint tenants of a mine or quarry may or may not be partners, and the mine or quarry itself may or may not be part of a common stock. But it is highly inconvenient, if not altogether that neither should sell without the con- chine to be used in common, in payment currence of the other. It was held that for which they give to the seil'er their they were tenants in common of the horse, joint note, renders them joint owners, not and not partners. partners. Ilifft. Brazil!, 27 Iowa 131. (w) See per Willes, J., in the case cited Joint owners of ships. — It is well set- in the next note. See, also, Lyon v. tied that, joint ownership of a vessel or Knowles, 3 B. & Sm. 556, where the gross cargo, in distinct proportions, -without receipts of a theatre were divided ; and any agreement to share in the profit or London Financial Assoc, v. Kelk, 26 Ch. loss which may ultimately arise, will not D. 107. make the co-owners copartners in the (x) French v. Styring, 2 C. B. (N. S.) property or voyage, but tenants in com- 357; qucere, whether there was in this mon. Thorndike v. De Wolf, 6 Pick. case a partnership in the profits? It (Mass.) 120; Merrill ?;. Bartlett, Id. 46; would seem not ; the agreement being to French v. Price, 24 Id. 13; Phillips v. divide the winnings as gross returns. See Purington, 15 Me. 425; Ward v. Bode- ante p. *18. man, 1 Mo. App. 272 ; Holmes v. United (y) Helme v. Smith, 7 Bing. 709 ; Ex States Ins. Co., 2 Johns. (N. Y.) Cas. 329; parte Young, 2 Ves. & B. 242 ; Ex parte Hopkins v. Forsythe, 14 Pa. St. 34 ; Jack- Harrison, 2 Rose 76; Green v. Briggs, 6 son v. Robinson, 3 Mason (U. S.) 138. Hare 395. Thus, the owners of whale ships, in the (z) 2 Swanst. 551. See Id., p. 575. absence of special agreements to that effect, 43. Sharing proceeds or earnings of are not partners, but tenants in common ; joint property. — A joint interest in a the other owners are not liable to contrib- patent does not confer upon the parties ute according to their shares to one of the character of partners. Parkhurst v. their number who has been obliged to pay Kinsman, 1 Blatchf. (U. S.) 488 ; Pitts v. more tlian his share in fitting out the ves- Hall,3Id. 201; Hermannsv.Duvigneaud, sel. Macy 1;. De Wolf, 3 Woodb. & M. 10 La. Ann. 114. So, also, the joint pur- (U. S.) 193. chase, by two persons, of a threshing ma- As to what acts of part owners of a ves- 72 CHAP. I., § VI.] CO-OWNERS. 55* im]30ssible, for co-owners of a mine or quarry to work it themselves without becoming partners, at least in the *profits of the p^-^, mine; and persons who work a mine or quarry in common '- are regarded rather as partners in trade than as mere tenants in com- mon of land, (a) 44 Three cases have here to be considered : 1. Co-owners partners in profits and in mine. — The co-owners may be partners, not only in the profits, but also in the mine itself The co-owners are then partners to all intents and purposes, and their mutual rights and obligations are determined by the law of partner- ship as distinguished from the law of co-ownership. (6) 2. Co-owners not ptartners at all. — The co-owners may not be part- ners at all, neither in the profits nor in the mine. Their mutual rights and obligations are then determined by the law of co-ownership as distinguished from the law of partnership. In this case each owner is entitled to an account of what the others have got from the mine more than their share ; (c) and to transfer his share in the mine with- out the consent of the other owners ; [d) and to have a partition made of the mine between him and them. But the writer conceives that in the case now supposed no owner is entitled to have the mine sold against the consent of the others, (e) Whether, if the co-owners can- not agree as to the mode of working the mine, an action will lie for sel will render them liable to be sued as the same. Bybee v. Hawkett, 12 Fed. partners, see Bacon v. Cannon, 2 Houst. Rep. 649; S. C, 15 Cent. L. J. 105; 8 (Del.) 47. Sawy. (U. S.) 176. (a) See Jefferys v. Smith, 1 Jac. & W. (6) There is no authority for saying 298 ; Crawshay v. Maule, 1 Swanst. 495 ; that in this case one of the partners can, Fereday v. Wightwick, 1 R. & M. 45. in the absence of a special agreement or 44. Co-owners of mines. — Where custom, assign his share without the con- three persons agreed to operate together sent of the other partners. That in this a "mining property as a company," this case the right is to a sale, and not to a creates a partnership between them from partition of the mine, see Wild v. Milne, the date of the agreement, and makes 26 Beav. 504; Crawshay v. Maule, 1 each of the three liable for debts con- Swanst. 495; Lees v. Jones, 3 Jur. (N. S.) traded in the prosecution of the enter- 954. prise, notwithstanding a further provi- (c) Denys v. Schuckburgh, 4 Y. & C. sion in their agreement that there shall Ex. 42. be no division of profits until two of the {d) Bentley v. Bates, 4 Y. & C. Ex. 182. three are reimbursed, out of the profits, (e) /. e., except under the act 31 and 32 for money expended by them in the pur- Vict , c. 40, enabling a sale to be made in chase of their shares of the property from lieu of partition. See Steward v. Blake- the other one, and the cost of improving way, 4 Ch. 603, and 6 Eq. 479. 73 5o*-56* CO-OWN i:rs of mines. [book i., the appointment of a receiver and manager, is not settled. Lord Eldon,. in Jeifcrys v. Smith, (/) is generally understood to have intimated that it will ; but the case before him was not of the description now under discussion, being one in which the mines were worked in partnership j and in a recent and care *fully considered case the contrary '^ -J rule was treated as more correct, [g) 3. Co-owners i^arlners in profits only. — The co-owners of a mine mav work it together, bring the produce into a common fund, and be partners in the profits of the mine, but not in the mine itself In this case the nuitual rights and obligations of the owners are deter- mined partly by the law of partnership and partly by the law of co- ownership, and some curious anomalies are the consequence. The most important of these are as follows : 1. Each co-owner may transfer his interest in the mine and in the partnership working it without the consent of the other owners, (li) 2. Each co-owner is entitled to maintain an action for an account against the others without seeking for a dissolution of the partnership, [i) 3. Upon a dissolution of the partnership, the mine itself, not beiijg partnership property, must be divided between its several owners and not be sold, [k) unless under the statute enabling sales to be made in lieu of partition, [l) 4. As between the real and personal representatives of a deceased partner, his share of the mine will be real, and not personal estate, (m) 5. With a view to a dissolution, the court will, if necessary, appoint a receiver and manager to carry on the mine for the benefit of all parties interested, {n) if) 1 Jac. & W.302. Wynget r. Heath- and 6 Eq. 479. A sale was decreed in cote, cited in 4 Y. & C. Ex. 187, supports the cases referred to, ante note (h), but in the same view, but the circumstances of them the mine was a partnership asset, the case are not sufficiently known. Consider the analogous case of a ship. (g) Koberts v. Eberhardt, Kay 148. {D 31 and 32 Vict., c. 40. Where the mine lias been worked in part- (m) Steward v. Blakeway, ubi sup. nership, and the partnership has been dis- (n) Roberts v. Eberhardt, Kay 148 ; solved, and the mine ordered to be sold. Lees v. Jones, 3 Jur. (N. S.) 954 ; Jefferys an interim receiver and manager will, if v. Smith, 1 Jac. & W. 302 ; Rowe v. Wood, necessary, be appointed, Lees v. Jones, 3 2 [d. 553 ; Wynget v. Heathcote, cited 4 Jur. (N. S.) 954. Y. & C. Ex. 187. Wliether a receiver (h) Betitley v. Bates, 4 Y. &C. Ex. 182 ; and manager will be appointed if no dis- Crawshay v. Maule, 1 Swanst. 517-519. solution is sought, see the judgment in (i) Bentley v. Bates, 4 Y. & C. Ex. 182. Roberts v. Eberhardt. {k) Steward v. Blakeway, 4 Ch. 603, 74 CHAP. I., § VI.] CO-OWXERS OF MIXES. 57* 6. The obligation of each co-owner to account to the *others r.^-- is the same as that of one partner to account to his copartners, ■- and much more extensive, therefore, than the obligation which exists in a case of mere co-ownership. The lien which each partner has on the shares of his copartners for what is clue from thera to tlie partner- ship extends to cases of this third class, (o) as does also the obligation which one partner is under to account to his copartners for benefits he may have received in respect of the common property. It has been decided that where two tenants in common of a mine construct a shaft at their own expense in land belonging to one of them exclusively, money paid by a stranger for the use of that sha'ft belongs to both tenants, and not exclusively to him iu whose land the shaft is con- structed, ip) Note on the remedies available by one co-owner against the others. In order still further to understand the difierences between co-ownership and co- partnership, it is necessary to compare the rights and remedies of co-owners against each other with the corresponding rights and remedies of partners. The rights and remedies of partners inter se will be fully investigated hereafter; but as there is no compendious summary of the rights and remedies of co-owners inter se, the following note is here appended. The obligation of a partner to account with iiis copartner arises ex contracba, and this obligation is not confined to the partners themselves, but devolves, with its cor- relative right, upon their respective representatives. The obligation of one co-owner to account with the other for the profits which may have arisen from the common property cannot be based upon contract where no contract has been entered into ; but it by no means follows that because there is no contract, express or tacit, to share profits, eacli co-owner ought to be entitled to get what he can and to keep what he may get. This was seen plainly enough by the Koman lawyers, who properly held an obligation to arise quasi ex contractu, and who found no difficulty in declaring that every co-owner ought to account to the others for the profits received by himself, and to contribute with them to the expenses properly incurred for the common benefit, {q) Our ancestors, however, seem to have taken a different view of the matter. *By the strict rule of the common law, one co-owner of land was entitled to> -I no account from another unless the former had made the latter his bailiff, or had been actually ousted from the land ; (;•) and one co-owner of a chattel had no remedy (o) Fereday v. Wightwick, 1 R. & M. 45 ; [q] See Inst., lib. 3, tit. 27, U 3-5 ; and Eoberts v. Eberhardt, Kay 148 ; Crawshay Dig , lib. X., tit. 2, 1. 25, ? 16, and tit. 3, 1. V. Maule, 1 Swanst. 495. 4, I 3, and lib. XVII., tit. 2, 1. 34. (p) Clegg V. Clegg, 3 Giff. 322. (r) See Co. Lit. 200. 75 58* REMEDIES OF CO-OWNERS INTER SE. [bOOK I., against another, unless he had destroyed the common property, (s) The statute 4 Anne, c. 16, § 27, has phiced co-owners of land in a somewhat better position than they were in before, by enacting that an action of account may be maintained by one co-owner against another for receiving more than his share ; but nothing has been done to improve the law as to co-owners of chattels except by the introduction, by equity judges, of rules founded on the principles of the Roman law. The inadequacy of the remedies available by oue co-owner against another at common law is justified by early writers upon the ground that each tenant in common has it in his own power to enter on the common property, if it be land, and to get possession of the common property, and retain it, if it be an ordinary chattel; and, according to the writers in question, it is only when one co-owner prevents the other from entering in the first case, and, by destroying the chattel, from getting possession of it in the other, that there is any necessity for having recourse to an action, {t) The unsatisfactory nature of this reasoning is too apparent to require comment ; for, admitting its force in the case of land, it is plainly in the highest degree unjust to allow one co-owner of a valuable chattel to keep it exclusively in his own possession, and to tell the other that his only remedy is to take it peaceably when he sees his time, and, having got it, to be careful not to part with it. Unsatisfactory, however, as the reasoning is, it affords the only explanation of the actual state of the law upon the subject under consideration. In order to understand accurately the remedies, which by the law of this country are available for one co-owner against another, it is necessary, in the first place, to distinguish land from chattels. 1. With respect to land. 1. Co-owners of land. — If land is owned by several persons, jointly or in common, each is entitled to enter upon and occupy it. (m) 2. If any one of them is actually excluded by the others, he can bring an action for the recovery of his undivided share ; {x) and, having recovered, he can sue for mesne profits; (2/) and, in an action for them, the jury are not bound to confine the damages to the value of the actual profits made by the defendant, (z) In cases of actual exclusion or destruction, an action for *danjages will also lie by one co-owner against the other; (a) and now an injunction and a receiver can be ^ obtained, even although there is no actual exclusion. (6) 3. Subject to the provisions of the act of 31 and 32 Vict., c. 40, one co-owner of land is entitled to have it divided between himself and the other owners, although they may not desire a partition, (c) (8) lb. (z) lb. (0 See Lit., ? 323. (a) Cresswell v. Hedges, 1 H. & C. 421, (w) Lit., I 323. One is not entitled to where the defendant paid money into a receiver as against the others if they do court in respect of the damage to the not exclude him. Sandford v. Ballard, 30 plaintiff's share. Beav. 109. See infra, note (6). [b) See Jud. Act, 1873, § 25, cl. 8. Por- (x) Lit., II 322, 323, and Coke's com- ter v. Lopes, 7 Ch. D. 358 ; Sandford v. ments upon them. As to evidence of ac- Ballard, 33 Beav. 401. tual exclusion, see Doe i>. Prosser, Cowp. (c) See Bac. Ab., "Joint Tenants," I, 7, 217 ; Jacobs v. Seward, L. R, 5 H. L. 464. and Agar v. Fairfax, 17 Ves. 533, and the (y) Goodlitle v. Tombs, 3 Wils. 118. notes to it in 2 White & T. Lead. Gas. 76 CHAP. I., § VI.] CO-OWXERS OF MIXES. 59* 4. If one co-owner makes the other his bailiff or receiver, the latter can be com- pelled to account, not only for what he has received, but also for what he might have received without his own willful default. ((/) 5. And by the statute of Anne (-4 Anne, c. 19, § 27), one co-owner who receives more than his share can be made to account to the other owners for what he has received more than he ought, (e) 6. Bat it has been decided, since the passing of this statute, that one co-owner of land, who merely occupies the whole, is not liable to pay any rent to the other owners. (/) 7. And it has also been decided that if one co-owner not only occupies the whole land, but expends his own industry and capital upon it, and thereby realizes profit (e. g. by farming), he is not liable to account to his co-owners for any share of such profit, {g) 8. But if one co-owner of land derives gain, not from the mere use of the land by himself, but by being paid for the use thereof by others, he must account to the other owners for what he receives beyond his own share, {h) 9. A fortiori, if one co-owner of land derives gain by wasting the common prop- erty, he is liable to account to the other owners for their shares of the money so obtained, (i) He can also be restrained by a co-tenant from committing destructive waste, {k) but not from cutting timber in a *proper and judicious manner ; -' nor, it is conceived, from mining in a similar way. (/) 10. If one of several joint tenants or tenants in common of a house lays out money in necessary repairs, his outlays will be taken into account upon a partition or sale ; (m) but he cannot enforce contribution by an action for damages ; (n) nor has he any lien on the house or on the interest of his cotenants therein for their shares of the expense, (o) ** {d) Co. Lit. 200 b, and 172 a. (i) Co. Lit. 200 b; Martyn v. Knowllys, (e) The remedy at law was by an action 8 T. R. 145. See the last sentence in the of account and not by an action for money judgment. See, as to injunctions to re- had and received. Thomas v. Thomas, 5 strain waste, Twort v. Twort, 16 Ves. 128. Ex. 28; Jacobs v. Seward, L. R., 5 H. L. (k) Arthur v. Lamb, 2 Dr. & Sm. 428; 464. Wilkinson v. Haygarth, 12 Q. B. 837. (/) Teasdale v. Sanderson, 33 Beav. (I) Arthur v. Lamb, 2 Dr. & Sm. 428 ; 534 ; Wheeler v. Home, Willes 208 ; Wilkinson v. Haygarth, 12 Q. B. 837. M'Mahon v. Burchell, 2 Ph. 127. But {m) See Leigh v. Dickeson, 15 Q. B. D. see Drury v. Drury, 1 Ch. 49. In Tur- 60. ner v. Morgan, 8 Ves. 145, there was (n) lb., where the passages in Co. Lit. exclusion. Where one of the co-owners 200 a, and F. N. B. 162, and the old writ is an infant, see Pascoe v. Swan, 27 Beav. of contributiou; are explained. 508. (o) Re Leslie, 23 Ch. D. 552. See, also, (g) Henderson v. Eason, 17 Q. B. 701, Kay v. Johnston. 21 Beav. 536; Teasdale and 2 Ph. 308 ; Jacobs v. Seward, L. R., v. Sanderson, 33 Beav. 534. 5 H. L. 464. 45. In an action by one of two tenants (h) Henderson v. Eason, 17 Q. B. 701. in common of land, against the other, to See, too, Clegg v. Clegg, 3 Giff. 322, ante recover one-half the plaintiff's outlay for p. *57, note (p) ; Carter v. Home, 1 Eq. taxes and improvements made during the Cas. Ab. 17, as to sharing benefits derived absence of the defendant, the principal by one. rights and duties of the parties, implied QQ* REMEDIES OF CO-OWNERS INTER SE. [bOOK I., 2. With resptel to chattels. Co-owners of chattels. — Ships are by far the most important chattels usually owned in common. But great care is required in applying the rules which govern ships to other chattels ; for, in the first place, the principles enforced in the Court of Admiralty differ in many Important respects from those by which the ordinary courts are gov- erned ; and, in the next place, the stringent provisions of the ship registry acts have frequently rendered it impossible to apply to ships those general doctrints of equity which are applicable to other kinds of property. For the purpose, therefore, of avoid- ing error in pursuing the present subject of inquiry, ships must be distinguished from other chattels. 1. Ships. — A considerable portion of the law which regulates tlie mutual rights and obligations of part owners of ships is based upon the assumption that it is particu- larly for the benefit of the public that ships should not lie idle. ( /)) Hence it is that a majoritv of the part owners of a ship can employ her against the will of the-others, upon giving them security to the value of their shares ; {q) a course which cannot be taken by a majority of the part owners of any other chattel. Where a ship is sent on a voyage by some of the part owners against the will of the others, the dissenti- ents are not entitled to share the profits of the voyage, (r) nor are they liable to con- tribute to its losses, (s) But where a ship is employed by all the part owners, or.by some of them, but not against the will of the others, (t) they all share her gross earnings, and contribute to the expenses incurred in obtaining them ; and in such a case there is little if any difference between the account which is taken between the part owners and that which would be taken if they w.ere actually partners. ^Before any division of profits amongst the part owners, the gross freight or earnings of the adventure must be applied in payment of the expenses of the '- voyage yielding them, including the costs of repairs and outfit for that voyage, (u) Lord Hardwicke went further, and held that each part owner had a lien on the ship by the law from their relation as tenants own risk and under the obligations of an in common, were held to be as follows : equitable restoration. The relation is not The right of partition, when either desires a partnership, but is controlled in some it; ilie right of mutual participation of respects by analogous rules. Smith v. the fruits and revenues, and the conse- Wilson, 10 La. Ann. 257. quent duty to account to each other there- {p) See Maclachlan on the Law of Mer- for; the duty of the co-proprietor, who chant Shipping (2d ed.), p. 90. is present, and in actual possession, to (q) Id., p. 94. take the .same care of the property as if it (r) Anon., 2 Ch. Cas. 36 ; Davis v. John- were wholly his own; and the right of ston, 4 Sim. 539. incurring expenses necessary for the pres- (s) Horn i'. Gilpin, 1 Amb. 255. Davis ervation of the common property, and v. Johnston, 4 Sim. 539, is not opposed to consequent obligations of reimbursing this. The marginal note, however, is cal- one another for such outlays. The court culated to mislead. further said that where one of the pro- (i) Strelley v. Winson, 1 Vern. 296, as prietors makes some change in the prop- corrected by Horn v. Gilpin, 1 Amb. 255. erty, in the other's absence, unnecessary (w) Green v. Briggs, 6 Hare 395 ; Lind- for its pre-servation, occasioning loss to his say i;. Gibbs, 22 Beav. 522, and 26 Id. 51, cotenant, or which he has just cause to and 3 DeG. & J. 690 ; Alexander ». Simms, disapprove of, the former does so at his 18 Beav. 80, and 5 De G., M. & G. 57. 78 CHAP. I., § VI.] REMEDIES OF CO-OWNERS INTER SE. 61* itself, and on the proceeds of its sale for the balance due to him from the other owners on the joint account, and had a right to a sale of the ship as if it were 'part- nership property, (x) But Lord Eldon thought this was going too far, and he reversed Lord Hardwicke's decision, and it is now settled that there is no such lien or right, iy) Lord Eldon's view, however, has not prevailed in America, (z) Other chattels.— Ps^sing from ships to other chattels, the position of a part owner not in possession was at law most disadvantageous ; for, first, he could not obtain possession otherwise than by taking the thing itself if he had the chance ; (a) second, he could not obtain the value of his share unless the thing had been actually or virtually destroyed ; (6) and, third, these rules applied as well to the produce of the thing as to the thing itself, (c) Whether, if one tenant in common of a chattel sold it, the other had any remedy at law for his share of the money produced by the sale, was doubtful, (f/) unless the sale had conferred a good title to the entirety upon the purchaser, when a remedy clearly existed, [e) The obligation of a co-owner of a chattel to account for the gain which he might have derived from its use may therefore be said to have been hardly, if at all, recog- nized at law. In equity the case was otherwise, but it is surprising how little direct authority there is upon the subject of co-ownership, if the decisions relating to ships and the winding up of partnerships are excluded from consideration. The princi- ples, however, upon which these decisions are based may safely be applied to other cases if the anomalies introduced by the ship registry acts, and the fact that the rights of partners and those claiming under them depend upon contract, are borne in mind. When the profits derived by one part owner of a chattel are not attributable to his own industry and exertions, but are simply what he receives from others in respect of it (e. g., dividends of stock, or shares, or money paid for hire)— or where the profits are produced in the ordinary *course of nature (e. g., by breeding) — tliere is J no difficulty in coming to the conclusion that his co-owners are entitled to make him account to them for their shares of what their property may have produced. Further, when one co-owner of a chattel derives gain from its use, and those gains are attributable, mainly or in part, to his own industry and exertions, justice to the other owners and to him requires either that the gains made by him shall be shared by all, they making him a proper allowance for his trouble and reimbursing him his expenses, or that he shall be allowed to keep the whole profits, paying the other •owners a proper sum for the use of their property. Of these two modes of adjusting the rights of the parties, the first seems to be most in accordance with the course (z) Doddingtoni;.Hallet, 1 Ves. Sr. 497, 241, where a whale had been converted and see Attorney-General v. Borrodaile, 1 into blubber and oil. Price 148, and per Lord Eldon, 2 Ves. & {d) See Heath v. Hubbard, 4 East 110 ; B. 243. Mayhew v. Herrick, 7 C. B. 229 ; Morgan iy) Ex parte Young, 2 Ves. & B. 242 ; v. Marquis, 9 Ex. 145; Barton ?;. Wil- Ex parte Harrison, 2 Rose 76. liams, 5 B. & A. 395; and Williams v. (z) See Story on Part., § 444. Barton, 3 Bing. 139. (a) Lit., § 323, and see 2 Wms. Saund. (e) See Jacobs v. Seward, L. K., 5 H. L. 47 0. 464, and the cases in the last note, and per (6) Co. Lit. 200 ; Jacobs v. Seward, L. Willes, C. J., in Wheeler v. Horn, Willes JR., 5 H. L. 464. 208. (c) See Fennings v. Grenville, 1 Taunt. 79 62* REMEDIES OF CO-OWNERS INTER SE. [bOOK I., usually adopted in analogous cases. Notwithstanding, therefore, the little direct autliority upon the point, the writer ventures to submit that as a general rule where one owner of a chattel derives gain from its use, he is, independently of any contract, bound to account to the other owners for their respective shares, he being allowed all proper charges and expenses. (/) *• Co-owners of patents and copyrights.— Cases may, nevertheless, arise in which justice may be done by allowing each co owner to make what he can and to keep what he may get. This may occur where the chattel is such that each co-owner can, in fact, enjoy his rights to the full extent, without the concurrence of the other owners (e. g., where the chattel is a patent for an invention). In the case of a patent, belonging to several persons in common, each co-owner can assign his share and sue for an infringe- ment, ig) and can also work the patent himself, and give licenses to work it, and sue for royalties payable to him for its use; {h) and it is now settled that he is entitled to retain for his own benefit whatever profit he may derive from the working, although it is perhaps still open to question whether he is not liable to account for what he receives in respect of the licenses, (i) The mutual rights of co-owners of a copyright, not bein"- partners, have not been much discussed ; but it has been decided that a licen.se to represent a dramatic entertainment granted by one only of several co-owners of the copyright in it, does not bind the others ; nor prevent them from recovering their shares of the penalties imposed by statute on persons who infringe the copy- right, (k) If part owners of an ordinary chattel cannot agree who ought to have it, or how it ought to be employed, the only remedy (if any) appears to be by an action for an injunction or a receiver and a sale. (/) (/ ) See the judgment of Wigram, V. C, (g) See Dunniclifi" v. Mallet, 7 C. B. (N. in Green v. Briggs, 6 Hare 395, and Strel- S.) 209, and Walter v. Lavater, 8 Id. 162. ley V. Winson, 1 Vern. 297. See, also, 1 As to tenants in common of trade-marks, Story's Eq. Jur., | 466. see Dent v. Turpin, 2 J. & H. 139. 46. In an early Pennsylvania case it is {h) Sheehan v. Great East. Rail. Co., held that joint purchasers, without an 16 Ch. D. 59. agreement of partnership, are not entitled (i) Mathers v. Green, 1 Ch. 29, revers- to the remedies nor subject to the respon- ing S. C, 34 Beav. 170. The same point sibilities of partners. Brady v. Calhoun, was discussed, but not decided, in Han- 1 Pa. 140. Thus, two joint owners of a cock v. Bewley, Johns. 601. See, also, horse who enter into a written contract, Russell's Patent, 2 De G. & J. 130; Hors- by which one is to keep the horse for a ley v. Knighton's Patent, 8 Eq. 475. certain time at a certain price, half of {k) Powell v. Head, 12 Ch. D. 686. See which is to be paid by the other, are not some observations on the indivisibility of partners, although so calling themselves copyright in 4 H. L. Cas. 992. in the contract, and an action will lie on (1) See Jud. Act, 1873, § 25, cl. 8. the contract by one against the other. Oliver v. Gray, 4 Ark. 425. 80 CHAP. II.] CONSIDERATION OF CONTRACT. 63* ^CHAPTER II. [*63 OF THE CONSIDERATION OF A CONTRACT OF PARTNERSHIP. Consideration for a partner skip. — Agreements to share profits, like all other agreements, require to be founded on some consideration in order to be binding. Any contribution in the shape of capital or labor, or any act which may result in liability to third parties, is a sufficient consideration to support such an agreement, (a) A bona fide contract of partnership is not invalidated by the unequal value of the contributions of its members, for they must be their own judges of the adequacy of the consideration of the agreement into which they enter. As observed by Vice Chancellor Wigram, " If one man has skill and wants capital to make that skill available, and another has capital and wants skill, and the two agree that the one shall provide capital and the other skill, it is perfectly clear that there is a good considera- tion for the agreement on both sides, and it is impossible for the court to measure the quantum of value. The parties must decide that for themselves." (6) 1 (a) See The Herkimer, Stewart's Adm. organize a company and appoint a treas- Eep. 23 ; Anderson's Case, 7 Ch. D. 75. urer, and, pursuant to agreement, one (6) Dale v Hamilton, 5 Hare 393. makes a promissory note, payable to the 1. Sufficiency of the consideration. — one appointed treasurer, for his unpaid Consent to continue a partnership is a suf- share, the previous liability and agree- ficient consideration for a promise by the ment constitute an adequate consideration other partner to pay to the one so con- for the note. lb. senting a portion of the profits. Emery v. Where the consideration of the contract Wilson, 79 N. Y. 78. of partnership consisted of the mutual When an agreement to become stock- covenants and promises of the partners, holders in a partnership, in sp«"cified and the acts they respectively engaged to shares, and to pay the amount subscribed, perform, although the business of the part- is signed by several persons with the num- nership was the buying and selling of ber of shares and the aggregate amount slaves, it cannot be said that the consid- thereof annexed to their names, although eration of the contract was the purchase no promisee is named in the agreement, of slaves. Belcher r. Conner, 1 So. Car. 88. each party, in effect, promises to the On the other hand, it is held that a part- others to pay the amount ; and the promises nership agreement in which one of the of the others are a consideration for the partners promises to give the other part- promise of each. Kimmins i-. Wilson, 8 ner an equal interest in the profits of the W. Va. 584. And when such subscribers enterprise, without any thing being fur- 81 ' 6 63* CONSIDERATION OF CONTRACT. [book I., Profits to be shared, hut losses not. — It often happens that persons agree that all profits shall be shared ratably, and, nevertheless, that all losses shall be borne by some or one of them exclusively. Such an agreement is not necessarily invalid as a nudum pactum, for it is noth- ing more than an agreement providing, amongst otlrer things, that some or one of the partners shall indemnify the others against losses; and the very fact that these latter become, or agree to become, partners, is quite sufficient consideration to give validity to a contract that they shall be indemnified. Such agreements appear, moreover, to be reas- onable where the partners *indemnified leave the whole man- *64] agement of the concern to their copartners, (c) 2 nished by the latter to accomplish the ob- ject of the copartnership, is without mu- tuality and accordingly is void. Mitchell V. O'Neale, 4 Nev. 504. An agreement between two physicians, F. and S., provided for an equal division of the gross receipts of their joint business in a certain town. F. might be absent six months in the year, or for any remain- ing portion tliereof. S. might be absent when he pleased, but neither, if absent more than two days at a time, should have any part of the income derived from the business of the other during such ab- sence. Before either should withdraw from the contract, any horse or carriage purchased for the joint business should be sold, and the loss sustained by the party withdrawing. If F. should withdraw and cease to do business in that town, without having shared the benefit of the business at all, then S. was to pay him a certain sum. Held, that so long as the contract was executory, there was no evidence of any consideration for the agreement to pay the sum mentioned, apparent on the face of the contract itself. Frothingham V. Seymour, 118 Mass. 489. (c) Geddes v. Wallace, 2 Bligli 270, is an instance of such an agreement. How- ever, in Brophy v. Holmes, 2 Moll. 1, Lord Chancellor Hart expressed an opinion that an agreement between A and B that A should advance capital, that B should be sole manager, and that they should divide the profits equally, but that all losses should fall on B, was, as regards the last stipula- tion, void as being nudum pactum ; and his lordship thought that under such an agreement the losses should be borne equally. But see, as to such partnerships, ante pp. *15, et seq. 2. Sharing profits only. — While, as a general rule, a partnership presupposes a communion of profits and losses among all the members of the firm, still a dispro- portionate interest in profits and losses may be agreed upon, and such a partner- ship agreement will be enforced. Weldon V. Beckel, 10 Daly (N. Y.) 472. Thus, an agreement by which one participates in the profits only of a business renders him a general partner as to third persons. Claflin V. Hirsh, 19 Week. Dig. (N. Y.) 248. And a stipulation exempting a part- ner from losses for a fair and just equiva- lent is valid as to the partners inter se. Consolidated Bank v. State, 5 La. Ann. 44. Where two agree to be partners in a business in which they are engaged together they become partners, though one of them receives no part of the profits. Le Roy v. Mathewson, 47 N. Y. Super. Ct. 389. Articles of partnership between A and B provided that A should have and bear forty-five per cent, and B twenty-five per cent, of the profits and losses, and that 82 €HAP. II.] RETURN OF PREMIUMS. 64* Of the return of premiums. Premiums. — It frequently happens, when one person is admitted into partnership with another already established in business, that it is agreed that the incoming partner shall pay the other a premium, i. e., a sum of money for his own private benefit. Such an agreement is valid, and if the premium is not duly paid, it may be recovered by an action, provided the plaintiff has been ready and willing to take the defendant into partnership as agreed, (d) The consideration for the premium is not only the creation of a partnership between the person who takes and him who parts with the money, but also the continuance of that partnership ; and if a person on his entry into a partnership pays a premium and then the partner- ship is determined sooner than was expected, the question arises whether any, and if any, what part, of the premium ought to be returned. In order to determine this point, it is necessary, in the first place, to ascertain whether the agreement for the premium was or was not tainted with fraud. Premiums returnable in cases of fraud. — If a person has been de- luded into becoming a partner by false and fraudulent representations, and has paid a premium, he may take one of two courses, viz., either abide by the contract and claim compensation for the loss occasioned by the fraud, which he may do in taking the partnership accounts ; or he may disaffirm the contract, and thereby entitle himself to a return ■thirty per cent, should be left undivided, store, and, to induce her husband to man- but to be divided pro rata if not otherwise age the same, the other defendants agree- disposed of. B wrote to C a letter, which ing to endorse her paper to the same was signed by A in his own name, offer- amount, which sum was to go into the ing him of the contract between them business, and they were to have an inter- *' thirty per cent, of the profits, of which est at all times in the goods in the store I represent seventy-five per cent., you to to the amount of their endorsement, sub- answer for any loss," &c., which proposal ject, however, to no liability except sucli C accepted. Held, that C became a part- endorsement. Held, that the agreement ner in the firm, and not merely a sharer did not make the parties partners as to in the profits of A. Arquimbo y. Hillier, creditors. Magovern v. Robertson, 40 49 N. Y. Super. Ct. 253.' Hun (N. Y.) 166. E. entered into a written agreement {d) Walker v. Harris, 1 Anstr. 245, with the other defendants by which she where it was held that no partnership agreed to put a stock of goods worth a deed need be tendered, ipecified amount of money in a certain 83 65* EETURN OF PREMIUMS. [bOOK I.^ of the whole of the money he has paid.(e) And *in a case . of this sort, in the event of the bankruptcy of the defrauding partner, the amount of the premium paid to him is a debt provable against his estate in competition with his separate creditors. (/) Return of premium where the consideration for it has failed. — But, if the ao-reement by virtue of which the partnership was entered into^ and the premium became payable, is not tainted by fraud, then the proper mode of dealing with the premium is not so easy to determine. [ii the first place, assuming the partnership to have been in fact created, it is clear that there has not been a total failure of considera- tion for the premium, and, consequently, it cannot be recovered as money paid for a consideration which has failed, (^r) In the next place, persons who enter into partnership know that it may be deter- mined at any time by death and other events, and unless they provide ao-ainst such contingencies, they may fairly be considered as content to- take the chance of their happening, and the tendency of modern deci- sions is to act on this principle, (h) Apportionment of premium when partnership ceases sooner than was expected. — On the other hand, if a person receives a premium for taking another into partnership, which is to endure for a certain time, and then himself does anything which determines the partnership before that time has elapsed, he may be fairly considered as having precluded himself from insisting on his strict right to retain or be paid his whole premium. Moreover, where there has been no misconduct, a premium paid for a partnership for a term of years has been held apportionable in the event of a premature determination of the partnership by an unforeseen occurrence. The fact that the consideration for the premium has partially failed has been considered sufficient to render it inequitable to retain or obtain payment of the whole premium, if) (e) See infra, pp. *65, et seq. ; and as (A) Whincup v. Hughes, L. R,6 C. P. to rescinding for fraud, infra, book III., 78 ; Ferns y. Carr, 28 Ch. D. 409. See, also, P_ 10. Akhurst r. Jackson, 1 Swanst. 85 ; Bond (/) Ex parte Turquand, 2 M., D. & D. i-. Milburn, 20 W. R. 197. 339; and see Bury v. Allen, 1 Coll. 589. (i) Similar views have been taken with The case of Ex parte Broome, as reported respect to what is right in cases of a sim- in 1 Rose 69, is opposed to this, but see, on ilar kind, arising on the death of a solici- that case, the note in 1 Coll. 598, and the tor who has been paid a premium by an observations at the end of the judgment, articled clerk. See Hirst v. Tolson, 2 Id., p. 607. Macn. & G. 134; Ex parte Bayley, 9 B. {g) See Taylor v. Hare, 1 Bos. cS: P. & C. 691. But these cases have been N. R. 260. since disapproved. See Whincup v^ 84 CHAP. II.] (X)NSIDERATION OF CONTRACT. 66* *The principles applicable to cases of this description are J not even yet well settled, nor are the decisions upon them easy to reconcile. The following rules are, however, submitted to the reader as guides on this subject : 1. Partnerships at loill. — Where a partnership is entered into for no specified time, and there is no agreement for a return or an apportion- ment of the premium in the event of an unexpected determination of the partnership, no part of the premium is returnable on the happen- ino- of such event. A case of fraud must be dealt with on its own demerits, and a person taking another into partnership for no definite time cannot, as soon as he has received the premium, dissolve the part- nership and retain what has been paid as the consideration for it. {k) But laving aside fraud, and supposing there to be nothing except a partnership created for no specified time and determined soon after its creation, it is difficult to hold that it was in fact entered into for a longer time, and that the person who came in, paying a premium, has not got all for which he stipulated, [l] 2. Partnerships for a time. Agreements to dissolve. — Where a part- nership is entered into for a specified time and is determined prema- turely, the first matter for consideration is whether the parties have come to any agreement on the dissolution. If they have, and if they have also provided for the premium, it must be dealt with according to the agreement; but if the agreement on dissolution is silent with respect to the premium, the inference is that the parties did not intend to deal with it, nor to vary their rights to it under the original agree- ment for its payment, (m) * Where, however, no agreement is come to on the dissolution, then the cause of dissolution must be considered. Premature termination, a. By death. — Death is a contingency which all persons entering into partnership know may unexpectedly put an end to it. If, therefore, they do not expressly guard against this risk, they may reasonably be treated as content to incur it ; and if death Hughes, L. R., 6 C. P. 78, and Ferns v. Groote, 2 Bos. & P. 134. Carr, 28 Ch. D. 409. (m) See Lee v. Page, 30 L. J. Ch. 357, {k) Featherstonhaugh v. Turner, 25 and 7 Jur. (N. S.) 768. A mere consent Beav. 382. See, also, Hamil v. Stokes, to dissolve may leave all questions of this Dan. 20, and Burdon v. Barkiis, 4 De G., sort open, as in Astle v. Wright, 23 Beav. F. & J. 42, per Turner, L. J. 77 ; Wilson v. Johnstone, 16 Eq. 606 ; (0 See per Lord Eldon, in Tattersall v. Bury v. Allen, 1 Coll. 589. 85 67* RETURN OF PREMIUMS. [bOOK I.^ should unexpectedly happen, no return of premium not expressly pro- vided for can, it is apprehended, be demanded, {n) But even in this case, if a person knows himself to be in a dangerous state of health and conceals that fact, and indnces another to enter into partnership with him, and to pay him a premium, and shortly afterwards dies, the fraud so practiced will entitle the partner paying the premium to a return of part of it, and he can obtain such return in an action for a partnership account ; he need not rescind the contract in toto. (o) b. By bankruptcy. — Bankruptcy of the partnership, as distinguished from the bankruptcy of one of the partners, cannot, it is apprehended, be a ground for apportioning a premium, for it is a contingency which every one may fairly be taken as contemplating, {p) But the bank- ruptcy of a partner receiving a premium is a ground for its apportion- ment if he was e*iibarrassed when the partnership commenced, and thi& fact was not known to his copartner ; {q) but not if it was. (r) What the effect would be if he became embarrassed after the commencement of the partnership, has not been decided. The bankruptcy of the- partner paying the premium cannot entitle him or his trustee to a return of any part of it, unless he has been made bankrupt by his co- partner who has received the premium, (s) c. Lunacy. — The lunacy of a partner causing a dissolution would perhaps be considered as a ground for apportioning the premium. *d. Disagreements. — Disagreements between the partners ^ resulting in a dissolution have given rise to much difficulty. The tendency of modern decisions is to apportion the premium in these cases, not only where neither partner is to blame, {t) but a fortiori where the partner receiving the premium has so misconducted himself as to give the partner paying it a right to have the partnership dis- solved, (w) and it matters not that the latter may himself not h& altogether free from blame ; {x) nor is tiie rule altered by the fact that (n) See Whinciip v. Hughes, L. R., 6 and 4 Price 161. In this case it is to be C. P. 78 ; Ferns v. Carr, 28 Ch. D. 409. observed that the contract of partnership (o) Mackenna v. Parkes, 36 L, J. Ch. was not rescinded on the ground of fraud. 366, and 15 W. K. 217. (t) Atwood v. Maude, 3 Ch. 369. (p) See Akhurst V. Jackson, 1 Swanst. (u) Bullock v. Crockett, 3 Giff. 507. 85, See, also, Rooke v. Nisbet, 50 L. J. Ch. 588^ (g) Freeland v. Stansfeld, 2 Sm. & G. where the partner dissolving was in fault, 479. and was the party to receive the pre- (r) Akhurst v. Jackson, 1 Swanst. 85. mium. (s) As in Hamil v. Stokes, Dan. 20, (z) Atwood v. Maude, 3 Ch. 369 (where 86 CHAP. II.] CONSIDERATION OF CONTRACT. 68*-69* the partners have consented to clissolv«e since the institution of legal proceedings, (y) Misconduct. — But where a partner has paid or agreed to pay a pre- mium, and has so misconducted himself as to induce the court to dis- solve the partnership on that ground, he cannot recover any part of the premium if he has paid it, nor avoid paying it if it is due and it is still unpaid, (s) In Wilson v. Johnstone, (a) Wickens,V. C, held that the misconduct must be such as to amount to a complete repudiation of the contract of partnership, but he did not lay down any rule for determining what misconduct amounts to such a repudiation, and the statement in the text is in accordance with the latest decision on the subject. (6) 3. Amount to be returned. — There is no definite rule for deciding in any particular case the amount which ought to be returned. The time for which the partnership was entered into, and the time for which it has in fact lasted, are the most important matters to be considered, but other circumstances must often be taken into *account in order to decide what is ftiir between the parties, {c) At the same time, the rule generally adopted is to apportion the premium with reference to the agreed and actual duration of the partnership, (d) The proper time for obtaining the decision of the court upon the question whether any part of a premium is returnable or not, is the hearing of the action. An inquiry on this point will not be added afterwards except under special circumstances, (e) the partner paying the premiuna was {b) Bluck v. Capstick, 12 Ch. D. 863. plaintiff) ; Astle v. Wright, 23 Beav. 77 ; (c) Lyon v. Tweddell, 17 Ch. D. 529, Pease v. Hewitt, 31 Beav. 22. Compare which shows that the court has a wide Airey v. Borham, 29 Beav. 620, where discretion in this matter, nothing was returned. {d) See Wilson v. Johnstone, 16 Eq. (y) Bury v. Allen, 1 Coll. 589; Astle v. 606 ; Atwood v. Maude, 3 Ch. 369 ; Bury Wright, 23 Beav. 77 ; Wilson v. John- v. Allen, 1 Coll. 589 ; Astle v. Wright, 23 stone, 16 Eq. 606. Compare Lee v. Page, Beav. 77 ; Pease v. Hewitt, 31 Beav. 22. 7 Jur. (N. S.) 768, and 30 L. J. Ch. 857. Compare Bullock i. Crockett, 3 Giff. 507; (2) See Bluck v. Capstick, 12 Ch. D. Freeland v. Stansfeld, 1 Sm. & G. 479; 868; Wilson v. Johnstone, 16 Eq. 606; Hamil t;. Siokes, Dan. 20, where this rule Airey v. Borham, 20 Beav. 620; Atwood was not adhered to. V. Maude, 3 Ch. 369. (e) Edmunds v. Kobinson, 29 Ch. D. (a) 16 Eq. 606. 170. 87 70* NUMBER OF PARTNERS. [bOOK I., *70] *CHAPTER III. OP THE PERSONS CAPABLE OF ENTERING INTO PARTNERSHIP. Section I. — Of the Number of Partners, *70. Section II.— Of the Capacity of Partners, *71. 1. Aliens, *72. 2. Felons and Outlaws, *73. 3. Li/ants, *74. 4. Lunatics, *76. 5. Married Women, ^11 . 6. Corporations and Companies, *78. The parties to a contract of partnership may be considered with reference to 1. Their number. 2. Their capacity. SECTION I. OF THE NUMBER OF PARTNERS. Statutes regulating the number of persons who may be partners. — By the common law of this country there is no limit to the number of persons who may be associated together in partnership, (a) But from time to time various statutes have been passed declaring that certain partnerships shall be either altogether illegal, or, at all events, deprived of some important rights, or exposed to serious pen- alties, if their members exceed a prescribed number. Of these statutes the Companies act, 1862, is the only one of present practisal import- ance. This act, by section 4, limits the greatest number of persons who can carry on business as partners, otherwise than under its pro- visions, to ten, if the business is that of bankers, and to twenty in other cases. (6) But this enactment does not apply to partnerships formed before the 2d of November, 1862 (see section 2), nor to those (a) As to the supposed illegality of volume on Companies, partnerships so large as to be incapable of (6) See, on this subject, the volume on practically suing and being sued, see the Companies. 88 CHAP, III., § II.] PERSONS NOT PARTNERS. 70* formed in pursuance of some other act of parliament, or of letters patent, nor to companies engaged in working mines within and sub- ject to the jurisdiction of the stannaries. All the other statutes relating to this subject, except the Banking act of 7 Geo. IV., c, 46, have been repealed ; (c) and *although that act is still in force, no partnership or company can now be formed under it. That act limited the number of persons who could lawfully carry on business as bankers in partnership and issue notes (except under certain restrictions), to six. {d) SECTION II. — OF THE CAPACITY OF PARTNERS. Persons who cannot be partners. — By the law of this country, a valid contract of partnership can be entered into between any persons who are not under the disabilities of minority or unsoundness of mind, and are not convicts within the meaning of 33 and 34 Vict., c. 23. As will be seen hereafter, when treating of illegal partnerships, there are certain trades, businesses and professions which cannot be lawfully carried on, either solely or in partnership, unless some statutory requi- site has been complied with. But now that the disabilities under which spiritual persons formerly lay have been removed, (e) the writer is not aware that there is any class of persons (except convicts) who, being of sound mind and over twenty-one, are rendered incapable of becoming members of a partnership. Married women may be part- ners, as will appear later on. Agreements entered into between several persons, some of whom are by law incompetent to contract, are not wholly null and void, but are only, in some respects, less eltective than if all the parties to them were competent. Hence, there is nothing to prevent a person who is not sui juris from being a partner. But if any such person is a partner, (c) A list of them will be found in the enacted that contracts entered into con- «econd edition of this treatise, vol. I., trary to them shall not be void (see Lewis p. 82. V. Bright, 4 E. & B. 917). Consequently (d) See, on this subject, infra, book I., the disabil'ity under which the clergy c. 5, ^ 1. formerly lay, and which rendered all (e) The law relating to the clergy is partnerships and companies of which now 1 and 2 Vict., c. 106, ^§ 29-31, and 4 they were de facto members illegal (Hall Vict., c. 14. Although a violation of v. Franklin, 3 M. & W. 259), exists no those laws is attended with the risk of longer. suspension and deprivation, it is expressly 89 7l*-72* ALIEN PARTXERS. [bOOK I.^ his or her want of capacity to contract will necessarily give rise to- consequences deserving special notice. These may be considered as they affect, first, aliens ; second, felons and outlaws ; third, infants ; fourth, lunatics ; fifth, married women ; and sixth, corporations and companies. Alien friends. — There is nothing to prevent an alien, not an enemy, from being a partner. (/) But a public minister of a foreign state, accredited to and received by the queen, cannot be sued here even in respect of commercial transactions in which he may have engaged, (g) Alien enemies stand in a very different position from alien friends. Effects of loar on the rights of partners. — When two supreme powers are at war, all persons who, for the time being, are the subjects of either, become, in contemplation of the civil tribunals of both, hos- tile to the subjects of the other, and so long as the war lasts, the sulv jects, for the time being, of the one country are incapable of entering into any valid contract with the subjects of the other, and all remedies available for the one against the other, in respect of transactions before the war, are suspended, (li) Consequently no partnership can subsist between the subjects of hostile powers ; (i) and if two partners are resident in two different countries, their partnership is determined by a war between those countries. (A;) These doctrines, however, are only recognized and enforced by the belligerent powers. Neutrals do not apply them to the determination of commercial questions arising between the subjects of belligerent states. It is to be remembered that whether a person is or is not to be con- sidered as an enemy depends, not on whether there is war between this country and his native land, but upon whether *there is war ^ between this country and the country in which he is volun- ^ (/) Co. Lit. 129 6; Bac. Ab., "Alien," v. Bell, 8 T. R. 548. See the note to D. See, generally, as to aliens, 33 Vict., Clemonston v. Blessig, 11 Ex. 141. c. 14. (i) See Evans v. Richardson, 3 Mer. {g) Taylor v. Best, 14 C. B. 487 ; Mag- 469 ; and infra, the chapter on Dissolu- dalena Steam Nav. Co. v. Martin, 2 El. & tion. E. 94. [k) See Griswold v. Waddington, 15 (A) Albretcht v. Sussmann, 2 Ves. & B. Johns. (N. Y.) 57, and 16 Id. 438. 323; Willison ?;. Patteson, 7 Taunt. 440; Whether peace operates retrospectively, Ex parte Boussmaker, 13 Ves. 71 • Potts see New York Life Ins. Co. v. Statham, 90 CHAP. III., § II.] FELON PARTNERS. 73''^ tarily resident. It is the place of his residence or trading, and not the place of his birth, which is of importance in these matters ; (J) and therefore, if a foreigner comes over here, enters into partnership here, and dwells here, and then w^ar breaks out between this country and that of which he is a native, the partnership will not, nor will his rights as a partner, be affected by the war, any more than if he were an Englishman, (m) On the otiier hand, if a partnership consists wholly of Englishmen, some of whom reside here and some in another country, and war breaks out between that country and this, the part- ners become enemies for all purposes of trade and commerce, just as much as if those abroad were natives of the country in wdiich they reside, (n) The same is true, even in the absence of any fixed residence in the belligerent country, if some of the partners go over there and trade there during the war. (o) 2. Felons and outlaws. Felons and outlaws. — Formerly a felon's or outlaw's share in a part- nership vested in the crown ;{p) and although a felon or outlaw could contract, -he could not sue in his own right until his disability had been removed ; i. e., in the case of felony until pardon or expiration of the term of punishment, and in case of outlawry, until its reversal, (q) But no person could plead his own attainder or outlawry as a defence to an action against him. (r) As regards outlaws, the law in these ,.„,-, respects ^remains unchanged; the law, however, respecting -^ felons was materially altered by 33 and 34 Vict., c. 23. This act abolished forfeiture for felony, (.s) and empowers the cr®wn to com- mit the custody and management of the property of any convict (i. e., 3 0Uo (U. S.) 24; and Parsons on Part., P. 113; O'Mealey v. Wilson, 1 Camp, c. 3, II 1, 3. 482, and compare Eoberts v. Hardy, 3 Mau. (/) See Albretcht v. Sussmann, 2 Ves. & & S. 533, and Ex parte Baglehole, 18 Ves. B. 323; Willison v. Patteson, 7 Taunt. 525, and 1 Rose 271. 440 ; Houriet v. Morris, 3 Camp. 303 ; (o) See The Yonge Klassina, 5 Ch. Eob. Bell V. Eeid, 1 Man. & S. 726. 303 ; The Indian Chief, 3 Id. 12 ; The (m) See Wells i'. Williams, 1 Ld. Raym. Portland, Id. 41. 282, and 1 Salk. 46, in which it was held ( p) Bac. A.b., "Felony and Outlawry;" that a plea of alien enemy was no de- Co. Lit. 128. fence to an action brought by a foreigner (5) lb., and see Bullock v. Dodds, 2 B, domiciled here, though there was war be- & A. 258. tween his country and this. (r) Foster's Cr. L. 61. (n) See McConnell v. Hector, 3 Bos. & (s) Section 1. 91 74* INFANT PARTNERS. [bOOK I., a person sentenced to death or penal servitude (t) ) to an administra- tor, (u) in whom all the convict's property, both real and personal, then becomes vested, (x) Moreover, a convict is absolutely disabled from alienating any property or making any contracts, and from suing, (y) except when lawfully at large under a proper license, (s) Provision is also made for the appointment of an interim curator of a convict's property, (a) Practically, this act facilitates the dissolution and wind- ing up of a partnership in the event of a member being convicted of felony. But it is unnecessary to allude further to this statute in the present place. 3. Infants. Infant partners. — An infant may be a partner. But, speaking gen- erally, whilst he is an infant he incurs no liability and is not responsi- ble for the debts of the firm ; and when he comes of age, or even before, he may, if he chooses, disaffirm past transactions. (6) The irresponsibility of an inflmt for the debts of a partnership of which he is a member is an obvious consequence of his general inca- pacity to bind himself by contract, and does not require to be sup- ported by any special authority, (c) It might, perhaps, be thought that an infant who held himself out as a partner would be liable to persons trusting to his representations if they did not know him to be under age ; but this is not so ; (d) and as an infant is not responsible for the torts of *his agent, an inflmt partner cannot be held ^ liable for the misconduct of his copartners. The irresponsi- *- . bility of an infant as a partner seems, therefore, to be complete, except in cases of fraud. But an infant who was guilty of fraud was not so free from liability in equity as he was at law, (e) and equitable as distinguished from legal («) Section 6. 3 Taunt. 307 ; and Burgess v. Merrill, 4 (u) Section 9. Id. 468, show that an infant partner ought (z) Section 10. not to be joined as a defendant in an ac- iy) Section 8. tion against the firm, (z) Section 30. (d) See Price v. Hewitt, 8 Ex. 146 ; (a) Section 21, et seq. Johnson v. Pye, Vin. Ab., ''Enfant," H, 2, (6) See Goode v. Harrison, 5 B. & A. pi. 16; Glossop v. Colman, 1 Stark. 25; 157-159 ; Ex parte Taylor, 8 De G., M. Green v. Greenbank, 2 Marsh. 485. <& G. 254. (e) See Wright v. Snowe, 2 De G. & S. (c) Chandler v. Parkes, 3 Esp. 76 ; Jaf- 321. fray v. Frebain, 5 Id. 47 ; Gibbs v. Merrill, 92 CHAP. III., § II.] INFANT PARTNERS. 75* relief, e. g., rescission of contract, may be obtained against him. (/) In accordance with these principles, although, as a rule, an infant can- not be made bankrupt, {g) yet if he fraudulently represents himself as of age, and obtains credit by his false representations, and is made bank- rupt, the adjudication against him will not be superseded, and his deceived creditors will be paid out of his estate, (/i) Re])udiation by infant. — Moreover, notwithstanding the general irre- sponsibility of an infant, he cannot, as against his copartners, insist that in taking the partnership accounts he shall be credited with profits, and not be debited with losses. The infant partner must either repudiate or abide by the agreement under which alone he is entitled to any share of the profits, (i) Time for avoidance of infantas contract. — An infant partner may avoid the contract into which he has entered, either before or within a reasonable time after he has come of age. {k) If he avoids the con- tract and has derived no benefit from it, he is entitled to recover back any money paid by him in part performance of it, (T) but he cannot do this if he has already obtained advantages under the contract, and can- not restore the party contracting with him to the same position as if no contract had been entered into, {m) ^Ratification by infant of his contract. — If, when an infant ■^ partner comes of age he is desirous of retiring from the firm, he should express his determination speedily and unequivocally. It is true that by the Infants' Relief act, 1874, (?i) promises made by a person who has attained twenty-one to pay debts contracted before that age cannot be enforced ; but a person who retains a share in a partnership cannot retain it without its incidental obligations, (o) and (/) Lempriere v. Lange, 12 Ch. D. 675. lin and Wicklow Rail. Co. v. Black, 8 Ex. (g) Ex parte Jones, 18 Ch. D. 109 ; Ex 181. parte Henderson, 4 Ves. 163 ; Ex parte [1) Corpe v. Overton, 10 Bing. 253. Lees, 1 Deac. 705 ; Belton v. Hodges, 9 (m) Holmes v. Blogg, 8 Taunt. 508 ; Ex Bing. 365. parte Taylor, 8 De G., M. & G. 254. Com- (h) See Ex parte Watson, 16 Ves. 265 ; pare Mann's Case, 3 Ch. 459, and Curtis' Ex parte Bates, 2 Mont., D. & D. 337 ; Case, 6 Eq. 455, where the infant had sold Ex parte Unity Banking Assoc, 3 De G. some shares, but not the rest. & J. 63. (n) 37 and 38 Vict., c. 62, § 2. (i) See Lon. & N. W. Rail. Co. v. Mc- (o) See Lon. & N. W. Rail. Co. v. Mc- Michael, 5 Ex. 114, and other cases of Michael, 5 Ex. 114; Cork and Bandon that class, in the volume on Companies. Rail. Co. v. Cazenove, 10 Q. B. 935, per {k) Co. Lit. 380 b. Newry and Enniskil- Coleridge and Erie, JJ. ; Ebbett's Case, 5 len Rail. Co. v. Coombe, 3 Ex. 565 ; Dub- Ch. 302. Compare Baker's Case, 7 Ch. 115. 93 76* INFANT PARTNERS. [bOOK I.j the doctrine of holding out is itself sufficient to impose liability upon an adult, although he may not long have attained his majority. This is well exemplified in Goode v. Harrison, {p) There an infant was a member of a firm, and he was known to be a member. After he had attained twenty-one he did not expressly either affirm or disaffirm the partnership. He was held liable for debts incurred by his copartners subsequently to that time. A person who, before he comes of age, represents himself as a partner, must, when he comes of age, take care to notify that he has ceased to be a partner if he desires to avoid liability. 1 ( p) 5 B. & A. 147. A fatlier invested his own funds and 1. Infant partners. — An infant's part- personal services, and tlie funds of his nership agreement is not void, but voida- chihiren in his hands as guardian, arising ble only. Denton v. Brown, 31 Mich. 182. from an unauthorized sale of their prop- An infant may be a partner, and his erty, in a partnership for their benefit, father, though indebted and insolvent, The children afterwards sought to enforce may release to his son all claim to his ser- the partnership in equity. Held, that the vices; and the consent of the father to the other partner could not avail himself of son's becoming a partner is a release of these facts to avoid the contract. Stein v. his services. Penn v. Whitehead, 17 Kobertson, 30 Ala. 286. Gratt. (Va.) 503. Tiiat the entering into a commercial In Massachusetts it is held that an in- business by an infant is, in effect, a decla- fant who enters into a partnership, con- ration to all who deal with him that he is tributes capital and does work for the of full, age, see Studwell t;. Shapter, 54 N. firm, cannot, afterwards, by rescinding the Y. 249. contract, recover the money so contribu- A widow and natural tutrix of her ted, or recover for the work so done, in minor children, having the possession the absence of an express promise. Page and administration of the property of her t' Morse, 128 Mass. 99. husband's succession during her life, en- The New York courts, however, hold tered into a partnership with the heirs, that an infant partner, on rescinding his who were of full age, and slaves and other partnership contract, may recover from property of the succession were employed the adult partner, individually, the capi- and used by the partnership. Held, that tal pkid to him. Sparman v. Keim, 83 the infant heirs were not, and could not N. Y. 245 ; reversing 44 Super. Ct. 163. be made, by her act, members of the part- A bill for the dissolution of a partner- nership ; and that they, consequently, af- ship will not abate on the filing by the ter her death, had the right to sue for and defendant of a plea of infancy, where, on recover from the surviving partners a debt complainant's motion to reject the plea, it due them by the partnership, before a set- appears that defendant deceived him in tiement and liquidation of partnership respect to his age. Bush v. Linthicnm, affairs. Cuill4 i). Gassen. 14 La. Ann. 5. 59 Md. 344. But such infant partner is An infant entered into partnership in not individually liable for firm debts, S. county, with two others, and put in aside from the amount contributed by him, $1000. Before his majority the partner- in the absence of ratification after major!- ship was dissolved, he receiving his $1000 ty, nor is he amenable to the costs of the back again. After this he removed to H. bill to dissolve. lb, county, and one A recovered a judgment 94 •CHAP. III., § II.] LUNATIC PARTNERS. 76* 4. Lunatics. Lunatic pai-tners. — If a lunatic enters into a contract with a person who acts bona fide, and who does not know of the incapacity under which the hinatic hibors, the lunatic is so far bound by the contract, that if it has been executed he cannot avoid it. (5) So, if a person ionafide contracts with a lunatic, without kno\ving him to be so, and performs the contract, lunacy affords no defence to an action for remuneration for what has been done, (r) It is not, therefore, possible to lay down as a universal proposition that contracts entered into by persons who are lunatics are void, nor consequently that such persons are incapable of being partners. *Any doubt, however, which might exist upon this subject p^„_ in point of principle is removed by those decisions which have settled that an existing partnership is not dissolved by the mere fact tliat one of its members has become lunatic, and that, notwithstanding his lunacy, he is entitled to share the profits made subsequently by his copartners, (s) To these authorities, which will be examined hereafter, may be added the case of Sadler v. Lee, {t) in which it was held that if a member of a going partnership becomes imbecile, he is neverthe- less responsible for the subsequent misconduct of the other members. It seems, therefore, that by the law of this country a lunatic is capable of being a partner, but all dealings and transactions with him when his lunacy is known are lial)le to be impeached. 5. Married ivomen. Married women partners. — A married woman who has no separate estate is incapacitated from entering into any contract binding on her- against the firm, including the infant, back, 2 Halst. (N. J.) Eq. 234. without his knowledge. A transferred {q) See Molton v. Camroux, 2 Ex. 487, the judgment to B. Three years after- and 4 Id. 17 ; Beavan v. M'Donnell, 9 Id. wards, B sued on the judgment, and re- 309, and 10 Id. 184. covered a second judgment, no process be- (r) See Drew v. Nunn, 4 Q. B. D. 661 ; ing served on the infant. B issued an Baxters The Earl of Portsmouth, 5 Barn. execution to the sheriff of H. county, & C. 170; Brown d. Jodrell, 3 Car. & P. which was levied on the property of the 30. See, as to the onus of proof where the infant there. He filed a bill, stating the lunatic has been so found by inquisition, foregoing facts, charging fraud, &c., and Snook v. Watts, 11 Beav. 107. an injunction staying proceedings on the (s) Jones v. Noy, 2 Myl. & K. 125. -execution was issued. Vansyckle v. Ror- (<) 6 Beav. 324. 95 77* MAKRIED WOMEN PARTNERS. [BOOK I.^ self"(w) except, fir«t, when the husband is a convicted felon ; (x) second, when the husband and wife are judicially separated ; (y) third, where the wife is protected from her husband by an order obtained under the divorce acts ; (z) fourth, when the husband is an alien enemy and abroad, (a) In these cases the wife is as capable of contracting as if she were unmarried. By the custom of London, moreover, a married woman may be a trader, and contract as if she were not married. (6) Neglecting these exceptions, it seems clear that a married woman with- out separate estate, having no capacity to contract, cannot l^e a partner. She may, however, be the agent of other people and bind them, although not herself Moreover, as in the case of infants, so in the case of married women having no separate estate, holding themselves out as partners does not subject them to the responsibilities which are incurred by other persons who act in a similar way. (c) ^Position of married women with separate estate. — But a ' -' married woman who has separate estate, which she is not restrained from anticipating, is as to such estate regarded as a, feme sole^ and debts and obligations incurred by her, either expressly or impliedly, on the credit of that estate, can be enforced against it, although not against her personally, (d) Supposing, therefore, that a married woman partner has such separate estate, it will be liable for the debts of the partnership, and to that extent she will be a partner, (e) But her husband will not. A married woman having separate estate may lend money to her husband, but if lent to him for purposes of trade and he becomes bankrupt, she is postponed to his other creditors ; (/) but a loan by her to a partnership of which her husband is a member, is payable out of its assets like any other joint debt, (g) A married woman having separate property and carrying on busi- ness separately from her husband, is liable to the bankruptcy laws, (h) {u) Marshall v. Kutton, 8 T. R. 545. {d) See 45 and 46 Vict., c. 75, §g 1, 12, (X) See Ex parte Franks, 7 Bing. 762. 19; Re Shakespear, 30 Cli. D. 169; Pal- iy) 20 and 21 Vict., c. 85, U 25, 26. User v. Gurney, 19 Q. B. D. 519. (z) 20 and 21 Vict., c. 85, § 21, and 21 (e) See Matthewman's Case, 3 Eq. 781, and 22 Vict., c. 108, 'i'i 6-10. where she was held a contributory. See, (a) Derry v. Mazarine, 1 Ld. Raym. 147 ; as to a married woman's separate trade, Barden v. Keverberg, 2 Mees. & W. 61. Ashworth v. Outrara, 5 Ch. D. 923. (6) See, as to this. Beard v. Webb, 2 (/) 45 and 46 Vict., c. 75, § 3. Bos. & P. 93. iu) Ex parte Nottingham, 1 9 Q. B. D. 88. (c) See The Liverpool Adelphi Loan (A) 45 and 46 Vict., c. 75, § 1 (5) ; Ex Assoc. V. Fairhurst, 9 Ex. 422. parte Gilchrist, 17 Q. B. D. 521. 96 CHAP. III., § II.] CORPORATIONS PARTNERS. 78*-79* But her position, if she carries on business in partnership with him, is not defined. There is, however, no reason why she should not do so ; (i) her liability to the extent of her separate estate for his contracts and his liability for hers would, in such a case, be governed by the principles of agency, {k) 2 6. Corporations and companies. Corporations, &c., may he partners. — There is no general principle of law which prevents a corporation from being a partner with another corporation or with ordinary individuals, except the principle that a corporation cannot lawfully employ its funds for purposes not author- ized by its constitution. (/) Having regard, however, to this *principle, it may be considered as prima facie ultra vires for |-^„q an incorporated company to enter into partnership with other persons, (m) 3 (z) See Butler v. Butler, 16 Q. B. D. Erhard, 8 Daly (N. Y.) 311 ; affirmed, 83 374. N. Y. 74; S. C, 38 Am. Kep. 396. (k) A husband is liable for his wife's In South Carolina, married women are torts. Seroka v. Kattenburg, 17 Q. B. D. allowed to become feme sole traders after 177. the manner of the custom of London. 2. Married women as partners. — In Newbiggin v. Pillans, 2 Bay (S. C.) 162; Massachusetts, a husband and wife cannot Surtell v. Brailsford, Id. 333; Dial v. enter into a partnership contract (Pub. Neufi'er, 3 Rich. (S. C.) 78; Hobart v. Stat., c. 147, § 2) ; and she is not liable for Lemon, Id. 131. See, also, Wallace v. the rent of a store hired by him in their Rippon, 2 Bay (S. C.) 112; 1 ouillier v. joint names as partners. Bowker v. Wernicki, 3 E. D. Smith (N. Y.) 310; Bradford, 140 Mass. 521. But a feme Wieman v. Andeison, 42 Pa. St. 311. covert may be bound by a note given in (l) See Gill v. Manchester, Sheffield, the name of a trading partnership of &c., Kail. Co., L. R., 8 Q. B. 186, as to one which she is a member, if her husband company being the agent of another, if is not a member of the firm. Plumer v. not its partner. Lord, 5 Allen (Mass.) 460. Otherwise if (m) See the American cases, Sharon her husband is also one of the firm. Lord Coal Corp. ?>. Fulton Bank, 7 Wend. (N.Y.) V. Parker, 3 Id. 127. 412; Catskill Bank v. Gray, 14 Barb. (N. In New Hampshire, the coverture of a Y.) 479. As to holding out, see Holmes t). female member of the defendant firm at Old Colony R. R. Co., 3 Gray (Mass.) 58. the time of contract may be given in evi- 3. Corporations as partners. — At dence to defeat the action. Brown v. common law, one corporation was held Jewett, 18 N. H. 230. competent to become a member with an- In New York, a husband and his wife other (Grant on Corporations 5), and may be partners, under the firm name of upon principle there would seem to be the husband " & Co." Zimmerman v. no question but that it may be a partner 97 7 CORPORATIONS PARTNERS. [bOOK I., with another corporation (Dalton City Co. business and purposes for which it was V. Dalton Manuf. Co., 33 Ga. 243), or established, is perhaps questionable, but with an individual (Holmes v. Old Colony it is believed that whatever might be the R. R. Co., 5 Gray (Mass.) 58; Allen v rule as to the rights of the corporation in Woonsocket Co., 11 E. I. 288), in any such a firm, it might render itself liable purpose connected with or incident to its as a partner to those who dealt with the business. Whether it can become a part- firm in ignorance of the scope and extent ner, and assume all the rights and liabili- of its corporate rights and powers. Coil- ties as such in a matter foreign to the yer on Part., p. 25. 98 CHAP. IV.J EVIDENCE OF PARTNERSHIP. 80'' *80] *CHAPTER IV. OP THE EVIDENCE BY WHICH A PARTNERSHIP OR QUASI PARTNERSHIP MAY BE PROVED. Evidence by tvhioh a partnership or quasi j^artnership may be proved. — The contract of partnership is one of those which does not require to be entered into with any particular formalities. By the common law of this country, a partnership may be constituted without any official act, such as registry, without any instrument under seal, and even without any writing whatever ; and this is the law at the present time, except so far as it has been altered by the statute of frauds, by the acts relating to marine insurance, (a) and by the various statutes relating to companies. But although a partnership may be constituted without any deed or writing, still, a person who has entered into a mere verbal agreement for a partnership with another, will not be able to sustain an action for its breach, unless he can prove the terms upon which the partnership was to be entered into. (6) Statute of frauds. — The only statutory enactment applicable to ordinary partnerships is the statute of frauds, the fourth section of which enacts, amongst other things : "That no action shall be brought whereby to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, or upon any agreement that is not to be performed within the space of one year from the making thereof, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized." Future partnerships, &o. — This enactment applies as well to an agreement for a partnership to commence more than a year from the date of the agree* ment (c) as to an agreement for a present partnership to last more than a year from its comhiencement. (d) '- (a) By 30 Vict., c. 23, § 7, agreements (c) See per Holroyd, J., in Williams v. for marine insurance must be in writing Jones, 5 Barn. & C. 108. and stamped ; and a mutual marine in- (cZ) lb. ; and see Britain v. Rossiter, 11 Burance society which infringes these en- Q. B. D. 123. But see, as to this, McKay actments is an illegal society. See infra, v. Rutherford, 6 Moore P. C. 414, and 13 book I., c. 5, I 1. Jur. 21. (6) Figes V. Cutler, 3 Stark. 139. 99 81* STATUTE OF FRAUDS. [BOOK I.^ But if in either case the parties have acted on tlie agreement and become partners, they must be treated as such, and tlie statute will not be applicable, (e) 1 Partnerships in land. — With respect to that part of the fourth sec- tion of the statute of frauds which relates to lands, it is held, first, that a partnership constituted without writing is as valid as one con- stituted by writing ;(/) and second, that if a partnership is proved to exist, then it may be shown by parol evidence that its property con- sists of land. This was first clearly laid down in Forster v. Hale, {(/} where a person attempted to obtain an account of the profits of a colliery on the ground that it was partnership property, and it was objected that there was no signed writing such as the statute required. But to this the Lord Chancellor observed : "That was not the question ; it was whether there was a partnership. The subject being an agreement for land, the question then is whether there was a resulting trust for that partnership by operation of law. The question of partnership must be tried as a fact, and as if there was an issue upon it. If by facts and circumstances it is established as a fact that these persons were partners in the colliery, in which land was necessary to carry on the trade, the lease goes as an incident. The partnership being established by evidence upon which a partnership may be found, the premises necessary for the purpose of that partnership are by operation of law held for the pur- poses of that partnership." The principle here stated was carried to its extreme limit by Vice Chancellor Wigram in Dale v. Hamilton. (A) He held that an (e) See Baxter v. West, 1 Dr. & Sm. them, on a contract made by one of them 173, where the partners had acted on, and with another party in the name of the were held bound by, an unsigned niemor- firm. Drennen v House, 41 Pa. St. 30. andum, continuing a partnership for Evidence of an agreement between a seven years. See, also, Williams i'. Wil- surviving partner and the brother of a de- liaras, 2 Ch. 294, and per Turner, L. J., ceased partner that upon the death of in Bunion v. Barkus, 4 De G., F. & J. 47. the deceased jjartner the brother should 1. Future partnerships. — Where two become a partner in the concern, and be persons, as intended partners, purchase a entitled to a share of the profits, is not stock of goods and agree to give their sufficient to establish a partnership, notes therefor, and on receiving the goods Brink v. New Amsterdam Fire Ins. Co., at the time fixed, one of them, the other 5 Robt. (N. Y.) 104. being absent, signs and delivers the notes (/) Essex v. Essex, 20 Beav. 449. in their joint names, the notes thus given (g) 5 Ves. 309. are firm notes, and the agreement and its (A) 5 Hare 369 ; S. C, on appeal, 2 Ph. consummation present a strong prima facie 266. case of partnership in an action against 100 €HAP. IV.] EVIDENCE OF PARTNERSHIP. 82* agreement to fonu a partnership for the purpose of buying and selling land might be proved by parol ; that it might then be shown by parol that certain land had been '''bought for the purposes of the ''■^ partnership, and consequently, that the plaintiff was entitled to a share of the profits obtained by its resale. The Vice Chancellor •directed an issue as to the fact of partnership, but his decision is an authority for the proposition that the statute of frauds does not pre- clude a person from establishing by parol an agreement to form a partnership for the purpose of buying and selling land at a profit, (i) This is certainly going a long way towards repealing the statute of frauds. Dale v. Hamilton was appealed from, and the plaintiff obtained a decree without any issue as to the fact of partnership. Both in Forster v. Hale and in Dale v. Hamilton there was a signed writing showing a trust in the plaintiff's favor; and this circumstance was relied on by Sir William Grant in the former case, (J) and by Lord Cottenham in the latter ;(^) but, curiously enough, the signed writing was not made the foundation of the decision of Lord Ross- lyn in Forster v. Hale, and was not considered sufficient by Vice Chancellor Wigram in Dale v. Hamilton. His decision is difficult to reconcile with sound principle, or with the more recent decision of Caddick v. Skidmore. (^) There, the plaintiff alleged that it had been agreed between him and the de- fendant that they should become partners in a colliery and share the profits equally. The plaintiff sought to enforce that agreement. The defendant denied the alleged agreement, and asserted that the true agreement was that the plaintiff and the defendant should share the royalties obtained from the colliery. The defendant also set up the statute of frauds as an answer to the plaintiff's claim. In this case, no partnership in fact was proved, and there was no agreement for a partnership as distinguished from the agreement to share the profits of the colliery in question. The terms of that agreement were not in writing and were in dispute. Under these circumstances, the statute of frauds was properly held to be a defence to the action. ^Pdvt 'performance. — In considering cases of this descrip- p^^^j tion, the equitable doctrines of part performance must be ^ borne in mind. They may enable a plaintiff to prove a parol agree- [i] See, too, Cowell v. Watts, 'I Hall & {k) Dale v. Hamilton, 2 Ph. 266. T. 224. {I) 2 De G. & J. 52. ( j) Forster v. Hale, 3 Ves. 696. 101 83* EVIDENCE OF PARTXERSHIP. [BOOK I., ment for sharing the profits arisuig from land, notwithstanding the statute of frauds, (m) 2 Question of partnership or no partnership, a mixed question of law and fact — The question whether a partnership does or does not sub- sist between any particular persons is a mixed question of law and fact, and not a mere question of fact. If it comes before a jury, the (m) See Cowell v. Watts, 2 Hall & T. and after having received the full benefit 224, where the phiintifF succeeded on this of the transaction, and availed himself of point, although by reason of his laches he all tlie advantages arising from the ser- failed to obtain a decree. vices rendered by his copartner, the other 2. Partnerships in land. — A partner- partner cannot be heard to charge bad ship for the purchase and sale of land may faith on the part of his copartner in mak- be created and proved by parol. Chester v. ing a purchase of land. Hunter v. Wiiite- Dickerson, 54 N. Y. 1 ; S. C, 13 Am. Eep. head, 42 Mo 524. 550. S. P., Traphagen v. Burt, 67 N. Y. The fact that real estate is treated in 30; Getty t;. Devlin, 54 Id. 403; Tomp- the firm books like other partnership kins V. Lee, 2 Thomp. & C. (N. Y.) 589; property, is controlling as between the Bissell V. Harrington, 18 Hun (N. Y.) partners tliemselves, as respects intention, 81. Co?i partner in a certain firm. Rizer v. James, McGuiret). O'llallaran, Hill . Kelley, 41 Me. 436. Burnside v. Dayrell, 3 Ex. 224; Watson On the trial of an action brought against V. Charlemont, 12 Q. B. 8-56. This will several as partners, only one of whom has be again alluded to in a subsequent chap- been served with process, on the question iQj. who constituted the partnership, the record 9 Judgments and records of former of a former action against the defendant suits. — A former judgment between the served with process, in which he pleaded same parties on both sides, in which the in abatement the non-joinder of the pres- defendants were described as partners un- ent defendants, is competent evidence. der a given firm name, is competent evi- M'Clelland v. Lindsay, 1 Watts & S. (Pa.) dence, in a subsequent suit, to prove the 360. defendants partners under the same name. In a suit against a firm on a promissory Button V. Woodman, 9 Gush. (Mass.) 255. note, purporting to be signed by the firm And where an action is brought against name, a copartner pleaded that he was not several persons as partners, and they omit a member of the firm at the time the note to make any defence, and allow judgment bore dale. Held, th-at evidence of suits to be taken against them by default, the and judgments, in which he was joined as record of such judgment is proper evi- a partner, by and against the copartner- dence of the existence of the partnership, ship, prior to the date of the note, was in another action afterwards brought inadmissible to rebut this plea. Collier w. against the same persons by different Cross, 20 Ga. 1. plaintifls. Marks v. Sigler, 3 Ohio St. Books and accounts of alleged firm. 358; Cragin v. Carleton, 21 Me. 492; —The firm books are not alone competent Fogg V. Greene, 16 Me. 282 ; Ellis v. evidence to prove the partnership ; but Jameson, 17 Me. 235. they are evidence in connection with other But it is held that a verdict, and judg- proof of partnership, and of access to and ment thereon, are not admissible evidence knowledge of their contents. Bryce v. of a copartnership, even where that fact Joynt, 63 Cal. 375 ; S. C, 49 Am. Rep. was expressly put in issue by tiie plead- 94. Entries in the books are not evidence ings, unless the action, in which such evi- against any one to show him to be a part- dence is offered, is between both the parties ner in the firm. Kobins v. Warde, 111 to the former suit. Burgess v. Lane, 3 Mass. 244 ; Abbott z). Pearson, 130 Id. 191. Greenl. (Me.) 16-5. But the books may be given in evidence In an action by an attorney for profes- to fortify or discredit a witness who swears 112 CHAP. IV.] EVIDENCE OF PARTNERSHIP. 86^ ^ -. *It need scarcely be observed that the principle now under discussion does not apply to exclude the testimony of a person deposing to the existence of a partnership between himself and another. Such testimony was not excluded even before the alteration of the law relating to the competency of witnesses, (c) and there is no pretence for excluding such testimony now. If a partnership is alleged to exist between A and B, and A is called to prove it, and he denies it, then, although the person calling A as a witness cannot adduce evidence to show that his testimony is generally unworthy of credit, yet such per- son may adduce other evidence to show that the partnership denied by the witness does, in point of fact, exist, (d) Acts of copartners after prima facie evidence of partner skip has been to the partnership. Moyes v. Brumeaux, has been introduced, the plaintiff's books, 3 Yeates (Pa.) 30. containing original entries, may be given Where, however, a person has suffered in evidence. Johnstons. Warden, 3 Watts his name to be held out to the world as a (Pa.) 101 ; Richter v. Selin, 8 Serg. & R. member of a mercantile firm, and permit- (Pa.) 425. ted persons to deal on the credit of the The headings in a measurer's abstract firm, he cannot object to the admission in book, showing that the defendant was evidence, as proof of the partnership, of charged for the work measured, as debtor books kept and accounts rendered in the to the plaintiff and another, are inadmis- name of the firm. Chidsey v. Porter, 21 sible as evidence for the defendant for the Pa. St. 390. purpose of proving a technical partner- The continuance of the partnership re- ship between the plaintiff and such other lation may be proved notwithstanding the party, there being no offer to connect them publication of a notice of dissolution ; and with other evidence going to show the ex- enlries made thereafter in the partner- istence, at any time, of such partnership, ship books are admissible to charge the Green v. Caulk, 16 Md. 556. partner making them. Gilchrist ii. Brande, Where a creditor seeks to charge a de- 58 Wis. 184. fendant as a member of a debtor firm, Where an administratrix of one estate neither the reports of a Hiercantile agency, brought a claim against another estate, nor declarations of other third persons, and the defence gave evidence tending to are competent evidence to charge such show that the decedents were in partner- defendant as a partner. Cook v. Penrhyn ship, and that defendant's intestate kept Slate Co., 36 Ohio St. 135. the accounts, a book of accounts in the Such reports are not admissible, unless latter's handwriting and containing en- knowledge, or means of knowledge, of tries purporting to have been made in the them is brought home to tte party at- presence of the other partner, was held tempied to be charged. Campbell v. admissible as tending to prove the copart- Hastings, 29 Ark. 512; Bonnell v. Cliam- nership and the condition of the accounts, berlain, 26 Conn. 487. Howard v. Patrick, 38 Mich. 796. See, also, Hale v. Brennan, 23 Cal. 511. Plaintiff's books, and books of third parties. — After evidence of partnership 113 (c) Hall V. Curzon, 9 Barn. & C. 646; Blackett v. Weir, 5 Id. 385. {(l) Ewer V. Ambrose, 3 Barn. & C. 746. 8 86^ EVIDENCE OF PAKTNERSHIP. [book given. — Further, it is to be observed that notwithstanding the prin- ci])le above stated, after sufficient evidence has been given to raise a presumption that several persons are partners, then the acts of each of those persons are admissible as evidence against the others, for the purpose of strengthening the prima facie case already established. Thus, in Norton v. Seymour, (e) in order to prove a partnership between the defendants, Seymour and Ayres, the plaintiff called a witness, who deposed that Ayres had, in conversation, admitted the partnership, and then the p-laintiiFgave in evidence a circular and invoice issued by Seymour, and headed '' Seymour and Ayres," and stating that the business would in future be carried on in those names. Ayres objected to the admissibility of tiiis document, there being, as she contended, no evidence to connect her with it ; but the court held it to be admissible ; for, before the document was put in, evidence of a partnership had been given, and the document tended to confirm that evidence. So, in Nicholls v. Dowding, (/) prima facie evidence of a j)artnership having been given, the declarations of one of the defend- ants were inquired into for the purpose of binding the others, and it was held that such evidence was admissible, a foundation for it having been previously laid. (^.) 10 (e) 3 C. B. 792. (/) 1 Stark. 81. {g) See, too, Alderson r. Clay, 1 Stark. 405. 10. Acts of copartners after prima facie proof, &c. — A partnership must first be proved aliunde, before the declara- tions of one partner can affect the other ; and evidence to sliow a continuance of a partnership, after it has been dissolved, with notice to the parties, must be as satisfactory as that required to show its establishment. AUcott v. Strong, 9 Cush. (Mass.) 323. But after pj-ima facie evi- dence of partnersliip, the declarations of one of the partners are evidence to bind the firm, although made on oath voluntarily by him, under the South Carolina sum- mary process. Allen v. Owens, 2 Spears (S. C.) 170. Accordingly, evidence that legal ser- vices were rendered in the joint names of an attorney-at-law and anotlier person, is not sufficient to prove a partnership be- tween them, and thus defeat an action for such services brought by the attorney alone. Bishop v. Hall, 9 Gray (Mass.) 430. (So, also, the rescission or modification of a partnersliip agreement cannot be proven by loose declarations or conversa- tions, especially when the subsequent con- duct of the parties accords with their original contract. Autrey v. Frieze, 59 Ala. 587. Where one was a partner in 1855 and 1857, but claimed that for 1856 he was not, his withdrawal being evidenced by a deed which was lost, and it turned out that he himself had destroyed the deed, and he answered delusively about it, and it appeared that he had acquiesced in certain acts of his partner, treating him as such, it was held that he was to be con- sidered as a partner in 1856 also. Clem- ents V. Mitchell, 6 Jones (N. C.) Eq. 171. 114 €HAP. IV.] EVIDENCE OF PARTNERSHIP. 87* *Proof of articles, &g., not necessary. — A person may be p^^_ made liable as if he were a partner without the proof of any partnership articles or deed which he may have executed. (A) And although, in order to prove an actual partnership, it may be neces- sary, by the law of some other country, to show that some formality has been observed, the non-observance of that formality will not pre- vent persons who in fact trade as partners from being so treated in this country in questions arising between them and third parties, (i) H Admissions. — An admission made by any one that he is a member of a particular partnership is evidence of that fact against him ; {k) and such an admission renders it unnecessary for the purpose of fixing him with the liabilities of a partner, to show that he executed any document whereby he became a partner. (I) Admissions, however, are not necessarily conclusive, and little weight ought to be attached to them if it is shown that they were made under erroneous suppositions. This seems to have been the true ground of the decision in the much debated case of Vice v. Anson, (m) There the defendant supposed herself to be a shareholder in a mine ; she had, in private letters and in private society, written and spoken of herself as a shareholder ; she had received certificates stating that her name A sued B and C, as the owners, in part- 11. Proof of articles, &c., not neces- nersliip of a race-course, for work done sary. — After receiving the services of thereon. C denied, under oath, the part- one as a partner, and recognizing him as nership, and after proof of a written such for several years, it is too late to set agreement between B and C, for the con- up either the non-payment of his portion struction of the course at joint expense of the capital stock or the non-execution and profit, A offered to prove that of articles of partnership as proof that no although he was employed by B to do partnership existed. Campbell v. Whit- the work, yet that C was often present, ley, 39 Ala. 172. giving orders and directions concerning {k) Sangster v. Mazarredo, 1 Stark. it, and shared the profits of the course 161 ; Studdy v. Saunders, 2 Dowl. & K. after it was completed. Held, that the 347 ; Clay v. Langslow, 1 Moo. & M. 45. proof was admissible as tending to estab- (/) Harvey v. Kay, 9 Barn. & C. 356 ; lish the partnership, and their joint Ealph v. Harvey, 1 Q. B. 845; and see liability as partners for the work. Perry Tredwen v. Bourne, 6 Mees. & W. 461. V. Randolph, 14 Miss 335. (m) 7 Barn. & C. 409, and Moo. & M. 98. {h) Alderson v. Clay, 1 Stark. 405, See, on this case, Owen v. Van Uster, 10 where a person was proved to be a mem- C. B. 318, and qu. if it is law ; for though ber of a company without the production the defendant had no legal interest in the of the company's deed. mine, was she not entitled as a partner to (i) Shaw V. Harvey, Moo. & M. 526 ; share the profits obtained by working the Maudslay v. Le Blanc, 2 Car. & P. 409, mine? And what more was necessary to note. make her liable to the supplier? 115 87* EVIDENCE OF PARTNERSHIP. [bOOK I., was registered in the act-book of the mine, and that she was entitled to share the profits of it ; and lastly, she had paid deposits on her shares. But Lord Tenterden held that she had not, in point of fact, any interest in the mine, and that as she never represented to the plaintiff that she was a shareholder therein, she could not be made liable to him simply because of her erroneous suppositions and admissions, *The inconclusive nature of an admission was distinctly -• recognized in Ridgway v. Philip, (n) where Parke, B., said : " It frequently happens in cases where the liability of persons as partners comes in question, that juries are induced to give too much effect to slight evidence of admissions. An admission does not estop the party who makes it ; he is still at liberty, as far as regards his own interest, to contradict it by evidence." In that case, one of the defend- ants was allowed to explain an admission made by him to the effect that he was in partnership with the others, (o) So, where the freighters of a ship addressed a letter to the captain instructing him on his arrival at the Cape to call upon their managing partner, Mr. AV. G. Anderson, it was held competent to the freighters to show that Mr. Anderson was not a partner of theirs. ( p) Even where a person has executed a deed describing him as a part- ner, the admission is not necessarily conclusive against him. (g) An admission by one person that he and another are partners, may be open to the explanation that they are partners to some limited ex- tent, or with respect to some particular transaction, but not to the ex- tent or with resj)ect to the business necessary to sustain the case made against him. (/•) 12 (n) 1 Cr., M. & R. 415. 12. Admissions. — The separate ad- (o) See, too, Newton v. Belcher, 12 Q. mission of each member of an alleged B. 921; Newton v. Liddiard, Id. 92-5, as partnership is competent evidence against to the admissions made by promoters of him, but not against the other supposed companies as to tlieir liabilities. members, to prove the partnership. Cur- (p) Brockbank v. Anderson, 7 Man. & rier v. Silloway, 1 Allen (Mass.) 19; Gor- G. 29-5. The real question was whetlier don v. Bankard, 37 111. 147 ; Drennen v. Anderson was an intere.sted witness, wiiich House, 41 Pa. St. 30 ; King v. Barbour, 70 he would have been had he been a part- Ind. 3-5. See, also, Filley v. McHenry, 71 ner. See Mant v. Mainwaring, 8 Taunt. Mo. 417; Brown v. Rains, 53 Iowa 81; 139; Brown v. Brown, 4 Id. 752. Fick v. MulhoUand, 48 Wis. 413 ; Flour- (>]) See Radcliffe v. Rushworth, 33 noy v. Williams, 68 Ga. 707. Thus, where Beav. 485 ; Emp.son's Case, 9 Eq. 597. three partners are sued, one of whom (r) See Ridgway v. Philip, 1 Cr., M. & pleads, the plaintiff cannot give the decla- R. 415, and De Berkora v. Smith, 1 Esp. 29. rations of the others to prove the partner- 116 €HAP. IV.] EVIDENCE OF PARTNERSHIP. 88* Retrospective articles, &c. — Again, persons may agree that as between themselves, the partnership between them shall be deemed to have commenced at some time before its actual commencement. Proof of ship. Nelson v. Lloyd, 9 Watts (Pa.) 22 ; Sherman v. Kelton, 2 R. I. 532. But it is lield tliat the successive acts and declarations of each of several de- fendants, sho.wing their partnership, are equivalent to a joint declaration to that effect by all, and may be given in evi- dence. Hiiughey v. Strickler, 2 Watts & S. (Pa.) 411 ; Welsh v. Speakman, 8 Id. 257. The true rule is that the declarations of one of several alleged partners cannot be given in evidence to prove a partner- ship, except as against the party making them (M'Pherson v. Rathbone, 7 Wend. (N. Y.) 216; Yancey v. Mariott, 1 Sneed (Tenn.) 28), until independent proof of the partnership has been made. Cross v. Langley, 50 Ala. 8; Converse v. Sham- baugh, 4 Neb. 376. And such declara- tions, if made at the time the debt of plaintiff was contracted, are admissible to prove that plaintiff relied on the exist- ence of the alleged partnership. Green- wood V. Sias, 21 Hun (N. Y.) .391. Where the question before the jury is whether the defendant is a member of a certain partnership, it is proper for the court to exclude the declarations of the defendant not made in the presence of the plaintiffs or their agent. Teller v. Patten, 20 How. (U. S.) 125. But where the pleadings show that the several de- fendants were jointly employed by the plaintiff, the admission of one of the de- fendants is competent to charge the other defendants as his copartners, and it is im- material whether such admission is made in a judicial proceeding or otherwise. And objection to such evidence on the ground of want of previous proof of part- nership is removed by subsequent testi- mony tending to prove that fact. Fogerty ■V. Jordan, 2 Robt. (N. Y.) 319. 1 Upon the question what amounts to such an admission of the existence of a partnership as to be admissible, it has been held that if defendants, sued as co- partners, introduce in evidence a receipt taken by them, in their copartnership name, of the plaintiffs, this is an admis- sion of the copartnership. M'Farland v. Lewis, 2 Scam. (III.) 344. And that where the suit is on an account stated, evidence that defendants admitted that they were partners should be allowed to go to the jury, even though not specifi- cally confined to the time within which the account accrued. Sager v. Tupper, 38 Mich. 258. On the other hand, it has been decided that an inventory filed by one partner after the death of the other, which imports to contain the assets of the firm, is no more than an implied admission of the partnership, made after its dissolution. Such inventory is not evidence either to prove the partnership as against the dece- dent, or to bind the partnership creditors as against the individual creditors of the decedent. Bond v. Nave, 62 Ind. 506. So, also, it is held that under the plea of 71071 est factum, involving the existence of a partnership, the declaration of the defendant to third persons, before the exe- cution of the instrument in question, that no partnership existed, is not evidence. What the defendant said when the note was offered to him for payment would be evidence, such declaration being a part of the res gestae. England v. Burt, 4 Humph. (Tenn.) 399. The following admissions have been held admissible and sufficient to prove partner- ship : An admission by one that a note was signed by his partner, and an offer to pay it if the holder would take goods. Thomas 17 8S* EVIDENCE OF PARTNERSHIP. [bOOK I., such an agreement as this would not enable a stranger to make the parties to it liable to him as partners for what took place before the partnership, in point of fact, began. As to third parties, such an agree- V. Wolcott, 4 McLean (U. S.) 3G5. had been started on the same road, and The unexplained failure of one sought that in consequence of the competition to be charged as a partner to reply to a the charge for passengers had been greatly letter written ai the time of a sale of goods reduced. Held, that this latter evidence to the alleged firm, in which he was ad- did not impair the weight of the declara- dressed as a partner. Humes v. O' Bryan, tions last made by defendant, but was 74 Ala. 64. irrelevant and was rightly rejected. An- The defendant's acknowledgment of the derson v. Snow, 9 Ala. 247. partnership of the plaintiffs. Bisel v. Where A and B were sued as partners^ Hobbs, 6 Blackf. (Ind.) 479. A was defaulted, and B pleaded the geu- Proof of frequent admissions, in conver- eral issue. Held, that letters written by sations, of the existence of a copartner- A, in the firm name, could nol; be read in ship, supported by entries in books kept evidence by B, to show that he was not a by the parties. Wallace v. Berger, 14 partner with A, but that the letters of the Iowa 183. plaintiff were good evidence to show that The testimony of a witness that he has he did not consider B as such partner, paid notes to the firm, in which were the Charaplin v. Tilley, 3 Day (Conn.) 303. individual names of the members, and Where A subscribed to a contract of the declarations of the members made sale the name of a firm, of which he prior to the institution of the suit. Woods claimed to be a member, and B, the other V. Quarles, 10 Mo. 170. partner, afterwards ratified the act, by re- The admission of a party that "he was ceiving the purchase money, &c. Held^ one of the proprietors of the firm of that this confirmation of B being estab- Adams & Co.'s Express," and that the lished, A's declarations as to the partner- signature of a receipt was that of one of ship, made when the contract was execu- their clerks. Fenn v. Timpson, 4 E. D. ted, may be given in evidence. Drum- Smith (N. Y.) 276. right v. Philpot, 16 Ga. 424. The following have been held inadmis- A told B that he was in partnership with sible : C, and B so informed C, who did not re- Admissions by one partner, after disso- ply. Held, suflicient proof that A and C lution, not made in the winding up, or in were partners. Slade v. Paschal, 67 Ga. relation to the dissolution. Nichols v. 541. White, 85 N. Y. 551. In an action against V. and B. upon a A letter of one partner, admitting the note signed " V. & Co.," the testimony of existence of the partnership. Porter v. a witness that he presented the note for Wilson, 13 Pa. St. 641. payment to B., who stated that the de- Instances and illustrations. — Plain- mand was just and that he would pay it tiff sought to charge a defendant as a in a short time, is sufficient evidence for partner in a stage-line, by evidence of the court to infer that B. was a partner of his declarations at different periods, the V. Vance v. Funk, 2 Scam. (111.) 263. earliest declarations admitting the part- Two persons purchased a mill and nership, and tiie later ones denying it. house, which they commenced to remove. Plaintiff also offered to show that at the but, before the removal was completed, time of defendant's denial, another line one of them died. Held, that the general 118 CHAP. IV.] EVIDENCE OF PARTXERSHIP. 89* ment is res inter alios acta, which does not affect them iu any way ; (s) and it is obvious that an admission of *the existence of a ^ r*89 partnership might be explained as true only iu this limited '- sense, in which case the admission might be worth nothing. Usual evidence of partnership. — The following is the kind of evi- dence usually had recourse to for the purpose of proving the existence of an alleged partnership or quasi partnership : Agreements in writing and deeds showing the right to share profits. If the signa- ture to a deed is proved, its due execution is inferred. (<) To prove who constituted a firm of A & Co., the attorney of B & Co. cannot be compelled to produce an agree- ment made between A & Co. and B & Co., if he objects on the ground of professional confidence, (u) ^' Admissions, (x) as to which, see ante pp. *87, ^SS. declarations of the deceased that the two had bought the mill in partnership, no terms of partnership being stated, were not sufficient evidence of a partnership, as such declarations might well consist with the existence of no more than a tenancy in common. Gregory v. Martin, 78 III. 38. Plaintiffs advised defendants of a pur- chase made by one A, claiming to be a partner in their firm. Defendants answered, promising to settle plaintiff's account, saying, " We will make the arrangement, &c. We thought it settled before, as we sent the money by A last win- ter," &c. Held, that these admissions, as tending to show a partnership, were suf- ficient to entitle the plaintiffs to recover. Cleghorn v. Johnson, 11 Iowa 292. Where, on a trial involving the ques- tio-n whether A was the partner of B, it appeared that on one occasion A was asked whether he was " in company in the store with B," and answered " Yes ;" and the jury returned a verdict negativ- ing the fact of a partnership, the court set aside the verdict, and granted a new trial. Palmer v. Pinkham, 33 Me. 32. Although the bare declarations of B and C that A was their partner are in- sufficient to charge him, their acknowledg- ments that articles of copartnership ex- isted between them and A, which they refused to produce upon the trial, after due notice, were held evidence from which a jury might reasonably infer that, if pro- duced, they would have shown the fact of a partnership. Whitney v. Sterling, 14 Johns. (N. Y.) 215. (s) Wilsford v. Wood, 1 Esp. 182; Vere v. Ashby, 10 Barn. & C. 288. The subject will be more fully examined in book II., eh. 2, 1 3. (<) Grellier v. Neale, 1 Peake 198. (w) Harris v. Hill, DowJ. & R. N. P. Cas. 17. 13. A mortgage deed of a partnership, relating to partnership business, executed by one of the firm, in the firm name, is evidence competent to be given to prove the existence of the partnership, though the deed was for a purpose foreign to the particular transaction or contract in the suit, where such evidence is sought to be introduced. Crowell v. Western Reserve Bank, 3 Ohio St. 406. See, also, Thomas V. Moore, 71 Pa. St. 1,93. [x) Sangster v. Mazarredo, 1 Stark. 161 ; Harvey v. Kay, 9 Barn. & C. 356 ; Ralph V. Harvey, 1 Q. B. 845 ; Clay v. Langslow, 1 Moo. & M. 45, 119 89^ EVIDENCE OF PARTNERSHIP. [book Advertisements, prospectuses, &c., containing the names of tlie alleged partners, (3/) and names over doors, (z) and on carts, (a) ^ * A7iswers in chancery containing admissions, (i) Bills to customers, J Circulars, V containing the names of tlie alleged partners, (c) ^® Invoices, ) Bills of exchange. The mode in which these have been drawn, accepted or en- dorsed has frequently been relied on with success, (d)^^ (y) Lake v. Argyll, G Q. B. 477 ; Bourne I'. Freeth, 9 Barn. & C. 632 ; Maudslay v. Le Blanc, 2 Car. & P. 409, note ; Reynell v. Lewis, 15 Mees. & W. 517 ; Wood v. Argyll, 6 Man. & G. 928. In Ex parte Matthews, 3 Ves. & B. 125, an advertisement of dis- solution was relied on. (z) Williams v. Keats, 2 Stark. 290. See, too, Pott V. Eyton, 3 C. B. 32, aiile p. *30. (a) Stables v. Eley, 1 Car. & P. 614, as to which, see ante p. *47. 14. The following advertisement shows a partnership: "People's Bank Stock- holders ; * * * every stockholder in- dividually responsible for all liabilities." Uhl V. Harvey, 78 Ind. 26. So, also, a subscription to the stock of a company in the partnership name may be given in evidence. Allen v. Kostain, 11 Serg. & E. (Pa.) 362. But an instruction to the jury that the presumption of a partnership from the use of a name such as is commonly used where a partnership exists, is slight and easily rebutted, affords no ground of exception. Charman v. Henshaw, 15 Gray (Mass.) 293. The fact that printed hand-bills, with the name of the firm signed thereto, were posted at various places in the town where de- fendant resided, and that one of them was posted on the door of the house where he boarded, is competent to be submitted to the jury. Tomlin v. Goldsmith, 40 Ga. 221. See, also, Barcroft v. Haworth, 29 Iowa 462. (6) Studdy v. Saunders, 2 Dowl. & R. 347 ; Grant v. Jackson, 1 Peake 268. (c) Young V. Axtell, 2 H. Bl. 242; Norton v. Seymour, 3 C. B. 792. 15. It is competent to show how the sup- posed firm made out their accounts, kept their books, and even marked boxes of merchandise ; but to make such proof available it must be shown that the party against whom it is offered had some agency in these acts, or impliedly or ex- pressly sanctioned or approved them. Mc- Neill V. Reynolds, 9 Ala. 313. But when the partnership of D. and M. was the ques- tion in issue, it was held that bills of gooda made out against D. alone, and found in a drawer in the room where the business was carried on, were inadmissible on be- half of M. to prove that no copartnership existed between them. McNamara v. Draft, 33 Iowa 385. In Tliomas v. Moore (71 Pa. St. 193), where B. sold part of a coal lease with the personal property to M., who constituted O. his attorney, it was held that orders drawn for goods by B. on a firm, " B. & Co.," in favor of the plaintiffs, accepted by O., and proof that goods were furnished accordingly, were evidence of partnership between B. and M. (d) Spencer v. Billing, 3 Camp. 310 ; Guidon v. Robson, 2 Id. 302 ; Duncan v. Hill, 2 Brod. & B. 682 ; Guruey v. Evans, 3 Hurlst. & N. 122. 16. Promissory notes executed in the firm name, to parties in the habit of deal- ing with the firm, are evidence of partner- ship. Cook V. Frederick, 77 Ind. 406. In such cases the burden of proof is thrown upon the other partners to show that the note was given in a matter not relating to the partnership business, and that with the knowledge of the payee. Whitaker 1;. 120 ■CHAP. IV.] EVIDENCE OF PARTNERSHIP. *89-90* Drafts of agreements which have been acted upon, (e) Letters and memoranda showing an intention to give a person a share of profits, coupled with evidence that such intention was acted on. (/) ^Meetings. Attending and taking part in them;(^) requiring them to be ^^J called. (A) Payment of money into court. When in an action against two persons, as partners, they pay money into court, this does not amount to an admission of the partnership alleged to exist between them, but only of a joint liability to the extent of the amount paid in. {i) Recitals in agreements, {k) Registers. These do not affect a person whose name is in them unless he can be proved to have authorized the use of his name, (/) or unless there is some statute ap- plicable to the case. An entry in custom-house books made by one of three alleged partners, to the effect that he and the other two were jointly interested in certain goods, though conclusive as between them and the crown, is not so as between them and other persons. (?n) Release executed by all the alleged partners, {n) Verdict. A verdict of a jury finding the existence of a partnership upon the trial of an issue directed out of chancery, was held by Lord Kenyon conclusive evidence against the partners in a subsequent action brought against them by a creditor, (o) Use of property by several jointly. ( p) Witness. A witness may be asked not only who compose such and such a firm, but also whether named individuals do so. [q) To prove a partnership between A, in England, and B, in Spain, it has been held not enough to show that A once dwelt in a town in Spain, and that B resides and carries on business there under the name of A, B & Co., and that there is no one there of the name of A. (»') Brown, 16 Wend. (N. Y.) 505. But the (i) Charles v. Branker, 12 Mees. & W. mere fact that two persons sign a note 743. jointly is no evidence of a partnership [k) Leiden v. Lawrence, 2 N. R. 283. between them. Hopkins v. Smith, 11 {I) Fox v. Clifton, 6 Bing. 776. As to Johns. (N. Y.) 161. joint stock companies, see the volume on (e) Worts V. Pern, 3 Bro. P. C. 558. that subject. (/) Heyhoe v. Burge, 9 C. B. 431; (m) Ellis v. Watson, 2 Stark. 453. Baxter v. West, 1 Drew. & S. 173, where {n) Gibbons v. Wilcox, 2 Stark. 43. a partnership for seven years was proved (o) Whately v. Menheim, 2 Esp. 608. by an unsigned memorandum on which Qu. if this can be supported? See Coll. the parlies had acted. on Part. 532, quoting Mr. Starkie's com- {g) Lake v. Argyll, 6 Q. B. 477, and ments on the case. Wood V. Argyll, 6 Man. & G. 928 ; noticed ( p) Weaver, v. Prentice, 1 Esp. 369. ante p. *44. See, also, Peel v. Thomas, 15 See, as to co-owners who are not partners, C. B. 714. ante pp. *58, et seq. (h) Tredwen v. Bourne, 6 Mees. & W. (q) Acerro v. Petroni, 1 Stark. 100. 461. (r) Burgue v. De Tastet, 3 Stark. 53. 121 91* ILLEGAL PARTNEUSHIPS. [bOOK I.^ *CHAPTER V. [*9l OF ILLEGAL PARTNERSHIPS. Section I. — What Partnerships are Illegal, *91. Section II.— Consequences of Illegality, *102. Illegal partnerships. — la order that a partnership may result from a contract, such contract must not be illegal. This gives rise to twa questions which it is proposed to discuss in this chapter, viz. : . What partnerships are illegal. . What are the consequences of their being so. SECTION I. — WHAT PARTNERSHIPS ARE ILLEGAL. Illegality never presumed. — Illegality is never presumed, but must always be proved by those who assert its existence ; and, in order to show that a partnership is illegal, it is necessary to establish either that the object of the partnership is one the attainment of which ia contrary to law, or that, the object being legal, its attainment is sought in a manner which the law forbids. But proof that a firm has been guilty of an illegal act is not sufficient to bring the firm within the class of illegal partnerships ; for if this were enough, every partner- ship which does not pay its debts, or which commits any tort, or is guilty of culpable negligence, would be illegal, which is obviously absurd, (a) Neither does it, by any means, follow that because one or more clauses in a contract of partnership are illegal the partnership is itself illegal. (6) 1 (a) See Armstrong v. Armstrong, 3 (6) See R. v. Stainer, L. R., 1 Cr. Cas. Myl. & K. 64, 65; Sharp v. Taylor, 2 Ph. Res. 230; General Co. of Land Credit, 5 818 ; BreU ?;. Beckwith, 3 Jur. (N. S.) 31, Ch. 363. M. R ; Longworth's Executor's Case, 1 De 1. Validity of the contract, generally. Ct., F. & J. 17. See the judgment of Lord — There is nothing in the nature or es- Campbell. sence of a partnership which confines it 122 CHAP, v., § I.] ILLEGAL PARTNERSHIPS. 92* •=92] * Grounds of illegality. Public policy.— I. A partnership may be illegal upon the general ground that it is formed for a purpose forbidden by the current notions of morality, religion or public policy, A partnership, for example, formed for the purpose of deriving profits from the sale of obscene prints, or of books reviling or ridiculing the established religion, or for the procurement of mar- riages, or of public offices of trust, would be undoubtedly illegal, (c) In the time of Charles II., it seems to have been held that a contract for sharing the profits derived from the public exhibition of a human monster was illegal ; {d) but the writer is not aware of any modern case to the same effect, and the decision alluded to would not probably now be followed upon grounds of public policy. 2 to ordinary trade and commerce or to dealings in personal property. It may exist between attorneys, conveyancers, mechanics, owners of stage-coaches, arti- sans, or farmers, as well as between mer- chants an-d bankers, and also between dealers and speculators in real estate, without becoming void by operation of the statute of frauds. Chester v. Dick- inson, 45 How. (N. Y.) Pr. 325. Partners may modify, alter or dissolve their contract, as between themselves, either in whole or in part, provided they do not violate any principle of law or public policy. Solomon v. Solomon, 2 Ga. 18. The contract between them may be usu- rious, and yet make them liable as pai t- ners to third persons. Pierson v. Stein- myer, 4 Eich. (S. C ) 309. (c) See the title, "Illegal Contracts," in Chitty's and Pollock's treatises on the " Law of Contracts ; " and, as to the sale of offices, Sterry v. Clifton, 9 C. B. 110 ; and, as to associations for promulgating irre- ligious opinions, see Pare v. Clegg, 29 Beav. 589 ; Thornton v. Howe, 8 Jur. (N. S.) 663. (d) See Herring v. Walronnd, 2 Ch. Cas. 110. The thing exhibited was a pair of female children, having "two heads, four arms, four legs, and but one belly, where their two bodies were conjoined." 1 2. Partnership contracts opposed to public policy. — A partnership cannot be lawfully formed to carry on an illegal or fraudulent scheme. Sampson v. Shaw, 101 Mass. 145; Dunham v. Presby, 120 Id. 285. Thus, in Louisiana it is held that part- ners in a lease of the penitentiary can make no contract for the use or hire of the negro convicts, except in the employ- ments required by law. Any contract, express or implied, for any other use is against public policy and cannot be en- forced. Pratt V. McHatton, 11 La. Ann. 260. And in New York a city ordinance providing that every proposal for munici- pal work should contain the names of alt persons interested, prohibiting any secret agreement or understanding that one not named should become interested in any con- tract, it was held that a secret partnership between two persons that they were to be equally interested in the contract for work obtained by one of them, was illegal, being against public policy and contrary to positive law. Kelly v. Devlin, 58 How. (N. Y.) Pr. 487. The following partnership agreements have been held not to be void as contrary to public policy: A combination between several persons engaged in furnishing recruits to the army not to furnish them for less than so much, without the consent of all, and 23 92* ILLEGAL PARTNERSHIPS. [bOOK I., War. — Whilst two countries are at war it is, by the law of each country, illegal for persons resident in either to have dealings with persons resident in the other. A partnership, therefore, formed between persons resident in this country for the purpose of trading with an enemy's country is illegal ; and a fortiori is such a partner- shin illeo-al if one of the members of it is resident in that country, and .... is, therefore, an alien enemy, (e) But a partnership in this country for running a blockade established by one belligerent nation in the ports of another is not illegal ; for, subject to the risk of capture, a neutral may lawfully trade with a belligerent. (/) 3 Trading under an assumed name. — In this country a i^erson may legally carry on business under a name not his own ; and when a firm has an established reputation, and one of its members dies, it is not deemed wrong for the survivors to continue the business under the old name, although, perhaps, the reputation of the firm may have been due mainly, if not entirely, to the ability and integrity of *the ^^ deceased partner. The legal view of such conduct is in accord- ance with established usage, and it has been accordingly held not to be illegal for surviving partners to continue to carry on business under the old name, (g) 4 to share all profits and losses equally, bin v. Holt, 2 Kay & J. 66 ; Lewis v. Lang- Marsh V. Russell, 66 N. Y. 288 ; revers- don, 7 Sim. 421 ; and compare Thornbury ing 2 Lans. 310. v. Bevill, 1 You. & C. Ch. 554. An agreement between two partners 4. Survivor continuing use of firm that all earnings, perquisites and sa'^ries name. — A entered into a partnership with received by eitlier of them as a public B, dissolved it, formed with C a partner- officer shall be immediately turned in to ship under the name of "A & Co.," and the funds of the firm as firm property, died. His administrator conveyed to B Thurston v. Fairman, 9 Hun (N. Y.j 584. the right to use A's name in his business. (e) See Evans v. Richardson, 3 Mer. Held, that the administrator and B might 469. join in a bill in equity, under Mass Gen. {/) Ex parte Chavasse, 4 De G., J. & Stat., ch. 56, § 3, to restrain C from con- S. 655 ; The Helen, L. R. 1 Ad. & Ecc. 1. tinning to do business under the name of 3. Effect of war. — A partnership A & Co. Morse v. Hall, 109 Mass. 409. formed for the purj)ose of running the See, also, Bowman v. Floyd, 3 Allen (Mass.) blockade of the insurrectionary states 76, where the same court held that a re- during the civil war in the United States ceipt given by executors for money due and was held not to be illegal. Wallis v. paid to the estate of their testator, from Wheelock, 26 La. Ann. 246. See, also, liis former partners, in which the latter Leftwicli V. Clinton, 4 Lans. (N. Y.) 167 ; are mentioned by tlie name of the former De Leon v. Trevino, 49 Tex. 89 ; and U. partnership, under which they ronlinued S. Dig., tit. "War." to carry on business, will not be construed (g) See Bunn v. Guv, 4 East 190 ; An- as a written consent to tiie continued iTse 124 CHAP, v., § I.] ILLEGAL PARTNERSHIPS. 93* Speaking generally, and excluding cases specially provided for by statute, (/i) a partnership is not illegal simply because it carries on business under a name which does not disclose its members, e. g., under such a name as " The City Investment and Advance Company." (i) It is indeed said that it is illegal at common law for persons not incor- porated to assume to act as if they were, and that to trade mider such a name as the above is assuming to act as a corporation ; but even if assuming to act as a corporation is an offence at common law, which is very doubtful, (k) the offence is not committed by trading under a name which is by usage as applicable to an unincorporated as to an incorporated body, (l)^ of the former partner's name in the new business and firm, if it was executed and delivered merely for the purpose of ex- hibiting the settlement of the claim. As to the rights of the successors in business of a dissolved partnership to the use of the old firm name, trade-marks and labels, under the New York decisions, see Hazard v. Caswell, 46 N. Y. Super. Ct. 559 ; S. C., 57 How. Pr. 1 ; Lunt v. Lunt, 8 Abb. (N. Y.) N. Cas. 76; Lane v. Ar- nold, 13 Id. 73; S. C, 11 Daly 293; reversing 63 How. Pr. 40 ; Amstaedt v. Blumenfeld, N. Y. Dail. Reg., June 17th, 1884. {h) See, as to pawnbrokers, infra. (i) See Maughan v. Sharpe, 17 C. B. (N. S.) 443 ; Garrard v. Hardey, 5 Man. & G. 471; Ex parte Grisewood, 4 De G. & J. 544. (k) See 6 Man. & G. 107. and the vol- ume on Companies. {I) See the cases in the last note but one. An unincorporated society was held to have no right to be provisionally regis- tered under 7 and 8 Vict., c. 110, under a name which necessarily denoted a cor- poration, e. g., the Sea, Fire, &c.. Insur- ance Corporation. R. v. Whitemarsh, 14 Q. B 803. 5. Using false or fictitious firm name. — The provisions of the New York act of 1833 (Laws of 1833, ch. 281) in ref- erence to transacting business under ficti- 1 tious names, which prohibits a person from transacting business in the name of a partner not interested in the business, and which requires that where "& Co." is used it shall represent an actual partner, does not apply to or inelude the use of the real name of an actual partner, although such a partner is under a disability at the time. Zimmerman v. Erhard, 83 N. Y. 74; S. C, 60 How. Pr. 163. Where, therefore, a firm is composed of a hus- band and wife, the latter being repre- sented by the " ic Co." in the firm name, in the absence of any intention to impose upon the public by obtaining undue credit, and conceding that a married woman cannot be a partner of her hus- band, this is not a violation of the statute, lb. That statute, being highly penal, must be strictly construed ; its violation by the plaintiff" in an action against carriers for loss of goods shipped by him in the name of a dissolved firm, is not a good defence. Wood I'. Erie Ry. Co., 72 N. Y. 196; S. C, 28 Am. Rep. 125 ; affirming 9 Hun 648. But it has been heH under this statute that an action cannot be sustained on a contract which was made by plaintiflT while transacting business under the firm name, including the words "& Co.," when the addition of "& Co." did not represent an actual partner (Swords v. Owen, 43 How. 25 93* ILLEGAL PARTNERSHIPS. [bOOK I., 2. Profits of crime. — A partnership is illegal if formed for the pur- pose of deriving profit ftom a criminal offence, e. g., from smuggling, robbery, theft, &c. {m) A curious instance of partnership between two hio-hwaymen is said to have come before the courts in the last century, and to iiave been referred to by Lord Kenyon. As the case is not to be found in the reports, an abridged note of it is given below ; {n) but (N. Y.) Pr. 176) ; and that a quad part- ing Company." LafFerty v. Wheeler, 11 ner, i. e., one who is liable to third per- Daly (N. Y.) 194. sons as a partner, is a partner within the In Louisiana it is held that the statute meaning of the above statute. Greenwood of that state (Rev. Stat., |? 2668, 2669). V. Brink 1 Hun (N. Y.) 227; S. C, 3 preventing the use of the name of a per- Thomp. & C. 740. son not interested in the firm, is designed A<^ain, it has been held, under this to prohibit the obtaining of credit, but same statutory provision, that the fact not the giving of it. Kent v. Majoiner, that plaintiflT, in an action for violation of 36 La. Ann 259. a contract made in a'liother state to be In California the failure to allege corn- performed here, was doing business in pliance with Civil Code, §| 2466, 2468, such other state under a fictitious partner- reqiliring certain partnerships to file a ship name, is no defence to the action, certificate giving the names of the part- Stoddart v. Key, 62 How. (N. Y.) Pr. 137. ners, under penalty of legal incapacity to See, also, Ross v. Wigg, 34 Hun (N. Y.) sue, will not make a complaint by such 192, and Ellison v. Smoller, 1 City Ct. partnership demurrable; non-compliance (N. Y.) Rep. 484, in which last-cited case with the law is matter of defence. Phil- a local court holds a contrary doctrine. lips v. Goldtree, 13 Pac. Rep. 313. The bona fide holder of a note en- (m) See Biggs v. Lawrence, 3 T. R. dorsed by the payee under a false firm 454, and Stewart v. Gibson, 7 CI. & F, name, may recover on such note against 707, as to smuggling. The last case is both maker and endorser (distinguishing instructive on account of the care taken O'Toole V. Garvin, supra). Bull's Head to conceal the true nature of the illegal Bank v. McFeeters, 41 N. Y. Super. Ct. transactions. 215. See, also, Hegeman v. Hegeman, 8 {n) Everet v. Williams (2 Pothier on Daly (N. Y.) 1. Obligations, by Evans, p. 3, note citing Again, violation of the statute consti- Europ. Mag., 1787, vol. 2, p. 360) is said tutes no defence to an action by tlie firm to have been a suit instituted by one high- on a fidelity bond given by an employee, way man against another for an account in which the individual names of the of their plunder. The bill stated that the partners are given as well as the fictitious plaintiff was skilled in dealing in several firm name. Gay v. Seibold, 97 N. Y. commodities, such as plate, rings, watches, 472. &c. ; that the defendant applied to him But a violation of the statute is a good to become a partner ; that they entered defence to an action for the price of goods into partnership, and it was agreed that sold by plaintiff under a false partnership they should equally provide all sorts of name. O'Toole v. Garvin, 1 Hun (N. Y.) necessaries, such as horses, saddles, bridles, 92 ; S. C, 3 Thomp. & C. 118. and equally bear all expenses on the roads The statute has no application to the and at inns, taverns, alehouses, markets use of the term "Alderney Manufactur- and fairs; that the plaintiff and the de- 126 ■CHAP, v., § I.] ILLEGAL PARTXERSHIPS. 94* "94] there *is some doubt whether it actually occurred. Real or fictitious, it is a good illustratiow of an illegal partnership of the class in question, (o) 3. Partnerships illegal by special statutes. — A partnership is also illegal if formed for a purpose forbidden by statute, although inde- pendently of the statute there would be no illegality. At one time a distinction was taken between mala prohibita and mala in se, but this distinction has very properly long ceased to be recognized as of any value for legal purposes. What judicial tribunals have to regard is the law they are called on to administer, and what is forbidden by that law is illegal, whether it is also forbidden by the laws of morality and religion or not. ( p) 6 Observations on such acts. — Whether a partnership is illegal by virtue of any particular statute obviously depends upon the construc- tion of the statute in question. With reference, however, to those statutes which prohibit unqualified persons from carrying on certain trades *or businesses, it may be observed that such statutes are not infringed by an unqualified person who does nothing [*95 fendant proceeded jointly in the said business with good success on Hoiinslow Heath, where they dealt with a gentleman for a gold watoh ; and afterwards the de- fendant told the plaintiff that Finchley, in the county of Middlesex, was a good and convenient place to deal in, and that commodities were very plenty at Finch- ley, and it would be almost all clear gain to them ; that they went accordingly, and dealt with several gentlemen for divers watches, rings, swords, canes, hats, cloaks, horses, bridles, saddles, and other things ; that about a month afterwards the defend- ant informed the plaintiff that there was a gentleman at Blackheath who had a good horse, saddle, bridle, watch, sword, cane and other things to dispose of which he believed might be had for little or no money ; that they accordingly went and met with the said gentleman, and after some small discourse they dealt for the said horse, &c. ; that the plaintifTand the defendant continued their joint dealings together until Michaelmas, and dealt to- gether at several places, viz. : at Bagshot, Salisbury, Hampstead and elsewhere, to the amount of £2000 and upwards. The rest of the bill was in the ordinary form for a partnersliip account. The bill is said to have been dismissed, with costs to be paid by the counsel who signed it ; and the solicitors for the plaintiff were attached and fined £50 apiece. The plain- tiff and the defendant were, it is said, both hanged, and one of the solicitors for the plaintiff was afterwards transported. See 20 Eq. 280, note. (o) The case was referred to by Jessel, M. R., in 11 Ch. D. 195. ( p) See Aubert v. Maze, 2 Bos. & P. 371. 6. In New Jersey, under a statute de- claring that no one should prosecute bis suit except by himself or by a licensed attorney -at-law, it was held that one could not prosecute by two or more attorneys in partnership, since they could not bring themselves within the description of one licensed attorney-at-luw. Wilson v. Wilson, 2Halst. (N.J.) 791. 127 95* ILLEGAL PARTXERSPIIPS. [bOOK I.^ more thau share the profits arising from those trades or businesses, if they are iu fact carried on by persons who are duly qualified. The unqualified person is not within the mischief of the statutes in ques- tion, and the partnership of which he is a member is not therefore illegal, (ry) Prohibitory and penal acts. — Again, although a statute may in terms apparently prohibit an act or omission, and affix a penalty in case of disobedience, it does not necessarily follow that all transactions to which the penalty attaches are illegal. They are so if the statute i& really prohibitory, (r) but they are not so if the true construction of the statute is that the penalty is, as it were, the price of a license for doing what the statute apparently forbids, (s) Therefore it was held, in Brown v. Duncan, (t) that a firm of distillers was not illegal, although one of the firm carried on business as a reiail dealer in spirits within two miles of the distillery (contrary to 4 Geo. IV., c 94,. §§ 132, 133), and was not registered as one of the firm in the excise books (as required by 6 Geo. IV., c. 81, § 7). It may, however, be doubted whether the statutes iu question were properly construed by the court, iu) The most important instances of partnerships rendered illegal by statute are as follows : (a;) Attorneys and solicitors. — See infra, " Solicitors." Bankers. — By 7 and 8 Vict., c. 32, § 21, (y) all bankers are required, on the 1st day of January, in every year, to make a return to the stamp office of their names, residences and occupations, or in the case of a company or partnership, of the name, residence and occupation ^ of every member of the *company or partnership, and in -^ default a penalty of £50 is inflicted. Upon this act a question (q) See Raynard ;•. Chase, 1 B'.irr. 2, East 180. and infra, under the heads of " Medical (i) 10 Barn. & C. 93, and see Smith v. Practitioners," " Solicitors." Mawhood, 14 Mees. & W. 452. (r) Melliss v. Shirley Local Board, 16 (w) See " Pawnbrokers," infra. Q. B. D. 446 ; Cope v. Rowlands, 2 Mees. (x) For a list of trades, &c., regulated & W. 149; Bartlett v. Vinor, Carth. 252 ; by statute, see Pollock on Contracts (4th Taylor i'. The Crowland Gas and Coke ed.), Appendix F, note. Co., 10 Ex. 293. iy) Sections 8 and 29 of this act and (s) Smith V. Mawhood, 14 Mees. & W. parts of sections 9 and 23 are repealed by 452 ; Swan i-. The Bank of Scotland, 2 37 and 38 Vict., c. 96. Mont. & A. 661 ; Johnson v. Hudson, 11 128 CHAP, v., § I.] BANKERS. 96* might arise as to the legality of a banking partnership, or company, composed in part of members whose names are not returned. By two statutes, which have since been considerably modified, it was made unlawful for banking firms of more than six members to issue in London, or within sixty-five miles thereof, notes payable on demand or within six months after date, (z) Upon these statutes it was held that a banking company of more than six persons, associated for the purpose of issuing notes payable on demand or within six months after date, was not illegal unless it was proved that the company issued such notes within sixty-five miles of London, (a) Upon a similar statute relating to Ireland (6) it was held that in order to establish the illegality of a banking company upon the ground that its houses of business had been, from the time of the formation of the company until the commencement of the suit, and then were, at places in Ireland within fifty miles of Dublin, it was necessary to prove the existence of a place of business *within that limit for the whole time alleged. (•) The statutes in ^ question, moreover, have been held only to . ifect partnerships formed for the purpose of carrying on the busines of a banker, and not to interfere with the issue of notes by firm not carrying on such business. (2) 39 and 40 Geo. III., c. 28, § 15 ; 7 of more than six persons carrying on the Geo. IV., c. 46. See further, as to the business of bankers within sixty-five miles issue of notes, 9 Geo. IV, c. 23 ; 3 and of London. In other words, there are 4Wm. IV., c. 83, and c. 98 ; 7 and 8 three limits : (1) London and three miles Vicl., c. 32 ; Attorney-General v. Birk- round, in which the Bank of England has beck, 12 Q. B. D. 605; Broughton v. an exclusive monopoly. (2) The district Manchester and Salford Waterworks more than three but within sixty-five Co., 3 B. & A. 1 ; Bank of England v. miles of London, in which the monopoly Anderson, 3 Bing. N. C. 589; Bank of is divided* between the Bank of England England v. Booth, 2 Keen 466 ; and on and banking firms of less than six mem- appeal. Booth V. Bank of England, 6 Bing. bers, lawfully issuing notes before May, N. C. 415 ; and 7 CI. & F. 509. The 1844. (3) The district more than sixty- joint effect of the above enactments seems five miles from London, in which the to be that : (1.) The Bank of England can monopoly is divided between the Bank of alone issue, in London, or within three England and banking firms of six or more miles of it, notes payable to bearer on de- or less members, lawfully issuing notes mand. (2.) Beyond that limit such notes before May, 1844. may be issued by bankers' who were law- (a) Ransford ti.Copeland,6 Ad. & E.482. fully issuing them before May, 1844, (b) 6 Geo. IV, c. 42, § 10. under a license; but by no other bankers; (c) Hughes v. Thorpe, 5 Mees. & W. and not, therefore, by any banking firm 656. 129 9 97* INSURERS. , [book I., Brohers. — The statutes imposing penalties upon brokers, who acted as such in the city of London without being duly admitted so to do by the mayor and aldermen, have been repealed by 47 Vict., c. 3. Although unqualified brokers could not recover their commission, {d) yet they could recover from their principals money paid for them by their directions or in conformity with the usages of the share market, (e) Liability to penalties under the repealed statutes did itot protect a broker from answering interrogatories relating to his dealings and transactions if he was sued in respect of them by his principal. (/) Marine insurers. — By a statute now repealed it was made lawful for any society or partnership (except the two corporations mentioned in the act) to carry on the business of maritime insurance, or to lend money on bottomry, [g) This enactment gave rise to numerous de- cisions, which are frequently referred to as illustrating the consequences resulting from an illegal contract of partnership ; and they will be noticed hereafter when those consequences are examined. In the pre-ent place, however, it is not necessary to do more than collect them in a note for facility of reference, (h) The Marine Policy Stamp act, 30 Vict., c. 23, prevents marine in- j^„ „-j surances being effected otherwise than by written policies *duly stamped, [i) Consequently, if the members of a mutual in- surance company insure each other's ships without any policies, the insured has no remedy against the insurers in case of a loss, (k) Medical practitioners. — By 55 Geo. III., c. 194, § 14, unqualified medical men are prohibited from practicing ; and by the Medical act, (d) Cope V. Rowlands, 2 Mees. & W. M. & S. 751 ; Aubert v. Maze, 2 Bos. & P. 149. 37 1 ; Watts v. Brooks, 3 Ves. 6 1 2 ; Knowles (e) Smith v. Lindo, 4 C. B. (N. S.) 395, v. Haughton, 11 Id. 168. and 5 Id. 587 ; Pidgeon v. Burslem, 3 Ex. {i) They can now be stamped after their 465; Jessopp z). Lutwyche, 10 Ex. 614. execution on payment of a penalty (39 (/■) Green i). Weaver, 1 Sra. 404; Eob- Vict., c. 6, | 2); but a written policy is inson v. Kitchin, 8 De G., M. & CJ. 88, and still necessary. 21 Beav. 365. {k) See Edwards v. Aberayron Mutual ig) 6 Geo. I., c. 18, repealed by 5 Geo. Soc, 1 Q. B. D. 563; Ex parte Hargrove, IV., c. 114, I 1, as to insurances. 10 Ch. 542; Fisher v. Liverpool Marine (A) The following are the decisions on Insur. Co., L. R., 9 Q. B. 418 ; Smith's the above enactment : Mitchell v. Cock- Case, 4 Ch. 611; Brett v. Beckwith, 3 Jur. burn, 2 H. Bl. 379 ; Booth v. Hodgson, 6 (N. S.) 31 ; Bromley v. Williams, 32 Beav. T. R. 405 ; Lees v. Smith, 7 Id. 338 ; Har- 177. With these cases compare Martin's rison v. Millar, Id. 340, note ; Everth v. Case, 14 Eq. 148. Blackburne, 2 Stark. 66 ; Ex parte Bell, 1 130 CHAP, v., § I.] ILLEGAL PARTNERSHIPS. 98* 1858, (/) it is enacted (section 32) that no person shall be entitled to recover any charge in any court of law for any medical or surgical advice, attendance or for the performance of any operation, or for any medicine which he shall have both prescribed and supplied, unless he shall prove upon the trial that he is registered under the act. By the same act (section 40) penalties are inflicted on all persons who willfully and falsely pretend to be, or take or use the name or title of, a pliysi- cian, doctor of medicine, licentiate in medicine and surgery, bachelor of medicine, surgeon, general practitioner, or apot4iecary, or any name, title, addition or description implying that he is registered under the act, or is recognized by law as a physician, &c. Upon the above acts it has been decided that agreements contrary to 55 Geo. III. are illegal and cannot be enforced, (/n) but that a medical practitioner may maintain an action for attendances, &c,, although not registered when they took place, it being sufficient that he should be registered at the time of trial ; (ii) and there is nothing illegal in one member of 'a firm being registered in one character and another in another ; nor in their respectively attending to their appropriate branches of the profession ; nor in their jointly suing in respect of the services rendered by each in his own branch. (o) It has also *been [-^qq intimated by high authority that if only one member of a firm '- is duly registered, the requisitions of the statute are complied with ; (p) but the unregistered partner cannot lawfully act as a physician, sur- geon or apothecary, (q) Newspaper proprietors. — By 44 and 45 Vict., c. 60, § 8, the titles of newspapers aixl the names, occupations and residences of their pro- prietors are required to be registered with the registrar of joint stock companies, and penalties are payable on default. Patentees. — Prior to 1852 a patent for an invention contained a pro- {l) 21 and 22 Vict., c. 90. As to chem- and as to pretending to be a legally qnali- ists and druggists, see 31 and 32 Vict., c. fied practitioner, see Pedgrift j;.Chevallier, 121, and Pharmaceutical Soc. v. Lon. Sup- 8 C. B. (N. S.) 240 and 246 ; Ellis v. Kel- ply Assoc, 5 App. Cas. 857. ly, 6 Hurlst. & N. 222. The cases decided [m) Davies v. Makuna, 29 Ch. D. 596. upon the Apothecaries acts, 55 Geo. III., (n) Turner v. Reynali, 14 C. B. (N. S.) c 104, and 6 Geo. IV., c. 133, will be found 328. in 1 Chitty's Statutes. (o) lb. {q) Howarth v. Brearley, 19 Q. B. D. (p) Per Erie, C. J., lb. Compare the 303 ; Davies v. Makuna, 29 Ch. D. 596 ; cases in the next note. See, further, De Pharmaceutical Soc. i;. Lon. Supply Assoc, la Eosa v. Prieto, 16 C. B. (N. S.) 578 ; 5 App. Cas. 857. 131 99* PAWNBROKERS. [bOOK I., viso to the effect that the patent should be void if more than twelve per- sons became interested in it as partners, (r) But now there is no limit placed upon the number of persons who may be interested in a patented invention. Pawnbrokers. — By 35 and 36 Vict., c. 93, § 13, every pawnbroker is required to have his name legibly printed over the door of every shop or place where he carries on his business. Under the previous act, 39 and 40 Geo. III., c. 98, an agreement to carry on a pawnbroking business in partnership was illegal if it was part of the agreement that the names of some of the partners should be concealed, or, in other words, if it was part of the agreement that some of the partners should be dormant, (s) Whether these decisions apply to the present act is open to some doubt (see section 51), but they probably do. It is conceived, however, that pawnbroking may be legally carried on by a registered company if the name of the company is properly painted up. ^Solicitors. — By several statutes, it has long been unlawful •^ for any person, not duly qualified, to act by himself or an- other as a solicitor, or to suffer his name to be made use of upon the account or for the profit of an unqualified person, (i) Upon these statutes questions have arisen as to how far it is lawful for a qualified solicitor to share the profits of his business with" a person who is not qualified, and it has been held that there is no illegality in this where the non-qualified person does not share the profits in consideration of his acting in any manner as a solicitor, (w) For example, there is nothing illegal in an agreement that a surviving partner of a firm of solicitors shall share his profits with the widow of a late partner.(a;) But an agreement for a partnership, in the ordinary sense of the (r) Hiudmarch on Patents 66. See 38 Vict., c. 68, § 12. See, as to partner- Duvert'ier v. Fellowes, 5 Bing. 248, and ships between town clerks and other soil- on app'eal, 10 Barn. & C. 826, and 1 CI. & citors, Hughes v. Statham, 4 Barn. & C. p gg 187 ; and as to prosecutions by partners of (s) See Lewis ?j. Armstrong, 3 Myl. & K. clerks of the peace, see 5 and 6 Wm. IV., 53 ; Armstrong v. Lewis, 2 Cromp. & M. c. 76, P^ 102, and K. v. Fox, 1 El. & E. 729. 274; Gordon I'. Howden, 12C1. &F. 237; {u) Scott v. Miller, John.s. 220, is a Fraser v. Hill, 1 M'Queen 392. Com- strong case on this head, pare Brown v. Duncan, 10 Barn. & C. 93,. (x) Chandler v. Chandler, Jac. 225, and where one of a firm of distillers was not 6 Madd. 141; Sterrv v. Clifton, 9 C. B. licensed as required by the excise laws. 110; and see Aubin v. Holt, 2 Kay & J. (0 See 6 and 7 Vict., c. 73, 'i^^ 2, 26, 32; 66. See, also, supra, " Medical Practi- 23 and 24 Vict., c. 127, ? 26, and 37 and tioners." 132 CHAP, v., § I.] ILLEGAL PARTNERSHIPS. 100* word, between a person duly qualified and one who is not, is clearly illegal, (y) and if the agreement is in writing and is for a present part- nership, parol evidence cannot be admitted to show that it was not to take effect until both parties were qualified, {z) But an agreement between a solicitor and his articled clerk that the latter, when a soli- citor, shall become a partner with the former and share his profits retrospectively, is not illegal. (a) However, the statutes cannot be evaded by an agreement to the effect that the unqualified person shall receive a share of the profits as a salary, and that he shall not be a partner with the other. (6) Nor can a solicitor's clerk, unless himself qualified, act as a solicitor under cover of his *principars r^-,^, name, (c) It was, however, held that a person who had been duly examined, sworn and admitted, but who had not taken out his annual certificate, was not unqualified within the meaning of the act of Geo. II. ; (d) and since the act 6 and 7 Vict., c. 46, it has been held not unlawful for a qualified solicitor to act, upon the usual agency terms, as the solicitor of another solicitor who has not taken out his certificate, (e) It is illegal for two persons, one qualified and the other unqualified, to hold themselves out as partners, and to put both their names to bills of costs and other documents in which their names ought not to appear, unless they are qualified solicitors. (/) Theatrical representations. — By several statutes, now repealed, [g) it was unlawful to act any play for gain except under certain restrictions. Partnerships, therefore, for sharing profits to be derived from acting plays otherwise than in accordance with these acts were illegal. (A) Unincorporated joint stock companies with transferable shares. — The question whether unincorporated companies with transferable shares were illegal at conniion law or under the Bubble act of 1719 (6 Geo. iy) Williams v. Jones, 5 Barn. & C. (d) Re Hodgson, 3 Ad. & E. 224 ; and 108. See Scott v. Miller, Johns. 220. see Hodgkinson v. Mayer, 6 Ad. & E. 194. (a) Williams v. Jones, 5 Barn. & C. 108. (e) Ex parte Foley, 11 Beav. 456. (a) Ex parte Joyce, 4 Ch. D. 596. (/) Edmonson v. Davis, 4 Esp. 14. (6) Tench v. Roberts, 6 Madd. 145 ; Re (g) 10 Geo. II., c. 28 ; 25 Id., c. 36 (made Jackson, 1 Barn. & C. 270; see, too. Re perpetual by 28 Id., c. 19) ; and 28 Geo. Clark, 3 Dowl. & R. 260; Hopkinson v. III., c. 30 ; repealed by 6 and 7 Vict., c. 68. Smith, 1 Bing. 13. Qucere the effect on As to what is a theatre within this act, these cases of the act 28 and 29 Vict., c. see Davys v. Douglas, 4 Hurlst. & N. 180. 86, ante pp. '*^35, et seq. [h) Ewing v. Osbaldiston, 2 Myl. & C. (c) Hopkinson v. Smith, 1 Bing. 13 ; Re 53 ; De Begnis v. Armistead, 10 Bing. 107. Palmer, 2 Ad. & E. 686. 101* UNREGISTERED PARTNERSHIPS. [bOOK I., I., c. 18), will be found discussed in the volume on Companies. The question lias now only a historical interest. Unregistered partnerships^ &c. — By the Companies act, 1862, § 4, all banking partnership's of more than ten members, and all other part- nerships of more than twenty members, formed after the 2d of No- vember, 1862,(i) must be registered under that act, unless formed in pursuance of some special act, charter or letters patent, or for working mines in the stannaries; and any partnership required to be registered, . and *not registered, is illegal. (A;) This subject will be found "■^ more fully examined in the volume on Companies. SECTION II. — CONSEQUENCES OF ILLEGALITY. Consequences of illegality. — If a partnership when it is formed will be illegal, any contract to form it must be illegal also. Upon this ground it was held, in Duvergler v. Fellowes, (l) that a bond for the payment of money upon the formation, by the obligee, of an illegal company was invalid ; and in \yilliams v. Jones, (m) that no action lay for the recovery of a premium agreed to be paid by the defendant on being taken into partnership with the plaintiff, and which partner- ship was illegal. Enforcing agreement. — ^An agreement for an illegal partnership will not be enforced even if it has been partly performed. Ewing v. Osbaldiston {n) is a good instance of this. There the plaintiff and the defendant agreed to become partners in a theatre. The plaintiff advanced part of the money, and the defendant applied it in part pay- ment for a lease of the theatre. The lease was afterwards assigned to him alone. The defendant did not perform his part of the agreement, (i) See, as to this, Shaw v. Simmons, 12 though overruled by Smith v. Anderson, Q. B. D. 117 ; and, as to what associations 15 Ch. D. 247, on the necessity of registra- need not be registered. Smith v. Anderson, tion, would have been rightly decided if 15 Ch. D. 247. the association had required registration. {k) Jennings v. Hammond, 9 Q. B. D. (/) 5 Biqg. 248 ; 10 Barn. & C. 826 ; and 225; Shaw v. Benson, 11 Id. 563; Ex 1 CI. & F. 39. parte Poppleton, 14 Q. B. D. 379 ; Pad- (m) 5 Barn. & C. 108. stow Total Loss Assoc, 20 Ch. D. 137. (n) 2 Myl. & C. 53. Sykes v. Beadon, 11 Ch. D. 170, al- 134 CHAP, v., § II.] CONSEQUENCES OF ILLEGALITY. 102* and the plaintiff accordingly filed a bill against him. The bill prayed that it might be declared that the plaintiiF and the defendant were partners in the theatre and in the lease thereof, and that the agreement made between the plaintiff and the defendant might be performed, and, if necessary, that the partnership might be dissolved and the usual accounts taken. The agreement, however, was illegal by 10 Geo. IL, c. 28, and the bill was dismissed. It was decided, on appeal, that the agreement being illegal, it was impossible for the court to decree its specific performance, and that if the plaintiflF sought to recover back *the money he had paid, he could not do so in that suit as (even r^-, ,«<, if he had a lien on the property for the money which the court denied) the bill did not seek to enforce such lien. Aotions by an illegal partnership. — If a partnership is illegal, its members cannot maintain any action in respect of any transaction tainted with illegality. For example, if a partnership is formed for selling smuggled goocts, it cannot recover the price of any smuggled goods which it may have sold, (o) So, an illegal loan society cannot recover money it has lent, {p) But an illegal partnership can prose- cute a person stealing its property. (g)7 Actions against an illegal partnership. — The illegality of a partner- ship affords no reason why it should not be sued. It cannot, indeed, be effectually sued by any person who, being aware of all the facts, seeks to enforce a demand arising out of a transaction tainted with the illegality which affects the firm, (r) but the illegality of the firm does not per se afford any answer to a demand against it arising out of a transaction to which it is a party, and which transaction is legal in itself. Unless the person dealing with the firm is partlceps criminis, there can be no turpis causa to bring him within the operation of the rule ex turpi causa non oritur actio, and he, not being implicated in any illegal act himself, cannot be prejudiced by the fact that the persons with whom he has been dealing are illegally associated in partnership, (s) (o) See Biggs v. Lawrence, 3 T. R. 454. debts, such persons cannot maintain an (p) Shaw V. Benson, 11 Q. B. D. 563; action of trespass, quare clausum /regit, Jennings v. Hammond, 9 Id. 225. jointly against a person who forcibly (q) See R. v. Frankland, Leigh & C. enters the storehouse and seizes the goods. 276 ; 9 Jur. (N. S.) 388 ; 32 L. J. M. C. 69. McPherson v. Pemberton, 1 Jones (N. C.) 7. Wiiere persons enter into a copart- L. 378. nersh-ip with the fraudulent purpose of (r) Re South Wales Atlantic Steamship hindering or delaying the creditors of one Co., 2 Ch. D. 7G3. of the parties in tiie collection of their (s) See the judgment of Mellish, L. J., 135 103* CONSEQUENCES OF ILLEGALITY. [bOOK I., So, if a partnership or company has been established l)y fraud, and persons have been induced to join it by false and fraudulent represen- tations, still the fraud so perpetrated affords no answer to a creditor of the firm, (t) unless that creditor has himself been party to the fraud, {u) Moreover, where a company has been established by fraud and where it has been engaged in illegal transactions, the innocent ^ shareholders *are nevertheless liable amongst themselves to -' contribute, if necessary, to the payment of the debts of the company ; for such shareholders are not so in delicto as to preclude any one of them from calling on the others to share the losses to which he and they are liable, (x) Actions for contribution, &g. — The most important consequence, however, of illegality in a contract of partnership is that the members of the partnership have no remedy against each other for contribution or apj)ortionment in respect of the partnership dealings and transac- tions. However ungracious and morally reprehensible it may be for a person who has been engaged with another in various dealings and transactions to set up their illegality as a defence to a claim by that other, for an account and payment of his share of the profits made thereby, such a defence must be allowed to prevail in a court of justice. Were it not so, those who — ex hypothesi — have been guilty of a breach of the law would obtain the aid of the law in enforcing demands arising out of that very breach ; and not only would all laws be infringed with impunity, but, what is worse, their very infringement would become a ground for obtaining relief from those whose business it is to enforce them. For these reasons, therefore, and not from any greater favor to one party to an illegal transaction than to his companions, if pro- ceedings are instituted by one member of an illegal partnership against another in respect of the partnership transactions, it is competent to the defendant to resist the proceedings on the ground of illegality, (y-) There are, indeed, some old cases in which this deft^nce was not allowed to prevail ; (2) but they have been long overruled, (a) Moreover, if in the last case, and Brett v. Beckwith, 3 (y) See Sykes v. Beadon, 11 Ch. D. 170 ; Jur. (N. S.) 31, M. R. Holman v. Johnson, 1 Cowp. 341 ; Thoni- (<) Henderson v. The Royal Brit. Bank, son v. Thomson, 7 Ves. 470 ; Cousins v. 7 El. & B. 356. ' Smith, 13 Ves. 544. («) See Batty v. M'Cundie, 3 Car. & P. (2) Dover v. Opey, 2 Eq. Cas. Ab. 7 ; 203. Watts V. Brooks, 3 Ves. 611. (x) See Longworth's Executor's Case, (a) See the cases cited infra. Johns. 465 ; aflSrmed 1 De G., F. & J. 17. 136 CHAP, v., § II.] ILLEGAL PARTNERSHIPS. 104*-105* the illegality is brought to the notice of the court, it will, of its own accord, decline to interfere between the parties, although there may be no desire on their part to urge such an objection. (6) Illegality a defence at law. — When partnerships of marine insurers were illegal, it was *held that if one member of a firm of such piQK insurers paid all the losses sustained by the firm, he could not recover any part of the moneys paid from his copartners ; (c) and that if the premiums were received by one only, the others could not obtain their shares from him. [d) So, where there was an express covenant to pay such shares, the covenant was held to be invalid by reason of the illegality which tainted it ; (e) and even where an arbitrator had awarded what was to be paid by one partner to the other, it was held that the award could not be enforced. (/) These cases are of undoubted authority, and are always referred to as such, although the particular ground of illegality on which they rested no longer exists. It has, indeed, been held, in one or two cases of illegal partnership, that if one partner has paid losses at the special request of the other, who promised to pay his share afterwards, an action for such share may be sustained ; {g) but these cases cannot be reconciled with others, and must be taken to be overruled. In De Begnis v. Armistead, Qi) the plaintiff and the defendant entered into an illegal agreement for bring- ing out an opera and dividing the profits arising from it. By the agreement, the plaintiff was to pay the singers, and the defendant was to provide a theatre and pay the dancers. This was done ; but, instead of profits, there were losses, and on the whole account a balance was found due to the plaintiff. A bill for the balance was given by the defendant, and it was proved that the balance was made up of diffei'ent sums paid by the plaintiff at the defendant's request. It was never- theless held that the original agreement being illegal, the plaintiff could not recover the balance in question, either on the bill or the common money counts. Illegality a defence to an aooount. — Nor can an action for an account be sustained by one member of an illegal partnership against another, in respect of its dealings and transactions, {i) Thus, if an association is (6) Evans v. Eichardson, 3 Mer. 469. Faikney v. Reynous, 4 Burr. 2070. (c) Mitchell v. Cockburn, 2 H. Bl. 380. {h) De Begnis v. Armistead, 10 Bing. (d) Booth V. Hodgson, 6 T. R. 405. 107. See Fisher v. Bridges, 3 El. & B. (e) Lees v. Smith, 7 T. R. 338. 642, reversing S. C, 2 Id. 118. (/) Aubert v. Maze, 2 Bos. & P. 371. {i) Knowles v Haughton, 11 Ves. 168 ; {g) See Petrie v. Hannay, 3 T. R. 418 ; Armstrong v. Armstrong, 3 Myl. & K. 45 ', 137 106* CONSEQUENCES OF ILLEGALITY. [bOOK * 106] illegal by reason of non-registration under the Companies act, 1862, an action cannot be sustained by its members against its trustees for the execution of their trust, nor to make them responsible for losses arising from breaches of trust, (k) 8 Concealed illegality. — Moreover, if it can be shown that the pur- pose with which a partnership was formed was illegal, the conse- quences of illegality will follow, however skillfully the true purpose may have been concealed ; [l) and parol evidence may be given to show the existence of the illegality, however formally the partnership agree- ment may have been drawn up, and however successful the parties may have been in making that agreement legal on the face of it. (m) Illegality, when not a defence. — In order, however, that illegality may be a defence, it must affect the contract on which the plaintiff is compelled to rely, in order to make out his right to what he asks. It Harvey v. ColleU, 15 Sim. 332. reimburse one partner from the estate of (k) Sykes v. Beadon, 11 Cli. D. 170, is the other for any losses suffered or debts an authority for this proposition, although contracted in the business of gambling, overruled on another ground, ante p. *101. nor for t-he settlement of the business of 8. Accounting between partners en- the partnership. gaged in illegal business. — One partner On the other hand, in Belcher v. Con- cannot sue the other for an account of ner (1 So. Car. 85), it was held that the profits made in Confederate money trans- fact that the partnership was for the pur- actions ; nor can the complainant sustain chase and sale of slaves will not prevent such action in respect of profits realized one partner from maintaining a bill in on dealings of a lawful character if the equity against his copartner for an ac- latter are so blended with Confederate counting. (See, also, McGunn v. Hanlin, money transactions that it is impossible to 29 Mich. 476.) And iu Pfeiffer v. Malt- so separate them as to give effect to the by (38 Tex. 323), the fact that a firm sold legal transactions alone. Zane v. Thomas, some wares manufactured by them to the 37 Tex. 157. Confederate States was held not to defeat But if, in a suit to settle the partnership, a suit by one of the firm for an account, it appears that a part of a partnership So, also, after a partnership contract business was legal and a part illegal, the confessedly against public policy has been court may take charge of that portion carried out, and money contributed by which is legal, and appoint a receiver one of the partners has passed into other therefor. Anderson v. Powell, 44 Iowa forms, a partner, in whose hands the pro- 20. fits are, cannot refuse to account for and Thus, in Watson v. Fletcher (7 Graft, divide them, on the ground of the illegal (Va.) 1), where it appeared in evidence, character of the original contract. Brooks but not in the pleadings, in an equity v. Martin, 2 Wall. (U. S.) 70. case, that the partnership, whose accounts (l) Stewart v. Gibson, 7 01. & F. 707; were to be settled in the suit, was for Armstrong t>. Armstrong, 3 Myl. & K. 53. gambling purposes, it was held that a (m) See Collins v. Blantern, 2 Wils. court of equity would not lend its aid to 341, and 1 Sm. L. Cas., and the notes there. 138 CHAP, v., § II.] ILLEGAL PARTNERSHIPS. 106* by no means follows, from the circumstance that money has been obtained in breach of some law, that therefore whoever is in posses- sion of such money is entitled to keep it in his own pocket. Effect of illegality on the 7'ight to recover back subscriptions. — If money is paid by A to B to be applied by him for some illegal pur- pose, it is competent for A to require B to hand back the money if he, B, has not already parted with it,(?i) and the illegal purpose has not been carried out. (o) Although, therefore, the subscribers to an illegal company have not a right to an account of the dealings and transactions of that company and of the profits made thereby, they have a right to have their subscriptions returned ;fj}) and ev^en though the moneys subscribed have been laid out in the purchase of land *and ^ [107 other things for the purpose of the company, the subscribers ■=- are entitled to have that land and those things reconverted into money, and to have it applied, as fkr as it will go, in payment of the debts and liabilities of the concern, and then in repayment of the subscrip- tions. In such cases, no illegal contract is sought to be enforced ; on the contrary, the continuance of what is illegal is sought to be pre- vented, {q) Again, Tenant v. Elliott, (r) and other cases, decided that if A and B are parties to an illegal contract, and B, in pursuance thereof, pays money to C for A's use, A can recover this money from, C. It follows from this that if two partners, A and B, enter into an illegal agree- ment with C, and, in pursuance of this agreement, C pays money to D for the use of A and B, not only can A and B recover tliis money from D, but if he pays it over to either one of the two partners, that one must account to the other for his share of it. This must also be the case if C, instead of paying the money to D, pays it over at once to A or B. In other words, it follows from Tenant v. Elliott and that class of cases that if an illegal act has been performed in carry- ing on the business of a legal partnership, and gain has accrued to the (n) See Taylor v. Lendy, 9 East 49 ; (q) Sheppard v. Oxenford, 1 Kay & J. Varney v. Hickman, 5 C. B. 271 ; Diggle 491 ; Butt v. Monteaux, Id. 98. See, also, V. Kiggs, L. R., 2 Ex. D. 422 ; Hampden Symes v. Hughes, 9 Eq. 475 ; Taylor v. V. Walsh, 1 Q. B. D. 189 ; Taylor v. Bowers, 1 Q. B. D. 291. Bowers, Id. 291. (r) Tenant v. Elliott, 1 Bos. & P. 3 • (o) See Herman v. Jeuchner, 15 Q. B. Farmer v. Russell, Id. 296 ; Bousfield v- D. 561. Wilson, 16 Mees. & W. 185 ; Nicholson v. (p) See Harvey v. Collett, 15 Sim. 332- Gooch, 5 El. & B. 999. Compare the cases in the next note. 139 107* CONSEQUENCES OF ILLEGALITY. [bOOK I., partnership from such act, and the money representing that gain has been actually paid to one of the partners for the use of himself and copartners, he cannot set up the illegality of the act from which the gain accrued as an answer to a demand by them for tl>eir share of what he has received. Upon this principle, it was held, in Sharp v. Taylor, (s) that a partner was entitled to an account against his co- partner of moneys actually come to the hands of the latter from the employment of a ship in a manner not permitted by the navigation laws; and, in Sheppard v. Oxenford, (i) that the directors of an illegal company were liable to account *for the money received by -^ them on behalf of the company and for the use of its mem- bers. Illegality set up by executors. — An executor or administrator of a deceased partner cannot protect himself from accounting for the estate of the deceased by setting up against his creditors, legatees or next of kin the illegality of the transactions in which the deceased may have been concerned, (u) That has nothing to do with their claims ; and the reasons upon which the maxim "Ux turpi causa non oritur actio" is founded evidently have no application to such a case. Even if the executor was one of the deceased's copartners, and was thus mixed up with him in the illegal transactions, still, if the share of the deceased in the gains arising from them has actually been placed to his credit in the partnership books, and has come, or might have come to the hands of the executor as such, he must account for that share, [x] But if there has been no account settled, it would seem that the ex- ecutor may, in his character of partner, rely on illegality, and decline to come to any account 'in respect of the gains in question, (y) Illegal trusts. — But, notwithstanding Tenant v. Elliott, Sharp v. Taylor, and other cases of that class, illegal trusts will not be enforced. Sykes V. Beadon, (2) already referred to, is a clear authority for this proposition. Another authority is Ottley v. Browne, (a) There A, who was a shareholder with B and others in two companies, wished to become a banker ; and in order to evade a statute which rendered it (s) 2 Ph. 801, recognized in Sheppard (2) See Joy y. Campbell, 1 Sch. &L. 328. V. Oxenford, 1 Kay & J. 491. Compare (y) See Ottley v. Browne, 1 Ball & B. Sykes v. Beadon, 11 Ch. D. 170. 360; and compare Sharp v. Taylor, 2 Ph. (<) 1 Kay & J. 491. See, too, Butt v. 801. Monteaux, Id. 98. (2) 11 Ch. D. 170, ante p. *105. (m) See Joy v. Campbell, 1 Sch. & L. (a) 1 Ball & B. 360; and see £x parte 339 ; Hale v. Hale, 4 Beav. 369. Mather, 3 Ves. 373. 140 CHAP, v., § II.] ILLEGAL PARTNERSHIPS. 108*-109* illegal for a banker to be a partner in commercial undertakings, (6) A assigned his shares to B in trust for himself. B, who carried on a separate trade, was made bankrupt, and his assignees sold all his shares in the above companies, and also the s-hares held by him in trust for A. A then filed a bill against B's assignees, praying that they might be declared trustees of these last shares for him, A, and that they might 'he ordered to pay the value *thereof to him, or that he might r*|Qg be at liberty to prove for such value against B's estate ; but the bill was dismissed with costs, on the ground that it sought to enforce a secret trust, which was directly against a positive law. (c) Indietment. — Before quitting the subject of the consequences of the illegality of a partnership, the risk of criminal prosecution ought to be mentioned. Persons engaged in an illegal business, whether partners or not, and whether incorporated or not, are liable to be punished criminally ; (d) and even where the object of a society is not illegal, its directors and managers will do well to bear in mind that if they willfully violate the provisions of an act of parliament, they are guilty of a misdemeanor, and are liable to be indicted accordingly, (e) (6) 29 Geo. IL, c. 16 (Irish). sell on Crimes, and Archbold's Criminal (c) The same principle is illustrated by Law. Thomson v. Thomson, 7 Ves. 470, which, (e) See Lord Campbell's observations^ however, was not a partnership case. in Longworth's Executor's Case, 1 De G.^ {d) See the title " Conspiracy " in Kus- F. & J. 31. 141 110* GENERAL NATURE OF A PARTNERSHIP. [bOOK I., *iiO] ^CHAPTER VI. OF THE GENERAL NATURE OF A PARTNERSHIP. Section I. — Of the Mercantile and Legal Notion of a Firm. Section II. — Consequences of the Non-recognition of the Firm in the Mercantile Sense. SECTION I. OF THE MERCANTILE AND THE LEGAL NOTION OP A FIRM. Mereantile view of a Jinn. — Partners are called collectively a firm. Merchants and lawyers have different notions respecting the nature of a firm, (a) Commercial men and accountants are apt to look upon a firm in the light in which lawyers look upon a corporation, i. e., as a body distinct from the members composing it, and having rights and obligations distinct from those of its members. Hence, in keep- ing partnership accounts the firm is made debtor to each partner for what he brings into the common stock, and each partner is made debtor to the firm for all that he takes out of that stock. In the mercantile view, partners are never indebted to each other in respect of partnership transactions, but are always either debtors to or creditors of the firm. Owing to this impersonification of the firm, there is a tendency to regard its rights and obligations as unaffected by the introduction of a new partner, or by the death or retirement of an old one. Notwith- standing such changes among its members, the firm is considered as continuing the same, and the rights and obligations of the old firm are reo;arded as continuins: in favor of or ag-ainst the new firm as if no o o o changes had *occurred. The partners are the agents and sure- ^^ ties of the firm — its agents for the transaction of its business; '- (a) See, on this subject, Cory's Treatise paper by J. M. Ludlow, Esq., " On the on Accounts (2d ed., 1839, Pickering), a Mercantile Notion of the Firm, and the valuable work, but, it is believed, not so Need of its Legal Recognition," in the see- widely known as it should be. See, too, a ond volume of the papers read before the 142 €HAP. YI., § I.] GENERAL NATURE OF A FIRM. Ill* its sureties for the liquidation of its liabilities so far as the assets of the firm are insufficient to meet them. The liabilities of the firm are regarded as the liabilities of the partners only in case they cannot be met by the firm and discharged out of its assets. Legal view of a firm. — But this is not the legal notion of a firm. The firm is not recognized by lawyers as distinct from the members composing it. (6) 1 In taking partnership accounts and in administer- ing partnership assets, courts have to some ex^ent adopted the mercan- tile view, and actions may now be brought by or against partners in the name of their firms ; (c) but speaking generally, the firm as such has no legal recognition. The law, ignoring the firm, looks to the part- ners composing it ; and any change amongst them destroys the identity of the firm. What is called the property of the firm is their property, and what are called the debts and liabilities of the firm are their debts and their liabilities. In point of law, a partner may be the debtor or the creditor of his copartners, but he cannot be either debtor or cred- itor of the firm of which he is himself a member. (cZ) A member of an ordinary partnership fills a double character ; he is both a principal and an agent. As a principal he is bound by what he does himself and by what his copartners do on behalf of the firm, provided they keep within the limits of their authority ; as an agent he binds them by what he does for the firm, provided he keeps within the limits of his authority. But a partner is not the surety of the firm. Every member of an ordinary partnership, however numerous the partners may be, is liable as a principal to have his private prop- erty seized for a partnership debt, whether the firm has assets to pay it or not ; and not only so, but the property of the firm is liable to be seized for the private debts of any of *the partners composing "^-' it. (e) This non-recognition of the firm, in the mercantile Juridical Society, p. 40. To both of these not require that the firm and not the in- the writer desires to acknowledge his ob- dividual lueiubers shall be taxed. Lanier ligations. v. The Mayor^ 59 Ga. 187. (6) Ex parte Gliddon, 13 Q. B. D. 43 ; (c) Rules of Sup. Ct., Ord. 16, rule 14 ; Hoare v. Oriental Bank Corporation, 2 Bank. Act, 1883, | 115, and Bank. Rules, App. Cas. 589, illustrate this ; and see per 1886, rule 259. James, L. J., in Ex parte Corbett, 14 Ch. (d) See Lord Cotteuhatu's judgment in D. 126. Richardson v. The Bank of England, 4 1. Each member of a firm of lawyers Myl. &0. 171, 172 ; and De Tastet t). Shaw, may be taxed separately, under an au- 1 B. & A. 664. thority to tax all persons exercising any (e) See " Execution," in book II., ch. 3, profession ; one member of sucii firm can- ? 4. 143 112* GENERAL NATURE OF A PARTNERSHIP. [bOOK I., sense of the word, is one of the most marked differences between part- nerships and incorporated companies. SECTION II. CONSEQUENCES OP THE NON-RECOGNITION OP THE FIRM IN THE MERCANTILE SENSE. 1. Generally, as regards its name. Name of a firm. — It follows from the foregoing remarks that the name under which a firm carries on business is, in point of law, a con- ventional name, applicable only to the persons who, on each particular occasion when the name is used, are members of the firm. (/) When a firm is spoken of by its name or style, evidence is admissible to show who in fact constituted the firm at the time in question ; (g) and if persons trade or carry on business under a name, style or firm, what- ever may be done by them under that name is as valid as if real names had been used. This is seen every day in the case of bills of exchange and promissory notes ; and even in the case of more formal^ instruments, there is no doubt of their validity, although some of the executing parties may be described as A & Co. {h) So, partners may be registered as shareholders in the name of their firm ; (i) and, under the Copyright act, 5 and 6 Vict., c. 45, *and Engravings act, r^^-i^o 8 Geo. II., c. 13, § 1, it is sufficient to register a book in the name of the firm, [j] or to print the name of the firm of proprietors under the engravings, (k) 2 (/) A firm is usually described in legal ment for a lease ; Moller v. Lambert, 2 proceedings as certain persons trading or Camp. 548, a bond ; Gorrie v. Woodley, carrying on business under and using the 17 Ir. C. L. 221, a guarantee ; Latouche name, style and firm of, &c. As to the v. Waley, Hayes & J. Ir. Ex. 43. Rovr sufficiency of tliis description, see Smith far the firm is bound by instruments on V. Ball, 9 Q. B. 361. which its true name does not appear will (gr) Carruthers v. Sheddon, 6 Taunt. 15 ; be seen hereafter ; and see, as to the par- Bass V. Clive, 4 Mau. & S. 13 ; Stubbs v. ties to sue on a covenant with a firm, Sargon, 2 Keen 255, and 3 Myl. & C. 507 ; Metcalf v. Rycroft, 6 Mau. & S. 75, noticed Latouche v. Waley, Hayes & J. Ir. Ex. 43. infra, book II., ch. 3. {h) See Maughan v. Sliarpe, 17 C. B. (i) Weikersheim's Case, 8 Ch. 831. (N. S.) 443, a mortgage; Brutton v. Bur- (j) Weldon v. Dicks, 10 Ch. D. 247. ton, 9 Chitty 707, a warrant of attorney ; (A) Rock r. Lazarus, 15 Eq. 104. Evans v. Curtis, 2 Car. & P. 296, an agree- 2. Firm name, generally.— The parties 144 CHAP. VI., § II.] LEGAL VIEW OF A FIEM. IIS^^ Effect of change amongst the partners. — But as the name of a firm is only a conventional mode of designating the persons composing it, any variation amongst these persons is productive of a new significa- to a copartnership may give it just such of both nominal firms are equally applica- a name as they please, and all contracts ble to the payment of all creditors of both. or obligations or notes, made with or Re Williams, 3 Woods (U. S.) 493. given to such firm, may be prosecuted in W here in the articles no name was the individual names of its members, agreed upon, and the concern went into Crawford u Collins, 45 Barb. (N. Y.) 269; operation under the articles, the books 30 How. Pr. 398. being kept, and the bills and accounts re- Persons doing business under a cor- lating to their transactions being made porate name, if not a corporation, are, it out at their warehouse, in the name of is said, inferred to be a partnership. Hoi- " H. & J.," it cannot be questioned but brook V. St. Paul F. & M. Ins. Co., 25 that a name thus assumed, recognized and Minn. 229. publicly used, became the legitimate name It is not necessary, in general, in deriv- and style of the firm, as fully as if it had ing a title through the endorsement of a been adopted by the articles of partner- firm, to allege in particular who the per- ship. Le Roy v. Johnson, 2 Pet. (U. S.) sons are composing that firm ; for if the 186. endorsement be made in the name of the An estimate for a corporation contract firm, by a person duly authorized, it gives purported by its title to be made by W. a complete title, whoever may compose and D., under the name and style of D., the firm. Nor is it necessary, in a decla- W. & Co. It was subscribed by each ration at the suit of the executor of a sur- individual name, and also by the firm Tiving partner, to set forth the names of name. Held, that it was to be treated as the firm. Childress v. Emory, 8 Wheat, a partnership act, and not as that of (U. S.) 642. the individual partners. People v. Croton Again, no firm name need be agreed Aqueduct Board, 5 Abb. (N. Y.) Pr., upon in the partnership articles. If there 316 ; affirmed, 6 Id. 42 ; S. C, 26 Barb, is evidence of an agreement to buy and 240. sell on joint account for mutual profit, F. C. and R. C. being in partnership, F. and if one partner, with the knowledge made a note, subscribing it *' F. C. & R. and assent, express or implied, of the C," coupling the two names together, other, is in the habit of using a certain Held, sufficient, as a partnership signa- name, it is sufficient to fix the liability of ture, to charge R., in the absence of proof the firm upon a note signed with that as to what was the firm name, except that name. Parsley v. Ramsey, 31 Ga. 403. in two instances the name of F. & R. C. So, it is not necessary that two firms, in was used. McGregor v. Cleveland, 5 different localities, entering into an agree- Wend. (N. Y.) 475. ment, in express terms, creating a partner- Using name of one of the partners, ship for the carrying on of a special busi- — A firm may do business under the ness, should adopt any partnership or firm name of one of the partners alone, and name. Wright v. Hooker, 10 N. Y". (6 can sue in all their names on contracts Seld.) 51. And where the same parties made in the name of such one alone, carry on the same business at different Martin v. Johnson, 8 Daly (N. Y.) 541. places, under diflferent partnership names, See, also, Ontario Bank v. Hennessey, 48 there are not two distinct firms ; the assets N. Y. 545. And bills of exchange, drawn 145 10 113* LEGAL VIEW OF A FIRM. [bOOK I., tion of the name. U, therefore, a legacy is left to a firm, the legacy is payable to those who compose the firm at the time the legacy upon and accepted by the partner whose tioned therein, and it appears upon its name is so used, will be recoverable face to be sini()ly the obligation of the co- against the firm, in the absence of proof partners contracted in their individual that such partner also carried on business names. lb. on his private account. Bank of Roches- Presumptions from use or disuse of ter V. Monteath, 1 Den. (N. Y.) 402; firm name. — Until a firm name is adopted Palmer 1). Stephens, Id. 47L the presumption is that each member is This right to use the name of one of the the agent of the others to transact the partners as a firm name is an exception firm business, even to the signing of the to the rule that one partner executing an names of the several members of the firm instrument intended to bind the firm must to writings executed i-n its legitimate busi- use the firm name. Williams v. Gillies, ness. Kitner v. Whitlock, 88 111. 514. 75 N. Y. 197 ; reversing 13 Hun 422 ; 53 Where a partnership is carried on in How. Pr. 429. the name of an individual, and a suit is A partner is not necessarily to be brought against the partners upon a note deemed dormant because his name does or other obligation signed by him, the not appear in the firm style. If he is not presumption is that it is the note of the an ostensible partner it is sufficient. And individual, and not of the partners. Plain- upon the question whether a member of a tiff, in order to recover against the part- partnership is a dormant partner, evi- ners, must not only prove execution of dence as to general reputation is admissi- the note, but also that the money was ble. Metcalf v. Officer, 2 Fed. Rep. 640 ; borrowed on the credit of the partnership, S. C, 1 McCrary (U. S.) 325. or used in its business. Oliphant v. Firm name need not be used to ren- Mathews, 16 Barb. (N. Y.) 608. der firm liable. — When funds or property It is no objection to a suit, upon notes are obtained on the obligation of only a payable to the plaintiff firm by their firm portion of the members of a firm, the fact name, that their consideration was a sale that the property thus obtained goes to the of goods to the defendant at a previous use of the firm is not of itself sufficient to time when one Vose was a partner, and render the firm liable. But where the the fact is immaterial. Whitlock v. Mc- property is not only obtained for and ap- Kechnie, 1 Bosw. (N. Y.) 427. plied to the benefit of the firm, but is so The use of " and company," after a obtained by the joint act and upon the firm name, creates a presumption that joint written obligation of all its mem- there is a partner not named, which, how- bers, and the credit is given to all, the ever, may be overcome by positive proof, transaction is in substance a copartnership lb; The Francis, 1 Gall. (U. S.) filS; transaction, though the firm name is not The San Jos4 Indiano, 2 Id. 268. But actually used in the writing, and though see Robinson v. Magarity (28 111. 423), the partners may have superadded to their where it is held that there is no presurap- joint obligation the several liability of tion of law or fact that a firm name in- each of them. Ct. of App , Jan., 1879. eludes more than one person; and if it is Berkshire Woolen Co. v. Juillard, 75 N. desired that the names of plainiiffs should Y. 535, 540; affirming 13 Han 506. Such be shown, the fact of partnership must be an obligation is payable out of the firm put in issue by a verified plea, assets, although the firm name is not men- The mere fact that an abbreviated 146 CHAP. VI., § II.] LEGAL VIEW OF A FIRM. 113^ vests ; (l) and, if a legacy is left to the representatives of an old firm, it will be payable to the executors of the last survivor of the partners constituting the firm alkided to, and not to its successors in business, (m) Advances to a. firm. — Again, if trustees are authorized to lend money to a firm, and, after the death or retirement of one of the members, the trustees lend to the remaining members, this, it seems, would be a breach of trust on the part of the trustees, (n) Agency. — An authority given to two partners to insure in their names does not authorize an insurance in the names of themselves and a third person afterwards taken into partnership with them, (o) So, if there be a firm. A, B and C, and it has an agent, D, and C retires from the firm, though D may continue the agent of the firm, he is no longer the agent of C, but ouly of A and B, (p) In Tasker v. Shep- herd, two partners had appointed an agent for four years and a half. One of the partners having died before the expiration of that time, it was held that the surviving partner was under no obligation to continue the agent in his employ. The court held that the appointment had *114] reference to the existing partnership only, *and that the con- tract was intended to be for four years and a half, provided the parties so long lived, {q) 3 form, as "Chas. & Wm. Feiokert," in- stead of " CBarles Feickert and William Feickert," is used in describing the payees of a note, does not, as a matter of law, authorize the public to assume they were partners. Ryhiner v. Feickert, 92 111. 305. (/) See Stubbs v. Sargon, 2 Keen 255, and 3 Myl. & C. 507. In Mayberry v. Brooking, 7 De G., M. & G. 673, a legacy of a debt due to A was held to pass A's interest in a debt due to him and his co- partners. See, also. Ex parte Kirk, 5 Ch. D. 800. (m) Leak v. McDowall, 3 N. R. 185, M. R.; Kerrison v. Reddington, 11 Ir. Eq. 451. See Greville v. Greville, 27 Beav. 594. {n) See Fowler v. Raynal, 2 De G. & S. 749, and 3 Macn. & G. 500. (o) Barron v. Fitzgerald, 6 Bing. N. C. 201. But of course a continuance of the authority may be inferred from the deal- ings of the person giving it with the changing firms. See Pariente v. Lubbock, 8 De G., M. & G. 5. (p) See Jones v. Shears, 4 Ad. & E. 832. iq) Tasker v. Shepherd, 6 Hurlst. & N. 575. 3. Agency. — The agent of a firm is not the agent of the individual partners, but of the partnership, collectively. John- ston V. Brown, 18 La. Ann. 330. An agency is revoked by the death of a member of the partnership, even though it arises from the fact of the partnership relation existing between the principal and the agent. Travers v. Crane, 15 Cal. 12. But compare Bank of N. Y. v. Van- derhorst (32 N. Y. 553), where it was held that where an agent of a firm, authorized to draw its moneys from the bank and ap- ply the same to the uses of the firm, con- tinues to do so after the death of one of the members, without knowledge on his part or on tiie part of the bank, of such 147 114* LEGAL VIEW OF A FIRM. [bOOK I.^ Offices held by a firm. — Upon the same principle, namely, that the name of the firm is only a conventional name for its members, if a firm is appointed by its mercantile name to any office, e. g., the office of trustee, guardian or executor, the partners in the house at the time of its appointment to the office are the persons who, in point of law, are considered as filling it, (?•) The firm as such cannot hold an office, nor can rights personal to the members of a given firm be exercised by new members who may be introduced into it, (s) nor by its succes- sors in business, (t) unless they are clearly intended to exercise them. Protection of name. — The name by which a firm is known is not of itself the property of the firm, and there is nothing at common law to prevent persons from carrying on business in partnership under any name they please, unless perhaps it purports to be the name of a corporation, [u) But one firm is not at liberty to mislead the public by so using the name of another firm as to pass off themselves or their goods for that other, or for the goods of that other, (a;) Moreover, an established firm can prevent a company from registering itself under the name of the firm, [y) 4 death, he acts within the scope of his (r) De Mazar v. Pybns, and Knudson v. authority, and his acts bind the firm. Pybus, 4 Ves. 649. See, also, Wilson v. Stewart, 5 Pa. L, J. (s) See Barron v. Fitzgerald, 6 Bing. 450. N. C. 201 ; Stevens v. Benning, 1 Kay & So, also, the dissolution of a partnership J. 168. revokes a power of attorney given by the {t) Hole v. Bradbury, 12 Ch. D. 886. firm. Schlater v. Winpenny, 75 Pa. St. (u) See, as to this, an/e p. *93. 321. But a mere change in the name of {x) See Lee v. Haley, 5 Ch. 155; Mas- a firm, tho firm under the new name being sam v. Thorley's Cattle Food Co., 14 Ch. composed of the same persons as that un- D. 748 ; reversing S. C, 6 Ch. D. 574 j der the old one, does not revoke an agency Burgess v. Burgess, 3 D. G. M. 896. See, conferred upon it. Billingsley v. Dawson, also. Singer Machine Manufacturers v. 27 Iowa 210. Wilson, 3 App. Cas. 376, and Singer Man. S. was a member of a transportation Co. v. Loog, 18 Ch. D. 395, and 8 App. firm, and carried on the business at A., Cas. 15 ; Braham v. Beachim, 7 Ch. D. and a similar business at the same place 848. alone, and drew checks in the name of {y) Hendricks !;. Montagu, 17 Ch. D. " S., agent," indifi'erently, in his own and 638. The Copyright acts have no ap- the firm business. The firm being sued plication to mere names. See Maxwell v. on such checks— Held, that the other part- Hogg, 2 Ch. 307. ners had a right to prove that the checks 4. Protection of name. — A purchaser in question were drawn on the private of all the partnership property, on the dis- account of S. Mechanics' and Farmers' solution of a firm, does not thereby acquire Bank v. Dakin, 24 Wend. (N. Y.) 411. the right to use the firm name as a label 148 CHAP. VI., § II.] LEGAL VIEW OF A FIRM. 114* Name a trade-mark. — The name of a firm may moreover be regis- tered as a trade-mark for particular classes of goods (46 and 47 Vict., c. 57, §§ 64 and 65), and if so registered it is capable of being assigned in connection with the good will of the firm. Section 70. Registra- tion is equivalent to antecedent use. Section 75. Provision is made *to prevent the impi'oper registration of the same trade-mark p^-. -, - by several persons. Section 72. Changes and mistakes in name of a firm. — Speaking generally, the rights and liabilities of a firm cannot be affected by a change in its name, unaccompanied by a change amongst its members. Regarded as a trade-mark, and in connection with good will, a change in name may be attended by important consequences, but, in other respects, it matters little ; for so long as there is no change amongst the members, the different names they assume all denote the same persons. It must not, however, be concluded that one partner can bind his copartners by using a name under which he and they do not carry on business, and the use of which they have not sanctioned ; and, as will be seen hereafter, he has no power so to bind them, (z) Moreover, a mistake in the name of a firm may be important ; e. g., under the Copyright act^ if the owners of a copyright carry on business in partnership, and are not registered properly, they cannot sue far an infringement, (a) 2. In legal pr'oceedings. Actions by and against firms. — The non-recognition of the firm, in on his goods, or to advertise himself as ing to do business under the corporate successor of such firm, and will be re- name, allaging that the defendants' pre- strained in so doing. Reeves v. Denicke, tended corporation no longer existed. 12 Abb. (N. Y.) Pr., N. s , 92. Held, not sufficient ground for the relief A company claiming to have been in- sought. If the defendants were no longer corporated under the laws of Michigan, incorporated, or if their original organiza- commenced business in Illinois under an tion as a corporation was illegal, they assumed corporate name. Subsequently still had a right to prosecute their business another company became incorporated as partners, and under any name they by the same corporate name, under the saw fit to adopt. Ottoman Cahvey Corn- laws of Illinois, and commenced business pany v. Dane, 95 111. 203. in the same city in which the first men- (z) See, as to this. Kirk v. Blurton, 9 tioned company was established. The Mees. & W. 284, and other cases of that company organized under the laws of class, noticed infra, book II., ch. 1, § 5. Illinois sued to restrain the persons com- (a) Low v. Routledge, 1 Ch. 42. posing the other company from continu- 149 115* LEGAL VIEW OF A FIRM. [bOOK L, a mercantile sense, was very apparent when it had to sue or be sued at law ; for, 1. A firm could neither sue nor be sued otherwise than in the names of the partners composing it. (6) 2. Consequently, no action could be brought by the firm against one of its partners, nor by one of its partners against it ; for in any such action one person, at least, would appear both as plaintiff and as defendant, and it was considered absurd for any person to sue himself even in form, (c) 3. For the same reason, one firm could not bring an action -, *ao-ain3t another if there were one or more partners common *116l to both firms, {d) So, if one member of a firm drew a bill on the firm, and the bill was accepted in the name of the firm, the drawer could not sue the firm on such a bill ; for he, as one of the firm, was liable as an acceptor, and ought, therefore, to be a defendant to the action in which he was plaintiff, (e) The extent to which these rules have been modified by modern legislation will be examined hereafter. (/) They are alluded to here in order to show the logical consequences which flow from the non- recognition of any such entity as a firm. In bankruptcy, however, the firm is often recognized, as will be seen hereafter. 5 (6) Seeinfra,booklL,ch.3. A corpora- proper names ; it is not sufficient to use tiou may sue in a name it has acquired the style of the firm. Seeley v. Schenck, by reputation. The Dutch West India 1 Pen. (N. J.) 75 ; Crandall f. Denny, Id. Co. V. Moses, I Str. 612. As to actions by 137 ; Burns v. Hall, Id. 984 ; Bentley v. individuals who have assumed to act as gmith, 3 Cai. (N. Y.) 170; Tomliuson v. a corporation, see Cooch v. Goodman, 2 Burke, 5 Halst. (N. J.) 295; Porter v. Q. B. 580. Cresson, 10 Serg. & R. (Pa.) 257; Pate v. (c) De Tastet v. Shaw, 1 B. & A. 664; Bacon, 6 Munf. (Va.) 219; Marshall v. Richardson v. The Bank of England, 4 Hull, 8 Yerg. (Tenn.) 101; Smiths. Can- Myl. & C. 171, 172. field, 8 Mich. 493. In some jurisdictions, (d) Bosanquet v. Wray, 6 Taunt. 597 , however, a partnership may sue on a debt Mainwaring v. Newman, 2 Bos. & P. 120. due to the firm in the partnership name. (e) See Neale v. Turton, 4 Bing. 1.49. Johnson v. Smith, 1 Morr. (Iowa) 105; Compare Beecham v. Smith, El., B. & E. Abernathy v. Latimore, 19 Oliio 286. See, 442, where the note sued upon was the also, Haskins v. Alcott, 13 Ohio St. 210. several note of the defendants. In Texas, if the individual names appear (/) See infra, book II., ch. 3. in the petition, the name of the firm may 5. Actions in the firm name.— The be used in the citation. Andrews v. Ennis, prevailing rule in this country is that 16 Tex. 45. copartners must sue and he sued in their So, also, an unincorporated company can- 150 CHAP. VI., § II.] LEGAL VIEW OF A FIRM. 116* Efed of change in a firm on its rights and liabilities. — Another most important consequence of the principle that on any change amongst the persons composing a partnership there is, in fact, a new partner- ship, and not a mere continuation of the old one, is that although, upon a change in a firm, it may be agreed between the members of the old and new firms that the rights and obligations of the old shall devolve upon the new partners, this has no effect upon third parties, unless they accede to it. As to them it is I'es inter alios acta, and there is no principle by virtue of which the existing rights or obliga- tions of non-partners can be affected, either for better or for worse, by agreements to which they are strangers. This subject will be alluded to hereafter, {g) 3. Partnership disabilities. Disabilities of one partner affecting the firm. — Speaking generally, no person can do by his agent what he cannot do himself; and although each member of a firm is a principal as regards his own con- duct, he is the agent of his copartners, and he cannot therefore do for not sue in the name of the firm. Davis V. Hubbard, 4 Blackf. (Ind.) 50; Hughes V. Walker, Id. 50. In California a complaint brought in a firm name, and not stating the names of the members as plaintiffs, is defective, and may be demurred to, but the defect cannot be availed of by appeal. Gilman v. Cos- grove, 22 Cal. 356. Such a complaint is good after verdict. Pate v. Bacon, 6 Munf. (Va.) 219. In South Carolina a summary process brought in the mercantile name of a firm, without setting out the partnership or the Christian names of the partners, is bad upon exception by plea ; but not on mo- tion for nonsuit. Martin v. Kelh', Cheves (S. C.) 215. Where a foreign firm is sued in its firm name and answers, and a verdict is taken upon the defence set up in the answer, without objection to the irregularity, the firm will be deemed to have waived their legal right to object. Brownson v. Met- 1 calfe, 1 Handy (Ohio) 188. Where plaintiff, in fact, assuming to act, not as a corporation, but as a partnership, sues by a name importing a corporation, the point may be raised by an answer alleging want of parties in interest to the suit. Heaston v. Cincinnati, &c., E.. R. Co, 16 Ind. 275. In Iowa, where a note is made payable to a firm by its name, it is advisable to declare thereon in the name of the firm ; but if the names of the several partners are set out, it is not necessary to prove them. Gordon v. Janney, 1 Morr. (Iowa) 182 ; Bernard v. Parvin, Id. 309. A judgment in favor of " L. & M.," trading as a firm, is valid, and is compe- tent evidence, in a suit brought by the firm, that the judgment was recovered by the partnership, their individual names being set out in full. Lash v. Arnold, 8 Jones (N. C.) L. 91. (g) See infra, book II., ch. 2, § 3. 51 116* AS KEGARDS SECURITIES. [bOOK I., the firm what they cannot do. In other words, the disability of one of the partners alfects the whole firm. Illustrations of this doctrine will *be found in book IL, ch. 3, § 1, relating to defences to r^-|,» actions by partners. Further illustrations are afforded by those cases which preclude a firm of solicitors or any of its members from doing work which one of the members cannot do. (A) Again, there are rules in bankruptcy which prevent the partners of the trustee, registrar or official receiver from doing various acts which they might do if they were not in partnership with him. (i) By 50 and 51 Vict., c. 58, § 40, no inspector of a coal mine can be a partner in it, nor can a partner of any land agent, mining engineer, &c., be an inspector. 4. As regards sureties and securities. Effect of change in a firm on the position of its sureties. — It is a principle of the law of suretyship that any act on the part of the principal creditor which alters the risk of the surety without his con- sent, discharges him from future liability, {k) Sureties to a firm. — If, therefore, a person becomes surety te a firm, it is important to ascertain whether he clearly contemplated changes in the firm, and agreed to become surety to a fluctuating body or not. If he did, his liability is not discharged by any change amongst the members constituting the partnership at the time he became surety ; [l) but if no such intention can be shown, then a contract of suretyship entered into with a firm will be deemed to be binding so long only as the firm remains unchanged (see 19 and 20 Vict., c. 97, § 4, on the (h) See Duke of Northumberland v. tin's, 2 Ad. & E. 655. Todd, 7 Ch. D. 777, as to swearing affi- (l) Pease v. Hirst, 10 Barn. & C. 122 5 davito. Metcalf v. Bruin, 12 East 400, and 2 (i) See Bank. Act, 1883, U 88, 116, (2) ; Camp. 422 ; and see Barclay v. Lucas, 1 Bched. 1, r. 26; Bank. R. 1886, r. 56, (2), T. R. 291, note; Kipling v. Turner, 5 B. 113, 114. & A. 261. In Pariente v. Lubbock, 8 De (A) See, as to sureties, the note to G., M. •& G. 5, an authority to a firm of Arlington v. Merrick, 2 Wms. Saund. 414. consignees, to recognize the consignor's As to the discharge of apprentices and son as his agent, was held to continue, their sureties by a change in the firm to notwithstanding changes in the firm, as which they are bound, see Lloyd v. Black- long as the consignor continued his busi- burne, 9 Mees. & W. 363 ; R. v. St. Mar- ness connection with the firm. 152 CHAP. VI., § II.] LEGAL VIEW OF A FIRM. 118* next page) ; *and consequently any change in it, whether by -' death {70) or the retirement (n) of a partner, or by the intro- duction of a new partner, (0) immediately puts an end to the surety's liability so far as subsequent events are concerned. In all such cases the surety's position and risk are altered, and whether he has in fact been damnified by the change or not, he has a right to say non in hceo foederaveni. Sureties for a firm. — Similar doctrines apply to cases where a person becomes surety /or the conduct of a firm. (j>) Moreover, a person who becomes surety for another is not necessarily surety for his con- duct as a partner, and obviously not for the conduct of himself and his copartner. (5) 6 Effect of incorporation. — Again, if a person becomes surety to several people for the conduct of a servant in their employ, and those people are afterwards incorporated, the surety is discharged, for the person created by the act of incorporation is different from the persons in whose employ the servant was, and with whom the surety con- tracted, (r) On precisely similar grounds it is conceived that a person who becomes surety to a corporation for the conduct of one of its servants would be discharged by the amalgamation of that corporation with another; for the two together would be a different body from either of its amalgamated members, (s) But a mere change of name consequent on registration with limited liability has not this effect. {C) "^Mercantile Laio Amendment act. — The doctrines estab- r:)ci-|Q lished in the foregoing cases have been expressly sanctioned by (m) Hollands. Teed, 7 Hare 50; Strange 6 Q. B. 514; Montifiore v. Lloyd, 15 C. V. Lee, 3 East 484 ; Weston v. Barton, 4 B. (N. S.) 203, where the partnership was Taunt. 673 ; Pemberton v. Oakes, 4 Russ. known to the surety. 154; Sim son u Cooke, 1 Bing. 452; Chap- 6. See Leabo v. Goode, 67 Mo. 126; man v. Beckington, 3 Q. B. 703 ; Back- Gates v. Hughes, 44 Wis. 333. house V. Hall, 6 N. R. 98, Q B. (r) Dance v. Girdler, 1 Bos. & P. (N. R.) (») Myers v. Edge, 7 T. R. 254 ; Dry 34. V. Davey, 10 Ad. & E. 30 ; and see Sol- (s) In The Eastern Union Railway Co. vency Mutual Guarantee Co. v. Freeman, v. (bckrane, 9 Ex. 197, and The London, 7 Hurlst. & N. 17. Brighton and South Coast Railway Co. i;. (0) Wright V. Russell, 2 W. Bl. 934. Goodwin, 3 Ex. 320, the surety was not (p) Bellairs V. Ebsworth, 3 Camp. 53 ; discharged; but the statute amalgamating University of Cambridge v. Baldwin, 5 the two companies contained an express Mees. & W. 580 ; Simson v. Cooke, 1 Bing. provision on the subject. 452 ; 19 and 20 Vict., c. 97, I 4. (0 Groux's Soap Co. v. Cooper, 8 C. B. (5) The London Assurance Co. v. Bold, (N. S.) 800. 153 119* AS REGARDS SECURITIES. [bOOK I., the legislature, it being enacted by the Mercantile Law Amendment act (w) that : " No promise to answer for the debt, default or miscarriage of another made to a firm consisting of two or more persons, or to a single person trading under the name of a firm, and no promise to answer for the debt, default or miscarriage of a firm con- sisting of two or more persons, or of a single person trading under the name of a firm, shall be binding on the person making such promise in respect of anything done or omitted to be done after a change shall have taken place in any one or more of the persons constituting the firm or in the person trading under the name of a firm, unless the intention of the parties that such promise shall continue to be binding not- withstanding such change shall appear either by express stipulation or by necessary implication from the nature of the firm or otherwise." Effect of change infirm on its securities. — Questions nearly akin to those just alluded to arise where securities have been deposited with bankers to secure future advances, and a change has occurred in the banking firm befi^re the making of some of the advances. Prima facie, the securities extend only to those advances which are made by the firm whilst its members continue the same as when the securities were deposited, [x) And similarly, if a partner pledges his separate property for future advances to be made to his firm, and he afterwards dies, an advance made after his death to his surviving partners will not be chargeable against the property pledged, [y) It has even been held that if a person deposits deeds as a security for advances to be made to him, the security does not cover advances made to him and his partners, {z) Equitable mortgagees. — However, it is established that an equitable mortgage by deposit of title deeds may be extended, even by parol, to cover advances made after a change in the firm with which the deeds , are lodged, (a) And although a legal mortgage to a firm *can- -' not be converted into an equitable mortgage merely by parol, (i) it may be so converted by a written agreement, and may as (w) 19 and 20 Vict., c. 97, ? 4. See, on See, too. Chuck v. Freen, 1 Moo. & M. this section. Backhouse v. Hall, 6 Best & 259. These cases turn on the terms of S. 507, and 6 N. R. 98, Q. B. the memoranda of deposit, and on the cir- (x) See per Lord Eldon in Ex parte cumstances under which the securities are Kensington, 2 Ves. & B. 83. given. (y) Bank of Scotland i-. Christie, 8 CI. (a) Ex parte Lloyd, 1 Glyn & J. 389 j & F. 214. Ex parte Lane, De G. 300; and see Ex (z) Ex parte Mackenna, 3 De G., F. & parte Nettleship, 2 Mont., D. & D. 124. J. 629 ; Ex par.te Freen, 2 Glyn & J. 246. (6) Ex parte Hooper, 2 Eose 328. 154 CHAP. VI., § II.] LEGAL VIEW OF A FIRM. 120* an equitable mortgage become available as a security for advances made after a change in the firm to which the legal mortgage was originally given, (c) Owing to these doctrines a security given to a firm for advances to be made by it, is, upon a change in the firm^ readily made a continuing security, and a slight manifestation of in- tention on the part of the borrower that it should so continue, will enable the new firm to hold the securities until the advances made by itself, as well as those made by the old firm, have been repaid. (cZ) Lien of solieitors. — The lien which a firm of solicitors has on the deeds, &c., of its clients, is not lost by a mere change in the firm, (e) But a solicitor's lien only attaches where the papers on which the lien is claimed have come to the possession of the very persons to whom the client is legally indebted, whence it follows that papers which come into the possession of a firm after the introduction of a new partner (/} or the retirement of an old one, (g) cannot be retained for a debt due before the change in the firm took place. The death of a partner is not, however, it is conceived, equivalent to retirement, for the survivors become the legal creditors, a^id there is, therefore, no reason why they should not have a lien for a debt due to them and their deceased part- ner on papers coming into their possession after his death. A dissolution of a partnership between solicitors operates as a dis- charge by them of their client, and any lien they may have on his papers is subject to his right to have them handed over to a fresh solicitor for the purpose of enabling him to finish business of the client pending at the time of dissolution. (Ji) 7 (c) Ex parte Parr, 4 Dow & C. 426. mercantile partnerships. One partner is* (d) See Ex parte Kensington, 2 Ves. & liable upon the contracts made by the B. 79 ; Ex parte Marsh, 2 Kose 239 ; Ex other within the scope of the partnership parte Loyd, 3 Deac. 305 ; Ex parte Alex- business, and for his negligence in respect ander, 1 Glyn & J. 409. to a partnership contract, and a right of (e) Pelly v. Wathen, 7 Hare 351, af- action against the firm survives against firmed, 1 De G., M. & G. 16. the survivor alone. Livingston v. Cox, 6 (/) Ee Forshaw, 16 Sim. 121 ; Pelly v. Pa. St. 360. Wathen, 7 Hare 351. A dissolution of such a partnership ig) Vaughan v. Vanderstegen, 2 Drew, does not affect engagements made during 409. its existence, so far as their clients are {h) Griffiths V. Griffiths, 2 Hare 587 ; concerned. Walker v. Goodrich, 16 111. Kawlinson v. Moss, 7 Jur. (N. S.) 1053, V. 341. C. W. If such a firm accept a retainer, the 7. Partnerships between attorneys contract is joint, and continues to the are subject to the ordinary incidents of termination of the suit, and neither attor- 155 120* LEGAL VIEW OF A FIRM. [book I., ney can be released from the obligation or responsibilities assumed, either by a dissohition of the firm, or any other act or agreement between tiie attorneys them- selves, lb. And see Smyth t. Harvie, 31 111. 62. Where one of the partners receives a retainer, conducts the trial and ciiarges the fee therefor on the books of the firm, the presumption will be of a retainer of the firm, and that the fee accrued to the firm. Harris v. Pearce, 5 Bradw. (111.) 622. An attorney who has received notes to collect is individually responsible for care and diligence, although he notifies his client that he has a partner who attends to the collecting; unless the client has recognized the partnership in the transac- tion of his business. Mardis v. Shackle- ford, 4 Ala. 493. So, attorneys who are partners are equally responsible for money collected and not paid over, though one of them had no .participation in the par- ticular transaction. Dwight v. Simon, 4 La. Ann. 490. A claim was placed in the hands of two attorneys, partners, for collection, a judg- ment obtained, land of the debtor sold under execution, and redemption made from the sale by paying the money to the sheriff, who paid it over to one of the at- torneys. Prior to the redemption the co- partnership between the attorneys was dissolved. Held, that both partners were liable to the client for the money thus re- ceived by one of them after dissolution. Smyth V. Harvie, 31 111. 62. 156 CHAP. VII.] DURATION OF PARTNERSHIP. 121* ♦CHAPTER VII. [*121 OF THE DITRATION OF CONTRACTS OF PARTNERSHIP — OF PARTNERSHIPS AT WILIi AND FOR A TERM. Partnerships at will and for a term. Prima facie, partnerships are at loilL — A contract of partnership is determinable at the will of any one of the persons who have entered into it, provided it has not been agreed that the contract shall endure for a specified time. In other words, the result of a contract of partnership is a partnership at will, unless some agreement to the contrary can be proved, (a) Such an agreement may be established as well by direct evidence as by implica- tion from the acts of the partners ; and it is not possible to lay down any rule by means of which the intention of the partners on this head can be certainly ascertained, where no express agreement has been come to. One or two points, however, on the subject have been de- cided, and demand notice. 1 Effect of existence of debts. — The mere fact that a firm has incurred debts, and charged its assets for their payment, is no proof of an agree- ment that the firm shall continue until its debts are paid, for those debts may be paid as well after as before a dissolution. (6) Effect of taking a lease. — Again, the fact that the partners have, for partnership purposes, taken land on lease for a term of years, is not proof of an agreement that the partnership between them shall subsist for the same period. This has been decided on several occasions, (c) (a) See per Parke, J., in Heath v. San- But where the articles prescribe a defi- son, 4 B. & A. 175 ; Frost v. Moulton, 21 nite period for the firm's duration, this is Beav. 596, and the cases cited in the fol- enough, without any prohibition of an lowino- notes. earlier dissolution, to prevent either part- 1. Duration of partnership as de- ner from terminating the relation at will, pendent on will of partner.— Where, Smith v. Mulock, 1 Kobt. (N. Y.) 569 ; in a copartnership agreement, no time is S. C, 1 Abb. Pr., n. s., 374. In such named for its continuance, and no provi- a case, it requires something more than sion made for the settlement of its concerns the mere will of a party to dissolve it upon dissolution, it is dissolvable at the within the term. Bishop v. Breckles, 1 will of either of the partners. McElvey Hoffm. (N. Y.) 534. V. Lewis, 76 N. Y. 373 ; aflSrming 44 Su- (6) See King v. The Accumulative As- per. Ct. 561 : Skinner v. Tinker, 34 Barb, surance Co., 3 C. B., n, s., 151. (N.Y.)333; Pine v. Ormsbee, 2 Abb. (N. (c) Featherstonhaugh v. Fenwick, 17 Y.) Pr., N. s., 375. Ves. 307 ; Jefierys v. Smith, 1 Jac. & W. 157 122* DURATION OF PARTNERSHIP. [bOOK I., and tlie reasons are thus given by Lord Eldon in Crawshay v. Maule, a leading case upon the subject : "Without doubt, in the absence of express there may be an implied contract as to the duration of a partnership, but I must contradict all authority *if I say "-' that whenever there is a partnership the purchase of a leasehold interest of longer or shorter duration is a circumstance from which it is to be inferred that the partnership shall continue as long as the lease. On that argument the court, holding that a lease for seven years is proof of partnership for seven years, and a lease of fourteen of a partnership for fourteen years, must hold that if the partners purchase a fee simple, there shall be a partnership forever. It has been repeatedly decided that interests in land purchased for the purpose of carrying on trade are no more than stock in trade." {d) Partner ships continued after their terms are expired. — Further, where a partnership, originally entered into for a certain number of years, is continued after their expiration, and there is no evidence as to the additional time for which the partnership was to last, it is treated as having become a partnership at will, and not as having been renewed for another definite period, (e) 2 Duration of suhpartner ships. — So, if one of several partners forms a subpartnership with a stranger, the fact that the principal partner- 301 ; Alcock v. Taylor, Taml. 506 ; Bur- limitation in the articles. A, one partner, don V. Barkus, 3 Giff. 412, and, on appeal, transmitted the articles to B, the other, 4 De G., F. & J. 42. with a renewal endorsed thereon, which {d) Crawshay i'. Maule, 1 Swanst. 509. B agreed to, provided he should be re- (e) Neilson v. Mossend Iron Co., 11 lieved from his difBculties by the arrival App. Cas. 298 ; Featherstonhaugh v. Fen- of a certain ship. The ship arrived, and wick, 17 Ves. 307 ; Booth v. Parkes, 1 B resumed his duties as partner. Held, Moll. 465. See, also, Cuffe v. Murtagh, 7 thai the partnership was renewed for the Ir. L. 411. original term, though there was no formal 2. Continuing after term has expired, renewal. — A partnership may be prolonged, by But a partnership is none the less express or tacit consent, beyond the time ended because the party who, upon final stated in the articles. In that case, prima settlement, turned over to the other as /acie, the articles are still binding. Mifflin cash certain drafts and notes, is to be re- D. Smith, 17 Serg. & R. (Pa.) 165. Thus, sponsible for his proportion of the debts a written agreement as to dividing profits uncollected thereon, or is afterwards em- may be extended tacitly by the mutual ployed by the other in making the collec- under.standing of the parties, or by their tions ; nor because any specific property conduct in relation to it. Robbins v. of the firm remains unsold, wherein each, Laswell, 27 111. 36^. under the settlement, retains his propor- In Dickson v. Bold (3 Dessau. (S. C.) tionate share. Sharpe v. Johnson, 59 501), a partnership having expired by the Mo. 557. 158 CHAP. VII.] DURATION OF PARTNERSHIP 123* ship has been entered into for a certain number of years is no proof that the subpartnership was intended to last for the same number of years, or for as many of them as were unexpired when the subpart- nership was formed. (/) Implied terms of duration. — On the other hand, in Wheeler v. Van Wart, (g) a company, the duration of which was not expressly fixed, was held to be intended to last at least until after a day appointed in its deed of settlement for the holding of a general meeting. And, in Reade v. Bentley, (A) it was considered that an agreement to the effect that a publisher should defray the expenses of a work written by an author, and should receive a percentage on the gross amount of sale, -and that the net profits of each edition should be divided equally between both parties, amounted to an agreement for a joint adventure between the author and the publisher for so long as might be necessary to dispose of a complete edition ; and that the publication of every new edition prolonged the partnership) until that edition should *be r-^ disposed of; but that when any edition was exhausted either ■- party was free to discontinue the joint adventure. 3 Cause's of dissolution. — The right to rescind a partnership contract for fraud or misrepresentation will be discussed hereafter in book III. ; and the right to dissolve a partnership, or to have it dissolved, and the consequences of its dissolution will be examined in book IV. (/) Frost V. Moulton, 21 Beav. 596. the court would not decide whether any (g) 9 Sim. 193, and better in 2 Jur. 252. condition or limitation as to the duration (A) 4 Kay & J. 656 ; and 3 Id. 271. of a partnership can be engrafted on the 3. Implied terms of duration. — " In partnership contract, as an implication the absence of an express there may be an from its nature. implied contract as to the time for which In Magill v. Merrie (5 B. Mon. (Ky.) a partnership shall endure (Crawshay v. 168), it was provided, in a contract of dis- Maule, 1 Swanst. 508), and where that is solution, that one partner was to withdraw the case, the partnership cannot be de- and be paid a proportion of the profits Btroyed by the act of the party until the when the estimates were made. Held, contemplated period arrives." Gow on that such a one continued to be a partner Part. 278. until the estimates were made. In Walker v. Whipple (58 Mich. 476), 159 n24] *BOOK II. OF THE EIGHTS AND OBLIGATIONS OF PAKTNERS AS REGARDS NON-PARTNERS. CHAPTER I. OV THE LIABILITIES OF PARTNERS FOR THE ACTS OF EACH OTHER. Section I. — General Principles of Agency as Applied to Ordinary Partnerships, *124. Section II. — Liabilities of Partners in Respect of Acts which are Neither Torts nor Frauds, *128. Section III. — Liability of Partners in Respect of Torts and Frauds, *147. Section IV. — Liability of Partners in Respect of Acts which are Unauthorized, and are Known so to be, *167. Section V. — Of the Liability of Partners in Respect of Contracts not Entered into on Behalf of the Firm, or not so IN Proper Form, *176. Section VI. — Liability of Partnerships in Respect of Contracts not Binding on them, but op which they have had the Benefit, *189. SECTION I. — GENERAL PRINCIPLES OF AGENCY AS APPLIED TO ORDINARY PARTNERSHIPS. Each partner the agent of the firm. — Every member of an ordinary partnership is its general agent for the transaction of its business in the ordinary way ; and the firm is responsible for whatever is done by any of the partners when acting for the firm within the limits of 160 CHAP. I., § I.J AUTHORITY OF ONE PARTNER. 124* the authority conferred by the nature of the business it carries on. (a) Whatever, as between the partners themselves, may be the limits set to each other's authority, every person not acquainted with those limits is entitled to assume that each partner is empowered to do for the firm whatever is necessary for the transaction of its business, in the way in which that business is ordinarily carried on by other people. (6) But no person is entitled to assume that any partner has a more extensive authority than that above described. The consequences of this principle are — 1. Qeneral rules. — That if an act is done by one partner on behalf of the *firra, and it was necessary for carrying on the partner- i-:,.-.^- ship business in the ordinary way, the firm will prima facie be liable, although, in point of fact, the act was not authorized by the other partners. 2. That if an act is done by one partner on behalf of the firm, and it was not necessary for carrying on the partnership business in the ordinary way, the firm will prima facie be not liable. In the first case, the firm will be liable unless the one partner had, in fact, no authority to bind the firm, and the person dealing with him was aware of that want of authority ; whilst in the second case the firm will not be liable unless an authority to do the act in question, or some ratification of it, can be shown to have been conferred or made by the other partners, (c) 1 (a) The case is different with mere part that one partner has a right to bind the ownerships. Bari?ou v. Williams, 5 B. & firm to any extent in contracts for the use A. 395; Helme v. Smith, 7 Bing. 709. of the partnership. Manuf. and Mechanics (6) See per James, L. J, in Baird's Bank v. Gore, 15 Mass. 75 ; Boardman v. Case, 5 Ch. 733, and per Parke, B., in Gore, Id. 331 ; Pearson v. Post, 2 Dak. T. Hawken v. Bourne, 8 Mees. & W. 710. 220; Hall v. Cook, 69 Ala. 87; Hall v. The fact that one partner ordinarily at- Green, Id. 368; Galloway v. Hughes, 1 tends to one branch of the business does Bailey (S. C.) 553 ; Storer v. Hinkley, not prevent his binding the firm when Kirby (Conn.) 147. acting out of his own department. Morans A leading case upon this subject is I'. Armstrong, Arms., M. & O. Ir. N. P. Winship v. Bank of United States (5 Pet. Rep. 25. (U. S.) 529), where Marshall, C. J., said (c) See Dickinson V. Valpy, 10 Barn. & (p. 561): "Partnerships, for commercial C. 128, and Crellin v. Brook, 14 Mees. & purposes, for trading with the world, for W. 11, where there was sufficient ratifica- buying and selling from and to a great tion. number of individuals, are necessarily 1. Each partner the agent of the governed by many general principles, others, generally.— The general rule is which are known to the public, which 161 11 125* DOCTRINES OF AGENCY. [bOOK II., Secret partnerships. Authority of dormant partner. — The doctrine that each member of any ordinary firm is its implied agent for the transaction of its business in the ordinary way, is generally laid down without qualification. But it is questionable whether this rule applies to a case in which a person who happens to be a member of a firm, subserve the purpose of justice, and wliich partners are identified with the company society is concerned in sustaining. One and have power to conduct its usual busi- of these is tliat a man who shares in the ness in the usual way. This power is con- profit, although his name may not be in ferred by entering into the partnership, the firm, is responsible for all its debts, and is perhaps never to be found in the Another, more applicable to the subject articles. If it is to be restrained, fair deal - under consideration, is that a partner, cer- ing requires that the restriction should be tainly the acting partner, has power to made known. These stipulations may transact the whole business of the firm, bind the partners ; but ought not to affect whatever that may be, and consequently those to whom they are unknown, and to bind his partners in such transactions, who trust to the general and well estab- as entirely as himself. This is a general lished commercial law." power, essential to the well conducting of Thus, one partner may transfer or assign business, which is implied in the exist- a chose in action, or a debt due to the part- ence of a partnership. When, then, a nership, or any other partnersiiip effects, partnership is formed for a particular so far as the same can be transferred or as- purpose, it is understood to be in itself a signed in law. Quinert;. Marblehead Ins. grant of power to the acting members of Co., 10 Mass. 476; Lamb v. Durant, 12 Id. the company to transact its business in the 54; CuUum v. Bloodgood, 15 Ala. 34; Har- usuai way. If that business be to buy and rison v. Sterry, 5 Cranch (U. S.) 289 ; An- sell, then the individual buys and sells derson w. Tompkins, 1 Brock. (U. S.) 456 ; for the company, and every person with Mills v. Barber, 4 Day (Oonn.) 428; Ran- whom he trades in the way of its business dolph Bank v. Armstrong, 11 Iowa 515; has a right to consider him as the com- Fromme v. Jones, 13 Iowa 474 ; United pany, whoever may compose it. It is StatesBankf. Binney, 5Mason(U. S.) 176 ; usual to buy and sell on credit; and, if it Hodges v. Harris, 6 Pick. (Mass.) 360; be so, the partner who purchases on credit Halsey v. Whitney, 4 Mason (U. S.) 206 ; in the name of the firm must bind the firm. Clark v. Rives, 33 Mo. 579; BosWell v. This is a general authority held out to Green, 1 Dutch. (N. J.) 390; McClelland the world, to which the world has a right v. Remsen, 36 Barb. (N. Y.) 622 ; 14 Abb. to trust. The articles of copartnership Pr. 331 ; 23 How. Pr. 175. are perhaps never published. They are Each member of a partnership is, in rarely if ever seen, except by the partners contemplation of law, the general agent themselves. The stipulations they may of the firm, and has power to bind his co- contain are to regulate the conduct and partners by acts done within the scope of rights of the parties as between them- the business of the partnership. Loudon, selves. The trading world, with whom &c., Society v. Hagerstown, &c., Bank, 36 the company is in perpetual intercourse, Pa. St. 498. This authority on tiie part cannot individually examine these arti- of one partner arises from the confidential cles, but must trust to the general powers nature of the partnership relation. Brew- contained in all partnerships. The acting ster v. Hardeman, Dudley (Ga.) 138. 162 CHAP. I., § I.] AUTHORITY OF ONE PARTNER. 125^ but who is not known to be such, and who has, in fact, no authority to act for it, takes upon himself so to do. Real authority is excluded by hypothesis, and it is difficult to see from what, in such a case, any authority can be implied. If, indeed, he was known to be a partner, whether by his own representations or otherwise, his authority to act for the firm would be properly inferred. But the case supposed ex- cludes all knowledge of his position, and under such circumstances it is conceived there can be no apparent as distinguished from real authority, (d) Partnerships between attorneys are sub- 5 Pa. St. 274. ject to the incidents to mercantile part- Whenever there are written articles of nerships; and one partner is liable upon agreement between partners, their power the contracts mads by the other within and authority, between themselves, are to the scope of the partnership business, and be ascertained and regulated by the terms for his negligence in respect to a partner- and conditions of the written stipulations, ship contract, and a right of action against But, independently of any such stipula- the firm survives against the survivor tion, each partner possesses an equal and alone. Livingston v. Cox, 6 Pa. St. 360. general power and authority,' in behalf of Another way of stating the general rule the firm, to transact any business within is that the presumption is that contracts the scope and objects of the partnership, made by a partner are made on account and in the course of its trade and business, of the partnership, and the firm will be Kimbro v. Bullitt, 22 HOw. (U. S.) 256. bound thereby, unless the parties with Thus, a written contract of partnership, in whom he contracts know the contrary an adventure limited to certain specified (Le Roy, Bayard & Co. v. Johnson, 2 Pet. transactions, and to some definite dura- (U. S.) 198 ; Rochester v. Trotter, 1 A. K. tion, does not give to the partners such Marsh. (Ky.) 54), and this, whatever their power to bind the firm as is possessed in liability intei- sese may be. White v cases of permanent and general mercan- Xearnev, 2 La. Ann. 639. tile transactions. Toof v. Duncan, 45 Thus, where the several obligees in a Miss. 48. bond constitute a partnership, a delivery In private associations, the majority to one is a delivery to ali. Moss v. Rid- cannot bind the minority without special <31e 5 Cranch (U. S.) 351. agreement, except in the case of partner- But while every partner is in a sense ships and ship-owners. Livingston v. a general agent of the firm, a firm is Lynch, 4 Johns. (N. Y.) Ch. 573. Never- not necessarily the agent, general or spe- theless, the acts of the trustees of an unin- cial of any other firm in which either corporated association, done in good faith, of its members is a partner. Wright v. and within the scope of their authority, Ames, 4 Abb. (N. Y..) App. Dec. 644. So, are binding upon the stockholders indi- where the same person is a partner in vidually, in a suit against them by a cred- two firms, his acts, done in the name of itor of the company, under the statute, one firm, cannot be proved in an action Slee v. Bloom, 20 Johns. (N. Y.) 669. against the other, the same persons not {d) See the judgment of Cockburii, C. comprising both firms. Kratzer v. Lyon, J., in Nicholson v. Ricketts, 2 El. & E. 163 125* DOCTRINES OF AGENCY. TbOOK II., Liability of dormant partners. — Again, with respect to the liability of dormant partners, a distinction must be drawn between — first, un- disclosed principals who carry on a business by partners or agents ; and, secondly, persons who simply share the profits of a business carried on by others on their own account, i. e., as principals only, and ^ *not as agents for those who share their profits. In the first *126l • ^ case the dormant partners are liable for whatever may be done by their partners and agents in the course of transacting the business in the ordinary way ; but in the second case the so-called dormant partners are not principals at all ; the persons who carry on their business do not carry it on as their agents, either really or apparently, and the doctrines applicable to undisclosed principals are altogether excluded, {e) 2 524, and of Cleasby, B., in Holme I'. Ham- those whose names are in the firm. This mond, L. R., 7 Ex. 233. distinction seems to be founded on the (e) This distinction is rendered neces- idea that if partners are not openly sary by the decision of the House of Lords named the resort to them must be con- in Cox V. Hickman. See ante pp. *30, et nected with some knowledge of the secret seq. stipulations between the partners, which 2. How far the rule applies to dor- may be inserted in the articles. But this mant partners. — In the case of Winship v- certainly is not correct. The responsibility Bank of United States (5 Pet. (U. S.) 562), of unavowed partners depends on the gen- Marshall, C. J., says, in continuation of his eral principles of commercial law, not on remarks quoted in the preceding note (p. the particular stipulation of the articles. It *125) : " The counsel for the plaintiff in has been supposed that the principles laid errorsupposes that though these principles down in the third instruction respecting may be applicable to an open, avowed part- these secret restrictions are inconsistent nership, they are inapplicable to one that is with the opinion declared in the first; secret. Can this distinction be maintained? that in this case, where the articles were If it could, there would be a difference before the court, the question whether this between the responsibility of a dormant was, in its origin, a secret or an avowed partner and one whose name was to the partnership, had become unimportant., articles. But their responsibility in all If this inconsistency really existed, it partnership transactions is admitted to be would not affect the law of the case, unless the same. Those who trade with a firm the judge had laid down principles in the on the credit of individuals, whom they one or the other instruction which might believe to be members of it, take upon affect the party injuriously. But it does themselves the hazard that their belief is not exist. The two instructions were well founded. If they are mistaken, they given on diflTerent views of the subject, must submit to the consequences of their and apply to different objects. Tlie first mistake ; if their belief be verified by the respected the parties to the firm and their fact, their claims on the partners who liability, whether they were or were not were not ostensible are as valid as on known as members of it ; the last applies- 164 CHAP. I., § I.] AUTHORITY OF ONE PARTNER. 126* Necessity the limit of authority. — It will be observed that what is necessary to carry on the partnership business in the ordinary way is made the test of authority where no actual authority or ratification can be proved. This is conformable to the most recent aud carefully con- sidered decisions ; but by adopting it, the liability of a firm for the acts of its copartners is not so extensive as non-lawyers sometimes imagine. The act of one partner to bind the firm must be necessary for the carrying on of its business, if all that can be said of it was that it was convenient, or that it facilitated the transaction of the busi- ness of the firm, that is not sufficient in the absence of evidence of sanction by the other partners. (/) Extraordinary necessity. — Nor, it seems, will necessity itself be suffi- cieut if it be an extraordinary necessity. What is necessary for carry- ing on the business of the firm under ordinary circumstances and in the usual way is the test ; and therefore, in a case where the nature of the business was one in which there was no necessity to borrow money to carry it on under ordinary circumstances and in the ordinary man- ner, the court held the firm not liable for money borrowed by its agent under extraordinary circumstances, although money was absolutely requisite to save the property of the firm from ruin, (g) This case is an authority for saying that a power to do what is usual does not to secret restrictions on the partners, secret partner who did not sign it ; but he which change the power held out to the is not liable unless the money came to the world by tiie law of partnership. The use of the firm. Bank of Alexandria v. meaning of the terms ' secret partnership,' Mandeville, 1 Cranch (U. S.) C. C. 575. or the question whether this did or did But while, by the law merchant, one not come within the definition of a secret may be answerable as a dormant partner partnership, might be unimportant ; and on a contract made by the partnership of yet the question whether a private agree- which he is in fact a member; this law is ment between the partners, limiting their confined to trade and commerce, and does responsibility, was known to a person not extend to speculations in the purchase trusting the firm, might be very import- and sale of lands ; for where lands are ant." sold, no man, as a dormant partner, can The credit given in such a ease, though claim any part of the lands by virtue of manifestly given to the ostensible partner, any conveyance to which he is not, on the is net to be presumed to be exclusive, but face of it, a party. Pitts v. Waugh, 4 all for whom such partner acts, if in their Mass. 424. business and for their benefit, will be (/) See Brettel u. Williams, 4 Ex. 630. liable. Richardson v. Farmer, 36 Mo. 35. (g) See Hawtayne v. Bourne, 7 Mees. & In Virginia an action may be main- W. 595 ; and see Ex parte Chippendale, 4 tained upon a promissory note against a De G., M. & G. 19. 165 126* DOCTRINES OF AGENCY. [bOOK II., include a power to do what is unusual, however urgent; and although in the case referred to the money was not borrowed by a partner, but by a person who was only an agent of the firm, the decision would, it is apprehended, have *been the same if he had been a partner. For notwitiistanding the fact that every partner is to a certain '- extent a principal as well as an agent, the liability of his copartners for his acts can only be established on the ground of agency. As their agent he has no discretion except within the limits set by them to his authority, and the fact that he is himself, as one of the firm, a princi- pal, does not warrant him in extending those limits, save on his own responsibility. (Ii) 3 {h) See Ricketts v. Bennett, 4 C. B. in the management of their business, and 686, and Dickinson v. Valpy, 10 Baru. & that consequently the other partners were C. 128. bound by his act. Woodward v. Winship, 3. Discretion in urgent cases. — 12 Pick. (Mass.) 430. While it is a rule of general application In Const v. Harris (Turn. & R. 496, that in the absence of a special agreement, 525), Lord Eldon says: " I call that the neither partner can make any contract act of all which is the act of the majority, beyond the commercial custom of the provided all are consulted, aad the major- business of the firm, without the consent ity are acting bona fide, meeting not for of the other (Chandler v. Sherman, 16 the purpose of negativing what, when Fla. 99), if that other can be consulted they are met together, they may, after due beforehand ; still, if he cannot be con- consideration, think proper to negative, suited, and the exigencies of the case For a majority to say, ' We do not care render it necessary for the partner on the what one partner may say, we, being the spot to act, he may generally do so. Ex majority, will do what we please,' is, I parte Daniels, 14 R. I. 500. apprehend, what this court will not al- Thus, in Hunter v. Wayrick (67 Iowa low." And at page 527, he continues :" In 555), where a partner, who did not, but all partnerships, whether it is expressed who might have consulted his copartner in the deed or not, the partners are bound by mail or telegraph, without his knowl- to be true and faithful to each other, edge or consent sold the entire property They are to act upon the joint opinion of of the firm to one who knew the facts, it all, and the discretion and judgment of was held that the absent partner could any one cannot be excluded. What repudiate the sale. weight is to be given to it is another On the other hand, where one partner question. The most prominent point on in a firm organized for a particular busi- which the court acts, in appointing a re- ness does an act on account of the firm ceiver of a partnership concern, is the which is prima facie beyond the scope of circumstances of one partner having taken his authority, it is competent to show upon himself the power to exclude that in the exercise of good fail h and rea- another partner from as full a share in Bonable discretion he was waranted in so the management of the partnership, as he, doing by the course pursued by the firm who assumes that power, himself enjoys." 166 CHAP. I., § I.] AUTHORITY OP ONE PARTNER. 127* Nature of the business the test of necessity. — The question whether a given act can or cannot be said to be necessary to the transaction of a business in the way in which it is usually carried on, must evidently be determined by the nature of the business, and by the practice of persons engaged in it. Evidence on both of these points is, therefore, necessarily admissible, and, as may readily be conceived, an act which is necessary for the prosecution of one kind of business in the ordinary way may be wholly unnecessary for carrying on another. Conse- quently, no answer of any value can be given to the abstract question — Can one partner bind his firm by such and such an act? — unless, having regard to what is usual in business, it can be predicated of the act in question either that it is one without which no business can be carried on, or that it is one which is not necessary for carrying on any business whatever. There are obviously very few acts of which any such assertions can be truly made. The great majority of acts, and, practically, all which giv^e rise to doubt are those which are necessary in one business and not in another. Take, for example, negotiable instruments ; it may be necessary for one member of a firm of bankers to draw, accept or endorse a bill of exchange on behalf of the firm, and to require that each member should put his name to it would be ridiculous ; but it by no means follows, nor is it, in fact, true, that there is any necessity for one of several solicitors to possess a similar power, for it is no part of the ordinary business of a solicitor to draw, accept or endorse bills of exchange. The question, therefore, Can one partner bind the firm by accepting bills in its name? admits of no *1 9sl general answer ; the nature of the business and *the practice of those who carry it on (usage or custom of the trade) must be known before any answer can be given, (i) 4 The question when the agency of a partner begins and ends will be examined hereafter, see book II., ch. 2, § 3. (t) See Hogarth v. Latham, 3 Q. B. D. duced that he knew of the transaction and 643 ; Taunton v. Royal Ins. Co., 2 Hem. assented to it. Goodman v. White, 25 &M. 135. Miss. 163; Steagale v. Coney, 49 Miss. 4. Nature of the business the test of 761 ; Hotdiin v. Kent, 8 Mich. 526 ; Cay- the power to bind — One member of a ton v. Hardy, 27 Mo. 536 ; Welles v. copartnership cannot be made liable for March, 30 N. Y. 344; Bell v. Faber, 1 the act or undertaking of another, in a Grant (Pa.) Cas. 31 ; Nichols v. Hughes, transaction not embraced in their original 2 Bailey (S. C.) 109 ; Scott v. Bandy, 2 Head partnership business, unless proof is ad- (Tenn.) 197 ; Venable v. Levick. Id. 351. 167 128^ IMPLIED POWERS OF PARTNERS. [book II., SECTION II. — LIABILITIES OF PARTNERS IN RESPECT OF ACTS WHICH ARE NEITHER TORTS NOR FRAUDS. Having noticed the general principles determining the extent to wlijch one partner is the agent of the firm, it is proposed to examine Speculative dealings in "futures" by one partner in a firm dealing in grain, are not to be deemed within the scope of the business. Irwin v. Williar, 110 U. S. 499. The authority of partners to bind each other is not fixed by tlie articles of copart- nership, but by the character of their deal- ings, and the manner in which they hold themselves out to the world. Catlin v. Gilders, 3 Ala. 536. It is proper to show the general busi- ness of a firm as bearing upon the ques- tion whether certain acts of one partner bind them. Saltmarsh v. Bower, 34 Ala. 613. Thus, a farming partnership confers no authority on one partner to carry on in the firm name a store for the sale of mer- chandise. Humes v. O'Bryan, 74 Ala. 64. In law partnerships either partner may attend to business intrusted to the firm. But if a firm contract with a client for the personal services of a particular partner, and he fails to perform them,. it is a breach of contract; yet the damages for such breach will be but nominal, if another party shall perform the duty with due professional skill, and without injury to the client. Smith v. Hill, 13 Ark. 173. A copartnership formed to transport passengers and their baggage, by a line of stages, does not, from the mere nature of the business, authorize one of the part- ners to bind tlie firm by an agreement that he will convey a person a certain distance in a specified time. Walcott v. Garfield, 3 Conn. 194. A declaration alleged, in brief, as fol- lows : The defendants, as partners, were engaged in the sale of drugs and medi- cines in the city of Macon, and were in- debted to plaintiff in the sum of $130.12, with interest. The plaintiff was employed by them as a clerk, and while so employed, he was the owner of a formula for " Rus- sel's Axle Grease." After making and selling this preparation for some time, one of the members of the firm volun- tarily told him that he would allow him a liberal royalty on the sale of the prepa- ration, whereupon ho compounded and sold it solely for the defendants, giving them all the profits. The plaintiff sold a quantity stated. The agreement fixed no amount as the plaintiff's royalty. He was reasonably entitled to half the net profits. Held, no cause of action ; the only liability, if any, being that of an in- dividual member of the firm, based on a promise without valuable consideration. There was nothing on which an amend- ment could be founded. Lamar v. Rus- sel (Ga.), 2 S. E. Rep. 467. Where one deals with a partner in a matter not within the scope of the firm business, the law presumes that he deals with him in his individual capacity. Davis ». Blackwell, 5 Bradw. (111.) 32. Partners in the practice of medicine are not jointly liable for the expenditures of each other having no connection with their partnership business as physicians. Thompson v. Howard, 2 Ind. 245. In order to establish that a commercial partnership is not bound by the act of one of the partners, in any particular matter, it is necessary expressly to deny his authority and to disclose, by evidence, 168 CHAP. I., § II.] DOCTRINES OF AGENCY. 128* the power of one partner to bind his firm in particular cases where there is no question of tort or fraud. For the sake of convenience, subjects noticed will be arranged in alphabetical order. 1. Accounts. — An account rendered by one partner relative to a the nature of their commercial business, of the partnership business. Hutison v. Vienne v. Harris, 14 La. Ann. 382. McKenzie, 1 E. D. Smith (N. Y.) 358. Ordinary partners are not bound in Either partner can bind himself by solido for attorney's fees for services ren- using the firm name in an affair having dered the firm under the employment by no connection with its business, but the one of its members. In such a case each liability extends no further as long as the one of the partners is bound for his party dealing with him understood iiim to share, if no agreement has been made be so using the firm name. Merchant v. between the attorney and the partner who Belding, 49 How. (N. Y.) Pr. 344. employed him. Hyams v. Rogers, 24 La. One partner cannot bind his copartner Ann. 230. by any contract, unless it is in some way A partner is not liable for bonds re- connected with the partnership business, ceived without his knowledge by his co- or unless the act be adopted and recog- partner on special deposit, where the re- nized by the copartner, or unless it be a ceiving of special deposits is no part of bill or endorsement of a note, which the the business of the firm. Hatheway's Ap- party taking it had good reason to believe peal, 52 Mich. 112. was authorized by the firm. Long i>. Car- One who deals with a partner in mat- ter, 3 Ired. (N. C.) L. 238. ters outside the business of the firm can One partner cannot make himself the acquire no claim against the partnership, agent of his firm to subscribe stock to a unless he can prove a previous authority railroad company, the building of rail- for, or a subsequent ratification of the roads not being within the scope of the partner's act; and this cannot be implied partnership. Livingston?). Pittsburg, &c., from the mere fact of partnership. Sel- K. R. Co., 2 Grant (Pa.) Cas. 219. den V. Bank of Commerce, 3 Minn. 166. Each member of an unincorporated A knowledge of third persons of the business association, in law a partnership, limited nature of the partnership will be may bind his copartners for debts con- inferred from circumstances. Livingston traded within the scope of the legitimate V. Roosevelt, 4 Johns. (N. Y.) 251. business of the association ; otherwise, as Partnership in a patent right, as for the to debts for purposes foreign to its ob- navigation of steam vessels, does not au- jects ; as to such, a partner can be held thorize one partner to bind the partner- liable only upon his assent or ratification, ship for building steamboats, this not Thompson's Estate, 12 Phil. (Pa.) 36. being strictly connected with the enjoy- A partnership to efiect a special end ment of their joint privileges. Lawrence binds the members for each other's acts V. Dale, 3 Johns. (N. Y.) Ch. 23. only in the prosecution of that end, unless An assignment by one of two partners, an authority may be implied from the in the partnership name, confers no title, method of transacting business. Town v. unless it clearly appear that the assign- Hendee, 27 Vt. 258. ment relates to a matter within the scope 169 128* IMPLIED POWERS OF PARTNERS. [bOOK II.^ partnership transaction is equivalent to an account rendered by the firm, {k) 5 The power of one partner to settle accounts, and to assent to a transfer of them, will be found noticed infra under the head "Debts." 2. Admissions. — The admissions of one partner, with reference to a partnership transaction, are evidence against the firm ; (l) but are not necessarily conclusive, (m) An a Amission by one person, who after- wards enters into partnership with others, is no evidence against them, merely because they and he are partners when the evidence is sought to be used, {n) Moreover, in an action against partners, the answer of one of *them to interrogatories cannot be read against the r^.nq others, (o) unless they have an opportunity of contradicting it. 6 {k) Fergusson v. Fyffe, 8 CI. & F. 121, counts thus made within a reasonable where an account sent by one partner time, he must be considered as having showing a balance due from the firm, and acquiesced in their correctness. Heartt v. bearing interest at nine per cent., was held Corning, 3 Paige (N. Y.) 566. to be binding on the firm. See, as to false (l) Wood v. Braddick, 1 Taunt. 104 ; accounts, infra, section 3. Pritchard v. Draper, 1 Ry. & M. 191 ; 5. Accounts.— In an action against A affirmed, 2 CI. & F. 379 ; Nicholls v. Dowl- as the dormant partner of B, accounts ing, 1 Stark. 81 ; Sangster v. Mazarredo, rendered by B to A, and retained by A Id. 162 ; Thwaites v Richardson, 1 Peake without objection, are admissible in evi- 23; Grant v. Jackson, Id. 268; Wright v. dence to show the nature of the connee- Court, 2 Car. & P. 232 ; and see the last tion between them. Corps v. Robinson, 2 preceding note, and ante p. *87. As to Wash. (U. S.) 388. But an account in part owners, see Jaggers v. Binnings, 1 the handwriting of the ostensible partner. Stark. 64. not shown to have existed while the part- (m) Wickham v. Wickham, 2 Kay & J, nership existed, is not competent evi- 491, where the point in question was the dence, in a suit against an alleged secret amount of a debt. partner, to show to what the business ex- (n) Tunley v. Evans, 2 Dowl. & L. 747; tended. Oakley v. Aspinwall, 2 Sandf. Catt v. Howard, 3 Stark. 3. (N. Y.) 7. (o) Parker v. Morrell, 2 Ph. 453; The execution of a certificate of deposit Dale v. Hamilton, 5 Hare 393. by a partner in the firm name, on an ac- 6. Admissions : when admissible, count not pertaining to the business of the generally. — As a general rule, subject to firm, and with the depositor's knowledge, the exceptions hereinafter noted, the ad- does not bind the firm. Rutledge v. missions or declarations of one partner as Squires, 23 Iowa 53. to firm transactions, against the interest Under a stipulation, in the articles, of the firm, are admissible to bind his co- that one partner should make up and partners. In such cases the admission state the partnership accounts at regular may be received in evidence, although the periods, it was held that unless the other suit may not be in the name of the firm, partner objected to the statements of ac- Fisk v. Copeland, 1 Overt. (Tenn.) 383. 170 CHAP. I., § II.J DOCT'RINES OF AGENCY. 129' See further, infra, under the heads " Debts ^^ and "Representations.'^ 3. Agents. — As to the appointment of agents, see infra, under the head "Servants.'' "^ Where one partner gives a note for money borrowed for the tirin and on its credit, this is a partnership debt, and a written admission by the other partner that the money was used for the purposes of the firm is competent evidence of the fact in a suit between firm creditors. An- derson V. Norton, 15 Lea (Tenn.) 14. So, also, the answer of one partner, admitting the indebtedness of the partnership, is sufficient to charge the partnership as garnishees. Anderson v. Wanzer, 5 How. (Miss.) 587. The admissions of a part- ner do not cease to be evidence in an action against the firm because a nolle prosequi has been entered as against him. Boyce v. Watson, 3 J. J. Marsh. (Ky.) 498. In an action to recover the balance of a partnership account, the accounts cur- rent rendered by each of the partners to the others are admissible to show, by the admissions of the parties, that the items of such accounts are not items of partner- ship account. Barry v. Barry, 3 Cranch (U. S.) C. C. 120. Where two mercantile houses do busi- ness under their respective names, but the same partners compose both firms, the acknowledgment of one is prima facie evi- dence against the other. Sneed v. Kelly, 3 Dana (Ky.) 538. — vsrhen inadmissible. — Where the authority of the partner making the ad- missions to speak for his associates is not shown, his statements, so far as concerns them, are mere iiearsay. HefFron v. Han- aford, 40 Mich. 305. And, in any case, he can only bind his associates by his admis- sions within the scope of the business of the firm. lb. Admissions of a partner, made during the partnership, may be introduced as evidence against him in favor of creditors of the firm, but not as evidence against the creditors of the partnership, for the purpose of diverting the firm assets to the payment of his individual debts. Bond v. Nave, 62 Ind. 506. Illustrations. — The Jolloxoing admissions have been held admissible: The acknowl- edgment of service of a writ, written by one partner in the presence of the other, 7. Agents. — One partner may legally the title to the mine does not come within authorize a clerk of the firm to accept the limited powers vested in a mining bills, and sign and endorse notes, in the partner. But this rule does not apply to name of the company. Tillier v. White- incorporated mining associations, nor to head, 1 Dall. (U. S.) 269. partnerships formed under Colorado stat- One partner may appoint an agent, by utes. Charles v. Eshleman, 5 Colo. 107. parol, to make and endorse bills, &c. ; and Where one member of a law partner- such power is not void, though given by sJiip obtained possession of a letter con- him by writing under seal. Lucas v. taining an authority to take care of the Bank of Darien, 2 Stew. (Ala.) 280. writer's interests, directed to the other Any partner in a firm may be the agent partner, and acted under the instructions of a third person, in drawing bills in favor contained in the letter — Held, that the of the firm, for advances made to such writer was bound by the act of the part- third person, under an express authority, ner, as much so as if the other partner Baring v. Lyman, 1 Story (U. S.) 396. had received the letter and acted upon it. The employment of counsel to litigate Beck v. Martin, 2 McMuU. (S. C.) 260. 171 129= IMPLIED POWERS OF PARTNERS. [book II., 4. Arbitration. — One partner cannot, without special authority, bind the firm by a submission to arbitration, (p) The power to refer dis- and with his consent. Freeman v. Car- hart, 17 Ga. 348. The confession of one member of a copartnership of any fact tending to bind the whole, in a matter of joint concern. Odiorne v. Maxcy, 15 Mass. 39. Entries made by one partner, during the continuance of the partnership, in a book of accounts. Walden v. Sher- burne, 15 Johns. (N. Y.) 409. Contra as to a declaration of a partner that a liability incurred by a third per- son, at his request, in borrowing a sum of money, was for the benefit of the firm. Thorn v. Smith, 21 Wend. (N. Y.) 365. Partnership relation not provable by admissions. — The admission of one partner is not suflBcient to prove the ex- istence of the copartnership as against the other partner. Corps v. Robinson, 2 Wash. (U. S.) 388 ; Evans v. Corriell, 1 Gr. (Iowa) 25; Lea v. Guice, 13 Smed. •& M. (Miss.) 656. The partnership must first be proved aliunde. McFadgen v. Harrington, 67 N. C. 29 ; Nixon v. Dow- ney, 42 Iowa 78 ; Alcott v. Strong, 9 Cush. (Mass.) 323. See, also, McLellan v. Fen- nel 1, 52 Me. 402. Where a partnership is alleged to exist between two persons, the acts and declara- tions of either bind him, but do not affect the other, and it often becomes necessary to prove the acts and declarations of one at a time, and therefore such testimony may properly be admitted, and the legal effect of it postponed until the judge in- structs the jury upon the law of the whole case, whose duty it would be to inform them that the acts and declarations of a party, before the partnership is proved, bind himself only. Jennings v. Estes, 16 Me. 323. But after the fact of partnership is proved by otlier evidence, the admissions of one partner may be received to charge the partnership in relation to transactions during its existence. Phillips v. Puring- ton, 15 Me. 425; Gulick v. Gulick, 2 Gr. (N. J.) 578 ; Goodenough v. Dufiield, Wright (Ohio) 455; Wolle v. Brown, 4 Whart. (Pa.) 365; Allen t;. Owens, 2 Spears (S. C.) 170. Thus, in an action against partners jointly, an answer in chancery of one of them may be given in evidence by the plaintiff, after the partnership has been proved, to show admissions of the plaintiff's demand, and, in such case, evidence to discredit the answer cannot be offered by the other members of the copartnership. Hutchins v. Childress, 4 Stew. & P. (Ala.) 34. Admissions after dissolution. — Part- nership transactions with third persons, which took place after the sale of his present interest by one partner to another and after the retiring partner had ceased to be a member of the firm, are not ad- missible against him upon the question of the value of his interest when sold, nor upon the question of fraud or mis- take in the contract of sale, and equally in- admissible are judgments rendered against the new firm, to which the retired mem- ber was no party. Dortie v. Dugas, 55 Ga. 484. In assumpsit by partners, for work and labor, statements of one of them, made after dissolution, so far as they tend to show a new contract destroying the part- nership claim and giving to each partner a separate demand for his part of the debt, are not admissible ; but his state- ments, so far as they show a payment (p) See Stead v. Salt, 2 Bing. 101 ; Antram v. Chace, 15 East 209. Adams v. Bankhart, 1 Cr., M. & R. 681 ; 172 CHAP. I., § II.] DOCTRINES OF AGENCY. 129* putes, even although they relate to dealings with the firm, cannot be said to be necessary for carrying on its business in the ordinary way. {q) made to liimself, may be proved. Lefa- vour V. Yandes, 2 Blackf. (Ind.) 240. The admissions of one partner, made at the time of the payment to him of a debt due to the partners, and at a time subse- quently to a dissolution, are admissible against the other partners, as the admis- sions of an agent relative to an act within the scope of his authority, made at the time when such act was done, are admis- sible in evidence to bind his principal. Kirk V. Hiatt, 2 Ind. 322. The admissions or declarations of one partner, after dissolution and not under a new authority, are not evidence against a former partner. Craig v. Alverson, 6 J. J. Marsh. (Ky.) 509 ; Crumless v. Sturgess, 6 Heisk. (Tenn.) 190 ; Dougelot v. Raw- lings, 58 Mo. 75 ; Tick v. MulhoUand, 48 Wis. 419. One partner can interrupt prescription as to all the other partners who are bound in solido, even after the dissolution of the partnership. Carroll v. Gayarrd, 15 La. Ann. 671. A and B were partners in trade, and upon their dissolution B ass.igned, for value, all his interest in the partnership effects to A Held, that B could not, by his mere declaration, made after such assignment, defeat an action brought in their joint names. Owings v. Low, 5 Gill & J. (Md.) 134. After dissolution of partnership between an active and a dormant partner, an action for the balance of an account was brought against both, in which the dormant part- ner pleaded payment, and the active part- ner was defaulted. Held, that an admis- sion made after the dissolution by the active parter, that such balance, in conse- quence of a mistake, had not been paid, was competent evidence. Bridge v. Gray, 14 Pick. (Mass.) 55. In Pennsylvania, under the statute of 1838, authorizing one firm to maintain an action against a-nother, both having a com- mon partner, the acts and declarations of such common partner, after dissolution of such partnership, are admissible in evi- dence. Tassey v. Church, 4 Watts & S. (Pa.) 141. Admissions of deceased partner. — In an action against a surviving partner for fraud and deceit in the purchase of a slave, the declarations of the deceased partner, by whom the contract was made, before and after the purchase, as to his object in purchasing, are not admissible for defendant to show that his copartner made the purchase on his own individual account, and not on account of the firm. Dixon V. Barclay, 22 Ala. 370. Where surviving partners are sued on a note given by the deceased partner in his individual name, his declarations that the note was given for the partnership business, and was a company note, are not admissible in the absence of evidence aliunde that those transactions out of which the note arose were for the part- nership. Ostrom V. Jacobs, 9 Mete. (Mass.) 454. Such declarations are admissible against the survivor, where the partner- ship is admitted. Doremus v. McCormick, 7 Gill (Md.) 49. In an action against the surviving partner, for money lent to the deceased partner, the defence was that the money was not borrowed or used for firm purposes. Held, that declarations of the deceased partner to third persons, made after the money was borrowed, to the effect iq) Stead V. Salt, 3 Bing. 101 ; Adams Boyd v. Emerson, 2 Ad. & E. 184. V. Bankhart, 1 Cr., M. & R. 681 ; and see 173 129* IMPLIED POWKRi^ OF PARTNERS. [book II., Wliere a partnersliip has been dissolved and it has been agreed that one of the pai'tners shall get in the debts due to the firm, he has no power, after bringing an action in the name of the firm for a debt due to it, to bind his copartner by a reference of all matters in difference that it was borrowed and ii-sed for firm pur- poses, were admissible. Klocli v. Beck- man, IS Hun (N. Y.) 502. Admissions of surviving partner. — If tlie admissions of a surviving partner with respect to a transaction within the scope of the copartnership, made after the death of his copartner, are competent evidence against the personal representa- tives of tlie deceased partner, tliey are not conclusive. McElroy v. Ludlam, 5 Stew. (N. J.) 828. Admissions of dormant partner. — Declarations of a dormant partner are admissible in evidence against his copart- ners, if they relate to the partnership business. Kaskaskia Bridge Co. v. Shan- non, 6 111. (1 Gilm.) 1.5. Declarations in favor of hrm or partner making them. — The acts, declarations or admissions of one of two partners are not admissible as evidence for them, in an action against them as a firm, and where they have jointly pleaded the general issue. Hutchins v. Childress, 4 Stew. & P. (Ala.) 34. So, also, the "admission" of one partner that his co- partner was indebted to him cannot bind such copartner, in a suit by a person claiming through the former. A claim cannot be allowed so to prove itself under the name of an admission. Lewis v. Allen, 17 Ga. 300. The rule is that the declarations of the alleged partners, unac- companied by acts, and unconnected with any of their declarations proved by the other party, are inadmissible in their own favor, Phillips v. Puringtoa, 15 Me. 425. Thus, in a suit against A and B as part- ners, declarations of A that B was not his partner cannot be introduced as evi- dence to exonerate B. Young v. Smith, 25 xMo. 341. Admission must have been relied on. — Wiiere the vendor of goods, at the time of the sale, professes to sell them to the vendee in his individual capacity, he cannot, in an action against a firm of which the vendee was a member, give in evidence the declarations or admissions of such vendee that the goods were pur- chased for the benefit of the firm. Lararus V. Long, 3 Ired. (N. C.) L. 39. Instances of admissions received in evidence. — A, being indebted to a firm on a note, paid a portion of it to B, one of the partners, who pnimised to endorse it on the note, but did not do so. After the dissolution of the p.'.Jtnership, C, the other partner, gave a writing, signed by his individual name, acknowledging that he had retained in his hands the money of A, to the amount due on the note, and promising to refund to A such sum, as, in a suit then pending on the note, the court should find had been paid thereon. The money so retained had been received by C, as a member of the partnership, and for their use and benefit. The suit was then withdra.wn, and A brought his action against B and C jointly, to recover back the amount first paid to B. Held, that the writing given by C to A was ad- missible in evidence. Story v. Barrell, 2 Conn. 665. Where a chose in action against a part- nership was assigned, and one of the part- ners, being called upon for payment by the assignee, said he would pay to him if he was legally entitled to receive it — Held, that it was sufficient to enable the assignee to maintain an action iii his own 174 -CHAP. I., § II.] DOCTRINES OF AGENCY. 1 29* between the plaintiffs and the Jefendant. (r) The partner actually referring the dispute is, however, himself bound by the award, (s) and the other partners may become bound by ratification, [t) 8 name against all the parlnera, on showing A, being in partnership with B, col- a legal assignment. Lang v. Fiske, 11 lected a sura of money in his individual Me. 385. capacity for C, and afterwards executed to Where one of two partners had assigned tiie latter a note in the name of the firm his interest in the partnership property to for the amount. In a suit against the firm his copartner as collateral security for a on the note, the plaintiff offered to prove debt which he owed iiim, but was still that A, during the existence of the firm, liable for the debts of the firm, and en- had declared that said money had been titled to his proportion of the surplus used by himself and partner in the busi- property after tlie debts of the firm and ness of the partnership. Held, that the his debt to his partner were paid — Held, evidence was inadmissible. Hickman v. that a paper signed by the partner who Reineking, 6 Blackf. (Ind.) 388. had assigned his interest, and made after (r) Hatton v. Royle, 3 Hurlst. & N. the commencement of the suit, stating 500. that after the assignment he had taken (s) Strangford v. Green, 2 Mod. 228. the money of the firm, to recover which (0 As in Thomas v. Atherton, 10 Ch. the action was brought, and had appro- D. 185. priated it to the payment of the note of 8. Arbitration. — The weight of author- another firm of which he was a member, ity is to the effect that one partner cannot, in the hands of the defendant, was admis- while the partnersliip continues, bind sible in evidence against the firm, in an another to a submission of the Interests action of assumpsit for money had and of both to arbitration. Carthaus y. Ferrers, received, brought for the benefit of the 1 Pet. (U. S.) 222 ; Jones v. Bailey, 5 Cal. assignee alone. Foster v. Fifield, 29 Me. 345 ; Wood v. Shepherd, 2 Patt. & H. 136. (Va.) 442; Buchoz v. Grandjean, 1 Mich. Instances of admissions rejected as 367 ; Martin v. Thrasher, 40 Vt. 460. But evidence. — An acknowledgment of ser- he can bind himself to the extent of his vice of process, on a writ against a part- interest in the firm. Carthaus v. Ferrers, nership, by one of the partners, signed supra; Fanchon v. Bibb Furnace Co, "T. S. C, one of the firm of C. & L.," is (Ala.), 2 So. Rep. 268 ; Armstrong v. Rob- not an acknowledgment in behalf of his inson, 5 Gill & J. (Md.) 412; Brink v. copartners. Clark v. Stoddard, 3 Ala. New Amsterdam, &c., Ins. Co., 5 Robt. 366. (N. Y.) 104. A entered into partnership with B in But where the other parties previously the business of tanning, and C bound him- assent to or subsequently ratify such sub- self, in a covenant to B, for A's conduct mission, it will bind them. Davis v. Ber- as a partner for a certain time. Held, ger, 54 Mich. 652, and cases last cited that in an action by B against C on the above. covenant, the admissions of A, made after In some states, however, if the submis- the expiration of the stipulated time, sion by one partner be not under seal, it were not admissible as evidence against C. will bind the other partners. Hallack v. Hotchkiss V. Lyon, 2 Blackf. (Ind.) 222. March, 25 111. 48 ; Southard v. Steele, 3 175 129* IMPLIED POWERS OF PARTNERS. [bOOK II., 5. Banking account. — One partner has no implied authority to bind the firm by opening a banking account on its behalf in his own name, (w) See infra, " Cheques." T. B. Mon. (Ky.) 435 ; Taylor v. Congell Jackson, 7 T. R. 207. But it does not fol- 12 Smed. & M. (Miss.) 243; Taylor v. low that one of several persons, who are Coryell, 12 Serg. & R. (Pa.) 243; Gay general partners, cannot in any way bind V. Waltman, 89 Pa. St. 453. See, also, the rest by a submission to arbitration Armstrong i;. Robinson, 5 Gill & J. (Md.) upon a specific matter of partnership 412. riglit. One partner may bring or settle That a sale of his interest by one part- an action on behalf of the rest. Furnival ner to the other, authorizes the latter to v. Weston, 7 J. B. Moore 356; Harwood v. submit the firm claims to arbitration, see Edwards, Gow on Part. (3d ed.) 65, note g. Becker v. Boon, 61 N. Y. 317. Why may he not enter into an agreement Where one partner signed a sealed sub- to refer the subject matter? And if so, mission to an award, and accepted the why may not one agree, on behalf of the amount awarded in favor of the partner- rest, to be governed by an opinion in ship, pursuant to such submission, and which both they and the opposite party endorsed a receipt in full on the award — may confide ? In Strangford v. Green, 2 Held, that it operated either as a release Mod. 228, the submission appears to have by one partner, or as an award and satis- been by arbitration bond, and therefore faction, and was sufficient to bar the part- the partner could not be bound. In Stead nership claim, though the submission v. Salt, 3 Bing. 101, the parties were not might not have been binding upon his partners generally, but only in the deal- copartner. Buchanan f. Curry, 19 Johns, ings to which the award related; the (N. Y.) 137. matter was twice referred. In the first Mr. Gow, in his Treatise on Partner- instance four partners signed the agree- ship (supplement, London, 1841, c. 2, ? 2, ment of reference; the arbitration went p. 17), in reviewing the English cases on ofi", and the new agreement was signed by this subject, says : " In the case of Boyd three only. In the absence of any explan- V. Emerson, 2 Ad. & E. 184, one question ation, it was reasonable to suppose that was whether a partner could bind his co- if both agreements were signed by the partners by a parol submission to arbitra- authority of all the partners the second tion. But the case being disposed of on would have been executed by the same other points, it became unnecessary to de- number as the first. The passage cited in aide that question. However, Sir F. that case, from Com. Dig., 'Arbitrament,' Pollock, who had to maintain the affirm- D 2, from which it was implied that a ative, in the course of his argument ob- partner cannot bind his copartner, prob- served that the point might be considered ably refers to submissions by deed, as res integra, and admitted that ' one There is no ground in reason for saying partner cannot bind another in a matter that in the case of a general partnership in a of arbitration, where the submission is by banking firm, one partner cannot submit, deed ; because, in general, he cannot bind on behalf of all, to such a mode of settling his partner by any deed.' Harrison v. a dispute upon a pa rtnership concern as (u) Alliance Bank, Limited, v. Kearsley, L. R., 6 C. P. 433. 176 CHAP. I., § II.] DOCTRINES OF AGENCY. 129* [5a. Assignments for benefit of creditoi-s.^l 6. Bills of e.'^change and promissory notes. — Every member of an ordinary trading partnership has implied power to bind the firm by was adopted here. Suppose the question pressing assent or dissent (Loeb v. Pier- had been a practical one, as to something point, 58 Iowa 469 ; S. C, 43 Am. Rep. to be done in the course of business, 122; Johnson v. Robinson (Tex.), 4 S. might not a partner have agreed to take W. Rep. 625), or has abandoned all con- the judgment of an experienced person, trol of the business (Kemp v. Carnley, 3 as a custom-house officer, a dock-master, Duer (N. Y.) 1), or has sold out his in- or an eminent merchant? And if so, terest to the partner who executes the why not the opinion of counsel in the assignment (Clark v. McClelland, 2 Grant present case? To hold that the opinion (Pa.) Cas. 31), or has absconded (Sullivan could not be so taken would throw great v. Smith, 15 Neb. 476 ; S. C, 48 Am. Rep. impediments in the way of a very com- 354) — in any such case an assignment mon, useful, and economical mode of executed by one partner is ordinarily settling such disputes." valid on the ground of necessity, though 9. Assignments for benefit of credi- it may, perhaps, be voidable by his co- itors — when one partner may assign. — partner. Sheldon v. Smith, 28 Barb. (N. It may be safely said that under ordinary Y.) 593. circumstances one partner may not, with- So, also, an assignment by a partner of out the assent of the other, assign the firm his separate property, m trust for the pay- property to a trustee for the benefit of the ment of the partnership debts, is valid as creditors ; yet if an extraordinary emer- against a separate creditor of such part- gency occurs in the affairs of the partner- ner. Newman v. Bagley, 16 Pick. (Mass.) ship, and the non-assigning partner can- 570. See, also, Hennessy v. Western Bank, not be consulted on account of his ab- (6 Watts & S. (Pa.) 300), where it was sence, under circumstances which furnish held that a general assignment of all the reasonable ground for inferring that he partnership effects for the benefit of cred- intended to confer upon the assigning itors, executed by a part only of the firm, partner authority to do any act for t-he and followed by delivery, is valid, firm which could be done with his con- In Anderson?;. Tompkins (1 Brock. (U. currence if he were present, such an as- S.) 456), Marshall, C. J., lays down the signment, if fairly made, will be pre- law as follows : " It will be readily con- sumed prima facie to be valid. Stein v. ceded that a fraudulent sale, whether La Dow, 13 Minn. 412; Forbes r. Scan- made by deed or otherwise, would pass nell, 13 Cal. 242; Robinson v. Gregory, nothing to a vendee concerned in the 29 Barb. (N. Y.) 560; Palmer v. Myers, fraud. But, with this exception, I feel 43 Id. 509 ; Deming v. Colt, 3 Sandf. (N. much difficulty in setting any other limits Y.) 284; National Bank v. Sackett, 2 to the power of a partner in disposing of Abb. (N. Y.) Pr. 286; Adams v. Thorn- the effects of the company, purchased for ton (Ala.), 3 So. Rep. 20. sale. He may sell a yard, a piece, a bale, Where the other partner assents to the or any number of bales. He may sell the making of the assignment by his copart- whole of any article, or of any number of ner (Baldwin v. Tynes, 19 Abb. (N. Y.) articles. This power certainly would not Pr. 32), or is absent or incapable of ex- be exercised in the presence of a partner, 177 12 129* IMPLIED TOWERS OF PARTNERS. [bOOK II., drawing, accepting or endorsing bills of exchange, or by making and endorsing promissory notes in its name and for the purposes of the firm, {x) And if two partners, unknown to each other, give two bills without consulting liim ; and, if it were so be consulted. He could not give an opin- exercised, slight circumstances would be ion. In leaving the country he must have sufficient to render the transaction sus- intended to confide all his business to the picinus, and, perhaps, to fix on it the im- partner who remained for the purpose of putation of fraud. In this respect, every transacting it. Had this, then, been a sale case raustdepend on- its own circumstances, for money, or on credit, no person, I think, But with respect to the power, in a case could have doubted its obligation. I can perfectly fair, I can perceive no ground perceive no distinction in law, in reason, on which it is to be questioned. But this or in justice, between such a sale and the power, it is said, is limited to the course transaction which has taken place. A of trade. What is understood by the merchant may rightfully sell to his cred- course of trade? Is it that which is act- itor, as well as for money. He may give ually done every day, or is it that which goods in payment of a debt. If he may may be done whenever the occasion for thus pay a small creditor, he may thus doing it presents itself? There are small pay a large one. The quantum of debt, or traders who scarcely ever, in practice, sell of goods sold, cannot alter the right, a piece of cloth uncut, or a cask of spirits. Neither does it, as I conceive, aSect the But may not a partner in such a store sell power that these goods were conveyed to a piece of cloth, or a cask of spirits ? His trustees to be sold by them. The mode power extends to the sale of the arti- of sale must, I think, depend on circum- cle, and the course of trade does not limit stances. Should goods be delivered to him as to quantity. So with respect to trustees for sale, without necessity, the larger concerns. By the course of trade transaction would be examined with sem- is understood dealing in an article in tinizing eyes, and might, under some cir- which the company is accustomed to deal; cumstances, be impeached. But if the and dealing in that article for the com- necessity be apparent, if the act is justified pany. Tompkins & Murray sold goods, by its motives, if the mode of sale be such A sale of goods was in the course of their as the circumstances require, I cannot say trade, and within the power of either part- that the partner has exceeded his power, ner. A fair sale, then, of all or of a part This is denominated a destruction of the of the goods was within the power vested partnership subject, and a dissolution of in a partner. This reasoning applies with the partnership. But how is it a destruc- increased force when we consider the sit- tion of the subject? Can this appellation uation of these partners. The one was be bestowed on the application of the on a voyage to Europe, the other in pos- joint property to the payment of the debts session of all the partnership effects for of the company ? How is it a dissolution sale. The absent partner could have no of the partnership? A partnership is an agency in the sale of them. He could not association to carry on business jointly. {x) See Re Kiches, 4 De G., J. & S. 581. Smith v. Baily, 11 Mod. 401; Lewis v. andoN. R.287; Pinckneyi). Hall, ISalk. Reilly, 1 Q. B. 349; Stephens v. Rey- 126; Dickinson v. Valpy, 10 Barn. & C. nolds, 5 Hurlst. & N. 513. See, also. The 128- Sutton V. Gregory, 2 Peake 150; Bills of Ex. Act, 1882, § 23, cl. 2. 178 OHAP. I., § II.] DOCTEINES OP AGENCY. 130* in the name of the firm in payment *of the same demand, -' the firm will be liable on both bills if held by bona fide holders for value without notice of the mistake, {y) 10 This association may be form«d for the partner had a right to dissolve this part- future before any goods are acquired. It nership. The act, however, of applying may continue after the whole of a particu- the means of carrying on their business to lar purchase has been sold. But either the payment of their debts, rnight suspend (y) Davison v. Robertson, 3 Dow 218. In all such cases the burden of proof 10. Power of one partner to execute is on the firm in the first instance, the bills and notes. — The law implies an au- legal presumption being that the note thority in one of several partners to exe- was given for a partnership indebtedness cute promissory notes in the name of the in the regular course of business, until firm : ( 1 ) where such authority is neces- the contrary be shown. Thurston v. sary to the successful carrying on of tlie Lloyd, 4 Md. 283 ; Knapp v. McBride, 7 business of the firm; or (2) according to Ala. 19; Barrett v. Swann, 17 Me. 180; the usage of similar partnerships; or (3) Eusminger v. Marvin, 5 Blackf. (Ind.) according to the course of trade of that 210; Littell v. Fitch, 11 Mich. 525 ; Hogg particular partnership. Gray v. Ward, 18 v. Orgill, 34 Pa. St. 344 ; Miller v. Hines, 111. 32; Storer v. Hinkley, Kirby (Conn.) 15 Ga. 197 ; Gregg v. Fisher, 3 111. App. 147 ; Newell v. Smith, 23 Ga. 170 ; Dow 261 ; Adams v. Ruggles, 17 Kan. 237 ; V. Phillips, 24 111. 249 ; Miller v. Hughes, Magill v. Merrie, 5 B. Mon. (Ky.) 168 ; 1 A. K. Marsh. (Ky.) 181 ; Waldo Bank Hamilton v. Soraers, 12 Id. 11 ; Waldo V. Lumbert, 16 Me. 416 ; Coursey v. Baker, Bank v. Greeley, 16 Me. 419 ; Carrier v. 7 Harr. & J. (Md.) 28 ; Bascom v. Young, Cameron, 31 Mich. 373; Laler v. Jordan, 7 Mo. 1 ; Potter v. Dillon, Id. 228; Partin 44 Miss. 283 ; Sylverstein v. Atkinson, 45 V. Leiterloh, 6 Jones (N. C.) Eq. 341; Id. 81; Davis v. Cook, 14 Nev. 265; Kirkpatrick v. Turnbuli, Add. (Pa.) 259. Whittaker v. Brown, 16 Wend. (N. Y.) Each partner is the agent of the other for 505 ; National Union Bank v. London, this purpose, but not to sign the firm name 66 Barb. (N. Y.) 189. to notes relating to business outside of the- Such a note, even though given without scope of the partnership. Zuel v. Bowen, the knowledge or consent of the other 78 111. 234 ; Wagnor v. Clay, 1 A. K. partner, and for a debt unconnected with Marsh. (Ky.) 257 ; Blodgett v. Weed, 119 the partnership business, will bind the Mass. 215; Nat. Union Bank v. London, firm in the hands of an innocent endorsee €6 Barb. (N. Y.) 189 ; Ditts v. Lonsdale, for value. Duncan v. Clark, 2 Rich. (S. 49 Ind. 521. The implied power exists C.) 587 ; Haldeman v. Bank of Middle- only where ihe usual course of the busi- town, 28 Pa. St. 440 ; Collier v. Cross, 20 ness would appear to require it. Bradley Ga. 1 ; Rich v. Davis, 4 Cal. 22 ; S. C, 6 1). Linn, 19 111. App. 322. See, however, Cal. 141 ; Hawes v. Dunton, 1 Bailey (S. 3 Kent Com. 42, where it is said that C.) 146; Marsh v. Thompson National ^'even if the paper was made in a case Bank, 2 111. App. 217; Walworth v. Hen- which was not in its nature a partnership derson, 9 La. Ann. 339; Boardman v. transaction, yet it will bind the firm if it Gore, 15 Mass. 331 ; First National Bank was done in the name of the firm and v. Morgan, 73 N. Y. 593 ; Roth v. Colvin, there be evidence that it was done under 32 Vt. 125. its express or implied sanction." In applying the foregoing principles 179 130* IMPLIED POWERS OF PARTNERS. [bOOK II.^ Acceptances in blank. — One partner, however, has no implied power to accept bills in blank, nor to bind his copartners, otherwise than the operations of the company, but did not is nothing in what is said above which. dissolve the contract under which their militates against the well-settled rule that operations were to be conducted." an assignment of all the property of a When one may not assign. — There firm, for the benefit of creditors, made by it has been held that although the ac- cept in blank) that he possesses to make ceptance of a security of a higher dignity notes which will bind the firm, the form merges and extinguishes the original of the paper not changing the principles cause of action ; yet, if one partner, who examined above. Thus, one copartner has executed, in the name of the firm, a may bind the firm by a bill of exchange single bill, for the amount of a debt which drawn by him in his own name upon the the firm owes, afterwards gives a promis- firm for a partnership debt. Dougal v. sory note in the name of the firm, a re" Cowles, 5 Day (Conn.) 511. But to sup- covery may be had thereon against the port an action against two as acceptors of firm. The partnership debt, which was ex- a draft in their partnership name, the- tinguished by the acceptance of the single plaintiff must prove the partnership, bill, is thereby revived. Davidson v. and that one, at least, of the defendants Kelly, 1 Md. 492. accepted the draft. Head v. Sleeper, 2a So, if one copartner make a negotiable Me. 314. note in the name of the firm, and forge The act of drawing a bill by one part- upon it the name of another person as ner, in his own name, on the firm of which endorser, a bona fide holder of the note, he is a member, for the use of the part- who has paid a valuable consideration for nership, is, in law, an acceptance by the it, may maintain an action against all the drawer in behalf of the firm, and an ac-i partners to recover the amount of the tion may be maintained against the firm note, although it was made without their as on an accepted bill. Dougal i'. Cowles, knowledge and there be no evidence that supra. they derived any benefit from it. Board- An individual acceptance of an order man i'. Gore, 15 Mass. 331. on two firms to pay what might be in their And if one member of a partnership hands, or in the hands of any partner, by sign a note representing a partnership a partner of both intrusted with the set- debt, all the other partners are, as between tlement of all accounts with the drawer,, themselves, under the same obligation to is presumed to be upon consideration of pay the note as the signer. Consequently, having the funds under his control, and is a payment of the note by a partner other therefore valid. Prentiss v. Foster, 28 than the signer, although from his private Vt. 742. funds, extinguishes the note ; nor will it But an acceptance of an order by one be revived by a bare promise made by the member of a firm will not bind the corn- signer to the partner who paid the note to pany where there is no allegation that the pay the same. Sprague v. Ainsworth, 40 defendants were partners, unless the part- Vt. 47. nership be proved. Meachem v. Batchel- Power of one partner to draw or ac- der, 3 Chand. (Wis.) 316. cept bills. — One partner has the same So, also, it is no part of the business of power to draw bills and accept them (ex- mercantile partnersliips to draw or accept 180 CHAP. I., § II.] DOCTRINES OF AGENCY. 130* jointly with iiimself. A bill accepted in blank by one partner in the name of the firm is not binding on it except in favor of a bona fide some of the partners without the consent v. Stone, 34 Mo. 329 ; Hughes v. Ellison, of the otiiers, is void, not only as to the 5 Mo. 463; Fish v. Miller, 5 Paige (N. other partners, but as to creditors. Pettee Y.) 26; Wells v. March, 30 N. Y. 344; V. Orser, 18 How. (N. Y.) Pr. 442; Hook Coope v. Bowles, 42 Barb. (N. Y.) 87 ; bills in order to pay debts of individual on bills of exchange, it is a fact from partners or as security for third persons, which the jury may legally infer that he and such acts by one partner in the name had authority from the other partners so of the firm create no obligation against to do. Bank of Kentucky v. Brooking, 2 the other members of the firm unless they Litt. (Ky.) 41. assent. Tutt v. Addams, 24 Mo. 186. But But one partner is not an agent for his see Freeman v. Eoss, 15 Ga. 252 ; Flem- copartner, to endorse other than partner- ming V Prescott, 3 Kich. (S. C.) 307. ship paper. Bowman v. Cecil Bank, 3 In Louisiana one partner cannot bind Grant (Pa.) Cas. 33. Nor can he, with- the other by a draft ; but where the action out the consent of the other, endorse a is not on the draft only, and the advances note for the benefit of a third person, in for which it was given are shown to have the partnership name. Such endorsement been for the partnership, such other part- imposes no liability on the firm. Lang ner will be bound for his share of the ad- v. Waring, 17 Ala. 145 ; Chenowith v. vances, though not for any portion of the Chamberlin, 6 B. Mon. (Ky.) 60; Laverty damages on the protested bill. Hermanos v. Burr, 1 Wend. (N. Y.) 529. V. Duvigneaud, 10 La. Ann. 114, Power of one partner to endorse for Power of one partner to endorse accommodation. — Where one partner bills and notes.— So, also, a partner may endorses a note in the name of the firm endorse a note in the name of his firm, for the accommodation of a third person, and it may be declared on as the endorse- without express authority from his co- ment of the firm. Manhattan Co. v. partners, they will not be bound thereby Ledyard, 1 Cai. (N. Y.) 191 ; Commercial as against the partner endorsing the note, Bank v. Lewis, 21 Miss. 226; State, Ac, and the latter having paid the note, a Bank v. Thompson, 42 N. H. 369. The judgment on it, recovered by an innocent same presumption of regularity and holder against all the members of the authority attaches as in the case of the firm, is not evidence to charge such co- making of a bill or note by one partner partners with contribution. Berryhill v. (see su^ra, in this note). Manning v. McKee, I Humph. (Tenn.) 31. Hayes, 6 Md. 5. Even though it appears that each one Each partner has the same right to of a firm has, with the assent of the other raise money for the use of the firm by members, repeatedly endorsed accommo- endorsement of negotiable paper, as to dation notes in the firm name, this is no do so by means of paper already is- evidence that either member was author- sued. Moorehead v. Gilmore, 77 Pa. St. ized to sign as maker and surety. Early 118. See, also, Manhattan Co. v. Led- v. Reed, 6 Hill (N. Y.) 12. yard, swpra. Still, a bona fide holder, without notice, If one of the partners has been in the of an accommodation note, endorsed with habit of endorsing the name of the firm the name of a firm by one of the mem- 181 130* IMPLIED POWERS OF PARTNERS. [book II.^ holder for value without notice of the way in which the bill was- accepted, (z) Joint and several notes. — A joint and several promissory note signed by one partner for himself and copartners does not bind them sev- 18 Abb. (N. Y.) Pr. 442; Palmer v. v. Murray, 1 E. D. Smith (N. Y.) 341. Myers, 29 How. (N. Y.) Pr. 8; Kimball For there is no implied authority result- V. Hamiltou Fire Ins. Co., 8 Bosw. (N. ing from the nature of the contract of Y.) 495; Pettee V. Orser, 6 Id. 123; Fisher partnership that will authorize one part- bers, without the assent of the others, may collect it of the firm. Austin v. Van- derniark, 4 Hill (N. Y.) 259; Maudlin v. Branch Bank, 2 Ala. 502 ; Stall v. Cats- kill Bank, 18 Wend. (N. Y.) 46t^ ; Wells V. Evans, 20 Id. 251 ; 22 Id. 324 ; Bank of St. Albans v. Gilliland, 23 Id. 311 ; Emerson r. Harmon, 14 Me. 271 ; Catskill Bank v. State, 15 Id. 364 ; Gildersleeve v. Mahony, 5 Duer (N. Y.) 383; Whaley v. Moody, 2 Humph. (Tenn.) 495. But one who receives a note so en- dorsed, knowing at the time that the en- dorsement was not given for a partner- ship debt or in the partnership business, but was written by one member of the firm, in a matter not relating to the firm's business, but, on the contrary, for the ac- commodation of another person, cannot recover thereon against the other mem- bers of the firm. Fielden v. Lahens, 9 Bosw. (N. Y.) 436; Whitmore v. Adams, 17 Iowa 567 ; Elliott v. Dudley, 19 Barb. (N. Y.) 326. Power of one partner to ^enev^r bills and notes. — Again, a partnership note continues binding on the firm, although renewed with the signature of one partner only, when no change in the liabilities of the parties is intended. Horsey v. Heath, 5 Ohio 358. The renewal by one partner of such a note, after the dissolution of the partnership, is binding upon the co- partner if the latter recognized and con- sented to it. Sanborn v. Stark, 31 Fed. Rep. 18. So, a member of a firm may re- new a note originally given for money to 1 be applied to his individual uses, but which was signed with the firm name, by his only partner, with the understanding that the loan was made on the credit of the firm. Tilford v. Ramsey, 37 Mo. 563. S. P., Wilson V. Richards, 28 Minn. 337. Power of one partner to waive grace^ or demand and notice. — A partner may waive grace upon a firm note given by him. Pierce v. Jackson, 21 Cal. 636. So-, also, he has authority to waive notice of non-payment, or direct any particular mode of dishonor, and such waiver i& binding upon the firm if the holder did not know that it was fraudulently done ;. and it makes no difference that the note in suit was not running at the time of the waiver. But a partner has no right, as- against his copartners, to waive notice upon a note endorsed by him for his own benefit. Windham County Bank v. Ken- dall, 7 R. I. 77. And a settling partner, after dissolution of the partnership and publication of notice thereof, has power to waive demand and notice of a note en- dorsed by the firm during its existence, and all the partners are bound thereby. Seldner v. Mount Jackson Nat. Bank (Md.), 8 All. Rep. 262. Where a note is endorsed by a partnership in the partner- ship name, an agreement by one of the partners to receive notice at a particular place is binding upon his copartners. Nutt V. Hunt, 4 Smed. & M. (Miss.) 702. (2) Hogarth v. Latham, L. R., 3 Q. B>. D. 643. 82 CHAP. I., § II.] DOCTRINES OF AGENCY. ISO^* erally ; (a) but it does bind them and hrm jointly (6) and himself sep- arately, (c) ner to make a general assignment of the partnership effects, without the knowledge or consent of his copartner. Kirby v. Ingersoll, Harr. (Mieh.) Ch. 172; S. C, 1 Dougl. 477 ; Wetter v. Schlieper, 4 E. D. Smith (N. Y.) 707 ; Kelly v. Baker, 2 Hilt. (N. Y.) 531 ; Haggerty v. Gran- ger, 15 How. (N. Y.) Pr. 243; Paton v. Wright, Id. 481. When a partnership formed, not for the purpose of buying and selling, but for a business in which the continued owner- ship of the partnership property is indis- pensable, has closed, or is about closing, neither of the partners can make an as- signment or sale of the joint property, even for the payment of creditors, when the other is present and capable of acting in the matter, without his consent; and, in such a case, mere knowledge of the intended sale will not be sufficient evi- dence of assent. Sloan v. Moore, 37 Pa. St. 217. Power of one partner to assign with preferences. — In Egberts v. Wood (3 Paige (N. Y.) 517), Chancellor Walworth says : " It appears to be the better opin- ion that one of the partners, at any time during tiie existence of the partnership, may assign the partnership effects, in the name of the firm, for the payment of the debts of the company, although, by such assignment, a preference is given to one set of creditors over another. In the case of Dickinson v. Legare and others, cited by the complainant's counsel from the equity reports of South Carolina (1 Desaus. 537), the Court of Chancery of that state de- cided against the validity of an assign- ment of all the partnership effects, made by one of the partners without the knowl- edge or consent of the other, to pay the debt of a particular creditor. Chancellor Matthews, who delivered the opinion of the court in that case, admits that it was a question of the first impression, no case analogous to it havmg come under the view of the court. That assignment, how- ever, was made under very peculiar cir- cumstances. The company, during the revolutionary war, were doing business in this country, and while one of the part- ners was on a voyage to France he was taken by a British ship of war and car- ried as a prisoner to England, where he was prevailed upon by a creditor residing there to give him a general assignment of all the partnership funds, which funds were then in this country, to secure the payment of his particular debt against the firm. Although the decision was put upon the general groimd that one partner had not the right to assign the partner- ship funds in this manner without the consent of his copartner, there is no doubt that the particular circumstances under which that assignment took place had a very considerable influence in bringing the mind of the Chancellor to that result. The assignment in that case being made by a citizen of one of the United States, during the existence of the war, to an alien enemy and in an enemy's country, was probably void by the laws of war, so far, at least, as to prevent its being car- ried into effect by any of the courts of this country ; and certainly it could not be considered as made according to any mercantile usage. That decision, how- ever, has been recently overruled by the (ft) See Perring v. Hone, 4 Bing. 32 ; 2 (c) See Elliot v. Davis, 2 Bos. & P. 338 ; Car. & P. 401. Gillow v. Lillie, 1 Bing. N. C. 695. (6) Maclae v. Sutherland, 3 El. & B. 1. 183 330* IMPLIED POWERS OF PARTNERS. [bOOK II., Powers of attorney to draw bills, &c. — In consequence of the doc- trine that every member of an ordinary trading partnership has au- Court of Appeals in the same state, in the insolvent concern. As a court of equity, case of Robinson v. Crowder, 4 McCord upon a proper application, would protect (S. C.) 519, where it was held that an the rights of the several partners in this assignment by one partner of all the respect before an assignment had actually effects of the firm, in payment of the been made, and if they could not agree partnership debts, was valid as against among themselves, would appoint a re- his copartners. In Pearpoint v. Graham, ceiver of the effects of the partnership, 4 Wash. (U. S.) 232, in the Circuit Court and would apply them in payment of all of the United States for the District of the debts due from the firm ratably, it PeuDsylvania, Judge Washington doubled might perhaps apply the same rule to tlie the right of one of the partners, without case of an assignment to a trustee for the the consent of the others, to assign the payment of the favorite creditors of one whole of the partnership effects in such of the partners only, wliere the equitable a manner as to terminate the partnership, rights of the parties had not in fact been But he declined expressing any decided changed by any proceedings under the opinion upon this question, which he con- assignment." sidered unnecessary to the decision of .the In a later case, however (Havens v. cause then before him, as in that case the Hussey, 5 Paige (N. Y.) 30), Chancellor copartner had subsequently assented to Walworth qualified his former opinion the assignment. In Mills v. Barber, 4 and limited his previous decision, saying : Day (Conn.) 428, the Supreme Court of "In the case of Egberts v. Wood, 3 Paige Errors in Connecticut decided that one 517, 1 had occasion to refer to most of the partner, without the knowledge of the cases relative to assignments of partner- other, might make a valid assignment of ship effects made by one of the copart- partnership funds to secure the payment ners. And I then arrived at the conclu- of a debt due from the firm. See Fork- sion that from the nature of the contract ner v. Stuart, 6 Gratt. (Va.) 197 ; and in of copartnership one of the partnership Harrison v. Sterry, 5 Cranch (U. S.) 289, might make a valid assignment of the the Supreme Court of the United States partnersliip effects, or so much thereof as decided that one of the partners might was necessary for that purpose, in the assign the partnership effects to a trustee name of the firm, directly to one or more for the security or payment of the cred- of the creditors in payment of his or their itors of the firm, without the concurrence debts, altiiough the effect of such assign- of his copartners. I do not intend, in ment was to give a preference to one set this case, to express any opinion in favor of creditors over another. But as it was of the validity of such an assignment of not necessary for the decision of that case, the partnership effects to a trustee by one I did not express any opinion as to the partner against the known wishes of his validity of an assignment of the partner- copartner, and in fraud of his right to ship effects by one partner, against the participate in the distribution of the known wishes of his copartner, to a trustee, partnership funds among the creditors, for the benefit of the favorite creditors of or in the decision of the question which the assignor, in fraud of the rights of his of those creditors should have a prefer- copartner to participate in the distribu- ence in payment out of the effects of an tion of the partnership eflects among the 184 DOCTRINES OF AGENCY. 130* €HAP. I., § II.] thority to draw, accept and endorse bills in its name if a member of such a partnership goes abroad and gives his copartner a power of creditors, or in the decision of tlie ques- tion as to wliich of the creditors, if any, should have a preference in payment out of the effects of an insolvent concern. The present case presents that point dis- tinctly for the decision of the court. And, upon the most deliberate examination of the question, I am satisfied that the de- cision of the Vice Chancellor is correct ; that such an assignment is both illegal and inequitable, and cannot be sustained. The principle upon which an assignment by one partner, in payment of a partner- fihip debt, rests is that there is an implied authority for that purpose from his co- partner, from the very nature of the con- tract of partnership; the payment of the company debts being always a part of the necessary business of the firm. And while either party acts fairly within the limits of sucli implied authority, his contracts are valid, and binding upon his copartner. One membei^ of the firm, therefore, with- out any express authority from the other, may discharge a partnership debt, either by the payment of money, or by the trans- fer to the creditor of any other of the co- partnership effects ; although there may not be sufficient left to pay an equal amount to the other creditors of the firm. But it is no part of tlie ordinary business of a copartnership to appoint a trustee of all the partnership effects, for the purpose of selling and distributing the proceeds among the creditors in unequal propor- tions. And no such authority as that can be implied. On the contrary, such an ex- ercise of power by one of the firm, with- out the consent of the other, is in most cases a virtual dissolution of the copart- nership, as it renders it impossible for the firm to continue its business. The case of Harrison v. Sterry, 5 Cranch (U. S.) 289, which, perhaps, has gone as far as any other on the subject, was not sus- tained as an assignment of all the part- nership effects to a trustee for the payment of preferred creditors. It professed to be the transfer of a certain specific portion of the partnership property, for the purpose of saving the credit of the firm, and to raise funds to carry on the partnership business. And upon the ground that it was not in fact what it professed to be, but was merely intended to give a prefer- ence to particular creditors, the court held the assignment void, as a fraud upon the bankrupt laws. It was only upon the supposition that the assignment was in fact what it professed to be that Chief Justice Marshall held it to be within the power usually exercised by a managing partner." See, also, Wilcox v. .Jackson, 7 Colo. 521 ; Bull v. Harris, 18 B. Mon. (Ky.) 195 ; Matter of Lowenstein, 7 How. (N. Y.) Pr. 100. In Hitchcock v. St. John (Hoffm. (N. Y.) Cli. 511), Hoffman, V. C, says, as to the power to prefer creditors : " The power to make a sale of the partnership effects resides in each partner while the relation exists. The power to bind the firm upon a purchase equally exists in each, although the goods never came into joint stock. All these instances of au- thority, as well as that to make negotiable paper, flow from the principle that each is the agent of the whole. But for what is he such agent? For the purposes of carrying on the business of the firm, and because the authority to do the act is im- plied from the nature of the business. Best, J., in Barton v. Williams, 5 Barn. & Aid. 395, 405. Now, a transfer of all the effects of a firm for payment of its debts, is a virtual dissolution of the partnership. It supersedes all the business of the firm as such. It takes from the control of each 185 130* IMPLIED POWERS OF PARTNERS. [bOOK II.^ attorney to manage his affairs, and draw, accept or endorse bills in hi& name, this authority warrants the attorney in putting his principal's name to non-partnership bills only, his authority to put the partner- ship name to partnership bills being independent of and unaffected by the letter of attorney, (d) Bills, &c., of non-trading partnerships. — With respect to partner- ships which are not trading partnerships, the question whether one partner has any implied authority to bind his copartners by putting the name of the firm to a negotiable instrument, depends upon the all the property with which such business whole. The capacity, integrity and in- is conducted. The purposes of the busi- dustry of another are brought to the man- ness, then, clearly do not require that such ag«ment, and the fitness of the party a power should be implied. What other selected is judged of solely by one mem- reason is there for holding that by the ber of the firm. From what part or prin- contract of partnership it is to be inferred ? ciple of the partnership relation can such I do not think that the principle insisted an authority emanate? It is impossible upon by the counsel for the defendant is to uphold a rule which would rob every the true one, namely, that such a transfer member of a firm of a voice and share in is only invalid when it operates as a fraud this last, and probably most important^ upon the other partner ; when, for exam- act of a failing house. It is no contradic- ple, it is made against his wishes and to tion of this doctrine that where the as- give preferences which he is unwilling to signment is made after insolvency, and give. It strikes me that the principle divides the funds with perfjfct equality upon which the invalidity is established among all the creditors, it will be sup- lies deeper. I consider thai neither dur- ported. It is clear that either partner ing the existence nor after the dissolution might file a bill, obtain an injunction and of a partnership, can such a transfer be receiver and insure an equal distribution made, because of want of power in any of all the funds. An assignment fairly one partner to make it. A direct pay- securing the same equality is an object of ment of money or a transfer of property favor in this court. In the absence of to an acknowledged creditor is an admitted any indication on the part of the copart- and a necessary power during the exist- ner of a contrary intention, it may well be ence of the partnership. We probably inferred that he consents to do justice. A are compelled by authorities to go so far serious question might indeed arise in a as to say that it is a necessary surviving case in which, after such an assignment by power after a dissolution, in whatever way one partner, the other should make a that is effected. All that is requisite to transfer of a specific piece of property in test the transfer is the amount of debt and payment of a just debt of the firm." the extent of the fund assigned. But In Heye v. Bolles (33 How. (N. Y.) upon an assignment of the property of a Pr. 266), a partner in two separate firms firm to a trustee, a complication of duties became the purchaser of the whole prop- and responsibilities is involved. An agent erty of each, and afterward made a general is appointed to control and dispose of the assignment for the benefit of creditors, iiv (d) Attwood V. Munnings, 7 Barn. & C. 278. 186 CHAP. I., § ir.] DOCTRINES OF. AGENCY. 130* nature of the business of the partnership, (e) In the absence of evi- dence showing necessity or usage, the power has been denied to one of sev- eral mining adventurers, (/) quarry workers, (^) * farmers, (/i) solicitors, (i) Where two firms agreed to accept each other's ^ drafts, and to share the profits arising from their sale, it was held that one of these firms was not liable to a person who had purchased a bill drawn on it by the other firm, but which the drawees had not accepted, [k) If, however, a member of a non-mercantile firm concurs in drawing, or authorizes his partner to draw a bill in the name of the firm, he impliedly authorizes its endorsement in the same name, for the purpose for which it was drawn. (I) H which he directed his assignee to pay first partnership effects, preferring certain his individual debts. It was held that creditors to others, which was contrary this assignment was fraudulent as against to a stipulation in the articles of dissolu- creditors of either firm. tion, providing for the equal payment of In Marsh v. Bennett (5 McLean (U. S.) all creditors, was held void. 117), an assignment, by a partner, of the (e) See Dickinson v. Valpy, 10 Barn. & matter not connected with their business C. 128. ( Walworth v. Henderson, 9 La. Ann. 339), (/) Brown I). Byers, 16 Mees. & W. 252; the rule is otherwise as to non-trading Dickinson v. Valpy, 10 Barn. & C. 128. partnerships, one member of which cannot Compare Brown v. Kidger, 3 Hurlst. & N. so bind his copartner, even though it be for 853. a debt of the firm, unless he has express {g) Thicknesse v. Bromilow, 2 Cr. & J. authority therefor from his copartner, or 425. the giving of such instruments is neces- (h) Greenslade v. Dower, 7 Barn. & C. sary to the carrying on of the partnership 635. business, or is usual in similar partner- (i) Hedley v. Bainbridge, 3 Q. B. 316 ; ships ; and the burden is upon the party Levy V. Pyne, Car. & M. 453; Harman v. suing on such note or bill to prove such Johnson, 2 El. & B. 61, and 3 Car. & K. authority, necessity or usage. Smith v. 272. Sloan, 37 Wis. 285. See, also. Prince v. (k) Nicholson v. Kicketts, 2 El. & E. Crawford, 50 Miss. 344, 497. When, however, a partnership is en- (Z) See Garland v. Jacomb, L. R., 8 gaged in a coursje of business in which the Ex. 216 ; Lewis v. Keilly, 1 Q. B. 349. use of its commercial paper is appropriate 11. Bills and notes of non-trading and reasonably to be expected, or does in partnerships. — While the law holds a fact make use of it, with the common commercial firm bound to any bona fide knowledge of the members of the firm, holder of a note or draft drawn, accepted whenever the convenience or necessities or endorsed by any partner in- the part- of the firm may require, the firm is liable nership name, though without the au- upon commercial paper made in its name thority of the other partners, and in a by one of its members to one who takes 187 331* IMPLIED POWERS OF PARTNERS. [book II., Authonty to transfer bill. — It must be borne in mind that a person who lias no authority to use the name of another, so as to render him it bona fide, in the usual course of business, before maturity, and for a valuable con- eideration, notwithstanding any fraud of the partner making the paper, or misap- propriation by him to other uses than those of his firm. Nat. Exchange Bank v White, 30 Fed. Kep. 412. Such Ihibility is not restricted to the case of a trading copartnership, if by that term is intended one engaged in the busi- ness of buying and selling, though it would, as a rule, include such, but ex- tends to all cases where the nature of the business fairly and reasonably implies such use as an appropriate incident there- to, or where the actual course of business pursued adopts the practice of issuing the mercantile paper of the firm to accommo- date its necessities or convenience when- ever the occasions occur, and such occa- sions do in fact occur, and are thus pro- vided for. lb. It thus becomes important to ascertain what classes of partnerships are deemed, in law, to be commercial or trading part- nerships, and this, of course, depends en- tirely upon the character of the business . O'Connell, 12Ir. Eq. 566. See, in cases mdn law. that one partner cannot bind of fraud, ante p. *135, note (r), and ivfra, his copartner by the execution of a deed « jielease." (Anthony v. Butler, 13 Pet. (U. S.) 423), (i) Ball V. Dunsterville, 4 T. R. 313; unless his authority so to do is itself under Burn V. Burn, 3 Ves. 578. See, as to seal. Donaldson v. Kendall, 2 Ga. Dec. ratifying a deed executed by one person 227 ; Trimble v. Coons, 2 A. K. Marsh. for another, Ttipper v. Foulkes, 9 C. B. (Ky.) 375; Snyder v. May, 19 Pa. St. (N. S.) 797. In Orr v. Chase, 1 Mer. 729, 235 ; Napier v. Catron, 2 Humph. (Tenn.) a bond executed by one partner, in the 534 ; Lambden v. Sharp, 9 Id. 224 ; Mor- 202 CHAP. I., § II.] DOCTRINES OF AGEXCY. IS?*" 13. Distress. — If several partners grant a lease, any one of thera may distrain, or appoint a bailiff to distrain, in the name of all ; and ris V. Jones, 4 Harr. (Del.) 428. In Blackburn v. McCallister (Peck (Tenn.) 371) it is held that he may do so if the terms of the partnership authorize it ; but, in Napier v. Catron, supra, where, in the agreement of partnership, under seal, each ptrrtner was authorized to bind his copartners by deed, and such agree- ment expired by its own limitation, and was continued by a written agreement, not under seal, it was held that tlie continua- tion did not carry with it the power ; and that a mortgage of real estate, executed by one of the firm to secure the partner- ship, did not bind the other members. In Harrison v. Jackson (7 T. K. 207, 210) Lord Kenyon said : " The law of mer- chants is part of the law of the land ; and in mercantile transactions, in drawing and accepting bills of exchange, it never was doubted but that one partner might bind the rest. But the power of binding each other by deed is now, for the first time, insisted on, except in the nisi prius case cited, the facts of which are not sufiiciently disclosed to enable me to judge of its pro- priety. Then it was said that if this partnership were constituted by writing under seal, that gave authority to each to bind the otiiers by deed. But I deny that consequence just as positively as tlie former; for a general partnership agree- ment, though under seal, does not author- ize the partners to execute deeds for each other, unless a particular power be given for that purpose. This would be a most alarming doctrine to hold out to the mer- cantile world ; if one partner could bind the others by such a deed as the present, it would extend to the ca^ of mortgages, and would enable a partner to give to a favorite creditor a real lien on the estates of the other partners." The acting partner of a mercantile part- nership cannot transfer the real property of the firm in the same manner as its personal property ; the conveyance, as- well as the descent of real property, is regulated by statute ; and neither of these modes is aflected by any general law of partnership. Piatt v. Oliver, 3 McLean (U. S.) 27; affirmed on other grounds, 3 How. 333. For the same reason, one partner can- not execute a bond under seal, in the partnership name, so a? to bind the other partner (Gerard v. Basse, 1 Dall. (U. S.) 119 ; Hart v. Withers, 2 Pen. (X. J.) 285 ,- Button V. Hampson, Wright (Ohio) 93 ; McDonald v. Eggleston, 26 Vt. 1-54 ; Pier- son V. Hooker, 3 Johns. (N. Y.) 68 ; and the plea of non est factiira will be sus- tained in an action against the firm on a bond so executed, even though it was exe- cuted under an authority from the copart- ner, not under seal, to execute a note in his name. Henry County v. Gates, 26 Mo. 315. In short, at common law, one partner cannot do any act under seal to afiect the interests of his copartner, unless it is to release a debt. M'Bride v. Hagan, 1 Wend. (N. Y.) 326. Cases holding parol or verbal au- thority sufficient. — In Gram v. Seton (1 Hall (N. Y.) 262) a case decided in the Superior Court of the city of New York, Jones, C. J., after reviewing the English and American cases on this subject, says : " The principle that a partner cannot, by virtue of the authority he derives from the relation of copartnership, bind his copartner by deed, has been too long set- tled to be now shaken. It is the technical rule of the common law applicable to deeds which has been engrafted into the commercial system of the law of partner- nership ; and unless the charter party in question can, under the circumstances of 203 137* IMPLIED POWERS OF PARTNERS. [book II., a distress by one partner, or by the bailiff appointed by him, will be lawful, although the other partners are no parties to the distress and do not assent thereto, (n) this case, be construed to be the deed of Bunker, the defence must prevail. The reasons for the restrictions are not very satisfactory, for all tl>e mischiefs which the expositors of the rule ascribe to the authority of members of a copartnership to seal for their copartners may flow almost as extensively, and nearly with equal facility, from the use of the name and signature of the copartnership. The dangers of allowing the use of a seal to the members of a copartnership are sup- posed to consist in these two attributes of the seal : that it imports a consideration, and that it is competent to convey abso- lutely, or to charge and encumber real estate. But negotiable paper, by which the partner may bind the firm, equally imports a consideration with a seal ; and, upon general principles, the use of the seal of the copartner, equally with the signature of the copartnership, would, if permitted, be restricted to copartnership purposes and copartnership operations solely, and the joint deed of the copart- ners, executed by the present for the ab- sent members, be held competent to con- vey or to encumber the copartnership property alone, and to have no operation upon tlie ptivat* funds or separate estate of the copartners. With these restric- tions upon the use and operation of the seal, is not the power of a partner to bind his copartner and to charge and encum- ber his estate as great and as mischievous, without the authority to use the seal of the absent partner, as it would be with that authority ? Those powers unde- niably place the fortune of the members of a general copartnership, to a great de- gree, at the disposal of any one of the co- partners ; but it is necessary to the bene- ficial management of the joint concern that extensive powers should be vested in the members who compose it ; and when the copartners live remotely from each other, their joint business concerns can- not be advantageously conducted or car- ried on without a latitude of authority in each which is inconsistent with the per- fect safety of the other copartners. It cripples the operation of a partner, whose distant residence precludes a personal co- operation, to deny him the use of the seal of his copartner for instruments requir- ing it, and which the exigencies of their joint concerns render expedient or bene- ficial to them. He must be clothed with the power to execute deeds for his copart- ner when necessarily required for the purposes of the trade ; and if that au- thority is not inherent in the copartner- ship, it must be conferred by letter of attorney, and it must be general, or it will be inadequate to the ends of its creation. A copartnership, especially, which is em- ployed in foreign trade, and has occasion to employ ships for the transportation of merchandise, or to borrow money on re- spondentia, if its members are dispersed, as is often the case, must be seriously em- barrassed in it? operations by the applica- tion of the rule that requires every co- partner who is to be bound by the charter party or the respondentia bond to seal it personally, or by attorney duly consti- tuted for that specific purpose, with its own seal. Similar difiiculties would arise out of the same rule when the operations of the house required the copartnership to execute other deeds. Can it then be that this stern rule of the common law, which (n) See Robinson v. Hofman, 4 Bing. 562, and the cases there cited. 204 CHAP. I., § II.] DOCTRINES OF AGENCY. 137^ 14. Extension of business. — It follows, from the principles investi- gated at the commencement of the present chapter, that one partner has its appropriate sphere of action, and a most salutary operation on those rela- tions of society where men not otherwise connected are the owners of undivided property, is to be applied in all its force, and to govern with unbending severity in the concerns of copartners whose inti- mate connection and mutual interest re- quire such large power and ample confi- dence in the integrity and prudence of eac'i other, to give to their operations efficiency, vigor and success ? The pres- sure of these considerations has induced a relaxation of the common law rule to adapt it to the exigencies of commercial copartnerships and other associations of individuals operating with joint funds for the common benefit. The rule itself re- mains, but the restrictions it imposes are qualified by the application of other prin- ciples. The general authority of a part- ner, for example, derived from his relation to his copartners, does not empower him to seal an instrument for them, so as to make it binding upon them without their assent and against their will. This is the fair import of the modern cases, and is, I apprehend, the principle courts are dis- posed to apply to the use of a seal in joint contracts for copartnership purposes. An absent partner is not bound by a deed executed for him by his copartner, with- out his previous authority or permission or his subsequent assent and adoption. But the previous authority or permission of one partner to another to seal for him, or his subsequent adoption of the seal as his own, will impart eflBcacy to the instru- ment as his deed ; and that previous au- thority or subsequent adoption may be by parol. These are the results which I de- duce from the judicial decisions, especially those of our own courts, on the subject ; and, if I am correct in my deduction, the conclusion must be favorable to the validity of this gharter party as the deed of both the partners." See, also, to the efTect that the authorization may be by parol, Grady v. Robinson, 28 Ala. 289 ; Herbert v. Hanrick, 16 Ala. 581 ; Drum- wright V. Philpot, 16 Ga. 424; Haynes v. Seachrest, 13 Iowa 455 ; Ely v. Hair, 16 B. Mon. (Ky.) 230; Pike v. Bacon, 20 Me. 280; Cady v. Sheperd, 11 Pick. (Mass.) 400; Clement v. Brush, 3 Johns. (N. Y.) Cas. 180; Swan v. Stedman, 4 Mete. (Mass.) 548 ; Fox v. Norton, 9 Mich. 207; Gwinn v. Rooker, 24 Mo. 290; Smith V. Kerr, 3 N. Y. 144; Bond v. Aitkin, 6 Watts & S. (Pa.) 165 ; Johns v. Rattin, 30 Pa. St. 84 ; Lowery v. Drew, 18 Tex. 786 ; Wilson i'. Hunter, 14 Wis. 683. Thus, an attachment bond signed and sealed by one partner in the firm name, and authorized or ratified by parol, is valid. Jeffreys v. Coleman, 20 Fla. 536. in Alabama, however, a deed by one partner in the firm name conveys only his interest, though subsequently the other partners orally assent. Bumson v. Morgan, 76 Ala. 593. Previous assent or subsequent ac- quiescence or ratification. — The weight of authority is to the eflect that while one partner cannot bind his associates by deed, by virtue of the contract of part- nership, yet where he executes a sealed instrument in the name of the firm, under a prior verbal authority, or subsequent verbal ratification, it is binding on the firm (Grady v. Robinson, 28 Ala. 289 ; Her- bert V. Hanrick, 16 Ala. 581 ; Gibson v. Wardon, 14 Wall. (U. S.) 244 ; Drum- wright V. Philpot, 16 Ga. 424 ; Haynes v. Seachrest, 13 Iowa 455; Ely v. Hair, 16 B. Mon. (Ky.) 230; Pike v. Bacon, 20 Me. 280; Cady v. Sheperd, 11 Pick. (Mass.) 400 ; Clement v. Brush, 3 Johns. 205 137 IMPLIED POn^ERS OF PARTNERS. [book II., has no implied power to biiul the firm with respect to matters not falling within the scope of the Ijusiness which it ostensibly carries on or was formed to carry on. (o) (N. Y.) Cas. 180; Swan v. Stedman, 4 Mete. (Mass.) 548; Fox v. Norton, 9 Mich. 207; Gwinn v. Kooker, 24 Mo. 290; Smith v. Kerr, 3 N. Y. 144; Bond V. Aitkin, 6 Watts & S. (Pa.) 165; Johns v. Kattin, 30 Pa. St. 84 ; Lowery v. Drew, 18 Tex. 786 ; Wilson v. Hunter, 14 Wis. 683) ; and that the assent of the other partner may be implied from circum- stances. Person v. Carter, 3 Murph. (N. C.) 321 ; Layton r. Hastings, 2 Harr. (Del.) 147 ; Doe v. Tupper, 4 Sm. & M. (Miss.) 261; Morse v. Bellows, 7 N. H, •549; Lucas v. Sanders, 1 McMull. (S. C.) 311; Lee v. Onstott, 1 Ark. 206; Mont- gomery V. Boon, 2 B. Mon. (Ky.) 244; M'Cart V. Lewis, Id. 267 ; Cummings v. Carsily, 5 Id. 47 ; Bentrin v. Zieriien, 4 Mo. 417; Turbeville v. Ryan, 1 Humph. :) and notice to an agent of matters connected with his agency is notice to his principal. (Z) Consequently, as a general rule, notice to one partner of any matter relating to the business of the firm is notice to all the other members ;(//i) and if two firms have a common partner, notice which is imputable to one of the firms is im- putable to the other also, if it relates to the business of that other. (?i) '^Firm afected by its agenfs knoioledge. — In conformity -^ with these principles, if a firm claims the benefit of a trans- (n Weikersheim's Case, 8 Ch. 831. 25. Pledges. — So, also, one partner may, by way of pledge, without the consent or even knowledge of his copartner, assign directly to a creditor a part or the whole of the partnership property to secure a firm debt existing or about to be con- tracted. Mabbett v. White, 12 N. Y. 442 Harrison v. Sterry, 5 Cranch (U. S.) 289 Deming v. Colt, 3 Sandf. (N. Y.) 290 Hodges V. Harris, 6 Pick. (Mass.) 360 TapleyiJ. Butterfield, 1 Mete. (Mass.) 515 Egberts v. Woods, 3 Paige (N. Y.) 517 CuUom V. Bloodgood, 15 Ala. 34; McCol iough V. Somraerville, 8 Leigh (Va.) 415 Ormsbee v. Davis, 5 R. I. 443 ; Russel v. Leland, 12 Allen (Mass.) 349. But one partner has no authority to agree that private property of the other partner, pledged by him for a firm debt, shall also stand as security for further advances. Beardsley v. Tnttle, 11 Wis. 74. See, also, generally, Miller (•. Sullivan, 1 Cin. (O.) 271. (k) See Mayhew v. Eames, 1 Car. ) it was held that a banking company was not entitled to the benefit of a mortgage given to it by its own manager, in his character of an execu- tor. For the mortgage was given as a security for money borrowed by the manager as executor, and advanced by himself as manager for improper purposes, and in breach of the trusts which, as executor, he had to perform ; and the company, in taking the mortgage, knew that their manager was giving a security on his testator's estate for money previously taken by him from the funds of the company, and which moneys he had been requested to replace or give security for. Under these circumstances, it was treated as clear that the bank could stand in no better position than the manager would have done had he advanced the money himself and taken a mortgage for it from himself. Meaning of phrase "Notice to one is notice to alV — When it is said that notice to one partner is notice to all, what is meant is (1) that a firm cannot, in its character of principal, set up the ignorance of some of its members against the knowledge of others of whose acts it claims the benefit, or by whose acts it is bound ; and (2) that when it is necessa^ry to prove that a firm had notice, all that need be done is to show that notice was given to one of its members as the agent and on behalf of the firm. The expression means no more than this, and although every person has notice of what he himself ■does, it would be absurd to hold that a firm has notice of everything done by each of its members. Where one member is acting beyond his powers, or is committing a fraud on his copartners, or is the per- son whose duty it is to give his firm notice of what he himself has -done, in all such cases notice on his part is not equivalent to notice by them.(g') *In Bignold v. Waterhouse (r) oiie of a firm of carriers r^,_,o entered into an agreement to carry valuable parcels free of charge, but under such circumstances as to rdnder the agreement not (o) Seeane of each of the partners, and may be of the partners. R. v. Leeds, 3 Stark. 70. 228 CHAP. I., § II.] DOCTRINES OF AGENCY. 147* sumes that one partner has also implied authority to discharge them, although he cannot do so against the will of his copartners, (x) 32 Barnett, 10 Kan. 455 ; Post v. Kimberly, 9 Johns. (N. Y.) 470. See, also, infi-a, p. *172 and note — , where this subject is more fully examined. But if such sale be made to a bona fide purchaser, and the money received is mis- applied, the other partner cannot follow the goods in the hands of such purchaser (Chipley v. Keaton, 65 N. C. 534) ; nor can he maintain an action of any kind against him. Wells v. Mitchell, 1 Ired. (N. C.) L. 484. See, also, Stokes v. Ste- vens, 40 Cal. 391 ; Corwin v. Suydam, 24 Ohio St. 209. The act of a partner in selling goods raises an implied promise on the part of the vendee to pay the partnership for them, subject, however, to be controlled by any express contract which may have existed to the effect that the vendee was not to pay the partnership, but to credit the amount of the goods on an individual claim against the partner who sold the goods, in favor of the vendee. Broaddus V. Evans, 63 N. C. 633 ; Ramey v. McBride, 4 Strobh. (S. C.) 12. Sale of land by one partner. — The mere fact that persons are mercantile part- ners does not empower one of them to execute an agreement for the sale of real estate in the name of both. McWhorter V. McMahan, 1 Clarke (N. Y.) Ch. 400. Where real estate is conveyed to a firm, or to the members thereof in trust for the firm, the partners become tenants in com- mon of the estate, and neither of them can alone convey more than his undivided interest therein. Anderson v. Tompkins, 1 Brock. (U. S.) 456; Willey i'. Carter, 4 La. Ann. 56 ; Weld v. Peters, 1 Id. 432 ; Arnold v. Stevenson, 2 Nev. 234 ; Donald- son V. Bank of Cape Fear, 1 Dev. (N. C.) Eq. 103. If the object of a partnership is to pur- chase, improve, and own a certain tract of land, neither partner has any implied power to alienate any part of the land. The power to create a debt and convey the land in payment cannot be implied from the power to convey in payment of a debt previously contracted by one partner, in the exercise of an undoubted power. Berry v. Folkes, 60 Miss. 576. But a contract to convey lands belong- ing to a firm, signed with the firm name by one partner, under a verbal authority from the other partner, is binding on both. Lawrence v. Taylor, 5 Hill (N. Y.) 107. And inasmuch as a surviving part- ner is charged with the payment of the debts of the firm, he has the right in equity to dispose of its real estate for that purpose ; and although his deed will not convey the legal estate to a purchaser, yet it will convey the equity to him, and through it he may compel the heir to convey the legal title. Andrews v. Brown, 21 Ala. 437. See, also, Paton v. Baker, 62 Iowa 704. (x) Donaldson v. Williams, 1 Cromp. & M. 345. But see Dixon on Part. 139, contra. 32. Servants.— Where one of two part- ners employs a laborer or other employee about the business of the firm, the whole firm is liable for his wages, whatever agreement may subsist between the part- ners. Coons V. Eenick, 11 Tex. 134. S. P., Bodwell V. Eastman, 106 Mass. 525. And such a contract for services binds the firm even after the admission of a new member into the firm. Froun v. Davis, 97 Ind. 401. See, alse, Beste v. Creditors, 15 La Ann. 55 ; Moister's Appeal, 74 Pa. St. 166. As to the power of the sole acting partner to dismiss employees, as against the power of the dormant partners to re- 229 147* IMPLIED POWERS OF PARTNERS. [bOOK II., 30. Shij)s. — Where necessary, one partner may bind the firm by chartering a ship on its behalf, and one partner may mortgage a ship belonging to the fi-rni. {y) SECTIOX III. LIABILITY OF PARTNERS IN RESPECT OF TORTS AND FRAUDS. Liability of principals for the torts and frauds of their agents. — If it were necessary, in order that one person should be liable for the tort or fraud of another, that the former should have authorized the commission of such tort or fraud, it would be a comparatively easy matter to determine in any particular case whether a tort or fraud committed by an agent could or could not be imputed to his principal. But as a principal is bound, not only by the authorized acts of his agent, but also by such unauthorized acts as fall within the scope of the authority apparently conferred upon him, the question whether a tort or fraud committed by an agent is or is not imputable to his prin- cipal becomes one of considerable difficulty ; for it is obvious that it does not follow from the circumstance that such tort or fraud was not authorized, that therefore the principal is not legally responsible for it. (z) ^ -. * General principles. — In order that responsibility may -* attach to the principal, in respect of a tort or fraud, it is necessary — 1. That he shall have authorized it in the first instance; or, 2. Tiiat it shall have been done on his behalf and he shall have ratified it ; (a) or, 3. That it shall have been committed for his benefit by the agent in the course and as part of his employment. (6) tain them, see Briggs v. Smith, 4 Daly 18 Id. 886 ; Brodie v. Howard, 17 C. B. (N. Y.)110. 109. (y) See, as to chartering, Thomas v. (z) Pollock on Torts 63, et seg. ; Story Clarke, 2 Stark. 451, and, as to mortgaging, on Agency, § 452 ; Paley on Agency 294, Ex parte Howden, 2 Mont., D. & D. 574. et seq. The circumstance that a person is regis- (a) Ratification can only be of an act tered as a part owner, does not, per se, done for the person ratifying. Wilson v. render him liable for the acts of the other Tumman, 6 Man. & G. 236. owners. Myers i. Willis, 17 C. B. 77, and (6) As to the meaning of this expres- 230 CHAP. I., § III.] DOCTRINES OF AGENCY. 148* That this last is sufficient is obvious from those cases in which masters have been held liable for the negligence of their servants ; (c) litigants for irregularities committed by their solicitors in the course of the litigation to conduct which they are retained ; ((^) merchants for frauds committed by their factors and brokers whilst acting on their behalf; (e) and shopkeepers for the illegal acts of their shopmen whilst in the shop and attending to its business. (/) ExGeptions to the rule '^Respondeat superior.''^ — On the other hand, a principal is not liable for the torts or frauds of his agent, except upon one or other of the three above-mentioned grounds. Thus, a princi- pal is not liable for the willful acts of his agent if not done in the course of his employment and as part of his business ; {g) and this is true not only of assaults, batteries, libels and the like, but also of frauds. The maxim '^ Respondeat superior^' does not render a principal liable for the frauds of his agent if the agent has been dealt with as a principal, (A) nor unless the frauds have been committed by the agent for the benefit of his principal and in the course and as part of his own employment, (i) Further, a principal is not bound by a contract which is a *fraud on him, and is known to be so by the person entering r^-j^^^ into the contract, {k) 33 sion, see Burns v. Poulsom, L. R., 8 C. P. fited by such a contract, Id., p. 55. 563 ; Pollock on Torts 72, et seq. 33. Liability of principal for torts ■ (c) See the last case, and Patten v. Rea, and frauds of agent.— The members of 2 C. B. (N. S.) 606. a firm are individually liable, in actions (d) Collett D.Foster, 2 Hurlst.&N. 356. of tort, for the acts of the firm, their (e) Hern v. Nichols, 1 Salk. 289. agents and servants, and for such acts (/) Grammar v. Nixon, 1 Str. 653; may be sued individually. Stockton v. Amory v. Delamirie, Id. 505. Frey, 4 Gill (Md.) 406. Thus, all the {g) McManus v. Crickett, 1 East 106 ; partners are liable for an injury occasioned Croft V. Alison, 4 B. & A. 590 ; Attorney- by the negligence of one of them, or of General v. Siddon, 1 Cromp. & J. 220. servants employed by the partnership, Compare Limpus v. Lon. Gen. Om. Co., 1 while transacting the business of the firm. Hurlst. & C. 526. Linton v. Hurley, 14 Gray (Mass.) 191. (A) Ex parte Eyre, 1 Ph. 227. And the assent of one of two partners to (i) Grant v. Norway, 10 C. B. 665 ; what is being done by a person acting as Coleman v. Riches, 16 Id. 104. a deputized constable in the service of an (k) British and American Tel. Co. v. execution in favor of the firm, is sufficient Albion Bank, L. R., 7 Ex. 119; Phosphate to bind both. Harvey v. McAdams, 32 of Lime Co. v. Green, L. R., 7 C. P. 43, Mich. 472. and see, as to the efi'ect of having bene- So, where one partner has an attach- 231 149* IMPLIED POWERS OF PARTNERS. [book II., Having made these preliininuiy observations, it is proposed, in the present section, to examine the liability of partners for torts and frauds, as distinguished from contracts. First, as regards torts. Torts of partners. — It follows from the principle of agency, coupled with the doctrine that each partner is the agent of the firm for the purpose of carrying on its business in the Usual way, that an ordinary partnership is liable in damages 'for the negligence of any one of its members in conducting the business of the partnership. It has ac- cordingly been held that a firm of coach proprietors is answerable for the negligent driving of a partnership coach by one of the firm, the coach being driven for the firm in the ordinary course of business ;(^) and that two partners are liable for not keeping the shaft of a mine in proper order, although one of them only actually superintended it.(rji) So, a partnership is liable for the negligence of its servants acting in the course of their employment by the firm, (n) 34 ment made on account of a firm debt, and executions of writs by one of two part- the goods are afterwards sold under an execution in the same suit, and the pro- ceeds applied to meet the debt, this is proof of a ratification of the attachment by all the partners ; and if it be wrongful, they will all be liable in an action of tort. Gurler v. Wood, 16 N. H. 539. But where one partner in a firm acting as agents for the owner of demised prop- erty, commits a trespass in expelling tlie tenant and removing his goods, the other partner, who takes no part in the act and knows nothing of it at the time, and neither advises nor directs it, cannot be rendered liable on the mere ground of his subse- quent approval and sanctioning of the act after its commission. Grund v. Van Vleck, 69 111. 478. (l) Moreton v. Hardern, 4 Barn. & C. 223 ; and see, as to ships, Steel v. Lester, 3 C. P. D. 121. (m) Mellors v. Shaw, 1 Best & S. 437 ; Ashworth v. Stanwix, 7 Jur. (N. S.) 467, and 3 El. & E. 701. See, as to irregular ners, Duke of Brunswick v. Slowman, 8 C. B. 317. (n) Stables v. Eley, 1 Car. & P. 614. 34. Torts of partners, generally.^- The firm is liable in solido for the tort of one partner committed by him as such, and in the course of the firm business . (Stockwell V. United States, 3 Clifi: (U. S.) 284) ; but if a partner commit a tort, not as a partner, but as an individual, in re- spect to a matter entirely foreign to the business of the partnership, the other part- ners are not liable (Schwabacker v. Rid- dle, 84 111. 517) unless they either au- thorized or adopted the wrongful act. Graham v. Meger, 4 Blatchf. (U. S.) 129; Heirn v. McCaughan, 32 Miss. 17 ; Taylor V. Jones, 42 N. H. 25. See, also, Eoney v. Buck-land, 5 Nev. 219. Conversion. — Where one partner, in the due course of business of the firm, seizes and takes the property of another, which is appropriated to the use and benefit of the firm, thereby increasing its 232 CHAP. I., § III.] DOCTRINES OF AGENCY. 149* Breach of revenue laws.— If one partner, in conducting the business of the firm, is guilty of a breach of the revenue laws, all the partners are jointly and severally answerable for the consequent penalties, although they may not themselves have authorized or been parties to the illegal conduct of their copartner, (o) 35 assets, the other partners will be liable for v. Brewer, 49 Ala. 119. And an action the conversion. Durant v. Rogers, 87 111. for injuries sustained through the negli- 5Qg_ gence of an employee of a firm may An assent by some of the partners to a be brought against any one or more, or conversion by the others will make them all, of its members. Roberts v. Johnson, wrong-doers equally with the rest, pro- 58N. Y. 613. vided the conversion was for their use and (o) R. v. Stranyforth, Bunb. 97 ; Attor- benefit, and they were in a situation to ney-General v. Burges, Id. 223 ; Attorney- have originally commanded the conver- General v. Weeks, lb. ; R. v. Manning, sion. Loomisz). Barker, 69 111. 360. S. P., Comyn 616. See, also, Mullins v. Collins, In re Ketchum, 1 Fed. Rep. 815. L. R., 9 Q. B. 292 ; Attorney-General v. A conversion by one of a firm to which Siddon, 1 Crbmp. & J. 220. Compare goods have been sent to be made up, does Newman v. Jones, 17 Q. B. D. 132. not excuse the owner from paying the 35. Breach of revenue laws.--Every other partners, and therefore he may partner is civilly liable for violations of bring trover against the guilty partner the revenue law by his copartners, whether alone. Stevens v. Faucet, 24 111. 483. he knew of or consented to such viola- In Loomis v. Barker (69 111. 360), tions or not. United States v. Thomasson, where one partner placed a claim in the 4 Biss. (U. S.) 99. And two or more hands of a constable for collection, under partners are jointly and severally crimi- which property of a stranger was seized nally liable for the circulation of change- and sold under attachment or execution, bills by their clerk, in violation of Ala. and the other partner being present at Rev. Code, § 3643, although they did not the sale, bid on the property, and treated jointly assent thereto, and did not know and spoke of it as having been taken and when the bills were emitted. Barnett v. sold on the process issued upon a claim State, 54 Ala. 579. due the firm, and received the proceeds If two persons composing a firm make of the sale as a payment on such claim, it and sign, in their partnership name, a was held in trover by the owner against false return to the assessor of internal the partners, that they were both liable revenue, they may be jointly indicted for the conversion. Loomis v. Barker, therefor. United States v. McGinnis, 1 69 111. 360. See, also, Chambus v. Abb. (U. S) 120. And where one of two Clearwater, 1 Abb. (N. Y.) App. Dec. partners, with the other's knowledge, con- 341 ; S. C, 1 Keyes 310 ; aflarming 41 verted to the firm's use money received by Barb. 200. bim as United States revenue collector, it Negligence.— The owner of a horse was held that a bond given by the firm to borrowed by a partner to be used in the indemnify the sureties on the collector's firm business, and lost through his bond created a firm indebtedness, even neglect, or other wrong doing, may recover though, at the time it was given, the sure- therefor against the partnership. Witcher ties had not made good the defalcation, as 233 149* IMPLIED rOWER-S OF PARTNERS. [bOOK II., Willful torts. — As a rule, however, the willful tort of one partner is not imputable to the firm. For example, if one partner maliciously prosecutes a person for stealing partnership property, the firm *is not ^ answerable, unless all the members are, in fact, privy to the *150l • • • • • ' f J -" malicious prosecution. (_p) But a willful tort, committed by a partner in the course and for the purpose of transacting the business of the firm, may make the firm responsible,(7) 36 Secondly, as regards frauds. Frauds of pa^-tners. — An ordinary firm is liable for frauds com- mitted by one of its members Avhilst acting for the firm and in trans- acting its business, and the innocent partners cannot divest themselves of responsibility on the ground that they never authorized the com- mission of the fraud. On the other hand, the firm is not liable for the other frauds of its members, unless it has in fact sanctioned such frauds, or the transactions of which they form part. It will be con- venient to examine this subject, first, with reference to misapplications of money, and secondly, with reference to false representations by partners. 37 their liability became fixed immediately by, 2 Sandf. (N. Y.) 421 ; Doremus v. upon the conversion. Wharton v. Clem- McCormick, 7 Gill (Md.) 49 ; Tenney v. ents, 3 Del. Ch. 209. Foote, 95 III. 101. As to what facts will (p) Arbuckle v. Taylor, 3 Dow 160. raise a presumption that a partner was iq) See Limpus v. Lon. Gen. Om. Co., cognizant of and assenting to a fraud C9m- 1 Hurlst. & C. 526 ; Pollock on Torts 80, mitted by his copartners, see Townsend v. et seq. Bogart, 11 Abb. (N. Y.) Pr. 355. 36. Willful torts. — That all of the part- Where A, on entering into partnership ners owning a newspaper are liable for a with B, purchases an interest in a stock libel published therein by one of them, of goods held by B, and the goods are see Lothrop v. Adams, 133 Mass. 471. afterwards seized on attachment as the 37. Frauds of partners, generally. — property of a third person, and in an All the members of a firm are answerable action by A and B against the attaching for a fraud committed by one of them, or officer it appears that the goods were sold by their agent, acting within the scope of to B by the attachment debtor, and that his authority. Locke v. Stearns, 1 Mete, such sale was fraudulent and void as to (Mass.) 560 ; Eeynolds v. Waller, 1 Wash, the attaching creditor, A and B cannot (U.S.) 164; Diirant i>. Rogers, 87 111. 508; recover any part of the goods, on the Wolf i;. Mills, 56111. 360; Chester r. Dick- ground that A purchased his interest erson, 54 N. Y- 1 ; Manuf-icturers', &c., without knowledge of the fraud. Esta- Bank v. Gore, 15 Mass. 75, 81 ; Board- brook v. Messersmith, 18 Wis. 545. man v. Gore, Id. 331 ; Hawkins v. Apple- A and B formed a partnership in the 234 CHAP. I., § III.] DOCTRINES OF AGEXCY. 150* Liability of ixirtnerships for misapplication of money by their mem- bers. — In order that a firm may be liable for the misapplication of money by one of its members, some obligation on the part of the firm to take care of the money must be shown. A receipt of the money by the firm prima facie imposes this obligation ; but where there is DO receipt by the firm, there is prima facie no obligation on its part with respect to the money in question. It becomes important, there- fore, to determine accurately when money is to be considered as re- ceived by the firm. Upon this point, the following observations suggest themselves : 1. The firm must be treated as receiving what any partner receives as its real or ostensible agent, 'i. e., in the course of transacting the business of the firm. 2. In a case of this sort, it is immaterial whether the other partners know anything about the money or not, for ex hypothesi, it is in the custody of one who must be regarded as their agent, (r) 3. The firm cannot be treated as receiving what one partner receives otherwise than as its real or ostensible agent, unless *the money actually comes into the possession or under the control of the '- other partners, (s) 4. Agency being excluded in such a case as the last, the money can- not be considered as in the possession or under the control of the inno- cent partners, unless they know that it is so, or unless they are culpably ignorant of the fact, (t) These principles will be found to reconcile most, if not all, of the numerous decisions upon the important subject now under considera- tion, and to warrant the following rules deduced from them. 1. Liability of firm, for money received by one partner in the course of business. — Where one partner, acting within the scope of his au- commission business, A furnished the knowledge of the illegality of the con- capital, and B generally did all the trad- tract. Tenney v. Foote, 95 111. 101. ing. B made a contract with another in (r) See infra, rules 1, 2, 3. the course of the firm business, which (s) See rules 3 and 4. was illegal, as relating to option or gam- {t) Compare rule 2 with rules 3, 4 and ing contracts. Held, that a note given in 5, and see infra, p. *161 ; and as to culp- consideration of a balance due under such able ignorance, compare Marsh v. Keat- contract to the firm, was void as against ing, 2 CI. & F. 289 ; Sims v. Brutton, 5 Ex. the firm, or an assignee with notice, 802 ; Ex parte Geaves, 8 De G., M. & G. although A, the other partner, had no 291 ; Cleather v. Twisden, 28 Ch. D. 340. 235 151* LIABILITY FOR MONEY MISAPPLIED. [boOK II., thority, as evidenced by the business of the firm, obtains money and misapplies it, the firm is answerable for it. 38 In Willett V. Chambers (w) two persons carried on business as solicitors and conveyancers, in partnership. One of them received money from a client to invest on mortgage, and misapplied it. The otiier partner was held liable to repay it to the client. Lord Mans- field relied upon the fact that the bill for the fictitious mortgage was made out in the name of the firm and was paid to the innocent part- ner. The transaction, therefore, was clearly a partnership transaction, and the defendant, although perfectly innocent of the fraud himself, was liable for the consequences. In Brydges v. Branfill (x) one of several solicitors connived at a fraud committed by a client of the firm in obtaining money *out -■ of the Court of Chancery. The money was received by the one partner under a power of attorney and was handed over to the client. The other partners were entirely innocent, and were, in fact, ignorant of the transaction. It was nevertheless heid that they were 38. Misapplication of money re- the dissolution. Smyth v. Harvie, 31 111. ceived by one partner in the course 62. S. P., Poole v. Gist, 4 McCord (S. C.) of business. — Money was fraudulently 259. obtained by one partner, in the name of (m) Cowp. 814. See, also, Atkinson v. the firm, and in business transactions such Mackreth, 2 Eq. 570 ; St. Aubynj). Smart, as the firm engaged in. Held, that the 5 Eq. 183, and 3 Ch. 646 ; Dundonald v. firm might be liable therefor, although Masterman, 7 Eq. 515. Compare Cleather the transactions were unknown to the v. Twisden, 28 Ch. D. 340 ; Viney v. Chap- other partner ; but that if the person deal- lin, 2 De G. & J. 483, and Bonrdillon v. ing with the one partner knew that he Roche, 27 L. J. Ch. 681, and Harman v. was acting in violation of his duty to the Johnson, 2 El. & B. 61 ; Plumer v. Greg- firm, the latter would not be liable. Alex- cry, 18 Ex. 621, noticed infra. These ander v. State, 56 Ga. 478. cases show that whilst it is the ordinary Where a claim was placed in the hands business of a solicitor to receive money of two attorneys, who were partners in from a client for investment on a specific the practice of law, for collection, a security, it is not part of his ordinary judgment obtained, land of the debtor business to receive money for investment sold under execution, and redemption generally, nor to keep negotiable securities from the sale by paying the money to the for his clients, nor, without express au- sherifi", who paid it over to one of the thority from them, to receive money for attorneys, and prior to the redemption them on the payment oflf of a mortgage, the law copartnership between the attor- or on a sale. See, also, Re Bellamy and neys was dissolved, both of the partners Met. Bd. of Works, 24 Ch. D. 387. were held liable to the client for the (x) 12 Sim. 369. See, too, Todd v. Stud- money thus received by one of them after holme, 3 Kay & J. 324. 236 CHAP. I., § III.] DOCTRINES OF AGENCY. 152* jointly and severally liable to make good the money to those to whom it really belonged. (3/) In these eases the receipt of the money by one of the partners was the receipt by the firm, and the firm was liable, although, in fact, the other partners never received the money or knew of its receipt. {£) 2. Liability affirm for money in its custody in the course of business. — Where a firm in the course of its business {a) receives money belong- ing to other people and one of the partners misapplies that money whilst it is in the custody of the firm, the firm must make it good. 39 In Devaynes v. Noble, Clayton's case, (6) some exchequer bills, deposited by their owner with a firm of bankers, were sold by one of the partners without the owner's knowledge ; the money produced by the sale was applied by the firm to its own use, and it was held to be clear that the money having been received by the partnership, the amount became a partnership debt whether all the individual partners were or were not privy to the sale. In Devaynes v. Noble, Baring's case, (c) the firm was held liable for stock of its customers standing in the name of one of the partners of the firm and wrongfully sold out by him. For the stock was stand- (y) Although solicitors who are part- Thus, the tortious conversion of succes- ners are responsible for the acts of each sion property by a commercial firm will other, the court will not exercise its sum- reader the members liable m solido. Bird- mary jurisdiction against a solicitor to sail v. Bemiss, 2 La. Ann. 449. whom personally no blame is attributable. In Gordon v. Coolidge (1 Sumn. (U. S.) See, Re Lawrence, 2 Sm. & G. 367 ; Ex 537) an assignment was made by a debtor parte Gould, 2 Mont. & A. 48 ; Dixon v. for the benefit of his creditors to a firm of Wilkinson, 4 Drew. 614, and 4 DeG.& J. two attorneys as trustees, one of whom 508; and Re Ford, 8 Dowl. 684. But assented to the assignment at the time, in where a firm of solicitors are the solicitors the absence of the other. Selcl, that the on the record, see Norton v. Cooper, 3 Sm. assent of the latter must be presumed, un- & G. 375. less, upon notice, he refused to accept the (z) See St. Aubyn v. Smart, ubi sup. trust, and gave notice of his refusal to the (a) See infra, propositions 3 and 5, as debtor ; especially where he and his part- to the importance of this qualification. ner proceeded to act under the assign- 39. Money in firm's custody in ment, by a private conditional agreement course of business.— A partner, inno- between them, as to giving a priority to cent in fact, may be charged for a conver- certain attachments made by them in sion by his copartners, in the regular line favor of certain creditors, which agree- of firm buf^iness, the profits and commis- ments were unknown to the debtor, sions thereon having gone to the firm {b) 1 Mer. 575. account. Castle v. Bullard, 23 How. (U. (c) 1 Mer. 611 ; see, too, Warde's Case, S.) 172. Id. 624, and VuUiamy v. Noble, 3 Mer. 593. 237 153* LIABILITY FOR MONEY MISAPPLIED. [bOOK II., ing ill lii.-s name alone, in accordance with the ordinary practice of the firm ; tiie prodnce of the sale of the stock had been received by the firm, and had thus become a partnership debt, and the firm, in the accounts rendered by *it to its customer, had falsely repre- sented the stock as still standing in the name of the partner •- who had sold it and had given credit for the dividends as if the stock had still been there. In Ex parte Biddulph((^) trust money in the hands of a firm of bankers was drawn out and misapplied by one of the firm, and it was held that all the i)artuers were liable to make it good. In Sadler v. Lee(e) the members of a banking firm were authorized jointly and severally to sell out stock standing in the name of a cus- tomer, and one of the partners exercised the power and sold out the stock, and the firm was credited with the proceeds of the sale. These were afterwards misapplied by one of the partners, and it was held that the firm was answerable for the money. Another well-known case illustrating the same principle is Blair v. Bromley. (/) There two persons were in partnership as solicitors. A client entrusted one of them with money to invest on mortgage, and was told by him that it had been invested, whereas, in truth, the partner who had received the money had misapplied it. For many years the client was regularly paid interest by the solicitor who at- tended to the matter, and the fraud was not discovered until he be- came bankrupt. The other partner, who knew nothing whatever of the fraud, was nevertheless held liable to make good the money. It had been placed to the partnership account at the bankers of the firm. The representation that it had been duly invested was within the scope of the duty of one partner with reference to the transaction in ques- tion, and it was held that the innocent partner could not divest him- self of his liability by showing that he had no control over the account at the bankers, and did not in fact attend to the monetary transactions of the firm. *i "11 ^^^ ^^ Ribeyre v. Barclay ((/) the defendants were in part- *nership as stockholder^^ and were in the habit of receiving moneys from the friends and connections of the firm, and of the in- (d) 3 De G. & S. 587. also, Eager i;. Barnes, 31 Beav. 579, a (e) 6 Beav. 324. somewhat similar case. (/) 6 Hare 542, and 2 Ph. 354. See, (g) 23 Beav. 107 ; compare this case 238 CHAP. I., § III.] DOCTIUNES OF AGENCY. 154* dividual partners for the purposes of investment. They also seem to have been in the habit of keeping for their customers the securities on which the investments were made. The plaintiff had some Portu- guese bonds held by one of the partners for the plaintiff as a customer of the firm. The plaintiff married, and these bonds were assigned to trustees, of whom that partner was one. The bonds remained iji his custody as before, and were in fact deposited (and, as it seemed, with other securities belonging to other customers) with the bankers of the firm. The bonds were afterwards converted by the same partner into other bonds, which were deposited as the first had been. He acted in this matter as a stockbroker, in conformity with the usual course of business of the firm, and advised the plaintiff from time to time in the name of the firm of what had been done. The bonds were after- wards misapplied by him. It was held that they were originally clearly in the custody of the firm, and not in the custody of one only of its members, simply as trustee. It was further held that the as- signment of the bonds did not take them out of the custody of the firm, and that the firm was therefore liable for the loss consequent on their unauthorized removal. In the same case the firm was held liable for the loss of other bonds and securities bought by them for the plaintifi", and left in their cus- tody in the usual way, and for money borrowed in the name of the firm, but from which the firm derived no benefit ; and the fact that the plaintiff dealt only with one partner was held immaterial, the business transacted being the ordinary and regular business of the firm, and appearing as such in its books and accounts. Principle of foregoing cases. — The principle of these cases is that the firm has, in the ordinary course of its business, obtained possession of the property of other people, and has then parted with it without their authority. Under such circumstances, the firm is responsible, and the fact that the property has been improperly procured and placed in the custody of the firm by one of the partners does not lessen the liability of the firm, for whether the firm is or is not liable for the original fraud by which the property *got into its ^ hands, it is responsible for the subsequent misapplication ^ thereof by one of its members. with Ex parte Eyre, 1 Ph. 227 ; Bishop v. Coomer r. Bromley, 5 De G. & S. 532, no- The Countess of Jersey, 2 Drew. 143 ; ticed infra, p. *159. 239 155* LIABILITY FOR MONEY MISAPPLIED. [bOOK IL, This was decided in the cases arising out of the notorious Fauntle- roy forgeries, (/i) Fauntleroy, who was a partner in the banking house of Marsli & Co., forged powers of attorney for the sale of stock belonging to the customers of the bank. Marsh & Co. had an ac- count with Martin Stone & Co., and the broker who sold out the stock under the forged powers of attorney remitted the proceeds of the sale to the credit of Marsh & Co. with Martin Stone & Co. Faunt- leroy then drew out these moneys by a cheque signed by him in the name of his firm, and applied them to his own use. The firm of Marsh & Co. was, however, held liable for them, although none of the partners except Fauntleroy had any hand in his forgeries or frauds, or in fact knew anything of what had taken place. The liability of the firm was based ujjon the ground that to sell stock for its customers and to receive the proceeds of the sale, fell within the scope of its business ; that the sale took place and the money was received in the usual way ; that the fraud of Fauntleroy in the subsequent appropria- tion of the money aiForded no defence after the money had once been in the custody of the firm, and that if the other partners knew noth- ing of the receipt of the money, they might have known it, and would have have ascertained the source from which it had been derived, if they had used ordinary diligence and had not placed such implicit confidence in their copartner, (i) 3. Liability of firm for money received, but not in ordinary course of business. — If a partner, in the course of some transaction uncon- nected with the business of the firm, or not within the scope of such *i ^fil ^business, obtains money and then misapplies it, the firm is -' not, without more, {j) liable to make good the loss. (Jc) 40 (h) Stone V. Marsh, 6 Barn. & C. 551, attorney were forged. In Marsh v. Keat- and Ey. & M. 364 ; Keating v. Marsh, 1 ing, they do not seem to have known any- Mont. & A. 582 ; Marsh v. Keating, 1 thing either of the sale of the stock or of Bing. N. C. 198, and 2 CI. & F. 250 ; Ex the receipt of the proceeds of the sale, parte Bolland, Mont. & M. 315, and 1 Compare, as to the receipt of the money Mont. & A. 570 ; Hume v. Bolland, Ry. & by the firm, the cases cited in the next M. 371, and 1 Cromp. & M. 130. This four pages. last case is hardly consistent with Stone n. (j) As to the effect of knowledge on Marsh, Marsh v. Keating, or Ex parte the part of the other partners, see Cleather Bolland. r. Twisdeu, 28 Ch. D. 340, noticed infra, {i) In Stone v. Marsh and Ex parte and proposition 5, hifi-a. Bolland, Fauntleroy's partners did know (k) See, also, proposition 4, infra. that the stock was sold by their broker, 40. Money obtained by one partner, but did not know that the powers of but not in the course of the firm busi- 240 CHAP. I., § III.] DOCTRINES OF AGEXCY. 156* In Harman v. Johnson {I) one of several solicitors was entrusted with money for the purpose of investing it on mortgage when a good opportunity offered. He misapplied it, and it was held that his copart- ner was not liable, inasmuch as there was no evidence to show that it was part of the business, either of the firm in question or of solicitors generally, to act as scriveners, i. e., as depositaries of money waiting for investment. The court intimated that if it had been shown that the money was given to the defaulting solicitor for the purpose of being invested on some specified mortgage, his copartner would have been liable for its misapplication. In Plumer v. Gregory [m] one of a firm of solicitors borrowed money, without the knowledge of his copartners, from a client, saying that the firm wanted to lend it to another client on mortgage. The other part- ners were held not liable for this money, although two of them had borrowed money from the same client before. In Cleather v. Twisden (w) bonds payable to bearer were placed for safe custody by trustees in the hands of one of a firm of solicitors, and he misappropriated them. The other partners were held not liable, it being no part of their business to accept such securities for safe custody, and they not, in fact, knowing that their partner had them. The decision would have been the other way if it had been proved that the innocent partners had in fact known that the bonds ness. — Where an administrator, who is a ignorant of the conversion. Palmer v. member of a partnership, applies to the Scott, 68 Ala. 380. partnership concerns money which be- Where a firm bought and paid for cer- longs to the estate of his intestate, and tain property, and the vendor deposited afterwards gives the note of the firm to the money with one of the members of the the creditor of the intestate, to whom such firm, to be held until the purchasers money was due, in discharge of, such should be satisfied with the title — Held, creditor's claim on the estate of the intes- that in the absence of any knowledge of tate, the firm is bound to pay the note, or connection with such deposit on the although the money was not in the hands part of the other members of the firm no of the firm when the note was given, responsibility attached to them in conse- Eichardson v. French, 4 Mete. (Mass.) quence thereof. Battle v. Street (Tenn.), 577. 2 S. W. Eep. 384. Where an agent collected money of his {I ) 2 El. & B. 61. principal and mingled it with the money (wi) Plumer v. Gregory, 18 Eq. 621, aa of a firm in which he was a partner, and to the £1700. Compare this and the last the money was used by the firm, it was case with Willett v. Chambers, and other held that this created a partnership lia- cases cited ante p. *151, note (m). bility, although the other partner was (n) 28 Ch. D. 340. 241 16 156* LIABILITY FOR MONEY MISAPPLIED. [bOOK II., wore in the custody of their copartner as representing tlie firm. Had such knowledge been proved, they would have been held to have had the bonds in their own custody, and would have been liable for them, (o) The case of Sims v. Brutton(j3) must be referred to this head *if its authority is to be upheld. There the defendants, Brut- ^.^^ ^„ T . . . 157 ton and Clipperton, were in partnership as solicitors. Brut- ^ ton received £500 from a client to invest on a mortgage, and the money was duly invested. The mortgage deed remained with the defendants, and the money secured by it was ultimately repai erty of the firm upon a purcliase of one of the partners to pay his private debt. In both cases the act is equally injurious to the other partners. It is taking their common property to pay a private debt of one of the partners.' The same doc- trine has been, on various occasions, fully recognized in the Supreme Court of the same state. And we need do no more than refer to one of the latest, the case of Everingham v. Ensworth, 7 Wend. (N. Y.) 326. Indeed, it had been fully considered long before, in Livingston v. Koosevelt, 4 Johns. (N. Y.) 251. It is true that the precise point now before us does not appear to have received any direct adjudication, for in all the cases above mentioned there was a known application of the funds or securities of the partnersiiip to the payment of the separate debt. But we think that the true principle to be extracted from the 74 CHAP. I., § IV.] UNAUTHORIZED ACTS. 173* that the contract entered into by *the one defendant was ^=^=-.-73 not binding oil the others, and that they were not liable for authorities is that one partner cannot the goods of the partnership, is valid apply the partnership funds or securities against the partnership and its creditors, to the discharge of his own private debt And in Kellogg v. Fancher (23 Wis. 21) without their consent; and that without it is said that one who, in ignorance of their consent their title to the property a copartnership, takes, in payment of the is not divested in favor of such separate individual note of a member given for creditor, whether he knew it to be part- his private debt, notes of third parties nership property or not. In short, his running to such member, but in fact the right depends, not upon his knowledge property of the copartnership, will be that it was partnership property, but protected as a 6o/ia/) So, if A, in his own name only, under- writes a policy of insurance, but the profit or loss arising from the transaction is to be divided between him and B, both A and B will be liable to the insured, {q) 57 (n) 9 Mees. & W. 79, and 11 Mees. & 8 Neb. 186 ; Brown v. Fitch, 4 Vr. (N. J.) W. 315, overruling Beckham v. Knight, 418 ; Tucker v. Peaslee, 36 N. H. 167 ; 4 Bing. N. C. 243. Eeynolds v. Cleveland, 4 Cow. (N. Y.) (o) City of Lond. Gas Light and Coke 282; Baxter v. Clark, 4 Ired. (N. C.) L. Co. V. Nicholls, 2 Car. & P. 365 ; Whit- 127 ; Poole v. Lewis, 75 N. C. 417 ; Given well V. Perrin, 3 C. B. (N. S.) 412. v. Albert, 5 Watts & S. (Pa.) 333 ; Miff- (p) Ruppell V. Roberts, 4 'Ne^. & M. lin v. Smith, 17 Serg. & R. (Pa.) 165; 31 ; Robinson v. Wilkinson, 3 Price 538 ; Burnley v. Rice, 18 Tex. 481 ; Griffith v. Bottomley v. Nuttall, 5 C. B. (N. S.) 122. Buffum, 22 Vt. 181 ; Hills v. Bailey, 27 iq) Brett v. Beckwith, 3 Jur. (N. S.) Vt. 548. 31, M. R. And the converse proposition is 57. Ordinary simple contracts— equally true, i. e., the firm may enforce firm liable though not named. — The a contract made for its benefit with only following cases fully bear out the text: one of its members in his individual Everett v. Chapman, 6 Conn. 347 ; Bisel name. Illinois, &c., R. E. Co. v. Owens, V. Hobbs, 6 Blackf. (Ind.) 479; Roth v. 53 111. 391 ; Havana, &c., R. R. Co. v. Moore, 19 La. Ann. 86 ; Baring v. Crafts, Walsh, 85 111. 58 ; Snell v. Atlantic, &c., 9 Mete. (Mass.) 380 ; Norton v. Thatcher, Co., 18 Am. L. Reg. (N. S.) 79. 285 178* DOCTRINES OF AGENCY. [bOOK II., LiahUily of dormant paHiierH. — These cases establish the im- portant proposition that dormant [)artners are liable for the debts of the firm, not\vith*standing their connection with the firm was unknown to its creditors when the debts were ^ contracted. ^8 One partner only liable, he only being dealt with. — On the other hand, if one partner only is dealt with, and the circumstances are such as to show that he was acting and was deait with on his own account, i. e., as a principal, and not as the agent of the firm, he alone is responsible, (r) Thus, where persons work a coach in partnership, each having his own horses, and one of them orders fodder on his own account, he alone is liable for it. (s) So, in the ordinary case of an agreement between an author and a publisher, to the effect that the publisher shall pay for tiie paper, printing and other expenses of publication, and that after reimbursing himself and deducting a commission, the profits shall be divided equally, the author is not liable for the Thus, in an action brought by a tan- acting partners bought land in their nery firm for false warranty of a mule own name for the purpose of obtaining bought by one member thereof, without from it wood to be used in the manufac- mention that it was for the firm, it was ture of irou, and so far as it was paid for, held that the burden of proof was on the it was paid for out of the partnership defendant to sustain his motion for a effects. The land is partnership prop- nonsuit, although there was no showing erty, and the partnership having failed, that the mule had ever been used in the the two dormant partners are liable to tannery. Little v. Hamilton, Pliil. (N. the vendor for the balance of the pur- C.) L. 29. chase money. Brooke v. Washington, 8 A orders goods of B by letter; the co- Gratt. (Va.) 248. partnership of which B was a member See, however, contra, as to the liability forwarded the goods to A, without a bill of dormant partners in land. Gray v. or letter, who received them, supposing Palmer, 9 Cal. 616. them to have been forwarded by B in- ()•) ^ee, in addition to the cases cited dividually. Held, that the copartnership below. Ex parte Eyre, 1 Ph. 227. might maintain an action, for goods sold (s) Barton v. Hanson, 2 Taunt. 49. and delivered, against A. Child u. Wof- Mr. CoUyer treats this as an exception ford, 3 Ala. 564. depending on particular custom, but 58. Liability of dormant partner. — this view is not correct. The law is A partnership for the manufacture of the same in Scotland ; see Jardine v. iron was composed of four persons, the M'Farlane, 3 Koss Lead. Cas. on Com. names of two of whom did not appear, Law 575. and these lived at a distance. The two 286 <:!HAP. I., § v.] FORM OF CONTRACT. 179* paper or printing which may have been supplied and executed for the publisher, [t) 59 Foi'm of written contracts. — With respect to contracts in writing it is to be observed that a contract or other instrument required by- statute to be in writing and signed by the party to be charged, only binds those partners who actually sign it ; (u) but if signature by the party to be charged, or his agent, is sufficient, the signature of (<) See the Scotch case of Venables v. thereon, for it may be shown by parol Wood, 3 Ross Lead. Cas. on Com. Law on whose account, the articles charged 529; Wilson ?;. Whitehead, 10 Mees. & were delivered, and the parties were W. 503; but, see Gardiner v. Childs, 8 competent witnesses for themselves or Car. & P. 345, where the paper was sup- each other to that point. Burton v. plied for the specific book. Ferris, Brayt. (Vt.) 78. 59. One partner only liable, he only Where one copartner makes a sale or being dealt with. — Although a part- disposition of the partnership property nership exists, yet one of the partners in his own name, and without disclosing may contract and bind himself in his in- the name of his copartner or copartners dividual capacity, and the partnership having an interest therein, at the same cannot be charged with it. McDonald time warranting the soundness thereof, V, Parker, Sneed (Ky.) 245. When no also in his own name, suit may be main- credit is given and there is no expecta- tained against him for a breach of this tion, originally, of looking to one part- warranty without joining his copartner ner for debts incurred by the other, no in the action. Cookingham v. Lasher, recovery against the former can be had. 38 Barb. (N. Y.) 656 ; Clark v. Holmes, Chapman v. Devereux, 32 Vt. 616 ; 3 Johns. (N. Y.) 148. Floyd V. Wallace, 31 Ga. 668. And the The plaintiff was employed by the mere fact that money loaned to one part- defendant on his credit alone, to open ner on his individual contract is applied and develop a coal mine on lands owned to the payment of partnership debts by the defendant, with others. It not does not constitute the lender a creditor appearing that the other proprietors re- of the firm. National Bank v. Thomas, quested the defendant to engage in this 47 N. Y. 15. It must further appear enterprise, or authorized him to employ that the money was so used with the the plaintiff to perform tliis service, it knowledge and approbation of the firm, was held that the mere fact that they or that the debt was subsequently as- were cotenants with the defendant in sumed by the firm. Nichols v. English, the land was not enough to warrant the 3 Brewst. (Pa.) 260 ; Smith d. Hoffman, presumption that they were partners 2 Cranch (U. S.) C. C. 651. But see with him in his scheme to develop a Snead v. Barringer, 1 Stew. (Ala.) coal mine upon it. Stannard v. Smith, 134. 40 Vt. 513. Defendant's being a partner in a firm (w) Swift v. Jewsbury, L. R., 9 Q. B. charged in book account is not, of itself, 301, reversing Swift v. Winterbotham, 8 • conclusive of his liability in an action Q. B. 244. 287 179* DOCTRINES OF AGENCY. [bOOK II., one partner in the name or on behalf of the firm will bind all the j)artners. (y) It is often a matter of difficulty to determine whether a particu- lar contract is entered into by the firm through one of the partners or by that one partner only. There is nothing to prevent one per- son from entering into a contract as a principal, and yet for and on behalf of another, (x) and when A enters *into a contract -' for B, it may not be easy to say Mdiether it is B who con- tracts or whether it is A for B's benefit. And yet the true answer to this question determines whether B is or is not liable on the con- tract. The cases on this subject relate principally to bills of ex- change and promissory notes, to which it is now proposed to pass. 60 3. Bills of exchange and promissory notes. — Although an ordi- nary contract not under seal, entered into by an agent for an undis- closed principal, is binding on that principal when discovered, and he can be sued upon it, the same rule does not apply to bills of exchange and promissory notes. For, subject to the qualification that the name of a firm is equivalent to the name of all the persons liable as partners in it, iy) no person whose name is not on a bill or note is liable to be sued upon it. (z) In order, therefore, that a bill or note may be binding on a firm, the name of the firm, or the names of all its members, must be upon it ; and if the names of one or more of the partners only are upon it, the others will not be liable to be sued upon the instrument, whatever may be their liability as regards the consideration for which it may have been given, (a) {v) See Duncan v. Lowndes, 3 Camp. 60. Execution of contract. — A con- 478. In Ex parte Harding, 12 Ch. D. tract drawn by one partner, and signed 557, a letter of guarantee was so framed by tbe other in the partnership name, is as to bind the firm and also those wlio the agreement of both as partners. Wit- signed it separately, ter V. M'Neil, 3 Scam. (111.) 433. See, {%) See, in addition to the cases cited also, Marvin v. Buchanan, 62 Barb. (N. hereafter, Gadd v. Houghton, 1 Ex. D. Y.) 468. 357 ; Hough v. Manzanos, 4 Ex. D. 104; {y) 45 and 46 Vict., c. 61, § 23 (2) ; Southwell V. Bowditch, 1 C. P. D. 374; and infra, note (6), et seq. Paice V. Walker, L. R., 5 Ex. 173. See, (2) Id., | 23 ; and Lloyd v. Ashby, 2 also,. Kay v. Johnson. 2 Hem. & M. 118, Car. & P. 138 ; Ducarry v. Gill, 4 Id. where an agreement for a lease entered 121 ; Eastwood v. Bain, 3 Hurlst. & N. into by directors was enforced against 738. them individually. (a) Bottomley v. Nuttall, 5 C. B. (N. 288 CHAP. I., § v.] FORM OF CONTRACT BILLS. 180* a. Bills in name of firm. — First, as regards bills having the name of the firm upon them. A bill drawn, endorsed or accepted in the name of the firm is considered as bearing the names of all the per- sons who actually or ostensibly compose the firm at the time its name is put to the bill ; and, consequently, all those persons, in- ♦cluding as well dormant as quasi partners, may be sued ^^^ ^ upon the bill. (6) Thus, where A employed B to carry on his business, and such business was carried on by B for A under the name of B & Co., a bill accepted by B in the name of B & Co., for the purposes of the business, was held to be the acceptance of A ; although B had positive instructions not to accept bills, and the holder of the bill, who was an endorsee for value, knew nothing of A or B or of the business, (c) Moreover, if two partners, A and B, carry on business in the name of A, a bill accepted by B in the name of A, for the purposes of the partnership, will bind both partners, although addressed to A at a place where he carries on a separate business, (d) 61 Two firms with one name. — If there are two firms with one name, a person who is member of both firms is liable to be sued on all S.) 122; Miles' Claim, 9 Ch. 635. As 739, and 2 Id. 147. N. B.— The bill was to the difference between an acceptance drawn on Reynolds at Woolwich, not at in the form A for B, and B per proc. Walworth, as stated in 1 Fost. & F. 740. A, see O'Reilly v. Richardson, 17 Ir. 61. Bills in. name of firm. — Where Com. Law Rep. 74. Bills may be made two firms in different localities enter payable to the holder of an oflSce for into an agreement, in express terms, the time being. 45 and 46 Vict., c. 61, § creating a partnership for the purpose 7 (2). of carrying on the legitimate freighting (6) 45 and 46 Vict., c. 61, ^ 23 (2). business, and, adopting no partnership See, as to dormant partners, Swan v. name, carry on the business in each Steele, 7 East 210; Wintle i;. Crowther, 1 locality under the name of the firm Cromp. & J.316; and, as to gfuasi partners, there established, a bill of exchange, Gurney v. Evans, 3 Hurlst. & N. 122. drawn by one firm upon the other, the A clerk who aflSixes the name of the proceeds of which are applied to the firm is not liable on the bill. Wilson partnership business, will bind the firm V. Barthrop, 2 Mees. & W. 863. against which it is drawn, not only in (c) Edmunds v. Bushell, L. R., 1 Q. an action for money lent, but also as a B. 97. party to the bill. Wright v. Hooker, (rf) Stephens v. Reynolds, 5 Hurlst. & 10 N. Y. 51. N. 513, and at Nisi Prius, 1 Fost. & F. 289 19 181* DOCTEIXES OF AGENCY. [bOOK II., bills bearing that name, and binding on either firm. But if a member of only one of the two firms is sued on the bill, his liability will depend, first, on the authority of the person giving the bill to use the name of the firm of which the defendant is a member ; and, secondly, on whether the name of that firm has in fact been used. If both these questions are answered in the afiBrmative, he will be liable, but not otherwise. Thus, in Swan v. Steele, (e) there were two firms of Wood & Payne, one a cotton firm, the other a grocer's firm. The defendant, Steele, was a partner in the cotton firm only. A bill was paid to the cotton firm for a debt due to it, and was made payable to its order. This bill was endorsed in the name of " Wood & Payne," by Steele's copartners, for a debt owing to the plaintiff by the grocer's firm, to which Steele did not belong. Steele was never- 09-1 theless held liable on this bill, *the plaintiff being a bona -' fide holder for value, without notice that any fraud on Steele was being committed. In this case the bill was properly endorsed " Wood & Payne," and the only question was who con- stituted that firm. The bill could only have been endorsed by the cotton firm. Steele was a member of it, though he was not a member of the firm for whose debt his partners paid it away. Lord Ellenborough held Steele's liability to be too clear for argu- ment ; for Steele was a member of the endorsing firm, and his co- partners in that firm were guilty of a fraud on him, of which the plaintiffs had no notice. 62 (e) 7 East 210. & Dana, a bill of sale of the property, 62. Two firms with one name or in which he acknowledged receipt of common partner.— A party can only payment by note, and the note which he be bound on a note executed in a firm received was, by Dana, signed " Downer name, who is actually a member of the & Dana," and it appeared in evidence firm executing the same, or who has that there was in existence at that time, held himself out as a member, so as to doing business, such a firm as " Downer give the firm credit on his responsibility, & Dana," consisting of those two indi- Sargent v. Collins, 3 Nev. 260. S. P., viduals, it was held that the plaintiflE" Cushing V. Smith, 43 Tex. 261 ; Cobb r. could not recover on the note against Illinois Central R. R. Co., 38 Iowa 601. another firm of different style, consisting Where the plaintiff delivered property of the same Downer and Dana and a to W. Downer and H. Dana, and exe- third person, notwithstanding it might cuted to them, by the name of Downer appear that the latter firm was also then 290 CHAP. I., § v.] FORM OP CONTRACT — BILLS. 182* Name of firm same as that of individual — Again, persons may carry on business in partnership in the name of one of themselves, and, if they do, they expose themselves to serious liability. Prima facie his acceptances will bind them, even although dishonestly given. (/) At the same time, if they can show that he gave the bills as his own, and not as the bills of the firm, they will not be liable, even to a bona fide holder for value. This was decided by the Court of Appeal in The Yorkshire Banking Company v. Beatson, (g) in which the law on this subject will be found ex- haustively examined. In that case an accommodation acceptance given by one partner in his own name was held not binding on his dormant partner, as the acceptance was not intended to bind him, and was, in truth, a private transaction, and was not entered in the books of the firm. The fact that the plaintiffs took the bill as the bill of the persons, whoever they were, who might be asso- ciated with the partner whose name was on the bill, was held imma- terial. The plaintiffs never knew of, or gave credit to any one else. If A, B & C are partners, and A draws a bill of exchange on B, and he accepts the bill, A, B & C cannot be sued upon it ; and this is so whether A, B & C have a business name or not ; {h) and even although the bill may have been used for the joint benefit of the three partners, (i) Even if it is agreed that the business of the three shall be carried on in the name *of one of them, it r^-ioq will not follow that all bills accepted by him will bind all the three partners. The question remains, Whose bill is it? This was decided by the Court of Appeal in Chancery, in Miles' Claim, {j) There four firms, F. & Co., M. & Co., M. & L., and doing business at the same place, there v. Downer, 19 Vt. 14. being no testimony tending even to prove (/) See 5 C. P. D. 123 and 124. that the latter firm had, at any time, (g) 5 C. P. D. 109, aflSrming S. C, done any act which could have induced 4 Id. 204, but on different grounds. N. the plaintiff to believe that Downer aiid B. — The court set aside the verdict of Dana had ever been authorized to use the jury. See, also, South Carolina their own name and style for the pur- Bank v. Case, 8 Barn. & C. 427 ; Ex parte poses of the other firm ; and that upon Law, 3 Deac. 541. this testimony it was improperly left to (h) See Nicholson v. Ricketts, 2 El. & the jury to fiiid whether the note was E. 497, and Miles' Claim, 9 Ch. 635. -executed, and received by the plaintiff (i) lb. as the note of the latter firm. Miner (j) 9 Ch. 635. 291 183* DOCTRINES OF AGENCY. [bOOK II., A. & Co., engaged in a joint adventure, and agreed to carry on business under the name of F. & Co., and to divide profits and losses in equal shares. They also agreed that funds for the adven- ture should be raised by the drafts of any one of the four firms on the others. Bills were drawn by M. & Co. on A. & Co., on M. & L. and on F. & Co., and were duly accepted. It was held that none of these bills bound all four firms jointly. As regards the bills drawn on A. & Co. and on M. & L., the case presented no difficulty, for it is plain that these bills were not drawn or accepted in the name in which the joint adventure was carried on. As re- gards the bills accepted by F. & Co., which was the name under which the joint adventure was carried on, there was an ambiguity • but the court held that this name, used as it was, really meant the separate firm F. & Co., and not the four firms engaged in the ad- venture, and that there was no sufficient reason for holding it to mean anything else. Again, in Hall v. West, (k) three brothers of the name of Daw- son carried on in partnership, under the name of Dawson & Sons, the business of millers, farmers, coal and corn dealers and bone crushers. The defendant was a dormant partner in the bone crush- ing business only. Dawson & Sons overdrew their account with their bankers, who knew nothing of West nor of his connection with the bone business. Having, however, discovered this, they sued him for the amount of the overdrawn account. He was held not liable, for in point of fact the balance due to the bankers was not in respect of any debt contracted by Dawson & Sons in connec- tion with the bone crushing business ; it was not, therefore, as be- tween the partners themselves, a debt of the firm of which the ^ defendant *was a member, and there was no apparent as -' distinguished from real authority, on wdiich the bankers could rely as against West. In the same case, bills were drawn by West on and accepted by Dawson & Sons. With one exception, these bills were drawn for purposes unconnected with the bone business. On the facts stated (k) A special case decided in the Exchequer, and afterwards in the Exchequer Chamber, in June, 1875. The above note of the case is taken from shorthand writer's notes of the judgments. 292 CHAP. I. v.] FORM OF CONTRACT BILLS. 184^ (but which it is unnecessary here to detail) the court held that all these bills had in fact been paid; it became unnecessary, therefore, to consider whether West could have been sued as an acceptor. It was contended, on the authority of Baker v. Charlton, {I) that he was liable; but the Court of Exchequer (m) dissented from that case and expressed a clear opinion that West could not have been liable as an acceptor of the bills, with the exception of the one which had been given for the purposes of the bone business in which he was a partner. The Court of Exchequer Chamber expressed no opinion on this point, it being unnecessary to do so. 63 (/) In Baker v. Charlton, Peake (3d ■ed.) Ill, two firms carried on business tinder the name of J. King & Co. The defendant was partner in one of them only, but his copartners were members of both firms ; the defendant was sued by an endorsee on a bill drawn by his copartners in the name of " J. King & Co. ; " the defendant resisted the action on the ground that the bill was not drawn by the firm to which he belonged, but by the other ; but Lord Kenyon de- clared the defence invalid. Having traded with persons under the style of ■" J. King, & Co.," the defendant was liable on bills drawn by them in that name. See, also, Davidson v. Robertson, 3 Dow 218; McNair v. Fleming, 1 Mont. Part. 37, and 3 Dow 229. But Baker V. Charlton cannot now be relied on. (m) /. e. Kelly, C. B., and Amphlett, B. 63. Name of firm same as that of individual. — Where a partnership is carried on in the name of an individual, and a suit is brought against the part- ners on a note or other obligation signed by such individual, the legal presump- tion is .that it is the note of the indi- vidual and not of the partners. The plaintiff, to recover against the partners, must not only prove the execution of the note, but go further, and prove either that the money for which the note was given was borrowed on the credit of the partnership, or that, when obtained, it was used in the business of the partner- ship. Oliphant v. Mathews, 16 Barb. (N. Y.) 608. S. P., Mercantile Bank v. Cox, 38 Me. 500 ; Chemung Bank v. In- graham, 58 Barb. (N. Y.) 290. Es- pecially does this presumption arise when the signer of the paper openly transacts business on his own account. Manufacturers', &c.. Bank v. Winship, 5 Pick. (Mass.) 11. In United States Bank v. Binney (5 Mason (U. S.) 176, 183, 184), the court say : " In respect to both general and limited partnerships, the same general principle applies that each partner has authority to bind the firm as to all things within the scope of the partner- ship, but not beyond it. Where the contract is made in the name of the firm, it will, 'prima facie, bind the firm, unless it is ultra the business of the firm. Where the firm imports, on its face, a company, as A, B & Co., or A, B & C, there the contracts made by the partners in that name bind the firm, unless they are known to be beyond the scope and business of the firm. But where the business is carried on in the name of one of the partners, and his name alone is the name of the firm, there, in. order to bind the firm, it is necessary not only 293 184^ DOCTRINES OF AGENCY. [book Il.y b. Bills not in name of firm. — Secondly, as regards bills not drawn, accepted or endorsed by the firm in proper form. In the absence of evidence to the contrary, a partner has no authority to to prove the signature, but that it was used as the signature of the firm by a party authorized to use it on that occa- Bion, and for that purpose. In other words, it must be shown to be used for partnership objects, and as a partnership act. The proof of the signature is not enough. The plaintiffs must go further, and show that it is a partnership signa- ture. In the present case the signature (if 'John Winship' may be on his own individual account, as his personal con- tract, or it may be on account of the partnership. Upon the face of the paper it stands indifferent. The burden of proof, then, is upon the plaintiffs to establish that it is a contract of the firm, and ought to bind them. * * * The notes are all endorsed in the name of 'John Winship.' For aught, therefore, that appears on the face of them, they were notes only binding him personally. The plaintiffs must, then, go further, and show, either expressly or by impli- cation, that these notes were offered by Winship as notes binding the firm, and not merely on himself personally ; or that the discounts were made for the benefit and in the course of the business of the firm. It is not sufficient for the plaintiffs to prove that the bank, in dis- counting these notes, acted upon the be- lief that they bound the firm, and were for the benefit and business of the firm- They must go further and prove that the belief was known to and sanctioned by Winship himself in offering the notes; and that he intentionally held out to them that the discounts were for the credit and on the account of the firm ; and that his endorsement was the endorsement of the firm, and to bind them ; and that the bank discounted the notes upon the faith of such acts and representations of Winship. The jury will judge from the whole evidence how the case stands in these respects. The mere fact that the discounts so pro- cured were applied to the use of the firm is not, of itself, sufficient to prove that tlie discounts were procured on account of the firm. It is a strong cir- cumstance, entitled to weight, but not decisive." Again, in Etheridge v. Binney (9 Pick. (Mass.) 272,274), the court say: " Now, as the partner, whose name is assumed by the firm, may also engage in other branches of business, in wliich he may want credit on his own private account, if he applies for a loan of money to one who is ignorant of the co- partnersliip, and no information is given of its existence, it is a private loan, and does not bind the firm, unless the cred- itor shall know that the money borrowed, or the goods procured, by the individual, went to the use of the firm. The burden of proof in such case is upon the cred- itor, in order to make good his claim upon the firm, for he credited the indi- vidual, and not the firm, and it will be presumed to be for the private benefit of the individual, unless the contrary is proved. But if the existence of tiie firm is known to the person who makes the loan, and representations are made to him by the borrower that he borrows for the use of the company, and that they are answerable for the debt, so that credit is given to the company, and not to the individual partner, the burden of proof is upon the company, when sued, to show that the power confided to the 294 CHAP. I., § v.] FORM OF CONTRACT — BILLS. 184* use for partnership purposes any other name than the name of the firm ; (n) and if he does, and there is any substantial variation which cannot be shown to be authorized by his copartners, the firm will not be liable. If, however, there is no substantial variation, the firm will be bound. In Faith v. Richmond (o) persons carrying on business in ♦partnership under the name of The Newcastle and Sun- r-^-.^^. derland Wallsend Coal Company were held not liable on a note issued in the name of The Newcastle Coal Company ; and in Kirk V. Blurton, {p) where two persons carried on business under the name of John Blurton, one of them was held not liable on a individual has been abused, and that the money borrowed wa.^. applied to his private use, and also that this was known to the lender to be his intention. This principle necessarily follows from cases settled. If a purchase is made in the name of a firm, or money borrowed, and a note given or endorsed in that name, this is prima facie evidence of a debt from the firm, and it can only be rebutted by proof, in the defence, tliat this was fraudulently done by the indi- vidual partner for his own private use, and that this was known to the creditor. So that in the limited partnership, if the name of the firm had been John Win- ship & Co., or Winship & Binney, all notes given to any creditor, in either of those names, would be company notes, unless disproved, as before stated. Now the making and offering of such a note is nothing more than a representation that the money is wanted for the use of the company, and as they confide in the individual, they will be bound by 'his acts. The name of the firm here being only the name of the individual, a note offered in that name, unaccompanied by any representation, would of course im- port only a promise by John Winship alone ; and the credit being given to him alone, the creditor would not recover against the firm, without proving that the money actually went into the funds of the firm. But if the borrowing partner states that he is one of a company, and that he borrows money for the company, or purchases goods for their use, then, as there is such company, and as they have given him authority to use the company credit to a certain extent, and as the creditor will have no means of knowing whether he is acting honestly towards his associates, or otherwise, if he lends the money or sells the goods on the faith of such representation, the company will be bound, unless they prove that the contract was for his pri- vate benefit, and known to be so by the creditor." (n) Kirk v. Blurton, 9 Mees. & W. 284 ; Hambro' v. Hull and London Fire Insurance Co., 3 Hurlst. & N. 789. (o) 11 Ad. & E. 339. (p) 9 Mees. & W. 284. This case was decided on the right principle, but most persons will probably agree with Martin. B., in thinking that tiie princi- ple was not properly applied, and that it should have been left to the jury to say whether John Blurton and John Blur- ton & Co. did not in fact mean the same thing. See per Martin, B., 5 Hurlst. & N. 517. 295 185* DOCTRINES OF AGENCY. [bOOK II., bill drawn and endorsed by the other in tiie name of John Blurton & Co. On the other hand, in Norton v. Seymour, (ry) where the name of the firm was Seymour & Ayres, a promissory note signed by one of the partners, thus : " Thomas Seymour &, Sarah Ayres," was held to bind both. 64 E§^ect of frequent use of icrong name. — In the above cases of Faith V. Richmond and Kirk v. Blurton, the name used was not the name of the firm sought to be made liable, nor was there any evidence to show that the firm was in the habit of making use of the name in question. If there had been such evidence the firm would have {q) 3 C. B. 792, ham v. Smithson, 12 Leigh (Va.) 32. 64. Bills not in firm name.— Ordi- The proprietors of a line of canal narily, where the partners of a firm have boats, by articles between themselves, a copartnership name which they con- agreed that the bi'siness of the concern Btantly use, they will not be bound by at Rochester should be conducted by J, the use of a new name, unless it be A., one of the proprietors, in his own shown that all the partners have assented name, and that at Albany it should be to the use of such new name, or that the conducted by W. M., an agent, in his partner who was intrusted with the con- name, but in behalf aud upon the re- trol and management of the business of sponsibility of the defendants, who were the firm had so assented. Palmer v. two of the proprietors ; that no copart- Stephens, 1 Den. (N. Y.) 471. But if a ship name should be used, and no paper partner, acting under the authority of made, accepted or endorsed in the name the firm, given by parol, to take up or on account of the copartnership ; money on joint account, and draw there- that each party should raise his share of for on A, does draw a bill of exchange the money needed by the concern upon in his own name, but directs the amount his own responsibility, and the other to be charged to account of the firm, and partners were not to be liable therefor, the parties, knowing the facts, receive but all the parties were to share equally the cargo, purchased with the funds so in the profits. Held, that a bill of ex- raised, without objection, the payee may change drawn by J. A., in his own name, recover of the partners as on a partner- to raise money for the business of the ship draft, or a draft guaranteed to the concern upon, and accepted by W. M. holder by them. Eeimsdyk v. Kane, 1 in his name, and which was discounted Gall. (U. S.) t^30. Thus, it has been by the plaintiflTs, bound all the proprie- held that a draft drawn by one only of tors as acceptors, and that all tlie pro- three partners, but on their joint credit, prietors were chargeable as drawers; and and for their joint benefit, may be recov- that no notice of non-payment was neces- ered as an item in an account against the sary, the drawers and acceptors being the firm. Beebe v. Rogers, 3 Iowa 319; same persons. Bank of Rochester v. Beach v. State Bank, 2 Ind. 488. Contra, Monteath, 1 Den. (N. Y.) 402. Heenan v. Nash, 8 Minn. 407 ; Cunning- 296 CHAP. I., § v.] FORM OP CONTRACT — BILLS. 185* been liable ; for whatever the name used may be, if it is that ordi- narily employed by a partner whose business it is to attend to the bills and notes of the firm, the other partners will not be heard to say that such name is not the name of the firm for the purpose for which he has habitually used it. Therefore, where the name of a firm was Hapgood & Co., but the managing partner was in the habit of endorsing bills of the firm in the name of Hapgood & Fowler, which had formerly been the name of the firm, it was held that such endorsement was valid, although the other partners were not shown to have authorized the use of the name in question. (/•) 65 Liability of persons using the wrong name. — Again, although in Faith V. Richmond and Kirk v. Blurton, the firm was held not bound, in consequence of the name of the firm not being used, those members of the firm who actually made use of the names in question were held liable ; for the name used was made theirs by *1 Sfll ^^^^^^ ^^"^^ ^^^- (^) Upon the *same principle, if blank bills -^ are drawn and endorsed by a firm, and before they are negotiated one partner dies and the name of the firm is changed by the surviving partners, and the bills previously drawn and en- dorsed are then negotiated, these bills will be binding on the new firm, although the name on the bills is that of the old firm and not that of the new. (t) Cases in tohioh error in name is unimportant. — A bill drawn on a firm by a wrong name and accepted in its right name, binds the firm ; {u) and a bill drawn on a firm and accepted by one partner (r) Williamson v. Johnson, 1 Barn. & a person of the name of Joseph Keep was C. 146. held liable on a bill accepted by himself 65. Effect of frequent use of wrong in the name of John Keep & Co. name. — In Crocker v. Colwell (46 N. Y. (I) Usher v. Daimcev, 4 Camp. 97. 212) one partner kept the bank account If a change is made in a firm, and, by a in his own name, with the knowledge mistake, a contract is entered into with and consent of the others, all partner- it in its old name, the members of the ship debts and accounts being paid by new firm may sue on it, provided the checks drawn and signed by. him alone, other party is not prejudiced by their so Held, that the firm was liable upon such doing. Mitchell v. Lapage, Holt, N. a check drawn in its business. See, also, P. Cas. 253. But see Boulton v. Jones, 2 Lemon v. Fox, 21 Kan. 152. Hurlst. & N. 564. («) So, in Wild v. Keep, 6 Car. & P. 235, (w) Lloyd v. Ashby, 2 B. & Ad. 23. 297 186* DOCTRINES OF AGENCY. [bOOK II.^ in his o^A'n name only has been hekl to bind the firm on the ground that the word " accepted/' if written by one of the partners, is suffi- cient without any signature ; and that his signature, if affixed, may be treated as redundant, (x) But there is no other case in wliich a firm is liable on a negotiable instrument, made, drawn or endorsed in the name of one of the partners only, (y) unless, indeed, his name is the name of the firm, (z) Even a bill drawn on one partner and accepted by him on behalf of the firm does not bind the firm, the other partners not being drawees, (a) 66 A bill drawn on a firm and accepted by one partner in the name of the firm and in his own name, does not bind him separately if the firm is bound by his acceptance. (6) But if he has no authority to bind the firm, he is himself liable on the bill. This was held in Owen V. Van Uster, (c) where a bill was drawn on " The Allty- Crib Mining Company," and was ^accepted " per proc. The r^-i 0/7 AUty-Crib Mining Company, W. T. Van Uster, London, Manager." It was held that Van Uster was personally liable on this bill, he being one of the company on which the bill was drawn, and therefore one of the drawees and also an acceptor. c. Promissory notes. — Thirdly, as regards promissory notes. With respect to promissory notes the following rules are deducible from the cases : 1. Promise by one partner. — If a partner promises for himself, and not for himself and copartners, he only is liable on the note, though he may promise to pay a partnership debt, (c/) 67 (x) Mason v. Eumsey, 1 Camp. 384 ; 66. Where a partner in a numeroua Jenkins v. Morris, 16 Mees. & W. 879 ; firm has power to bind the firm by giv- Byles on Bills (11th ed.) 43 and 45; ing notes, a variation in the style of the Id. (14th ed.), p. 47, et seq. In such a company is not material. Kinsman v. case the acceptor may also be sued alone. Dallam, 5 T. B. Mon. (Ky.) 382. See infra. (6) Re Barnard, 32 Ch. D. 447 ; Mal- (y) Emly v. Lye, 15 East 7 ; Ex parte colmson v. Malcolmson, L. R., 1 Ir. Ch. Bolitho, Buck 100; Lloyd v. Ashby, 2 D. 228. Car. & P. 138; Williams v. Thomas, 6 (c) 10 C. B. 318. The company in Esp. 18. this case was a mere partnership. (z) As to which, see ante pp. *182, (d) Siffkin v. Walker, 2 Camp. 308; *183. Murray v. Somerville, 2 Camp. 99, note; (a) NichoUs v. Diamond, 9 Ex. 154; and see Ex parte Harris, 1 Madd. 583. Mare v. Charles, 5 El. & B. 978. 67. Promise by one partner.— It has 298 CHAP. I., § v.] ' FORM OF CONTRACT NOTES. 187* 2. Promise by several partners. — If several partners sign a note in this form, '' I promise to pay," all who sign the note are liable on it, jointly and severally, (e) 68 been held that generally, when a mem- ber of a firm makes a note, or draws a bill, in his own name, tlioiigh it is known to be on the partnership account, the firm will not be bound. Ke Warren, Dav. (U. S.) 320; Farmers' Bank v. Bayless, 35 Mo. 428 ; Foster v. Hall, 4 Humph. (Tenn.) 346. But the better considered rule seems to be that a note, given in the individual name of one partner, is prima facie deemed his individual obligation, unless his partner be a dormant partner (Scott V. Colmesnil, 7 J. J. Marsh. (Ky.) 416; Graeff :■. HitoJiman, 5 Watts (Pa.) 454) ; and in order to make such a note bind- ing upon the firm, it must be made to appear, affirmatively, that it was given and received as a firm note, binding upon all the partners (Hubbeli v. Woolf, 15 lud. 204 ; Buckner v. Lee, 8 Ga. 285 ; Staats V. Hewlett, 4 Den. (N. Y.) 559) ; and to have been intended to have a joint operation. Crozier r. Kirker, 4 Tex. 252. S. P., Puckett v. Stokes, 58 Tenn. 442 ; Farmers' Bank v. Bayless, 41 Mo. 275; Chemung Bank v. Ingra- ham, 58 Barb. (N. Y.) 290. Chancellor Kent states the rule as fol- lows : " In all contracts concerning ne- gotiable paper, the act of one partner binds all ; and even though he signs his individual name, provided it appears on the face of the paper to be on partner- ship account, and to be intended to have a joint operation. But if a note or bill be drawn by one partner in his own name only, and without appearing to be on partnership account, or if one partner borrow money on his own security, the partnership is not bound by the signa- ture, even though it was made for a part- nership purpose, or the money applied to a partnership use. The borrowing partner is the creditor of the firm, and not the original lender. If, however, the bill be drawn by one partner, in his own name, upon the firm or partnership account, the act of drawing has been held to amount, in judgment of law, to an acceptance of the bill by the drawer in behalf of the firm, and to bind the firm as an accepted bill. And though the partnership be not bound at law in such a case, it is held that equity will enforce payment from it, if the bill was (e) Clarke v. Blackstock, Holt N. P. Cas. 474; March v. Ward, 1 Peake (3d ed.) 177. 68. Promise by several partners. — A note, signed by two partners with their individual names, is sufficient to bind the firm. Maynard v. Fellows, 43 N. H. 255 ; Kendrick v. Tarbell, 27 Vt. 512; In re Thomas, 17 Bankr. Reg. 54. But it is held that where the priority of different creditors attaching the property of a firm is to be determined by the in- dividual or partnership character of their respective claims, the mere fact that a promissory note is signed by the individuals who compose the firm is in- sufficient to show that it is a partnership debt. Gay v. Johnson, 45 N. H. 587. A note made by one partner, in which he says, " I promise to pay," &c., but subscribes the partaership name, " A, B & Co.," is binding on the firm, and not on the partner alone who executed it. Doty V. Bates, 11 Johns. (N. Y.) 544. But compare Sherwood v. Snow, 46 Iowa 481. 299 187* DOCTRINES OF AGENCY. [bOOK II., 3. Promise by one in name of firm. — If one partner promises, in the name of the firm, to pay that for which he and not the firm is liable, the promise binds him, at all events. As an illustration of this, reference may be made to Shipton v. Thornton. (/) There the defendant, a partner in the house of Thornton & West, was solely liable to the plaintiff for certain freight, and he gave the plaintiff a note in this form : 69 actually drawn on partnership account." Where merchandise was delivered by 3 Kent's Com. 41-44. partners, in payment of a note signed In Macklin v. Crotcher (6 Bush (Ky.) by one of the partners, but given for a 401) it is required that in order to bind a partnership transaction, it was held that partner by a note drawn by his copart- the vendors could not recover tlie value ner in iiis own individual name, it must of the merchandise of the vendees, on appear that such individual name was the ground that it was not a note of the the style of the firm. partnership. Owings v. Trotter, 1 Bibb In Thayer v. Smith (116 Mass. 363) (Ky.) 157. it is held that the accommodation en- A member of a firm, which was well dorser of a note signed by one partner, known, purchased a horse, for which he as maker, in his individual name, and gave his individual note. Held, that by the other partner as endorser, may the partnership was not liable, although recover the amount he is compelled to the avails of the horse, when sold, went pay as such accommodation endorser, into the partnership fund. Holmes v. in an action against the firm for money Burton, 9 Vt. 252. paid to its use. A declaration stated that the defend- In Arnold v. Camp (12 Jolins. (N. Y.) ants, A and B, formed a copartnership, 409) it is held that where a promissory and agreed between themselves that A note is given by a partnership, and the should buy certain goods for the firm, payee afterwards takes the individual and execute his own note in payment, note of one of the partners for the on which they should be jointly liable, amount, and gives up the partnership whereupon A bought the goods ; that in note, it is a payment of the partnership consideration of the acceptance of A's note. note in payment, and the delivery of the Instances. — Where two persons, by goodstothe firm, the defendants promised virtue of an agreement, became partners to pay the amount of the note when it fell as to third persons, without any firm due. J?ieW to show a good consideration name, and one of the parties who trans- for tlie promise of B, and that it was an acted the business gave a note, signed in original undertaking, and not a promise his own individual name, for goods pur- to pay t?iie debt of another. Hotchkiss chased, and the payee was ignorant of v. Ladd, 36 Vt. 593. the relations of the parties, it was held (/) 9 Ad. & E. 314. See, too, Hud- that the dormant partner was not liable son v. Kobinson, 4 Mau. & S. 475. on the note. Palmer v. Elliott, 1 Cliff. 69. Promise by one partner in {U. S.) 63. name of firm. — Where the articles of 300 CHAP. I., § v.] FORM OF CONTRACT NOTES. 187^ " I hereby engage to pay the amount of freight, &c., " I am, &c., " K. & R. Thornton & West." On this note the defendant was held separately liable. 4. Joint and several notes. — One partner has no authority, as. such, to bind himself and copartners jointly and severally, {g) But if some members of a firm make a joint and several promissory note, they will be personally liable, although they may have signed only on behalf of themselves and copartners ; and persons sign- ing notes in the following forms have been held liable on them a& *makers, and not merely incidentally as members of the ^88] company to which they belonged : " We jointly and severally promise to pay, &c., value received, for and on be- half of the Wesleyan Newspaper Association. "Parker Story, ) "James Ware, f I>irector8." (A) copartnership do not fix the name of the firm, and a contract is made by one partner for the joint account, a note executed by one for the whole, in name of himself and company, is binding upon all. Aspinwall v. Williams, 2 Hill (S.C.) 64. Where a partnership is limited by articles to a particular business, if one partner make a note in the partnership name for other than such business, it lies with the person suing the note to show an assent, express or implied, on the part of the other partners to the transaction ; a disclaimer of it, to any other than the party to whom the note was given, cannot be shown in evidence. Waller v. Keyes, 6 Vt. 257. C, one of the partners of the firm of A, B & C, executed the following note: " Dec. 7, 1835. One day after date, due J. Sithens 267 dollars 87 cents, for work done on West Kiver bridge for the com- pany of A, B and C. By me, C." Held, that this note bound the firm. Caldwell V. Sithens, 5 Blackf. (Ind.) 99. A member of the firm of " Charles G. Eamsey & Co." signed a promissory note " Chas. G. Ramsey & Co." Held, in a suit upon the note against the firm, that it was a question of fact whether there was any substantial difference be- tween the signature and the firm name, and that the jury were well warranted in finding that the name and signature were the same. Tilford v. Ramsey, 37 Mo. 563. A note for a firm debt, to which one partner has signed the individual names of the firm, is as good ^s if he signed the firm name. Holden v. Bloxum, 3& Miss. 381. ig) Maclae v. Sutherland, 3 El. & B. 1, which shows that a joint and several promissory note is valid as a joint note, though it is not binding, as a several note, on any person who does not sign it. (A) Healey v. Story, 3 Ex. 3, in which Story and Ware were sued jointly. 301 188* DOCTRINES OF AGENCY. [bOOK II., " We, the directors of the Royal Bank of Australia, for ourselves and other shareholders of this company, jointly and severally promise to pay, &c., value received, on account of the company. "T. W. Sutherland, \ "M.bTyT'^' > Directors." (i) "A. Duff, J "Midland Counties Building Society. "We jointly and severally promise to pay, &c. " W. R. Heath, ) "S. B. Smith, | directors. " W. D. Fisher, Secretary." (k) ""^ 5. Promise for self and copartners. — If a partner promises for him- self and copartner, this amounts to a promise by the firm. (T) Accord- ingly the firm has been held liable on notes in the following form : " Sixty days after sight I pay A or order £200, value received. "For J. Matthew, "T. Whitsmith, "T. Smithson, " J. Matthew." (m) And, contrary to an older decision, {n) the firm has been held liable on notes in the following form : *" Leicester and Leicestershire Bank. " I promise to pay the bearer, on demand, £5, value received. *- " For John Clarke, " Richard Mitchell, "Joseph Phillips, "Thomas Smith, " Richard Mitchell." (o) (i) Penkivil v. Connell, 5 Ex. 381, in individual transaction. Crouch v. Bow- which Connell only was sued. man, 3 Humph. (Tenn.) 209. (k) Bottomley v. Fisher, 1 Hurlst. & (l) Smith v. Bailey, 11 Mod. 401 ; C. 211, in which Fisher only was sued. Lane v. Williams, 2 Vern. 277 and 292; 70. Joint and several notes. — A, B, Smith ?'. Jarves, 2 Ld. Raym. 1484. C and D were partners, under the style (in) Galway v. Matthew, 1 Camp. 403. of A, B & Co. C executed a note, sign- (n) Hall v. Smith, 1 Barn. & C. 407, ing the names of each of the firm, where the form was, " I promise to pay Held, on a plea of non est factum, filed for A B, C D and E F. Signed, A by A, B and D, that C had no power to B," and which was held to bind A B bind them by such signature ; but that separately. it constituted the note prima facie an (o) Ex parte Buckley, 14 Mees. & W. 302 CHAP. I., § VI.] LIABILITY ON CONTRACTS. 189* SECTION VI. LIABILITY OF PARTNERSHIPS IN RESPECT OP CONTRACTS NOT BINDING ON THEM, BUT OF WHICH THEY HAVE HAD THE BENEFIT. Effect of having had the benefit of a contract. — It is au erroneous but pojDular uotioii that if a firm obtains the benefit of a contract made with one of its partnsrs, it must needs be bound by that contract. Now, although the circumstance that the firm obtains the benefit of a contract entered into by one of its members tends to show that he entered into the contract as the agent of the firm, (_p) such carcumstance is no more than evidence that this was the case, and the question upon which the liability or non-liability of the firm upon a contract depends is not, " Has the firm obtained the benefit of the contract ? " but, " Did the firm, by one of its part- ners or otherwise, enter into the contract ? " (g) A leading case on this head is Emly v. Lye. {r) There a part- ner drew bills in his own name, and sent them to an agent of the firm in order that he might get them discounted. They were dis- counted, and the money obtained was remitted by the agent, and was paid to the account of the firm. It was held that the firm was neither liable for the amount of the bills on the bills themselves, nor for their proceeds on the common counts. There was no loan to the partnership, no contract with it and no liability attached to the firm by the fact that the partner who alone was liable had ap- o.-.^^-, plied the monev, after *he u'Ot it, for the benefit of his co- *1901 . , . -* partners as well as for tlie l)enfc'fit of himself. Again, in Bevan v. Lewis, (s) one partner borrowed money and executed warrants of attorney to confess judgment. The money which he obtained was applied by him for the benefit of the part- 469, and 1 Ph. 562, and Ex parte Ernest v. Nicholls, 6 H. L. Cas. 423. Clarke, De G. 153, reversing Ex parte Similarly, the fact that one partner only Christie, 3 Mont., D. & D. 736. has obtained the benefit of a contract ip) Per Rolfe, B., in Beckham v. does not show conclusively that the firm Drake, 9 Mees. & W. 99, 100. is not bound. Ex parte Bonbonus, 8 {q) Per Rolfe, B., ubi supra. See, Ves. 544. too, Kingsbridge Flour Mill Co. v. The (?•) 15 East 7. Plymouth Grinding Co., 2 Ex. 718; (s) 1 Sim. 376. 303 190* LIABILITY ON CONTRACTS. [book II., nership, and was obtained in part with the knowledge of his co- partner, in order that it might be so applied. But it was held that the partnership was not liable for the money, the loan having been clearly made to the one partner against whom alone judgment was to be entered, and not to tiie firm through him.71 Money borrowed by one partner. — So, in ordinary cases, when one partner borrows money without the authority of his copartners, the contract of loan is with him and not with the firm, and the nature of that contract is not altered by his apj)li('atioii of the money. The lender of the money has, therefore, no right to repayment by the firm, although the money may have been applied for its benefit, (t) unless he can bring himself within the equitable doc- trine referred to below. 72 71. Effect of having had the benefit of a contract. — A firm is not liable for debts contracted by the partners before the firm commenced, though the prop- erly for which the debt had been con- tracted had been introduced among the partnership property ; nor with rent on a lease to a partner. Brooke v. Evans, 5 Watts (Pa.) 196. But where a note is made in the part- nership name by one member without the authority of the other, who, how- ever, makes no objection when informed thereof, he is, if benefited as partner, jointly bound. Otherwise, where iu the absence of authority he has not impliedly ratified or been benefited by the trans- action. Stewart v. Caldwell. 9 La. Ann. 419. So, also, a lease under seal, executed by one partner in the name of the firm as lessees, the firm occupying thereunder for two years, paying rent directly to the lessor, is evidence of an agreement for a lease, which, as they have had the benefit of it, will be enforced against the sur- viving partners after the death of him who executed it. Kyle v. Koberts, 6 Leigh (Va.) 495. And where one partner, negotiating as such, with a stranger for the doing of a certain thing, makes a promise, on the strength of which the agreement to do that thing is made and carried out with the firm, the firm is liable on the promise. Pond v. Starkweather, 99 N. Y. 411. {t) See Smith v. Craven, 1 Cromp. & J. 500 ; Hawtayne v. Bourne, 7 Mees. & W. 595 ; Burmester v. Norris, 6 Ex. 796; Eicketts v. Bennett, 4 C. B. 686; The Worcester Corn Exchange Co., 3 De G., M. & G. 180 ; Fisher v. Tayler, 2 Hare 218. In all these cases the firm got the benefit of the money borrowed, and yet was held not liable to repay it. 72. Money borrowed by one part- ner. — The rule is settled that a firm is not rendered liable for money loaned to one partner, upon his individual credit^ by the mere fact that the money wa» afterward applied to the benefit of the firm. Union, &c.. Bank of Memphis v. Day, 12 Heisk. (Tenn.) 413 ; Peterson v. Koach, 32 Ohio St. 374. But in Siegel I'. Chidsey (28 Pa St. 279), where money was obtained on the personal credit of one partner, but used solely for partner- 304 CHAP. I., § VL] liability OX CONTRACTS. 190* Goods supplied to one jjcirtner. — The same rule applies to goods, services and works supplied to or done for one partner, either on his own account, or if for the firm, at the request of one of its members acting beyond the limits of his apparent as well as of his real authority. The firm does not, in any case of this sort, enter into any contract, express or implied, with the person dealing with the partner in question, and does not incur any obligation towards that person by reason of the circumstance that it gets the benefit of what he has done, (u) The principle of these decisions governs those cases in which one partner, in breach of trust, but without the knowledge or consent of his copartners, *applies trust money over which he has control as a trustee, to the purposes of ■- the firm. The fact that the firm has been benefited by the money in question does not necessarily render it liable to the owners of the money, (x) 73 Equitable doctrine in these cases. — Where, however, the money borrowed by one partner in the name of the firm, but without the authority of his copartners, has been applied in paying off debts of the firm, the lender is entitled in equity to repayment by the firm of the amount which he can show to have been so applied, and the same rule extends to money bona fide borrowed and applied for any other legitimate purpose of the firm, {y) This doctrine is founded ship purposes, it was held that this was [y) The leading cases on this subject a good consideration for a subsequent are Ex parte Chippendale (the German promise of the firm to pay the debt. Mining Co.'s case), 4 De G., M. & G. (u) See, in addition to the cases al- 19; The Cork and Youghal Rail. Co., ready cited, Kingsbridge Flour Mill Co. L. R., 4 Ch. 748 ; Blackburn Building V. Plymouth Grinding Co., 2 Ex. 718 ; Society v. Cunliffe, Brooks & Co., 22 Ch, Lloyd V. Fteshfield, 2 Car. & P. 325, and D. 61, and 9 App. Cas. 857, and 29 Ch. 9 Dowl. & R. 19; Galway v. Matthew, D. 902; Baroness Wenlock v. River Dee 10 East 264; Kilgour v. Finlyson, 1 H. Co., 19 Q. B. D. 155. The case of in- Bl. 155; Ex parte Wheatly, Cooke's fants is analogous; an infant is liable Bank L. (8th ed.) 5.34; Ball v. Lanes- for necessaries; but he was not liable at borough, 5 Bro. P. C. 480 ; Ex parte law for money lent, though applied in Peele, 6 Ves. 603, 604 ; Ex parte Hartop, the purchase of necessaries. Darby v. 12 Id. 352. Boucher, 1 Salk. 279. But otherwise in (x) Ex parte Apsey, 3 Bro. C. C. 265; equity, Marlow v. Pitfield, 1 P. Wms. Ex parte Heaton, Buck 386. See ante 558. So, a husband was not, at law, liable P- *160. for money lent to his wife to enable her 73. See supra, p. *304, note 72. to obtain necessaries, and applied by her 305 20 191* LIABILITY ON CONTRACTS. [book IL, partly on the right of the lender to stand in equity in the place of those creditors of the firm whose claims liavc been paid off by his money, and })artly on the right of the borrowing partner to be in- demnified by the firm against liabilities bona fide incurred by him for the legitimate purpose of relieving the firm from its debts or of carrying on its business, (z) The equitable doctrine in question is limited in its application to cases falling under one or other of the princijjles above indicated, (a) 74 for that purpose. Knox t;. Bushell, '6 C. B. (N. S.) 334. Bat see, in equity, Jenner v. Morris, 1 Drew. & S. 218, and 3 De G., F. & J. 45 ; Deare v. Soutten, 9 Eq. 151 ; and observe that in the last case the plaintiff had no ground for suing in equity, except his inability to recover at law. (z) See infra, book III., eh. 3, § 1. (a) See, in addition to the cases cited in note iy), National Permanent Benefit Building Society, 5 Ch, 309 ; Magdalena Steam Nav. Co., Johns. 690 ; Athenseum Life Ins. Soc. v. Pooley, 3 De G. & J. 294. 74. Equitable doctrine in these cases. — One partner is liable for the acts of another partner, whereby decep- tive appearances are created in land which is the subject of the partnership, and whereby the partnership realizes the proceeds of the fraud. Chester v. Dickerson, 52 Barb. (N. Y.) 349. Though the payee of a partnership note believed that the proceeds of the note were to.be applied to the individual debts of one of the firm, the note would still be binding on the firm, if the proceeds were in fact used by the firm. Hamil- ton V. Summers, 12 B. Mon. (Ky.) 11. 306 CHAP. II., § I.] INDIVIDUAL PAETNER'S LIABILITY. 192" *192] *CHAPTER II. OF THE NATURE, EXTENT AND DURATION OF THE LIABILITY OP INDIVIDUAL MEMBERS OF PARTNERSHIPS TO CREDITORS. Section I. — Nature of the Liability, *192. 1. As regards contracts, *192. 2. As regards torts and frauds, *198. Section II. — Extent of the Liability, *200. Section III. — Duration of Liability, *201. 1. Commencement of liability, *201. 2, Termination of liability, *210. a. As to future acts, *210. b. As to past acts, *223. (1) Payment, *22.5. (2) Release, *237. (3) Substitution of debtors and securities, *239. (4) Lapse of time, *257. Nature and extent of a jiartner's liability. — Having examined in tlie preceding pages the liabilities of a firm for the acts of its mem- bers, it is proposed in the present chapter to investigate the liability of the individual partners in respect of such obligations as, upon the principles already discussed, are binding on them all. SECTION I. — NATUEE OF THE LIABILITY. 1. As regards contracts. No several liability on contracts binding the firm. — An agent who contracts for a known principal is not liable to be himself sued on the contract into which he has avowedly entered only as agent. Consequently, a partner who enters into a contract on behalf of his 307 192* NATURE OF LIABILITY [book II., firm is not liable on that contract except as one of the firm ; in other words, the contract is not binding on him separately, but only on him and his copartners jointly, (a) One partner may render himself separately liable by holding himself out as the only mem- ber of the firm, (6) or by so framing the contract as to bind him- self separately from his copartners as well as jointly with them ; (c) but unless there are some special circumstances of this sort, a con- tract which is binding on the firm is binding on all (cZ) *the r^.Qp partners jointly and on none of them severally. There is no difference in this respect between law and equity, (e) except that which arises from the equitable jurisdiction to rectify mistakes and from the principles adopted by courts of equity in administer- ing the estates of deceased partners. (/) These principles will be investigated at a later period in book IV., ch. 3. 1 (a) See Ex parte Buckley, 14 Mees. & W. 469; Ee Clarke, De G. 153; Ex parte Wilson, 3 Mont., D. & D. 57. (6) Bonfield v. Smith, 12 Mees. & W. 405 ; De Mautort v. Saunders, 1 B. & Ad. 398. (c) See ante p. *179, et seq., and Ex parte Harding, 12 Ch. D. 557 ; Higgins V. Senior, 8 Mees. & W. 834 ; Ex parte Wilson, 3 Mont., D. & D. 57. (d) Not including dormant partners. Beckham v. Drake, 9 Mees. & W. 79 ; Brett V. Beckwith, 3 Jur. (N. S.) 31, M. K. (e) Kendall v. Hamilton, 4 A pp. Cas. 504, and 3 C. P. D. 403. (/) lb., where the whole law on this subject will be found carefully exam- ined. 1. No several liability on contracts binding on the hrm. — The principle is, that a contract made by copartners is several as well as joint, and the assumpsit is made by all and by each. It is obliga- tory on all, and on each of the partners. Barry v. Foyles, 1 Pet. (U. S.) 311. Compare Woodworth v. Spafford, 2 Mc- Lean (U. S.) 168. Where, on dissolution, a portion of th& members of the firm continued the busi- ness, and the plaintiff, who had occupied the position of bookkeeper to the old firm, kept on in that position with the new firm, and carried a balance due him for services into his account with the new firm, which account, as thus made up, the new firm afterwards paid, with- out knowing that it contained anything due on the part of the old firm, it was held that plaintifi' was entitled to retain the money so received, as the members of the new firm were personally liable for the debts of the old one. Strong v. Niles, 45 Conn. 52. In an action against the members of an unincorporated association, sued as partners, the court will not delay the relief to which the plaintiff is entitled as against all the defendants, pending an inquiry instituted by the defendants to ascertain which of them, as between themselves, is primarily liable for the debt. Manning v. Gasharie, 27 Ind. 399. A partnership between four was dis- solved bv the death of one^ and letters of 308 €HAP. II., § I.] IX RESPECT OF CONTRACTS. 193* Partnership debts not several as welt as joint. — It has often been said that in equity partnersliip debts are separate as well as joint ; but this proposition is inaccurate and misleading. It is true that a creditor of a partnership can obtain payment of his debt out of the estate of a deceased partner, (g) but the judgment which such a creditor obtains is quite different from that which a separate creditor is entitled to, (/i) and it is a mistake to say that the joint creditor of the firm is also in equity a separate creditor of the deceased part- ner, (i) In bankruptcy the joint debts of a firm are never treated as joint and several, and yet in bankruptcy equitable as well as legal principles are always recognized. 2 administration on his estate were taken out by a surviving member. The sur- vivors, having formed a new firm, took the stock, and each gave his note for one- third of said stock, at an appraised vahie, payable to the firm. Held, tliat the three were chargeable jointly for the whole Talue of the stock. Washburn v. Good- man, 17 Pick. (Mass.) 519. A plaintifi" suing a firm must show a joint contract or joint promise, express or implied. Sager v. Tupper, .38 Mich. 258. In Mississippi, all partnership con- tracts are declared by statute to be joint and several ; therefore, in a suit against one partner, counts on a firm debt for which he is severally liable, may be joined with counts on an individual debt, but if the creditor treat the con- tract as joint, by suing all the partners, he must prove a joint contract as alleged, and cannot amend by discontinuing as to part of the defendants and joining a count on a contract by one only, in order to meet the proof which is of such a con- tract. Miller v. Northern Bank, &c., 34 Miss. 412. A suit was brought against two as partners ; both were served with pro- cess ; both appeared and pleaded joint- ly ; notice to produce a book containing the contract on which the action was brought was given to both, and it was produced. The contract was in the name of the firm, and was proved to be in the handwriting of one of the defendants. Upon the trial, an admission was made by the counsel acting for both defend- ants that a certain amount of labor was done by plaintiff for defendants, and certain payments made to him. Held, that the evidence was sufficient to establish a joint liability on the part of the defendants. Balliett v. Fink, 28 Pa. St. 266. The liability of a partner is to be de- termined by the law of the place where the partnership is carried on, and not where the debt was incurred. Hastings V. Hopkinson, 28 Vt. 108. (g) See the next note. Hoare v. Con- tencin, 1 Bro. C. C. 27, shows that this was not always the case. (A) See Re Barnard, 32 Ch. D. 447 ; Hills V. M'Rae, 9 Hare 297 ; Ee Hodg- son, 31 Ch. D. 177 ; Ee McCrae, 25 Id. 16, and post, book IV., ch. 3. {i) Except in partnership cases the liability in equity on a joint contract is the same as at law. Other v. Iveson, 3 Drew. 177 ; Jones v. Beach, 2 De G., M. & G. 886 ; Eawstone v. Parr, 3 Euss. 539. 2. Partnership debts not several as 309 193* NATURE OF LIABILITY [bOOK II., In Kendall v. Hamilton (Jc) two out of three partners were sued for a partnership debt, and judgment was recovered against them. Afterwards the plaintiffs, having discovered that the defendant Hamilton was a member of the firm, sued him for the same debt, which was still unsatisfied. But it was held that the action could not be maintained, for the liability of Hamilton was a joint liability only, and tlic judgment obtained against his copartners was a bar to another action against him. Efed of judgment againd some partners. — This case would have presented no difficulty before the passing of the Judicature acts, but it was contended that Hamilton's liability was, in equity, sev- eral as well as joint, and that since the passing of the Judicature acts he could be sued ^notwithstanding the judgment re- ■^ covered against his copartners. This construction, how- ever, was decided to be unsound, and it did not prevail. Before the passing of the Judicature acts, the Court of Chancery would have had no jurisdiction in such a case as Kendall v. Hamilton, and there were no circumstances importing equitable considerations into it. Effect of judgment against surviving partners. — It must not, how- well as joint. — A debt due from part- admitted in part the sale and delivery ners, in a suit against both, may be re- and indebtedness alleged. The plain- covered against either, and either may tiifs, in reply, denied the statement in be compelled to pay the whole. Al- A.'s answer, and moved for judgment though due from the company, it is also on the pleadings. Held, that the mo- due from each member of the company^ tion was rightly denied, and judgment and the claim of the creditor for its of dismissal properly rendered. Such satisfaction extends to the whole property a state of the pleadings furnishes no of each member of the firm, as well as basis for a several judgment against tothe joint property of the firm. Tucker either of the defendants. Beatty v. V. Oxley, 5 Cranch (U. S.) 34 ; reversing Ambs, 11 Minn. 331. S. C. 1 Cranch C. C. 419. I" an action against several as part- In an action against A. & W., former ners, although but one of the defendants partners, on an alleged joint indebted- be brought into court, if he appears and ness for goods sold and delivered, A.'s pleads the general issue, the plaintiff is answer denied the sale and delivery, but not entitled to recover, unless he estab- admitted that the goods were left with lishes a joint liability of the defendants, the defendants for sale on commission, Halliday i;. McDougal, 20 Wend. (N. Y.) and that sales of the same were made to 81 ; S. C, 22 Id. 264. a certain amount, for which an indebted- {k) 4 App. Cas. 504, and 3 C. P. D. ness was admitted ; and W.'s answer 403. This case arose after the Jud. acts 310 CHAP. II., § I.] IX EESPECT OF CONTRACTS. 194* ever, be inferred from Kendall v. Hamilton that if a creditor of a firm sues the surviving partners and recovers judgment against them he cannot obtain payment of his demand out of the assets of a deceased member of the firm. The contrary is well established by a long series of cases which are in no way affected by Kendall V. Hamilton. Equitable doctrine illustrated. — It has long been held that a cred- itor of a firm is himself entitled to obtain payment from the estate of the deceased, even although he may have taken as a security for his debt a bond or covenant binding the partners jointly, il) Thus, in Bishop v. Church, (m) two partners borrowed £2000, for which they afterwards gave their joint bond. One of them then died and the other became bankrupt. A bill was filed by the creditor for payment of the bond out of the estate of the deceased partner, and it was held that his estate continued liable notwith- standing that it was discharged at law, the bond being joint, and not joint and several. In this case it was also held that the bond ought to be treated as joint and several so as to make the estate of the deceased partner liable as for a specialty debt and not as for a simple contract debt, as would have been the case without the bond, in) In Beresford v. Browning (o) four partners agreed that on the death of any of them the survivors should not be bound to *pay out his capital at once, but should pay it by certain r^-,QP instalments, as ascertained at the last preceding stock-taking. The agreement did not purport to bind the survivors jointly and severally. But it was held that even if they were at law bound only jointly, they were liable in equity severally as well as jointly, came into operation. between them and otlier partnerships. (/) See, in addition to the cases cited (m) 2 Ves. Sr. 100 and 371. Simpson in the next few notes, Primrose v. Brom- v. Vaughan, 2 Atk. 31, is a very similar ley, 1 Atk. 90 ; Darwent v. Walton, 2 case. Atk. 510; Lane v. Williams, 2 Vern. (?i) Tlie following cases are to the 292; and see Sleech's Case, 1 Mer. 539; same effect as Bishop v. Church, viz.: Devaynes v. Noble, 2 Russ. & M. 495, and Simpson v. Vaughan, 2 Atk. 31 ; Thomas the cases there commented on ; Smith v. v. Frazer, 3 Ves. 399 ; Burn v. Burn, Id. Smith, 3 Giff. 263. The cases only re- 573 ; Orr v. Chase, 1 Mer. 729, ap- late to mercantile partnerships, but quaere pendix. if there is any difference in this respect (o) 20 Eq. 564, and 1 Ch. D. 30. 311 195* NATURE OF IJABILITY [bOOK II., and that the executor of the partner first dying was entitled to be paid the amount due to him out of the estate of a surviving part- ner, who had himself died, and was not restricted to suing the ulti- mate surviving partner. Effect of judgment. — Nor, if the creditor sues the surviving part- ners and obtains judgment against them, will he be therefore pre- cluded from proceeding to enforce his original claim against the estate of the deceased partner, (p) In the case here supposed the judgment does not affect his estate. So, if the creditor of the firm first seeks payment out of the estate of a deceased partner, he is not precluded from afterwards suing the surviving partner, (g) Effect of rule on creditors inter se. — The doctrine acted on in Bishop V. Church and other cases of the same sort is applied, not only for the benefit of creditors against the partners and their rep- resentatives, but also as between competing creditors. This was settled in Burn v. Burn, (r) In that case, partners being indebted to a large amount, gave to their creditor a joint bond ; one of the partners died, the others afterwards became insolvent, and a bill was filed by the bond creditor for payment out of the estate of the deceased partner. Two questions then arose between the plaintiff and the simple contract creditors of the deceased partner, viz., first, whether the plaintiff could rank as a creditor at all against the assets of the deceased ; and, secondly, whether, if he could, he should rank as a specialty or only as a simple contract creditor. The court decided both questions in favor of the plaintiff, and held that he was entitled to rank as a specialty creditor, although the consequence was that after satisfying his demand, little remained for payment of the other creditors. *iQft1 * Oases where the equitable and legal liabilities are the -' sa7ne. — But even in administering the estate of a deceased partner it must not be supposed that every joint debt contracted by the firm is payable out of his assets. It is a question of intention on the part of the firm and on the part of those with whom it deals. If, therefore, partners enter into a contract binding them- ip) Liverpool Borough Bank v. (g) Ee Hodgson, 31 Ch. D. 177. Walker, 4 De G. »& J. 24; Jacomb v. (r) 3 Ves. 573, and see Simms v. Harwood, 2 Ves. Sr. 265, Barry, there cited. 312 CHAP. II., § I.] IN RESPECT OF CONTRACTS. 196* selves jointly and not severally, and if such contract is not a mere security for the payment of a debt, or for the performance of a joint and several obligation, and if it has not been made joint in form by mistake, the effect of the contract will be, in equity as in law, to im- pose a joint obligation and no other, (s) A leading case on this head is Sumner v. Powell, [t) There, one of a firm of partners died, the firm being at the time of his death liable for a breach of trust committed by one of its members. A new partner was admitted into the firm and a deed was executed between the executors of the deceased partner and the surviving partners and the new partner, whereby, in consideration of certain payments by the executors and of a release by them of all demands, the surviving partners and the new partner covenanted jointly to indemnify the executors from the debts and liabilities of the old firm. A suit was afterwards instituted in respect of the breach of trust, and the executors were ordered to make good the same out of the assets of their testator. The executors then filed a bill to be indemnified out of the estate of the new partner, and contended that the covenant into which he had entered, though joint in form, ought to be considered as joint and several. But it was held other- wise, for the obligation of the new partner to indemnify the plaintiffs existed only by virtue of his covenant, and the extent of the obliga- tion could therefore be measured only by the words of such covenant. Again, in Clarke v. Bickers, (w) a lease w^as made to two partners jointly of lands wanted by them for partnership purposes. The demise and lessees' covenants were all joint. *After the p^,Q^, death of one of the partners his executors were sued in *- equity in respect of various breaches of covenant, and it was con- tended that the covenants ought to be treated as joint and several. But it was held on demurrer that no equity arose to the lessor from the fact that the lessees were copartners ; the lessor determined for himself how his leases should be granted. The demurrer was con- sequently allowed. (s) See, in addition to the cases no- 177 ; Rawstone v. Parr, 3 Euss. 424, 539. ticed in the text, Richardson v. Horton, {t) 2 Mer. 30 ; affirmed on appeal, 6 Beav. 185; Jones v. Beach, 2 De G., Turn. & R. 423. M. & G. 886 ; Other v. Iveson, 3 Drew. {u) 14 Sim. 639. 313 197* NATURE OF LIABILITY [bOOK II.^ The same doctrine was acted on and even carried further in Wil- mer v. Currey. (a;) In that case three partners dissolved partner- ship, one of them, the plaintiff, retiring. By a deed made between the three partners, the plaintiff assigned all his share and interest to the other two, and they jointly covenanted to pay the debts of the firm, and to indemnify the plaintiff therefrom and to pay the plaintiff certain snms of money. One of the two continuing part- ners having died and the covenants not having been performed, the plaintiff filed his bill against the surviving partner and the execu- tors of the deceased partner in order to obtain the sums remaining due to him and to have the unliquidated partnership debts paid. But it was held on demurrer that the plaintiff had no equity against the estate of the deceased partner ; for although that partner was, irrespectively of the deed, liable to contribute towards payment of the partnership debts, that was different from the obligation which arose by virtue of the covenant of which the plaintiff sought the benefit. It is, however, difficult to reconcile this case with Beresford v. Browning, {y) Joint liability in cases of holding out. — A creditor who alleges that A, B and C are his debtors can, it is apprehended, prove his case by showing that one of them contracted on behalf of all three and that the other two are estopped from denying his authority to do so. Cases in which persons have been held jointly liable on this principle are to be found in the books, {z) The case of Scarf v. Jardine, (a) which seems at first sight to throw some doubt on this doctrine, is really not opposed to it. In that case S. & R. carried on business in partnership under the name of E,. & Co. "^S. -J retired. R. continued the business in the old name, and took another person into partnership with him. J. was a customer of the old firm ; he had no notice of S.'s retirement, and he con- tinued to deal with and became a creditor of the new firm. J. then was made acquainted with the fact that S. had retired ; but J. nev- ertheless sued the new firm for their debt to him, and on their bank- (x) 2 De G. & S. 347. (z) Waugh v. Carver, 1 H. Bl. 235, iy) The Court of Appeal, however, and other cases of holding out, ante p. thought the two might be distinguished. *40, el seq. See 1 Ch. D. 30. (a) 7 App. Cas. 345. 31-i CHAP. II., § I.] IN RESPECT OF CONTRACTS. 198* ruptcy he proved against their estate. He then sought to recover the same debt against S. ; but it was decided that S. was not liable. It was held that J. had the option of suing the new firm or S., but that J. could not sue the new firm and S. jointly, and that having elected to sue the new firm, he could not afterwards sue S., who was not in fact a member of it. The importance of this case turns on the grounds on which it was held that J. could not have sued S. jointly with the members of the new firm. The reason why he could not have done so was that J. did not in fact contract with the new firm upon the faith that S. was a member of it. (6) If it had been proved that J. had so contracted, he could, it is apprehended, have sued S. and the other members of the new firm, and have proved S. to have been a partner by estoppel. 2. As regards torts and frauds. Torts create joint and several liabilities. — For torts imputable to a firm, all the partners are liable jointly and severally, (d) To thi& general rule an exception occurs where an action e.^; delicto is brought against several persons in respect of their ownership in land, for then they are liable jointly, and not jointly and severally, (e) 3 Distinction between torts and breaches of contract. — Although for general purposes it may be convenient to distribute acts and for- bearances which give rise to obligations under the heads "Breach of Contract" and "Tort," it would not be difficult to show the im- (6) See 7 App. Cas. 350, per Lord as tort feasors, as upon an unauthorized Selborne, and 357, 358, per Lord Black- disposal thereof. Their liability rests burn. upon contract, not upon tort, and is ne- (d) Mitchell v. Tarbutt, 5 T. E. 649 ; cessarily joint, not several. Harris v. 1 Wms. Saund. 291 /and jr; Com. Dig., Schultz, 40 Barb. (N. Y.) 315. "Abatement," F, 8. An action on the case for negligence (e) See 1 "Wms. Saund. 291 / and g. occasioning the loss or destruction of a 3. Torts create joint and several slave hired by plaintiff to a copartner- liabilities. — Where partners assign prop- ship, may be maintained against one of erty to a creditor as security for the debt, the members of the firm, without join- and he intrusts such property to the ing the other partners. So, if the neg- partners to sell, as his agents, and to pay ligence be that of an agent of the co- over the proceeds to him, they do not partnership. White v. Smith, 12 Rich, become liable, upon sale of the property, (S. C.) 595. 315 199* NATURE OF I.IABILITY [bOOK II., possibility of always distinguishing between the two. (/) And yet if a breach of a contract binding *on the firm imposes a ^ . . r*199 joint liability only on its living members (as to which, see '- sent by J. S. to the execution of use of a patent right, and as such en- the note. Shaw v. McGregary, 105 . joyed benefits thereunder, is liable, not Mass. 96. on the express contract, but on an im- {g) See Horsley v. Bell, 1 Bro. C. C. plied contract to pay for his enjoyment 101, note, per Gould, J. of benefits according to the terms en- {h) Wilson V. Tumman, 6 Man. & G. joyed by the rest of the firm. Rogers v. 236. Eeissner, 30 Fed. Rep. 525. (i) 4 Taunt. 582. An incoming partner is not liable for {j) 1 Ves. Jr. 131. the previous debts of the concern, unless 8. Liability of incoming partner. — he makes himself so by express agree- A partner who enters a firm after it has ment, or by such conduct as will raise 326 CHAP. II., § III.] INCOMING PARTNERS. 206^ AppliGation of principle to promoters of companies. — Again, in Beale v. Mouls, {k) the member* of a provisional committee of a company entered into a special agreement with the plaintiff for the the presumption of a special promise. Kingo V. Wing (Arlc.), 5 H. W. Rep. 787. One partner transferred his interest to the other, who subsequently took a new partner. Held, such new firm could not be held liable, as survivors, fur a debt of the old firm, in the absence of evidence that the new firm assumed payment of such debt. Dowling v. Clift, 23 N. Y. Week. Dig. 275. Where the seller of goods to a firm agrees to deliver them at a future day, and prior to that time a new partner is admitted to the firm, and a note is given in the firm name for the goods when delivered, the new partner is liable even though the seller did not know, when he took the note, that a new member had entered the firm. Kearney v. Snodgrass, 12 0reg. 311. In Atkins v. Hunt (14 N. H. 205, 206), Gilchrist, J., said : " There is of course an essential difference between a mere proposition to form a partnership, and its actual constitution. Persons may take a deep interest in the objects to be accomplished by the comparny ; may make donations to aid its progress ; or may sign their names to subscription papers for the same end, without being liable for debts which other persons may contract in the prosecution of the same purpose. But a difficult question often arises as to where the proposition to make the contract ends, and the con- tract itself begins. In Bourne v. Freeth, 9 Barn. & C. 632, a prospectus was issued, Btating the conditions upon which the company was formed ; that the concern was to be divided into twenty shares, to be under the management of a commit- tee, and ten per cent, of the subscriptions to be paid in by a certain date. It was held that this prospectus imported only that a company was to be formed, and not that it was actually formed, and that the signature to the prospectus did not indicate to any person who should read it that the signer had become a member of a company already formed. So, in a case where all the acts proved and relied on were equally consistent with the sup- position of an intention on the part of the defendant to become a partner in a trade or business to be afterwards car- ried on, provided certain things were done, as with that of an existing part- nership, it was held that he was not a partner. (Dickinson v. Valpy, 10 Barn. & C. 128, per Parke, J.) And where a prospectus for a company was issued, to be conducted pursuant to the terms of a deed to be drawn up, it was held tliat an application for shares, and payment of the first deposit, did not constitute one a partner who had not otherwise inter- fered in the concern. (Fox v. Clifton, 6 Bing. 776.) It was an important ele- ment in that decision that the deed was not executed by the defendant who was sought to be charged as a partner. In Howell V. Brodie, (6 Bing. N. C. 44), the defendant, from 1829 until 1833, ad- vanced various sums, with a view to a partnership in a market about to be erected ; knew that the money was ap- plied towards the erection, and was con- sulted in every stage. In October, 1833, {k) 10 Q. B. 976. See, too, Bremner ridge v. Hesse, 9 Car. & P. 200. V. Chamberlavne, 2 Car. & K. 569 ; Ker- 327 206* COMMENCEMENT OF LIABILITY. [bOOK II., maiiuflictiire of a steam carriage. Afterwards, but before the con- tract was completed, the defendant Mouls became a member of the committee and interested himself in the completion of the carriage. Several alterations and payments on account were also made whilst lie was a member, and with his knowledge. The carriage was com- pleted, but the committee then refused to take it or to pay for it. In *an action brought against Mouls and the other members r^f,^- of the committee, it was held that Mouls was not liable. ^ He was not liable on the special contract, for he was no party thereto, by himself or any agent, and he could not be made liable on any implied contract, for the existence of a special agreement excluded any implied contract relative to the same subject matter. It follows, from the principles on which this case was determined, that if the carriage had been accepted by the committee, Mouls would not have been liable to pay for it. The delivery and acceptance in such a case would have been in pursuance of the contract, to which, ex hypothesi, he was no party ; and no liability could attach to him by virtue of any implied contract to pay that which became payable by virtue of an express contract made with other people. It has, indeed, been expressly decided that if several members of a com- mittee order goods, and then a new member joins tJie committee, he is not liable to pay for the goods, though they are delivered after he joined it. {I) 9 it was settled by a written agreement 9. Application of principle to pro- that he should have a seventh share of motersof companies.— In Fox v. Clifton it ; but it was held that he was not liable (6 Bing. 776), Lord Chief Justice Tindal as a partner until October, 1833, although said: "Upon this first question, tbere- profits had been made, but not accounted fore, whether a partnership was actually for to him, before that time. Lord Chief formed, we think, if the right to partici- Justice Tindal mentions the fact that no pate in the profits of a joint concern is account of profits was rendered previous to be taken, as undoubtedly it ought to to October, 1833, as being in favor of the be, as a test of a partnership, these de- defendant." fendants were not entitled at any time {I) Newton v. Belcher, 12 Q. B. 921 ; to demand a share of profits, if profits Whitehead v. Barron, 2 Moo. & K. 248. had been made ; inasmuch as they had In Beech v. Eyre, 5 Man. & G. 415, the never fulfilled the conditions upon wliich goods were both ordered and supplied they subscribed. We think the matter at a time when there was evidence to proceeded no further than that the de- Bhow that the defendant was one of the fendants had offered to become partners committee. in a projected concern, and that the con- 328 CHAP. II., § III.] INCOMING PARTNERS. 207* New contract. — Cases, ho\s'ever, of this kind must not be con- founded with those in which a new though tacit contract is made cern proved abortive before the period The general doctrine is well summed at which the partnership was to com- up by Mr. Collyer in his work on Part- mence ; and therefore, with respect to nership Law (book 5, c. 1, § 2, pp. 735- the agency of the directors, which is the 743), as follows: "In joint stock corn- legal consequence of a partnership com- panics, more than in any other kind of pletely formed, we think the directors partnership, a variety of acts are done proceeded to act before they had au- before the partnership is actually com- thority from these defendants ; for they menced. Notices are published, pros- began to act in the name of the whole pectuses are distributed, meetings are before little more than half the capital held, officers are chosen, deposits are was subscribed for, or half the shares paid, and scrip receipts are given, long were allotted. The persons, therefore, before the business is commenced or the who contracted with the directors must deed of settlement is executed. Indeed, rest upon the security of the directors many of these acts are necessarily done who made such contract, and of those before even the full complement of the in- subscribers who, by executing the deed, tended shareholders is made up. Hence, have declared themselves partners, and although the prime movers and agitators of any who have, by their subsequent of the scheme will undoubtedly be liable conduct, recognized and adopted the acts in respect of the contracts into which and contracts of the directors. But they they enter for the purpose of launching have not the security of the pfesent de- the company ; yet they cannot by such fendants, who are not proved by the evi- proceedings bind those who merely an- dence to stand in any one of such pre- swer their invitation ; those, for instance, dicaments. It is unnecessary to advert who name themselves subscribers, and to any of the cases which have been re- even pay deposits, and do other acts ferred to, each of which must rest upon showing an intention of becoming part- its own peculiar circumstances, except ners, but who, by neglecting to observe that with respect to Perring v. Hone, de- the rules or to comply with the demands cided in this court, we think it right to of the society, never become entitled to observe that the great point, whether share the profits. The contract of part- there was a partnership or not, does not nership, as regards these passive sub- appear to have been made the prominent scribers, is executory only, and may be subject of argument, but to have been abandoned, if tlie terms of the partner- rather assumed than disputed ; for the ship are not reasonably fulfilled by the advertisement or prospectus was not projectors. Under such circumstances, brought to the attention of the court, nor they never have become actual partners is there any argument upon the terms in the concern, and consequently have of it. It is not incompatible with that never rendered themselves liable for its determination that the court might have debts. In the language of a learned held the proof of partnership incom- judge: * If there is a contract to carry plete, if the same materials had been on business by way of present partner- brought before them which are presen- ship between a certain definite number ted to us." of persons, and the terms of that contract 329 207* COMMENCEMENT OF LIABILITY. [bOOK II.,. after tlie inti-uduction of a new partner. Dyke v. Brewer (m) illus- trates the distinction alluded to. In that case the plaintiff agreed with A to supply him with bricks at so much per thousand, and the plaintiff began to supply them accordingly. B then entered into partnership with A, and the plaintiff continued to su])ply bricks as before. It was held that both A and B were liable to pay, at the rate agreed upon, for the bricks supplied to both after the partner- ship commenced. The ground of this decision was tJiat as A had not ordered any definite number of bricks, each delivery and acceptance raised a new tacit promise to pay on the old terms, although if all the bricks delivered had beeu ordered by A in the first instance, he alone would have been liable to pay for them, (n) * Incoming partner taking debts on himself. — If an incom- ^ iug partner chooses to make himself liable for the debts incurred by the firm prior to his admission therein, there is nothing to prevent his so doing. But it must be borne in mind that even if an incoming partner agrees with his copartners that the debts of the old shall be taken by the new firm, this, although valid and binding between the partners, is, as regards strangers, res inter alios acta, and does not confer upon them any right to fix the old debts on the new partner, (o) In order to render an incoming partner liable to the creditors of the old firm, there must be some agreement, express or tacit, to that effect entered into between him and the creditors, and founded on some sufficient consideration. If there be any such agreement, the incoming partner will be bound by it, but his liabilities in respect of the old debts will attach by virtue are unconditional, or complete, then the contracts, it seems to me to be clear that partners give to each ether an implied he is not bound by them, on the simple authority to bind the rest to a certain ground that he has never authorized extent. But if a person agree to be- them.' " come a partner at a future time with {m) 2 Car. & K. 828. others, provided other persons agree to {n) Helsby ?;. Mears, 5 Barn. & C. 504, do the same, and advance stipulated is another case turning on the same prin- portions of capital, or provided any ciple as is explained by Lord Denman other previous conditions are performed, in Beale v. Mouls, 10 Q. B. 976. he gives no authority at all to any other (o) See per Parke, J., in Vera v. individual, until all those contracts are Ashby, 10 Barn. & C. 298; Ex parte performed. If any of the other intended Peele, 6 Ves. 602 ; Ex parte Williams,. partners in the mean time enter into Buck 10. 330 CHAP. II., § III.] INCOMING PARTNERS. 208* of the new agreement, and not by reason of his having become a partner. 10 Evidence of agreement to do so. — An agreement by an incoming; 10. Incoming partner taking debts on himself — when liable. — Incoming partners may assume to themselves tlie debts of the concern with which tliey connect themselves; and this assump- tion may, both at law and in equity, either be proved by their express cove- nant or contract, or be inferred from the terms of it, or from the treatment of such debts by the tirm, to the knowledge of the incoming partners, as the debis of the new firm. Updike v. Doyle, 7 K. I. 446. Where an incoming partner adopts an executory contract made by the other partner, he becomes liable the same as if he had always been a member of the firm. Lucas v. Coulter, 104 Ind. 81. Where a drawee of a bill of exchange, before its acceptance, enters into part- nership with others, all agreeing that the goods for which the bill was given shall be used in the business and be paid for by the firm, and the drawee partner accepts the bill for the firm, such accept- ance is binding on the partners. Mark- ham V. Hazen, 48 Ga. 570. Where a husband, being a partner, dies, and the wife succeeds him in the firm, it will be presumed that she be- comes liable for his partnership debts, and a mortgage executed therefor is founded on a good consideration. Presser V. Henshaw, 49 Iowa 41. While a special promise is necessary, yet an assumption by an incoming part- ner of the prior debts of the firm may be proved by very slight testimony. Cross V. Burlington Nat. Bank, 17 Kan. 3o6. Where a party purchases an interest in a commercial house, entitling him " to an equal undivided one-third inter- est and ownership, and to all stock of merchandise, bills receivable, and debts in book accounts on hand, due or owing to the firm on a given day (over and above the payment of the liabilities of said firm)," he is responsible for the debts of the house existing at the time of pur- chase. Hughes y. Waldo, 14La. Ann. 348. Illustrations. — Goods were purchased by one person for which a promissory note was given. Afterwards he entered into partnership with another, and by consent of both partners, and of the holder of the note, the words " and com- pany"' were added to the signature of the maker, to make the note stand against the tirm. Held, that the note was binding on the partnership. Crum V. Abbott, 2 McLean (U. S.) 233. Defendant entered into partnership with a party who was indebted to plain- tiffs. Defendant agreed with his partner to pay one-half of this indebtedness. Held, that, as an interest in the assets to which plaintiffs had a right to look for the satisfaction of their claims had been transferred to defendant, the latter's promise to liis partner to pay one-half of plaintiffs' claims was a promise for plaintiffs' benefit, and inured by an equitable subrogation to plaintiffs, enti- tling them to sue defendant thereon. Eingo V. Wing (Ark.), 5 S. W. Rep. 787. Where a retiring partner sold his in- terest in the firm to A, who undertook to be responsible for the firm's tlebts t» the extent of the vendor's liability, and he became a member of the firm, and the new firm did pay some of the old firm's debts, and the assets which the re- tiring partner left were sufiicieut to pay all the firm's debts, it was held, in a suit 31 •208^ COMMENCEMENT OF LIABILITY. [book IL, partner to make himself liable to creditors for debts owing to them before lie joined the iirm, may be, and in practice generally is, es- tablished by indirect evidence. The courts, it has been said, lean by the retiring partner, to compel an application of the firm's assets to the payment of the old firm's debts, that the undertaking by tlie new firm to pay the old firm's debts would be implied, but as no fraud was proved, that the com- plainant was only entitled to be repaid that whicii he had been compelled to pay as partner. Peyton v. Lewis, 12 B. Mon. (Ky.) 356. F., by an agreement in writing, pur- chased the interest of S., in the firm of S. & O., and bound himself "to assume all the debts and liabilities of said S. in the late firm, and to save him harmless on account of all debts whatever of said firm." Held, that a creditor of the firm was entitled to be substituted to a per- sonal judgment against F., on his agree- ment in favor of S., the latter consent- ing thereto. Francis v. Smith, 1 Duv. (Ky.) 121. A, being a member of a firm, and hav- ing contributed to the stock of the com- pany less than he had agreed on forming the partnership, sold out his interest to B, with the assent of the other partners, and was released by them from all lia- bility to pay any of " the debts due by, or demands which might be brought against, said establishment." Held, that B, succeeding to the interest of A, took upon himself the liability of A to con- tribute to the other members of the firm. Cornwell v. Sandidge, 5 Dana (Ky.) 210. Two consignees became partners for the transaction of commission business, and, circumstances tending to show that they turned their separate consignments into common stock, both were held liable for the proceeds. Dix v. Otis, 5 Pick. (Mass.) 38. When not liable. — -The general rule is that an incoming partner does not be- come liable for antecedent debts of the firm without an express undertaking to that effect upon a sufficient considera- tion. Meadorz). Hughes, 14 Bush (Ky.) 652; Wright v. Brosseau, 73 111. 381; Parmalee v. Wiggenhorn, 6 Neb. 322; Fagan v. Long, 30 Mo. 222 ; Stenburg V. Callanan, 14 Iowa 251. The presumption is that an incoming partner is not liable for previously con- tracted debts. Kountz v. Holthouse, 85 Pa St. 235. The rule is that he is not so liable. Babcock v. Stewart, 58 Pa. St. 179; Deere v. Plant, 42 Mo. 60; Harp V. Tomlinson, 2 Vt. 103 ; Adkins v. Arthur, 33 Tex. 431 ; Atwood v. Lock- hart, 4 McLean (U. S.) 350. A copartner cannot make an incoming partner liable for the pre-existing debts by giving the note of the new firm there- for, but the debt may be novated with the consent of all parties. Fagan v. Long, 30 Mo. 322. Where a partnership dissolves, a new firm composed entirely of a portion of the members of the old partnership can- not be sued jointly, in their firm name, for a debt of the dissolved firm. Shorter V. Highlower, 48 Ala. 526. An incoming partner will not be liable for an old debt of the firm, unless there is a novation of the debt by a new promise by the entire now firm, upon a valid con- sideration, and a discharge of the old firm upon the old debt. Stenburg v. Callanan, 14 Iowa 251. To warrant a suit by creditors against an incoming partner, upon a previous debt of the firm, there must be an agree- ment between him and the creditors 332 CHAP. II., § III.] INCOMING PARTNERS. 208^ in favor of such an agreement, and are ready to infer it from slight circumstances ; {p) and they seem formerly to have inferred it when- ever the incoming partner agreed with the other partners to treat such debts as those of the new firm, (g) But this certainly is not enough, for the agreement to be proved is an agreement with the creditor, and of such an agreement an arrangement between the partners is of itself no evidence. (7-) As an instance where an incoming partner made himself liable founded upon sufficient consideration. An agreement between him and his co- partners that he shall be liable does not give the creditors a right to sue. More- head V. Wriston, 73 N. C. 398. The rule that entries on the firm books bind the firm does not apply to the lia- bility of a new partner for debts of the old firm charged to th« new firm on its books, where he has not had access to the books so as to enable him to know what has been done. But his consent to be bound will be implied if he fails to object when he first has notice of such entries. Shoemaker Piano Mfg. Co. v. Bernard, 2 Lea (Tenn.) 358. Illustrations. — Where T. bought the interest of H. in the firm of H. & W., and, with W., gave H. a bond of in- demnity against all debts of the old firm, covenanting to pay them, the creditors of the old firm had no right of action against the new, upon the bond, for want of privity thereto. Hicks v. Wyatt, 23 Ark. 55. A and B having been partners, C pur- chased the interest of A in the firm, agreeing to pay one-half of the partner- ship debts of A and B, and B and C then formed a partnership. Held, that the partnership debts of A and B did not become debts of the firm of B & C by the terms of the agreement between B and C. Hyer r. Norton, 26 Ind. 269. Where the purchaser of a lot of mules upon credit, which were to be delivered to him at a future time, before their de- livery formed a partnership with another person, with the agreement that the mules were to be put into the joint stock and sold on joint account, and they were so sold — Held, that the surety on the notes given by the purchaser for the mules, who had been compelled to pay the notes, could not hold the partner liable as a joint purchaser. Duncan v. Lewis, 1 Duv. (Ky.) 183. Where a partnership between attor- neys was dissolved after a suit begun, and a new partnership formed by one of the former partners and a new partner^ which in turn was dissolved before the money in the suit was collected, an action for detaining the amount col- lected cannot be maintained against the new partner, the other alone having been attorney of record in that suit. Ayrault V. Chamberlin, 26 Barb. (N. Y.) 83. (p) Ex parte Jackson, 1 Ves. Jr. 131 j Ex parte Peele, 6 Ves. 602. See, also, Rolfe V. Flower, L. R., 1 P. C. 27. {q) See Cooke's Bank. Law (8th ed.) 534, citing Ex parte Bingham and Re Staples ; Ex parte Clowes, 2 Bro. C. C. 595. (r) Ex parte Peele, 6 Ves. 602 ; Ex parte Parker, 2 Mont., D. & D. 511. See, also. Ex parte Freeman, Buck 471 ; Ex parte Fry, 1 Glyn & J. 96 ; Ex parte Wil- liams, Buck 13. 333 209* COMMENCEMENT OF LIABILITY. [boOK II., for debts contracted by the firm ])efore he joined it, reference may be made to Ex parte Whitmore. (s) In that *ease Warwick ^ . r*209 and Clagett became partners. Warwick, who had had '- dealings with merchants in America, informed them that he had taken Clagett into partnership, and requested them to make up their accounts and transfer any balance due to or from him (Warwick) to the new firm. These instructions were repeated and confirmed by Warwick and Clagett, and were acted on. A debt owing from Warwick was placed to the debit of the new firm, and a bill was drawn on the firm for the amount of the debt and was accepted, but was dishonored. On the bankruptcy of the firm it was held that the debt in question had become the joint debt of Warwick and Clagett, and not only so, but that the joint liability of the two had been accepted in lieu of the sole liability of Warwick, li Bills by old partners for old debts a fraud on new partner. — Be- fore leaving this subject it may be as well to observe that as an in- coming partner does not, by the fact of entering the firm, take upon himself the then existing liabilities thereof, if after he has joined the firm his copartners giv^e a bill or note in their and his name for a debt contracted by them alone, this is prima facie a fraud upon him, and consequently he will not be liable to a holder with no- tice, {t) Account stated in respect of old debt. — -For similar reasons, an in- coming partner will not, it is apprehended, be liable to pay a debt contracted before he became a partner, merely because his copartner has afterwards stated an account with the creditor and thereby admitted that the debt in question is due from the firm, {u) But, as will be seen hereafter, an incoming partner, unless he takes care, may find himself liable to pay the balance of an open running account commencing before he joined the. firm and continued after- (s) 3 Deac. 365. See, also, Rolfe v. persons who desire to establish such Flower, L. E,., 1 P. C. 27, which was a contract. Peters v. McWilllams, 78 Va. stronger case. 567. 11. Evidence of agreement to be (t) See Shirreff v. Wiiks, 1 East 48, bound by debts of old firm. — A newly ante p. *173. admitted partner only becomes liable for (m) See, as to accounts stated, French the debts of the firm by a special con- v. French, 2 Man. & G. 644, and Lemere tract, and the burden of proof is on the v. Elliott, 6 Hurlst. & N. 656. 334 ■CHAP, ir., § III. J INCOMING PARTNERS. 210=^ wards, although payments have been made since he joined the firm sufficient to liquidate that part of the account for which he is directly responsible, (x) ^ ^ *2. Termination of liability. When a partner's liability ends. — Before examining the circum- stances wiiich put an end to a partner's liability to creditors of the firm, it is necessary to draw attention to the distinction between a partner's liability for what may be done after his copartners have ceased to be his agents and his liability for what may have been done whilst their agency continued. It is obvious that there may be many circumstances which have no effect upon a liability already accrued, but which, nevertheless, may prevent any liability for what is not yet done from arising ; and in order to determine with ac- curacy the events which put an end to a partner's liability to cred- itors, it is necessary to distinguish his liability for the future from his liability for the past. a. Termination of liability as to future acts. A partner's agency ends by notice. — The agency of each partner in an ordinary firm, and his consequent power to bind the firm, i. e., himself and his copartners, may be determined by notice at any time during the continuance of the partnership ; [y) for his power to act for the firm is not a right attaching to him as partner inde- pendently of the will of his copartners, and although any stipula- tions amongst the partners themselves will not affect non-partners who have not notice of them, yet if any person has notice that one member of the firm is not authorized to act for it, that person can- not hold the firm liable for anything done in the teeth of such notice, (z) With one or two exceptions, which will be mentioned presently, (x) See Beale v. Caddick, 2 Hurlst. 227; Willis v. Dyson, 1 Stark. 164; & N. 326, and Scott v. Beale, 6 Jiir. (N. Rooth i-. Quinn, 7 Price 193; Galway v. S.) 559, noticed infra, under the head of Mathevv, 1 Camp. 402, and 10 East 264. ""Appropriations of Payments." (z) This subject has been already dis- (y) See Vice v. Fleming, 1 You. & J. cussed. See ante p. *170, et seq. 335 210* TERMINATION OF LIABILITY [bOOK II., the agency of each partnei' and his consequent power to bind his copartners can only be effectually determined by giving notice of its revocation. The authority imputed to each partner must con- tinue until some event happens to put an end to it, and this event ought to be as generally known as that wiiich conferred the au- thoritv upon *him. The same reason which leads to the ^ ' • r*2ii imputation of the power to act for the firm at all, demands ^ that such power shall be imputed so long as it can be exercised and is not known to have been determined, (a) 12 To this principle there are exceptions, which may be conveni- ently disposed of before the principle itself and its application are discussed. 1. Efed of death. — When a partner dies, notice of death is not requisite to prevent liability from attaching to the estate of a de- ceased partner, in respect of what may be done by his copartners (a) As to the liability of an outgoing partners for its continuance, either dis- partner for the acts of his late partners solve the partnership or extricate him- and a new partner, see Scarf v. Jardine, self from the responsibilities of a part- 7 App. Cas. 345, noticed ante pp. *46, ner, either in respect to his associates or *197. to third persons ; but the partnership 12. Partner's agency ends by no- may be put an end to by the act of God, tice. — Where a firm is formed for an in- or by operation of law — e. g., by death definite time either partner may with- or bankruptcy, see Pearpoint v. Graham, draw at his will, provided he does so 4 Wash. (U. S.) 232. without fraudulent purpose. Fletcher v. Where property was bailed to a part- Eeed, 131 Mass. 312. nership for no definite time, and the Where a partner abandons the busi- bailor could have removed it at his ness and property of the firm, and writes pleasure, one of the partners, upon retir- to his copartners, refusing to join in a ing from the partnership, may give the settlement of the partnership business, bailor notice of his retiring and require and telling them to settle as they please, him to remove the property, and absolve and they form a new firm, and transfer himself from any liability for loss of the property of the old firm to the new, property occurring after his retirement, the dissolution will be complete. Blake Winston ». Taylor, 28 Mo. 82. V. Sweeting (111.), 12 N. E. Rep. 67. One member of a firm gave notice to A partnership is terminated by a posi- his copartner that the connection be- tive refusal of one of the partners further tween them was dissolved, but this was to recognize it or to do anything under not assented to by the copartner, and the it. Ligare v. Peacock, 109 111. 94. parties did not afterwards act upon it. That one partner cannot, by with- Held, that it did not operate a dissolution drawing himself from the association of the firm. Sanderson v. Milton Stage before the period stipulated between the Co., 18 Vt. 107. 336 CHAP. II., § III.] AS TO FUTURE ACTS. 211^ after his decease, (6) for, by the law of England, the authority of an agent is determined by the death of his principal, whether the fact of death is known or not. (c) The death of one partner does not, however, determine an au- thority given by the firm through him before his death, and conse- quently, if after his death such an authority is acted on, the sur- viving partners will be liable for it. In Usher v. Dauncey(d) bills were drawn and endorsed in blank by a partner in the name of the firm, and were given by him to a clerk to be filled up and negoti- ated as occasion might require. The partner in question died, and after his death, and after the name of the firm had been altered, one of the bills was filled up and negotiated. Lord Ellenborough held that the bill was bindi-Ag on the surviving partners, consid- ering that the power to fill up the bill emanated from the partner- ship, and not from the individual partner who had died.13 ^ (6) Devaynesv. Noble, Hn-jlton's case, his death. Scholefield v. Eichelberger, supra. S. P., Burwell v. Mandeville, 2 How. (U. S.) 560. And a court of equity may authorize the continuance of a partnership after the death of a partner, on behalf of infants. Powell v. North, 3 Ind. 392. Contracts for the services of attorneys who are partners entitle the client to the service of each partner, and are deter- mined by the death of either partner. McGill V. McGill, 2 Mete. (Ky.) 258. Under a special contract to that effect, 1 Mer. 616; Johne's Case, Id. 619; Brice's Case, Id. 620 ; Webster i'. Web- ster, 3 Swanst. 490 ; See Vulliamy v. Noble, 3 Mer. 614 ; Brown v. Gordon, 16 Beav. 302, as to the power of surviv- ing partners who are the executors of the deceased partner, to bind his estate. (c) See Blades v. Free, 9 Barn. & C. 167 ; Smout v. Ilbery, 10 Mees. & W. 1 ; Campanari v. Woodburn, 15 C. B. 400. (c^) 4 Camp. 97. 13. Effect of death or marriage to end liability. — The death of a partner a commercial partnership will continue dissolves the partnership, unless there is after the death of one of the partners. an express stipulation to the contrary. Scholefield v. Eichelberger, 7 Pet. (U. S.) 586; Knapp v. McBride, 7 Ala. 19; Goodburn v. Stevens, 5 Gill (Md.) 1 ; Williamson v. Wilson, 1 Bland (Md.) 418 ; Ames v. Downing, 1 Bradf. (N. Y.) 321 ; Gratzi'. Bayard, 11 Serg. & R. (Pa.) 41 ; Davis v. Christian, 15 Gratt. (Va.) for the purpose of administration and liquidation, if not for all purposes. Pow- ell V. Hopson, 13 La. Ann. 626. So, also, a partnership is dissolved by a marriage of the two partners. Bassett V. Shepardson, 52 Mich. 3. In Crawshay v. Maule (1 Swanst. 495, 509) Lord Eldon said: "The doctrine 11. But the liability of a copartner, as that death or notice ends a partnership well as his interest in the profits of a has been called unreasonable. It is not concern, may, by contract, be extended necessary to examine that opinion ; but against and in favor of his estate, beyond much remains to be considered before it 337 22 211* TEKMINATION OF LIABILITY [bOOK IL, Contribution after death. — ]Moreover, it does not follow that be- cause a creditor has no remedy against the estate of a deceased partner in respect of debts contracted by his copartners since his death, his estate is not liable to contribute to such debts at the suit -. ^-, of the *survivino; partners. That is a diiferent matter "-' altogetiier, and depends on the agreement into which he entered with his copartners, as will be seen hereafter when the subject of dissolution is under consideration, (e) 14 2. Effect of bankruptcy. — When a firm becomes bankrupt, the authority of each member to act for the firm at once determines. If one partner only becomes bankrupt, his authority is at an end, and his estate cannot be made liable for the subsequent acts of his solvent copartners. At the same time, if, notwithstanding the bankruptcy of one partner, the others hold themselves out as still in partnership with him, they will be liable for his acts, as if he can be approved. If men will enter 14. Contribution after death.— By into a partnership, as into a marriage, the general rule of law, every partner- for better and worse, they must abide by ship is dissolved by the death of one of it; but if they enter into it without say- the partners; but a partner may, by his ing how long it shall endure, they are will, provide that the partnership shall understood to take that course in the ex- continue, notwithstanding his death, and pectation that circumstances may arise if it be assented to by the surviving in which a dissolution will be the only partner, it becomes obligatory. Burwell means of saving them from ruin; and v. Mandeville, 2 How. (U. S.) 560. considering what persons death might On the decease of a partner, his inter- introduce into the partnership, unless it est in real estate, belonging to the part- works a dissolution, there is strong reason nership, descends to his heirs-at-law, for saying that such should be its eflect. subject to the debts of the partnership. Is the surviving partner to receive into Piatt i'. Oliver, 3 McLean (U. S.) 27. the partnership, at all hazards, the ex- The estate of a deceased partner is ecutor or administrator of the deceased, liable for partnership debts, if the sur- his next of kin, or possibly a creditor viving partner be insolvent. Caldwell taking administration, or whoever claims v. Stileman, 1 Eawle (Pa.) 212. by representation, or assignment from A partner dying, and leaving in his his representative ?" administrator's hands partnership and (e) For instances where the estate of separate property, the partnership cred- a deceased shareholder has been held itors and the separate creditors are to be liable to contribute to debts incurred paid pari passu from their respective since his decease, see Baird's Case, 5 Ch. funds, and then the balance of the sep- 725 ; . Blakeley's Executor's Case, 3 arate property is to be equally divided Macn. & G. 726 ; Hamer's Devisees' among them pro rata. Bell v. Newman, Case, 2 De G., M. & G. 366. 5 Serg. & R. (Pa.) 78. 338 €HAP. II., § III.] AS TO FUTURE ACTS. 212^ -and they were partners, (/) and although the estate of a bankrupt partner does not incur liability for the acts of the other partners done since the bankruptcy, yet the solvent partners have power to bring the partnership transactions to an end, and to dispose of the partnership property. Tliis subject will be examined hereafter in the chapter on ''Bankruptcy," to which the reader is therefore re- ferred, {g) 15 3. Eff'ect of retirement of dormant ijartner. — Another apparent, but not real, exception to the rule is that if a dormant partner, i. e., one not known to be a partner, (A) retires, the authority of his late partners to bind him ceases on his retirement, although no notice of it be given. But this is because he never was known to be a partner at all, and the reason for the general rule has there- fore no application to his case. The following decisions illustrate (/) See Lacy v. Woolcott, 2 Dowl. & the payment of his debts by one of the H. 458. (g) See Fox v. Hanbury, Cowp. 445 ; Morgan v. Marquis, 9 Ex. 145. 15. Effect of bankruptcy or insolv- ency. — The mere insolvency of a co- partnership is sufficient to defeat an partners who has become. insolvent, dis- solves the partnership, and the other partner may settle up the partnership aflfairs. Odgen v. Arnot, 29 Hun (N. Y.) 146. Tiie bankruptcy of one partner dis- attachment made by a creditor of one of solves -the firm only so far as to prevent the firm, although the partnership cred- the making of new contracts and the in- itors have commenced n-o action for the curring of new obligations, confining recovery of their debts. Commercial the firm to the completion of unfinished Bank v. Wilkins, 9 Me. 28. business necessary to the winding up of An assignment of partnership prop- its affairs. The assignee in bankruptcy erty for the benefit of creditors, which of such partner becomes a tenant in is void for wan4; of conformity with common with other partners, entitled to statute requirements, will not work a an accounting and to receive the bank- dissolution of the partnership. Sim- rupt's share when the former business is mons V. Curtis, 41 Me. 373. settled. Such accounting may, at his Simple insolvency, without stoppage option, include profits realized from new of payment, or assignment, or any judi- business carried down with the assets cial process, does not work a dissolution of the firm. King v. Leighton, 100 N. of the partnership or divest tlie partners Y. 386. of their dominion over the partnership {h) A dormant partner known to a property. Siegel v. Chidsey, 28 Pa. St. few persons to be a partner is not dor- 279; Arnold v. Brown, 24 Pick. (Mass.) mant as to them; see the cases cited 89. infra, note {r). The assignment of his property for 339 212* TERMIXATIOX OF LlAl'.lLITY [BOOK II., this exception : In Carter v. Whalley (i) the defentlant Saunders was a partner in the " Plas Madoc Colliery Co.," but there was nothing to show that the plaintiff or the public ever knew that such was tiie case. Saunders withdrew from the company, but no notice of his withdrawal was given either to the plaintiff or to the pui)li('. After his withdrawal, the company became indebted to *the plaintiff, and it was held that Saunders was not liable r-^^^ ^ for the debt ; because the name of the company gave no information as to the parties composing it, and Saunders himself was not known either to the plaintiff or to the public to have be- longed to the company before he withdrew. In Heath v. Sansom {k) the defendants, Sansom and Evans, carried on business as partners under the style of Philip Sansom & Co., but Evans was not known to be a partner. They dissolved partnership by mutual agreement, but did not notify the fact. After the dissolu- tion, Sansom gave the plaintiff a promissory note on which he sued Sansom and Evans. The court decided that Evans was not liable, for when his right to share profits ceased he could not be held responsible for the subsequent acts of his copartner unless he au- thorized those acts or held himself out as still connected with him, and he had done neither. (/) 16 Effect of lunacy. — With the three exceptions which have been noticed, the general proposition above stated holds good. Thus, if a partner becomes lunatic and his lunacy is not apparent or made {i) 1 B. & Ad. 11. mitted into an existing firm doing biisi- {k) 4 B. & Ad. 172. ness under a fixed firm name, in which [1) See, too, E.vans v. Drummond, 4 no change is made, such new partner is Esp. 89. This doctrine seems not to to be deemed a dormant partner, unless apply to Scotland. See Hay v. Mair, 3 his connection with the firm is, in some Ross' Lead. Cas. on Com. Law. 639. way, by publication or otherwise, made The case of the Western Bank of Scot- known to the public. Phillips v. Nash, land V. Xeedell, 1 Fost. & F. 461, seems 47 Ga. 218. at first sight opposed to the authorities One who is a member of a partnership in the text, but it is conceived that in trading under the firm name of R. M. that case there must have been evidence & Co., does not become a dormant part- to show that the defendant was known ner, by reason of the creditor being to the plaintifTs to have been a partner ignorant of the name of the copartner before he retired. of R. M. Deford v. Reynolds, 36 Pa. 16. Effect of retirement of dormant St. 325. partner. — Wliere a new partner is ad- 340 CHAP. II., § III.] AS TO FUTUEE ACTS. 213* known, his power to bind the firm and his liability for the acts of his copartners (??i.) will remain unaffected. 17 Effect of dissolution of which no notice is given. — So, if a part- nership is dissolved, or one of tl>e known members retires from the jfirm, until the dissolution or retirement is duly notified, the power of each to bind the rest remains in full force, although, as between the partners themselves, a dissolution or a retirement is a revocation of the authority of each to act for the others. (?i) Thus, if a known partner *retires and no notice is given, he will be liable to '214] be sued in respect of a promissory note made since his retirement by his late partner, even though the plaintiff had no dealings with the firm before the making of the note, (o) And in determining whi^ch was first in point of time, viz., notice of the dis- solution or the making of the note, effect must be given to the pre- sumption that the instrument was made and issued on the day it bore date, unless some reason to the contrary can be shown, (p) 18 (m) See Molton v. Camroux, 2 Ex. [p) See Anderson v. Weston, 6 Bing. 487, and 4 Id. 17 ; and Baxter v. The N. C. 296. Earl of Portsmouth, 5 Barn. & C. 170, 18. Effect of dissolution of which and the cases cited post, book IV., ch. 1, no notice is given. — The general rule ^ 2, to show that the lunacy of one- part- is that where no notice of dissolution is ner does not dissolve the firm. See given, the persons who composed the further on this subject, Story on Agency, firm continue liable to creditors who I 481, and note there. See, also. Drew were ignorant of the change in the firm. V. Nunn, 4 Q. B. D. 661. The following cases fully illustrate this 17. Effect of lunacy. — An inquisi- principle: Amidown v. Osgood, 24 Vt. tion of lunacy, found against a member 278; Bradley v. Camp, Kirby (Conn.) of a partnership, ipso facto dissolves the partnership. Isler v. Baker, 6 Humph. (Tenn.) 85. 77 ; Benjamin v. Covert, 2 N. W. Eep. (N. S.) 625 ; Buffalo City Bank v. How- ard, 35 N. Y. 500 ; Bernard v. Torrance, [n) See Mulford v. Griffin, 1 Fost. & 5 Gill & J. (Md.) 383; Dickinson v. F. 145; Faldo v. Griffin, Id. 147, and Dickinson, 25 Gratt. (Va.) 321; Grady the cases in the next note. v. Robinson, 28 Ala. 289; Heroy v. Van (o) See Parkin v. Carruthers, 3 Esp. Pelt, 4 Bosw. (N. Y.) 60; Hunt v. Hall, 248 ; Williams v. Keats, 2 Stark. 290 ; 8 Ind. 215 ; Howell v. Adams, 68 N. Y. Brown v. Leonard, 2 Chitty 120; Dol- man V. Orchard, 2 Car. & P. 104, in which last three cases, however, there was a continual holding out. See, as to ■ordering such a bill to be delivered up, Byan v. Mackmath, 3 Bro. C. C. 15. 314; Kennedy v. Bohannon, 11 B. Mon. (Ky.) 118; Ketcham v. Clarke, 6 Johns. (N. Y.) 144; Lamb v. Singleton, 2 Brev. (S. C.) 490; Merritt v. Pollys, 16 B. Mon. (Ky.) 355; Newcomet v. Brotz- man, 69 Pa. St. 185 ; Princeton, &c., 341 214=' TERMINATION OF LIABILITY [book II., Torts after dissolution. — A partner who retires and does not give sufficient notice, exposes himself to the risk of being sued for torts Turnpike Co. v. Gaiick, 1 Harr. (N. J.) 161 ; Price v. Tuvvset, 3 Litt. (Ky.) 423 ; Scluirten v. Davis, 21 La. Ann. 173; Southern v. Grim, 67 111. 106 ; Spears i'. Toland, 1 A. K. Marsh. (Ky ) 203; Soutiiwick V. McGovern, 28 Iowa 533 ; Tabb V. Gist, 1 Brock. (U. S.) 33; Thurston v. Perkins, 7 Mo. 29. See, also, Woodruff?;. King, 47 Wis. 261. To establish the liability as partners of defendants who have dissolved part- nership, it must appear : 1, that the plaintiff, at the time the contract was made under which his account accrued, knew that the defendants had been in partnership ; 2, that he was ignorant of their dissolution ; and 3, that he made the contract supposing he was contract- ing with the defendants as partners, and in reliance upon their joint liability. Pratt V. Page, 32 Vt. 13; Benton v. Chamberlain, 23 Vt. 711. Its scope and extent. — Where, after dissolution, one of the partners gives a note in the individual names of both, for goods sold to him on the credit of the firm, the note binds both partners if the seller of the goods did not know of the dissolution. Iddings v. Pierson, 100 Ind. 418. Where one of three partners retires from or a new partner comes into the firm, or both, and notice thereof is given, but the business continues to be carried on in other respects as before, those part- ners as to whom no notice was given will be presumed to hold the same rela- tion to the concern afterwards that they did before. Howe v. Thayer, 17 Pick. (Mass.) 91. Where notice of dissolution has not been published in a newspaper, or brought home to the knowledge of the party to be affected by it, evidence of the mere notoriety of the dissolution is not admissible to prove such notice. Pitcher v. Barrows, 17 Pick. (Mass.) 361. Where it is material to know the ex- act time of dissolution, evidence that one had notice of such dissolution at a cer- tain time is not admissible. Shaffer v. Snyder, 7 Serg. & K. (Pa.) 503. Notice of dissolution may be shown either by direct or circumstantial evi- dence, sufficient to establish the fact that the person seeking to enforce the part- nership liability knew of the dissolution. Laird v. Ivens, 45 Tex. 622. See, also^ Lovejoy v. Spafford, 93 U. S. 430 ; Cod- dington v. Hunt, 6 Hill (N. Y.) 595 ;. Mauldin v. Branch Bank, 2 Ala. 502. Want of notice of a dissolution will charge the firm on a subsequent accom- modation endorsement, the holder hav- ing had previous dealings with the firm, in the same manner as if the firm eon- tinued to exist. Dundass v. Gallagher, 4 Pa. St. 205. Its limits and exceptions. — A per- son who takes a partnership note, know- ing that the partnership articles provide for its dissolution in case of the with- drawal of the capital, is put upon in- quiry as to whether such dissolution has taken place. Smith v. Vanderburg, 46 111. 34. The principle that after a partnership' is dissolved, one partner, dealing with a person who has no notice of the dissolu- tion, may bind his copartner, applies only to transactions in the usual course of business. Whitman v. Leonard, 3- Pick. (Mass.) 177. A member of a firm who retired there- from without publishing notice of the dissolution, is not liable on a note signed i42 CHAP. II., § III.] AS TO FUTURE ACTS. 214^ committed subsequently to his retirement by his late copartners or their agents ; and in the absence of proof of the true state of things he would be held liable for them, (g) in the firm name by another member, and given to a new customer eleven years after the retirement. Farmers', &c.. Bank V. Green, 1 Vr. (N. J.j 316. A contract by a customer of a partner- ship, with one of the partners, on ac- count of the firm, after a dissolution, but without notice of the dissolution, will not bind the firm, unless, by the avoid- ance of the contract, the customer would sufier a loss, or be put in a worse situa- tion than he would have been in had he been advised of the dissolution before making the contract. Brisban v. Boyd, 4Paige(N. Y.) 17. Notice of dissolution is necessary where the outgoing partner holds him- self out as the representative of the firm, but not where he acts exclusively for himself. Taylor v. Young, 3 Watts (Pa.) 339. One who has notice, at the beginning of a partnership, of the period at which it will expire, cannot charge the firm with goods sold to its agent after that period. In such a case the dissolution is a revocation of the agent's authority. Schalter v. Winpenny, 75 Pa. St. 321. Various illustrations of the forego- ing principles. — A party, after his with- drawal from a firm, suffered his name to appear in the firm name for some time after his withdrawal, and his name ap- peared before his withdrawal in the business card of the firm, published in a newspaper, to which he was a subscriber. It appeared he had admitted that he still had an interest in tiie firm, and that his name was used as before, and that he was liable to the same extent he had been. He continued for more than a year after his withdrawal at his place in the firm. No notice of dissolution was given. Held, that from these facts the jury were fully warratated in finding him liable as a member of the firm. Ellis V. Bronson, 40 111. 455. Two partners in a mill and cotton fac- tory, in a small town, dissolved their partnership, and posted up written no- tices of the dissolution in four or five places in the town. Soon after, one of the partners gave a note in the name of the firm, to a bank in a town twelve miles distant. Held, that the court could not say that the notice was suffi- cient, nor disturb a verdict for the bank, which implied a finding that it was in- sufficieJit, as being contrary to evidence. Mitchum v. Bank of Kentucky, 9 Dana (Ky.) 166. Where a note was signed by one of the members of a commercial firm, with the addition of the words "in liquidation," it was held that such a note was a notice to the payee that the firm was dissolved, and that, without a special authorization to the partner signing the note from his copartner, the note was not binding on him. Speake v. Barrett, 13 La. Ann. 479. Plaintiff" sued defendants, as copart- ners, upon an account for work and labor. It appeared that defendants were in part- [q) Stables v. Eley, 1 Car. & P. 614. This, however, was a wrong application In this case such proof was given, and of that doctrine. See ante p. *47, and the defendant was nevertheless held Pollock Dig. (3d ed.) 25. liable, on the ground of holding out. 343 214* TERMIXATIOX OF LIABILITY [book II., Case of dormant pdrttier. — Moreover, if a dormant partner is known to certain individuals to have been a partner, he is, as to them, no longer in the situation of a dormant partner, and must nership till within a short time of nlain- ing a new connection when the new firm tiff's engagement; that at the time of occupied the old store, and used the old such engagement the defendant, who ap- firm's books and collected their debts, peared and defended the action, showed was not sufficient evidence of a dissolu- him his work ; that the tools and appa- tion, as the old firm might have been ratus of the partnership remained un- continued for the purpose of settling its changed ; that the business was still car- afTairs. Brown v. Clark, 14 Pa. St. 469. ried on in the partnership name; and A firm doing business in A was dis- that nothing was done, until after plain- solved, but no notice of the dissolution tifT had rendered his services, to notify was published in a newspaper. About third persons that the partnership was the time of the dissolution, B, a member dissolved. Held, sufficient to support a of the firm, gave a nole in the name of finding of a continuance of the partner- the firm to a bank at C, which note was, ship as to third persons. Eeid v. Frazer after , the dissolution, renewed by an (Minn.), 35 N. W. Kep. 269. agent acting under a sealed power of After the dissolution of a firm, and an attorney given by B in the name of the assignment of its property, a debtwr set- firm. Held, that the notice of the disso- tled with one of the partners, without lution was insufiicient, so far as the actual notice of the assignment. Held, bank at C was concerned ; that the firm that the settlement was binding on the were liable on the note, whether given assignee, because one partner has au- before or after the dissolution ; that, if thority to settle firm debts, after dissolu- the renewal was void, the bank liad the tion, in the absence of an agreement to right to recover on the original note, the contrary known to the debtor, and which it had retained ; that an assignee because the dissolution was not suflBcient of the firm, for the payment of the debts to put the debtor on inquiry as to whether thereof, had properly paid this debt to there was any such agreement or any as- the bank, although he, the assignee, may signment. Huntington v. Potter, 32 have had the requisite notice of the dis- Barb. (N. Y.) 300. solution, and that the debt was con- A brought an action as endorsee on a tracted afterwards. Hammond v. Aiken, note ma. Tool- Pardee v. Markle, 111 Pa. St. 548; S. min, 7 CI. & F. 349 ; Brown v. Adams, C , 56 Am. Rep. 299. 4 Ch. 764 ; Laing v. Campbell, 36 Beav. A partnership was dissolved, and one 3. And as to the application of the rule partner continued to carry on the pre- to trust moneys mixed with other moneys, vious business, and was to settle the Ee Hallett's Estate, 13 Ch. D. 696 ; Pen- partnership business ; such partner hav- nell V. Deffell, 4 De G., M. & G. 372. ing subsequently paid to a creditor of 36. Rule in Clayton's Case. — Where the firm the amount due from himself one partner, in order to induce another separately, as well as from the firm, it not to leave the firm, gives him a bond was held that the retiring partner was indemnifying him against acts and omis- discharged from the debt, though no ap- sions of the third partner, who, both be- propriation was made at the time of fore and after the giving of the bond, payment. Baker v. Stackpoole, 9 Cow. misappropriated the funds of the firm, (N. Y.) 420. part of which he subsequently paid (6) As in Clayton's Case, 1 Mer. 572. 380 CHAP, ir., § III.] APPROPRIATION OF PAYMENTS. 229* businesses have been carried on by others without any break ; (c) and retired partners, whether known (cZ) or dormant, (e) Moreover, the discharge of the deceased or retired partner being the conse- quence of the payment of his former creditor, the discharge does not depend on the knowledge of the creditor of the change which has taken place in the firm, {e) It is true that if the creditor had known of the change he might have objected to continue to deal with the continuing or surviving partners unless the old and new accounts were kept distinct; but this circumstance does not entitle him to treat his old debt as still unpaid when he has in fact dealt on the footing of there being only one continuous account, and when on this footing he has been paid his old debt. (/) ^ -. *AppUGatioii of rule to all single running aoGounts. Dis- -* charge of surety. — Tiie rule in Clayton's Case applies to all accounts of the nature of one entire debit and credit account, with- out reference to any question of partnership, and is available not only by a firm against an okl creditor, but also against a firm for tlie benefit of its debtors. For example, where a person becomes surety to a firm guaranteeing a debt owing to it by a third party, then, if the debt is an item in an account between this third party and the firm, and is liquidated by general payments with which he is credited, the debt guaranteed will be extinguished and the surety will be discharged, although upon the whole account there may always have been a balance owing to the firm. (^) On the other hand, if the guaranteed debt is not extinguished by the rule in question, the surety will not be discharged, (h) Moreover, the rule (c) Sterndale r. Hankinson, 1 Sim. berton t). Oakes, 4 Russ. 154 ; Toulmin d. 393 ; Smith v. Wigley, 3 Moo. & S. 174. Copland, 3 You. & C. Ex. 625, and Cop- (cZ) Hooper v. Keay, 1 Q. B. D. 178. land v. Toulmin, 7 CI. & F. 350 ; Bank (e) Brooke v. Enderby, 2 Brod. & B. of Scotland v. Christie, 8 CI. & F. 214; 70 ; Newniarch v. Clay, 14 East 239. Medewe's Trust, 26 Beav. 588. Com- (/) See the last note. The creditors pare Ex parte Whitworth, 2 Mont., D. in those cases did not know of the &D. 164; City Discount Co. i'. Maclean, changes in the firms with which they L. R., 9 C. P. 692, where, notwithstand- dealt. See, also, Merriman v. Ward, 1 ing the mode in which the books were Johns. & H. 371. kept, the real intention was to keep the (g) See Kinnaird v. Webster, 10 Ch. second debt separate from the others. D. 139 ; Bodenham v. Purchas, 2 Barn. (h) Re Sherry, 25 Ch. D. 692 ; Wil- & A. 39; Field v. Carr, 5 Bing. 11 ; Pem- liams v. Rawlinson, 3 Bing. 71. 381 230^ TERMINATION OF LIABILITY. [book II., applies even as between persons who do not know that they are being affected by it, and who, if they did, might take care to exchide its operation. (/) 37 (i) Ante note (/) ; Merriman v. Ward, 1 Johns. & H. 371; Scott v. Beale, 6 Jur. (N. S.) 559. 37. Application of rule to all single running accounts. — Wliere an account with tlie debtor of the firm is, with his knowledge and consent, continued in the surviving partner's name, in the absence of any direction from the debtor, subse- quent payments may be applied in satis- faction of the original balance due to the firm. Boyd v. Webster, 59 N. H. 89. In Bodenham v. Purchas (2 B. & Aid. 39) Mr. Justice Bayley said : " I cannot distinguish this in principle from Clay- ton's Case. The decisions in the courts of law do not break in upon the distinc- tion there taken. The principle estab- lished by those decisions is this : that where there are distinct accounts and a general payment, and no appropriation made at the time of such payment by the debtor, the creditor may apply such payment to which account he pleases. But where the accounts are treated as one entire account by all parties, that rule does not apply. In this case the bond was given in 1801 for advances made or to be made in Havard's life- time ; at his death, the balance due was £4404. The surviving partners might then have called for payment of that sum, or they might have treated it as an insulated transaction and kept that as a distinct and separate account. But in- stead of that they blend it with the sub- sequent transactions ; for in the first account delivered after Havard's death are included several items, down to the 30th of June, and the payments after his death reduce the balance at that time to £1420. They might even then have treated this balance as a distinct account, and as money due on the bond, if they had so cliosen. Do they do so ? Look at the next account ; the parties balance tiieir accounts every three months; and in the next quarterly account they bring forward the balance of £1420, and make it an item in one entire account subsist- ing between these parties. The account goes on from 1810 'till 1813; and the then balance is treated as one entire balance of one entire account, as the re- sult of all the transactions between the parties in the intermediate time. The plaintiffs were not bound to have so treated it at Havard's death ; but, having done so, there is not any autliority for saying that they are now at liberty to apply the several payments in reduction of the debt incurred by the subsequent advances to the exclusion of the bond debt. It certainly seems most consistent with reason that where payments are made upon one entire account, such pay- ments should be considered as payments in discharge of the earlier items. Clay- ton's Case, where all the authorities were fully considered by the Master of the Rolls, is directly against the plain- tiff's right to make any such appropria- tion as he desires. That case does not break in upon any of the cases at law, and ought to govern our decision in the present instance ; and I am, therefore, of opinion that there ought to be judgment for tlie defendant." In Pemberton v. Oakes (4 Russ. 154, 168) Lord Lyndhurst said : " The third question is whether the balance due from Stokes to the bank at the time of Harding's death has been discharged by his subsequent payments; and that 9 CHAP. II., § III.] APPROPRIATION OF PAYMENTS. 230^ Rule applies against the debtor as well as against the creditor. — Further, as a creditor has no right to take the account subsisting between him and his debtor backwards, so as to make himself ap- pear a creditor in respect of the earlier rather than of the later items of the account, so, on the other hand, a debtor, after making general payments in respect of one entire account, is not at liberty point is decided by Clayton's Case, and Bodenham v. Purchas. It is true tnat the facts here are not, in everj^ respect, precisely the same with the circum- stances of these two cases. But the de- cisions in them proceeded on a broad general principle, equally applicable to the state of circumstances existing here. Where divers debts are due from a per- son, and he pays money to his creditor, the debtor may, if he pleases, appropri- ate the payment to the discharge of any one or other of those debts ; if he does not appropriate it, the creditor may make an appropriation ; but if there is no appropriation by either party, and there is a current account between them, as between banker and customer, the law makes an appropriation, according to the order of the items of the account, the first item on the debit side of the account being the item discharged or re- duced by the first item on the credit side. Here it is not pretended that any distinct appropriation of the payments was made by the parties. It was the practice of the bank to settle their accounts with Stokes quarterly, trans- ferring, at the end of each quarter, the balance then due from him to the account of the next quarter. Harding died in the middle of a quarter, but on that occasion no change took place in the mode of settling the accounts. At the end of the then current quarter, the balance was struck exactly as if Harding had been alive, and no notice was taken of his death. There being no distinct appropriation of tlie payments, either by the one party or the other, the law makes the appropriation with reference to the order of the, items of the account. If so, the debt which Stokes owed to the bank at the time of Harding's death has been discharged by the subsequent payments. In Bodenham v. Purchas, a court of law confirmed the rule which Sir William Grant had laid down in a court of equity. The point was again brought into discussion in Simson v. Ingham (2 Barn. & C. 65), and the prin- ciple was again confirmed, though the particular circumstances of the transac- tion produced a diflferent decision. In that case, two accounts were formed by a London bank at the death of one of the partners in a country bank which dealt with them — the one was styled the old account, tlie other the new ; and in the latter the London bank entered all the payments made to them by the country bank after the death of that partner — so that a distinct appropriation was made. The same question arose in Brooke v. Enderby, before the Common Pleas, and there, too, the principle of Clayton's Case was adopted. Feeling myself bound by the force and authority of these decisions, and acquiescing com- pletely in the reasoning of Sir William Grant, I must decide that there was no debt due to Oakes and Willington under the indenture of the 4th of January, 1802, at the time when the memorandum was endorsed on the bond." 383 230* TERMINATION OF LIABILITY. [bOOK II., to have those payments applied in liquidation of the subsequent rather than of the earlier items, (k) JEffect on incoming partner. — This has an important bearing on the position of incoming partners, for although they are not liable for debts contracted before they joined the firm, still if such debts and others subsequently contracted are allowed by an incoming partner to *form one single running account and payments are made generally in respect of it, those payments, ■- although made with the money of the new firm, will be applied to the old debt, and a balance will be left for which the incoming part- ner will be liable. {1} But the rule in Clayton's Case cannot be insisted on to the prejudice of a new partner without his consent, express or tacit. Without such consent a creditor of the old firm who goes on dealing with the new firm has no right to appropriate a payment made by a new partner to a debt owing by his copart- ners, nor to run two distinct accounts together, and treat a general payment as made in respect of the earliest items. Burland v. Nash (m) may be referred to as an illustration of this. In that case A succeeded B in business, and agreed with him to take his debts upon himself; A then contracted debts of his own to one of B's creditors, and A afterwards made such creditor a general payment on account ; it was held that the creditor could not, without A's consent, apply this payment in discharge of the debt owing by his predecessor, B.38 (k) Beale v. Caddick, 2 Hurlst. & N. ence that the two accounts had been run 329. into one with the consent of the de- (/) See the last case, and also Scott v. fendant. Beale, 6 Jur. (N. S.) 559. This case is 38. Effect of rule on incoming part- badly reported, but it is tolerably plain ner. — A new member joined a firm that the incoming partner was held lia- which owed money on a running ac- ble to pay, not the debt due to the plain- count, which account was continued after tiff when the partnership commenced, he joined the firm, and payments made but the balance of moneys due to him from time to time. Held, that these on his whole account, and which bal- payments could not be applied upon ance consisted of moneys received by that portion of the account which wa* the defendants after the partnership be- due when the new partner became a tween them was created. member of the firm. St. Louis Type (m) 2 Fost. & F. 687. Quiere, whether Foundry Co. v. Wisdom, 4 Lea (Tenn.) the evidence did not warrant the infer- 695. 384 CHAP. II., § III.] APPROPRIATION OP PAYMENTS. 231* Rule incipplicahle where there are distinct accounts. Right of ap- propriation in such a case. — The rule in Clayton's Case, however, applies only to an entire unbroken account, and has no application to cases where one person is indebted to another in respect of sev- eral matters, each of which forms the subject of a distinct account. In such a case, if the debtor does not appropriate the payment when he makes it, the creditor is at liberty to apply the payment to whichever account he thinks proper, (n) Moreover, when a change takes place in a iirm by the retirement or death of a member, a creditor of the firm is under no obligation to assent to a carrying over of his debt so that it shall form the first item in a fresh ac- count with the new firm. He is at liberty to keep the accounts with the two firms distinct, and if he does so, payments made gen- erally bv the new firm will not necessarily *go, by virtue "^ J of the rule in Clayton's Case, in liquidation of the debt owing by the old firm. A remarkable illustration of this is afforded by the well-known case of Simson v. Ingham, (o) There, two country bankers, Benjamin and Joshua Ingham, gave a bond to a London bank as a security for advances which it might make on account of the persons constituting the country bank, or either of them, associated or not with any other persons. Benjamin died, and at his death a considerable sum was due to the London bank for advances made to the country bank. The London bank was in the habit of sending in monthly accounts to the country bank. In the month following Benjamin's death the London bank received and paid considerable sums on account of the country bank, and the sums were entered by the London bank in its own books in con- tinuation of the former account between it and the old country bank. No account, however, was sent to the country bank until two months after Benjamin's death, and then two accounts were sent, one of them being an account of receipts and payments prior to his death, and the other being an account of receipts and pay- ments made subsequently thereto. A considerable balance was due to the London bank on the first of these accounts, and to recover this balance an action was brought against Benjamin's representa- tives. It was contended that his estate was discharged by virtue of (n) Ante p. *227. (o) 2 Barn. & C. 65. 385 25 232* TERMINATION OF LIABILITY, [bOOK II., the rule in Clayton's Case, the London bank having received, since his death, much more than sufficient to liquidate that balance; but it was held that the rule in question did not apply. The judgment of Mr. Justice Bayley contains such an admirable statement of the principles applicable to such cases that no hesitation has been felt in setting it out at length. " The general rule is that the party who pays money has a right to apply that payment as he thinks fit. If there are several debts due from him, he has a right to say to which of those debts the payment shall be applied. If he does not make a specific application at the time of payment, then the right of application generally devolves on the party who receives the money. But tliere is a third rul-e, viz., that where one of several partners dies, and the partnership is in debt, and the surviving partners continue their dealings with a particular creditor, and the latter joins tiie transactions of the old *and new firms in one entire r*233 account, then the payments made from time to time by the surviving part- ners must be applied to the old debt. In that case, it is to be presumed that all the parties have consented that it should be considered as one entire account, and that the death of one of the partners has produced no alteration whatever. In this case, the partner died in September, 1814. If in the ordinary course of busi- ness, a monthly account had been sent in, stating the transactions before and after the death of the partner, as forming part of one entire account, and the balance is due from the survivors, in that case the creditor would have been precluded, and would have had no right to have said that the payments made subsequently to the death of the partner should be applied to any but the old account. In fact, the bankers in London did not send in any account after the death of the partner until November, and then they sent in two distinct accounts— one made up to the day of the death of the partner, and the other commencing from that period. At that time, therefore, the bankers in London expressed their dissent from making the whole one entire account. It has been insisted that at that period of time they had no right so to do, because they were precluded by the entries which they had already made in their own books in the intermediate space of time. If, indeed, a book had been kept for the common use of both parties as a pass-book, and that had been communicated to the opposite party, then the party making such entries would have been precluded from altering that account; but entries made by a man in books which he kept for his own private purposes are not conclusive on him until he has made a communication on the sabject of those entries to the opposite party. Until that time, he con- tinues to have the option of applying the several payments as he thinks fit. For these reasons, I am of opinion that the plaintifis were not precluded from apply- ing the payments to the new account, and therefore this award is right." Right to blend accounts. — The case of Simson v. Ingham was decided upon the principle that a creditor of a firm has a right, 386 CHAP. II., § III.] APPROPRIATION OF PAYMENTS. 233* when a change occurs in the firm, to decide for himself whether the sum due to him from the old firm shall or shall not form an item in his account with the new firm. This principle is further illustrated by the case of Jones v. Maund. {p) There, three persons, A, B and C, were partners, and D was indebted to them in a sum secured by a covenant and a mortgage. A and B died, C retired and assigned her interest to E, who, with F, continued the business of the old firm under the old name. D continued to deal with the new firm, and he made it several payments, more than sufficient to liquidate the debt above mentioned if appropriated thereto. The mortgage had been realized and the sum arising from it had been applied in part discharge of *the debt secured by it. There was noth- ^ intr to show that D's debt had been made an item in the account between him and the new firm, and it was conliequently held that D had no right to insist that the payments made by him generally to the new firm should be applied to the balance due from him on his covenant, (g) Transfer of debt from one account to another. — It should be borne in mind with reference to cases of this description, that one partner can bind the firm by assenting to a transfer of a debt due to or by it from one account to another, (s) 39 Eide in Clayton's Case inapplicable lohere it defeats the intentions of the parties. — The rule in Clayton's Case, viz., that in current accounts it is presumably the sum first paid in that is first drawn out, or, in other words, that presumably it is the first item on the ■debit side of the account which is discharged or reduced by the first item on the credit side, is a rule based on the presumed intention of (p) 3 You. & C. Ex. 347. with the debt as it liked? See Pember- {q) The case was decided on demurrer, ton v. Oakes, 4 Russ. 154. and according to the report it was held {s) Ante pp. *230, *231 ; Beale v. that the balance due on the covenant Caddick, 2 Hurlst. &N. 326. could not be considered as liquidated, 39. Transfer of debt from one ac- unless it could be shown that it had, count to another.— Taking an account with C's assent, been made an item in the of stock, and transferring the amount account between D and the new firm, due to one partner to another firm of But qucBi-e what C had to do with it, which he is a member, does not of itself she having assigned all her interest in dissolve the partnership. Russell z>. Le- the debt to the new firm ? Did she not land, 12 Allen (Mass.) 349. therebv authorize the new firm to deal 387 234* TERMINATION OF LIABILITY. [bOOK II., the parties, (t) It is not, as is sometimes represented, a rule of law obtaining independently of their will, and consequently, if it can be shown that some other appropriation was intended, the rule ceases to be applicable. An intention to appropriate a payment to a later rather tiian to an earlier item in the account may be inferred from the usual course of business between the parties ; {u) from the source from wliicih the money was obtained ; (x) from the security to meet which the payment was made ; (y) from the fact that the earlier item was secured and intended to be kept separate from the *others;(2;) from the fact that the payment was a dividend on all debts ; (a) from the representations of the parties ; (6) '- "" and from other circumstances, (c) An instructive case on this head is Wickham v. Wickham, (d) which, in substance, was as follows : a firm of Finch & Sons, as agents of the plaii-itiifs, supplied goods to the firm of Smith & AVilley upon the terms that the latter should become debtors to the plaintiff in respect of such goods. Finch & Sons also supplied Smith & Willey with other goods on their own behalf. In the accounts between Finch & Sons and Smith & Willey no distinction was made between goods supplied by Finch & Sons on their own behalf and those which they supplied as agents of the plaintiffs. Smith & Willey made payments generally on account, and applying the rule in Clayton's Case, nothing was due from Smith & Willey in respect of the goods supplied to them on behalf of the plaintiffs. However, Edward Finch was a partner in both firms, and repre- sentations were made to the plaintiffs by the firm of Finch & Sons to the effect that a large debt was due to the plaintiffs from the firm of Smith & Willey, and Finch & Sons undertook that Edward (t) Ke Hallett's Estate, 13 Cli. D. 696 ; (y) Newmarch i'. Clay, 14 East 240. Wilson V. Hurst, 4 Ba<-n. A Ad. 767, per (z) City Discount Co. v. Maclean, L. Lord Denman. In Copland v. Toulmin, R., 9 C. P. 692. See ante p. *230. 7 CI. & F. 349, there was evidence to (aj Ante p. *228. show an agreement for a different appro- (6) Wickham v. Wickham, 2 Kay & priation, but it was not deemed sufficient J. 478 ; IVIerriman v. Ward, 1 Johns. & to exclude the rule. H. 371. (u) Taylor v. Kymer, 3 Barn. & Ad. (c) See Henniker v. A\lgg, 4 Q. B. 320 ; Lysaght v. Walker, 5 Bli. (N. S.) 1. 792. Compare Re Boys, 10 Eq. 467. (x) Stoveld V. Eade, 4 Bing. 154; {d} 2 Kay & .J. 478. See, too, Merri- Thompson v. Brown, Moo. \- M. 40. man v. Ward, 1 Johns. & H. 371. 388 €HAP. ir., § III.] APPROPRIATIOX OF PAYMENTS. 235* Finch should use his influence as a partner in the firm of Smith & "Willey to secure the reduction of such debt. Upon the faith of this representation and undertaking, the plaintiffs forebore to sue Smith & Willey. It was held that the firm of Smith & Willey was precluded from treating its debt to the plaintiffs as liquidated by the payments made by it to the firm of Finch & Sons ; for it was not competent to the two firms so to arrange their accounts as to liquidate a debt wbich a person who was a partner in both firms represented to the plaintiffs as still owing to them. Application of the rule in cases of fraud. ^-Upon the same prin- ■ciple, viz., that the rule in Clayton's Case is founded on the pre- sumed intention of the parties, it follows that it cannot be applied *9-^fi1 ^^ against a person who is a *creditor in respect of a fraud -' committed on him and of which he is igi>orant. This, in fact, was determined in Clayton's Case itself. For Clayton, in ad- dition to the claim which was held to have been discharged by the operation of the rule noticed above, (e) had another claim upon Devaynes' estate arising out of a breach of trust committed by a fraudulent sale of some exchequer bills, and of which sale he was kept in ignorance. The payments made to Clayton since Devaynes' death were more than sufficient to satisfy both claims ; but it was held that the claim arising out of the concealed sale of the bills was not affected by those payments. (/) So, if one partner fraudulently overdraws his account with the firm, and keeps paying money in and drawing money out, so that his fraudulent overdrawing is never discovered, it will not be treated as having been made good so long as there is a balance against him. [g] Imputation of payment where debts are owing to a firm and to a member of it. — Before leaving the subject of appropriation of pay- ments, it may be as well to advert to a question of some difficulty which arises when a person indebted to a firm, and also to an indi- vidual member of it, pays him a sum of money under such circum- stances that it cannot be ascertained on account of which debt the payment was made. In such a case ought the payment to be ap- plied in liquidation of the debt due to the partnership or that due (e) Ante p. *228. {g) Lacey v. Hill, 4 Ch. D. 537. (/) See Clayton's Case, 1 Mer. 572, 580. 389 236* TERMINATION OF IJAHIUTY. [bOOK II., to the iiulividnal member? Potlnei'(/i) .says that good faith requires that the partner receiving the money .shcnild apply it proportionally to both demands. The writer is not aware of any decision on this subject, but he apprehends that as between the partner and the debtor, the payment might be applied to either debt at the option of the partner, whilst, as between the partner and his copartners, good faith would require that the payment should be applied wholly to the partnership debt, (i) *2. Release. [*237 Release of one partner is a release of the firm. Covenant not to sue has a different effect. — A release of one partner from a partnership debt discharges all the others ; (k) for where several persons are bound jointly or jointly and severally, a release of one is a release of them all. (I) But in this respect a covenant not to sue differs from a release ; for although where there is only one debtor and one credi- tor, a covenant by the latter never to sue the former is equivalent to a release, it has been decided on several occasions that a covenant not to sue does not operate as a release of a debt owing to or by other persons besides those who are parties to the covenant, (m) 40 (A) Pothier, "iSoci^t^," ^ 121. lease of the firm. — A sealed release of (i) See Thompson v. Brown, Moo. & one partner discharges his copartners M. 40, and Nottidge v. Prichard, 2 CI. & also. Gray v. Brown, 22 Ala. 262 ; F. 379. Williugs V. Consequa, Pet. (U. S.) C. C. (k) Bower v. Swadlin, 1 Atk. 294 ; Ex 307 ; United States v. Thompson, Gilp. parte Slater, 6 Ves. 146; Cheetham v. (U.S.) 614; Williamson v. McGinnis, Ward, 1 Bos. & P. 630 ; Cocks i;. Nash, 11 B. Mon. (Ky.) 74; Tudarman v. 9 Bing. 341. Newball, 17 Mass. 581 ; American (/) See the last note, and as to joint Bank v. Doolittle, 14 Pick. (Mass.) 126; and several obligations, Co. Lit. 233, a ; Brown v. Marsh, 7 Vt. 327 ; Benson v. Lacy V. Kinaston, 1 Ld. Eaym. 690 ; Kincaid, 3 Pa. St. 57. But not where Kiffin V. Evans, 4 Mod. 379. the instrument otherwise provides. (»i) Clayton v. Kynaston, 2 Salk. 573 ; Williams v. Hitchings, 10 Lea (Tenn.) Lacy V. Kynaston, 1 Ld. Raym. 688, 326. and 2 Salk. 575 ; Hutton v. Eyre, 6 A parol agreement to release one part- Taunt. 289 ; Dean v. Newhall, 8 T. K. ner does not operate to discharge a debt 168 ; Walmesley v. Cooper, 11 Ad. & E. as against the other. To have that effect 216 ; and see Price v. Barker, 4 El. & B. it must be under seal. Evans v. Carey, 760. 29 Ala. 99; Shotwell v. Miller, 1 N. J. 40. Release of one partner is a re- L. 181 ; Walker v. McCulloch, 4 Me. 390 CHAP. II., § III.] RELEASE. 237* Releases inform held to he covenants not to sue. — If a release is so drawn as to show that it was intended to enure only for the benefit of the releasee personally, and not to avail even him in an action by the releasor against the releasee jointly with other people, then persons jointly liable with hiiu in respect of the debt released will not be discharged therefrom. In such a case the deed will itself show that it was not in fact intended to operate as a release. In Solly V. Forbes (n) the defendants, Forbes and Ellerman, were partners, and were indebted to the plaintiffs, and had stopped payment. In consideration of a sum paid by Ellerman, the plaintiffs released him from all further demands, but it was declared in the release (to which, however, Forbes was not a party) that nothing therein con- tained should affect the plaintiffs' rights against Forbes, either sep- 421; Shaw v. Pratt, 22 Pick. (Mass.) 305 ; Harrison v. Clare, 2 Johns. (N. Y.) 449; Kowley v. Stoddard, 7 Id. 207: Catskill Bank v. Messenger, 9 Cow. (N. Y.) 37; De Zeng v. Bailey, 9 Wend. (N. Y.) 336; Lunt v. Stevens, 24 Me. 534. portion of a copartnership debt, is a good consideration for an agreement on the part of the creditor to release and dis- charge the maker from liability for the debt. Ludington v. Bell, 77 N. Y. 138 ; reversing 43 Super, Ct. 557. A creditor who has accepted his pro- A partner cannot avail himself of a portion of an assignment made by a firm, promise by a creditor of his firm to re- and given the firm a release, has no right lease him from liability, if he has paid of action against a former partner of the the creditor nothing and has not parted firm who retired before the assignment with any security, or acted upon the was made, and received from the firm a faith of the promise. Fagg v. Hambel, bond of indemnity against all debts. 21 Iowa 140. Bank of Wilmington v. Almond, 1 In Missouri, the statute (Rev. Stat., § Whart. (Pa.) 169. 666) providing that two or more joint or Where a judgment is recovered in several debtors may be released without Pennsylvania against one partner only, discharging the others, applies to co- on a firm debt contracted in that state, partners. Grant v. Holmes, 75 Mo. 109. and a release is executed to the other The release of a judgment against partner in another state, the effect of one of two joint and several debtors, such release upon the judgment is to be obtained without service of process upon ascertained by reference to the law of the other, necessarily releases that other, Pennsylvania. Greenwald v. Kaster, 85 although the converse of the rule would not be true. Coonley v. Wood, 36 Hun (N. Y.) 559. The giving of his individual promis- Pa. St. 45. (w) 2 Brod. & B. 38. See, too, Price V. Barker, 4 El. & B. 760 ; Thompson v. Lack, 3 C. B..540; Willis v. De Castro, sory note, by one of the members of a 4 C. B. (N. S.) 216 ; Bateson v. Gosling, copartnership, after its dissolution, for a L. R., 7 C. P. 9. 391 237^ TERMIXATIOX OF LIABILITY. [bO(^K II., aratcl.y or as ])artiier with Ellerman, or against the joint estate of tlie two, and timt it should be lawful for the plaintiffs to sue Eller- man, either jointly wi-th Forbes or separately, for the purpose of ^ obtain*ing satisfaction of their debt, either out of the joint -* estate of the two or from Forbes. In an action brought by the j)laintiffs against Forbes and Ellerman to recover the debt owing by them, it was held that this deed was no bar to the action. Again, in Hartley v. Manton,(o) where a bill was drawn by a firm on and was accepted by one partner, it was held that a release of the drawers did not discharge the acceptor, the object of the release being to discharge the joint liability of the firm, but not to affect the several liability of the accepting partner.4l (o) 5 Q. B. 247. creditor in trust to pay certain other 41. What releases are. merely cove- creditors. He afterwards assigned all nants not to sue. — Where a creditor his property to the endorsee for the releases a surviving partner from liabil- benefit of all his creditors, with a stip- ity on a bond and mortgage given by ulation for a release from them. The the firm, the estate of the deceased part- assignee, in his private capacity, exe- ner is also released from liability on cuted such release to the debtor. Held, the bond, whatever the intention of the that tiiis did not release his claim upon creditor may have been. But as to the the other members of the partnership, mortgage, such estate is not released, as as endorsee of tiie bill. Hazelhurst v. the release is in the nature of a cove- Pope, 2 Stew. & P. (Ala.) 259. nant not to sue the surviving partner. Where a partnership closed up its Murray v. Fox, 39 Hun (N. Y.) 108. business, and all the goods, effects and The fact that the consideration paid credits were left with P., one of the by one of several partners, upon a com- partners, for the purpose of paying off promise made by him, for his release the debts, and this partner entered into from a debt owing by the firm under the an agreement with some of the credi- New York act of 1838, authorizing an tors that they should take P.'s notes, en- individual member of a partnership to dorsed by E,., who was not a member of compromise his individual liability in the firm, for forty cents on the dollar case of a dissolution, was taken out of of their indebtedness, and the creditors the copartnership funds which he had thereupon released to P. all right to re- in his hands, will not make such release sort to any of the goods and effects, and enure to the benefit of the other mem- the goods were mortgaged to R. to se- bers of the firm, or deprive the creditor cure his endorsement, and a covenant of the protection of the statute. Stitt was entered into by the creditors not V. Cass, 4 Barb. (X. Y.) 92. to sue P. for twenty years, and P. and Illustrations. — The pa^eeof a bill of R. afterwards disposed of the goods — exchange, drawn by a firm of which he it was held that tlie other partners were was a member, endorsed the same to hi-s liable to the creditors to tlie amount of 392 CHAP. II., § III.] RELEASE. 238* Recitals of releases. — In construing releases, particular attention must be paid to the recitals ; for, however general the operative words of the deeds may be, they will be confined so as not to effect more than the parties appear, from the deed itself, to have contemplated, (j)) Removing seal. — If several persons are bound by a bond jointly, or jointly and severally, and their creditor removes the seal of one of them from the bond, all the others are discharged ; but if the obligors are only bound severally, then the removal of the seal of one of them does not affect the liability of the others, (q) Arrest. — Before arrest for debt was abolished (as it now is except in a few special cases), an arrest of a debtor, followed by a discharge of him by the arresting creditor, was equivalent to a release by the creditor of his debt ; whence it followed that if a creditor of a firm obtained judgment against it and arrested the partners and then let one of them go, the others were entitled to be discharged from custody. (?•) Composition in bankruptcy. — If a creditor accepts a composition in bankruptcy in respect of a joint debt, he is not precluded from suing one of the debtors who may be separately liable to him in respect of the same debt, (s) ^Receipt in full. — A receipt given to one partner in sat- r^o.^q isfaction of all demands against him will not discharge his ^ copartners unless that also was intended, (t) the partnership indebtedness to them, (p) See, for illustration of this rule, less the notes for forty per cent. Rob- Lindo v. Lindo, 1 Beav. 496 ; Payler v. €rts V. Strang, 38 Ala. 566. Homersham, 4 Man. & S. 423 ; Simons The plaintiff and defendant were part- v. Johnson, 3 Barn. & Ad. 175 ; Boyes v. ners, and the defendant, having received Bluck, 13 C. B. 652 ; Lampon v. Corke, money on the partnership account, min- 5 B. & A. 606. gled it with money held by him and A (g) See Collins v. Prosser, 1 Barn. & in trust, and allowed it to pass into A's C. 682. hands. The plaintiff afterwards, having (r) Ballam v. Price, 2 Moo. 235. been wrongfully kept in ignorance by (s) Simpson v. Henning, L. R., 10 Q. the defendant of the receipt and dispo- B. 406 ; Megrath v. Gray, L. R., 9 C. P. sition of the money, released A. Held, 216. Wilson v. Lloyd, 16 Eq. 60, co;i^ra, that the defendant was accountable to must be considered as overruled on this plaintiff for the money so received, not- point ; Cragoe v. Jones, L. R., 8 Ex. 81, withstanding the release to A. Mum- was a case of a surety, ford V. Murray, 6 Johns. (N. Y.) Ch. 452. (t) Ex parte Good, 5 Ch. D. 46, where 393 239* TERMINATION OF LIABILITY. [bOOK II., 3. Substitution of debtors and securities. A liability which is originally joint, or joint and several, may be extinguished by being replaced by a liability of a different nature;. and this may happen in one of two ways, viz., either by an agree- ment to that effect come to between the parties liable and the person to whom they are liable ; (u) or by virtue of the doctrine of merger,, independently of any such agreement. (a) Of substitution by agreement. Extinction of liability by subditution of debtors. — In order that one liability may be extinguished by being replaced by another by agreement, it is essential that the person in whom the correlative right resides should be a party to the agreement, or should, at all events, show by some act of his own that he accedes to the substi- tution. If A, being indebted to B, transfers his liability to C, and B does not assent to the transfer, his rights are wholly unaffected, he will neither acquire any right against C nor lose his former right against A. As regards B, the agreement between A and C is res inter alios acta, and it does not in any way benefit or prejudice him. But if B assents to the arrangement come to between A and C, and adopts C as his debtor instead of A, then A's liability to B is at an end, and B must look for payment to C, and to him alone. (.'c)42 one partner was a nominal partner, and partner from liability for the debts of the not, therefore, liable to indemnify the old firm. Nixdorf v. Smith, 16 Pet. (U. others. S.) 132. (w) Sometimes called " novation," but Where a creditor of the firm sties a nothing is really gained by using this retiring partner, the burden of proof is word. See, as to this word, 1 Ch. D. on the defendant to show his discharge, 322, per James, L. J. either by express agreement or by facts (x) See, per Buller, J., in Tatlock v. from which such agreement may be im- Harris, 3 T. K. 180. plied. Hall v. Jones, 56 Ala. 493. But 42. Substitution of debtors by such agreement need not be made in agreement. — Where one partner sells writing. Hopkins i;. Carr, 31 Ind. 260; his share in the partnership stock to a Schwindler v. Euell, 45 How. (N. Y.) stranger, and receives payment therefor, Pr. 33. and the purchaser becomes a partner in The introduction into the firm of a the concern, such purchase and pay- new member is a dissolution of the firm, ment will not have the effect to relieve Hatchett v- Blanton, 72 Ala. 423. the share of the stock of the remaining Whether the assumption, by an in- 394 CHAP. 11., § in. J SUBSTITUTION OF DEBTORS. 239^ Agreement between partners does not affect creditors. — To apply this to cases of partnership, let it be supposed that a firm of three members, A, B and C, is indebted to D ; that A retires, and B and solvent firm, of the individual debts of a retiring partner can in any case be valid, and as to the proof required to show good faitli and a sufficient consid- eration, see Keith v. Fink, 47 111. 272. Under Stat. 1865, ch. 113, a creditor's proof of his claim and acceptance of a dividend, under an order distributing, among the joint and several creditors alike, the estate in insolvency of a part- ner who, on the dissolution, had agreed to pay the partnership's outstanding debts, bars any right of action on the debt against the other jjartner, although, after the dissolution, he has changed his domicile to the creditor's state. Bucklin V. Bucklin, 97 Mass. 256. Where a partnership is dissolved, and the partner continuing the business assumes the liabilities of the firm, and publishes notice that lie will pay them, the other partners are nevertheless liable to a creditor who did not present his claim in the manner directed by the no- tice. Umburger v. Plume, 26 Barb. (N. Y.) 461. Illustrations. — On the dissolution of a partnership, it was agreed between the partners that one of them should assume and pay the partnership debts. A cred- itor, on being afterwards informed of the arrangement, replied that he was satis- fied with it. Held, that such reply was not such evidence as would warrant the jury in finding that he had discharged the other partner. Chase v. Vaughan, 30 Me. 412. A and B dissolved partnership, and by the agreement of dissohition A was to pay tiie debts of the concern. C, a creditor of the firm, assented to this ar- rangement, and promised to give up the partnership note and take that of A alone, but this was not done. Held, that B was not released. Frentress v. Markle, 2 Gr. (Iowa) .553. In an action by a surviving partner, where the declaration contained the usual common counts, in the form pre- scribed by the act. of 1856, ch. 112, and a special count on an agreement, the evidence consisted of accounts between the original firm of the plaintiff' and its successors noting as agents of the de- fendant and the defendant, and the writ- ten agreement. Held, that the accounts should not be excluded on the ground that the plaintiff must prove an ac- knowledgment of indebtedness on the part of the defendant; and that it was competent for the jury to find, from the facts proved, whether there was an as- signment or transfer of the accounts from the old firm to the new, and whether the defendant assented to it, and promised, expressly or impliedly, to 'pay the balance to the plaintilE Stewart v. Rogers, 19 Md. 98. Where, after the dissolution of a part- nership between W. & C, a creditor of the firm stated an account in which they were charged with certain goods purchased by them, and at the same time stated a separate account of his dealings with W., who had assumed the adjustment of the partnership con- cerns, in which account W. alone was charged with another partnership debt, it was held that C. was not discharged from such other partnership debt thereby; but that, whether he was dis- charged or not, no one but C. could avail himself thereof ; and a note given by C, either by way of security or satis- 395 240^ TERMINATION OF LIABILITY [book II., C, either alone or together with a *new partner, E, take -' upon themselves the liabilities of the old firm. D's right to obtain payment from A, B and C is not affected by the above arrangement, and A does not cease to be liable to him for the debt in question, (y) But if, after A's retirement, D accepts as his sole debtors B and C, or B, C and E (if E enters into the firm), then A's liability will have ceased and D must look for payment to B and C, or to B, C and E, as the case may be. When, therefore, a faction of such debt, would be founded on a good consideration. Averill v. Ly- man, 18 Pick. (Mass.) 346. A, of London, gave a letter of credit to B & C, of Boston (partners in a ship- ment), who thereupon drew bills on A, wliich he accepted and paid. B had other accounts with A, in which C had no concern ; C had funds in the hands of B, and requested B to remit to A and close the account of B & C. B after- wards made a remittance to A, and ad- vised him by letter of other forthcoming remittances, and requested him to apply the sum which was actually remitted to B's account generally, and place the bills which A had accepted and paid for B & C to B's debit. This letter -was shown to C before it was forwarded to A. A replied that he Jiad received B's letter and "noted the contents." This letter was also shown to C. Before this letter was received, B failed, being largely indebted to C; and in about seventy days after the letter was writ- ten, A suspended payment, not having, in his correspondence, again alluded to B's request to debit him with the bills accepted and paid for B & C. About four and a half months after said letter was written, A forwarded his account against B & C, »nd it was put in suit. Held, that A had not, by the terras of his letter to B, agreed to discharge C, and look for payment to B alone ; that there was no consideration for such agreement, if it had been made ; and that A was entitled to recover of B & C. Wildes V. Fessenden, 4 Mete. (Mass.) 12. A & B, as copartners, gave a note to C, and afterwards the copartnership was dissolved, B agreeing to pay all the debts, and B and C formed a copartner- ship. Held, that this did not operate as an extinguishment of the note, unless it was so expressly agreed between B and C at the time their copartnership was formed, and although it was alleged that this note was to form a part of C's stock in the firm. Mitchell v. Dobson, 7 Ired. (N. C.) Eq. 34. A judgment was confessed by D, in favor of a firm consisting of A, B and C, to secure future advances. Three years afterwards C withdrew from the firm, A and B purchasing his interest. The new firm continued to make advances, charg- ing them and giving credit for pay- ments, &c., as before, no change being made in the books. The judgment was entered up by A and B, and was the first lien on D's land. Held, that the judgment secured the advances made by the old and the new firm. Shenk's Appeal, 33 Pa. St. 371. iy) Smith v. Jameson, 5 T. K. 601 ; Kodgers v. Maw, 4 Dowl. & L 66 ; Dick- enson V. Lockyer, 4 Ves. 36; Cummins V. Cummins, 8 Ir. Eq. 723. 396 CHAP. II., § III.J SUBSTITUTION OF DEBTORS. 240^ partner has retired and a creditor of tlie firm continues to deal with the continuing partner and such other persons, if any, as may have become associated with them in partnership, it is of great importance to ascertain whether the creditor has or has not accepted the new firm as his debtors in lieu of the old firm. If he has, the retired partner's liability will have ceased, whilst if he has not, it will still continue.43 Liability not got rid of by transferring share. — Nothing used to be more common than for promoters of companies to put forward a prospectus in which it was said that all liability on the part of a shareholder would cease on a transfer of his share, but the hope thus held out was as false and delusive as that intended to be raised 43. Agreement between partners does not affect creditors. — Equities between the partners do not affect cred- itors of the firm. Bartles v. His Cred- itors, 11 La. Ann. 432. A mere change in the name or style of tlie firm does not affect its rights or liabilities. Gills v. Ferris, 82 Mo. 156. Where, on the retirement of one part- ner, the others agree with him to pay a firm debt, which is known to the cred- itor, the retiring partner will be deemed, in law, a surety as to that debt. Wil- liams V. Boyd, 75 Ind. 286. An agreement by an incoming part- ner to pay the firm debts in considera- tion of an interest in the firm, is not within the statute of frauds, and may be enforced by creditors who were total strangers to the agreement. Poole v. Hintrager, 60 Iowa 180. Where it was agreed between a retir- ing partner and his copartners, who were to continue the business, that the latter should assume the old firm's debts, and take all their assets, to be used in pay- ing those debts, the agreement constitu- ted the new firm trustees of the assets for the benefit of the creditors of the old firm, and the interest of the new firm and their creditors is confined to what remains, if anything, after payment of those debts. Bowman v. Spalding (Ky.),. 2 S. W. Kep. 911. Where two partners, having ordered a piece of work done under contract, dis- solve partnership, an agreement between one of them and the contractor that such last-mentioned partner should be discharged from his liability for tiie work already done, is void for want of consideration, the other partner not hav- ing promised to assume such liability. It would be otherwise if the other partner did so promise, one debt being substitu- ted, in that case, for the other. Col Iyer V. Moulton, 9 R. I. 90. Where, upon the dissolution of a co- partnership, one partner assumes a lia- bility, he does it prima fade, upon suffi- cient consideration, leaving his copart- ners liable only as sureties ; and they may take measures to have the claim assigned and collected, from the partner liable. iEtna Ins. Co. v. Peck, 28 Vt. 93. As to the liability of a retiring part- ner, to one whom he has notified to " go and get his money" from the continuing partner, see Maier v. Canavan, 8 Daly (N. Y.) 272. 397 240* TERMINATrOX OF LIABILITY. [book IL, by the assertion that the liability of the shareholders would be lim- ited to the amount of their shares, (z) It cannot be too often repeated that merely by retiring, a partner or a shareholder gets rid of no liability as to past transactions, unless there is some statutory enactment applicable to his case ; and the same observation applies to a total dissolution. To use the words of Mr. Justice Heath, " when a partnership is dissolved, it is not dissolved with regard to things past, but only witli regard to tilings future. With regard to things past, the partnership continues and always must con- tinue." (a) 44 (z) See Blimdell u. Winsor, 8 Sim.613. of the payee of a note previously exe- (a) Wood V. Braddick, 1 Taunt. 104. cuted by the firm, and his transfer of Therefore, partners continue liable on his interest to the other partners, who the covenants entered into by them in a assume the firm debts, does not dis- lease of the partnership premises, al- charge the retiring partner from liabil- though the firm may have been dis- ity on the note. Clark v. Billings, 59 solved since the lease was granted. See Ind. 508. Hoby V. Roebuck, 7 Taunt. 157 ; Gra- ham V. Whichelo, 1 Cromp. & M. 188. 44. Liability not got rid of by trans- ferring share. — A relinquishment by one ostensible partner to another, of all In a suit on a note made by one of the partners, the fact that one member of the firm had transferred all his interest to his copartners may be shown, as tend- ing to prove a dissolution. Waller v. his interest in the partnership, does not Davis, 59 Iowa 103. discharge him from liability as a part- Members of a copartnership associa- ner to third persons, who afterwards tion who have assigned their interest deal with the company without notice therein to other solvent parties, with of such relinquishment. Grady v. Rob- the assent of their copartners, and who inson, 28 Ala. 289. But the sale of one accept such assignees as copartners in partner's interest to an outsider, or any their stead, and recognize and treat them other admission of the new partner into as such, as between themselves, are not the firm, works a dissolution. McCall liable for the debts of the copartnership V. Moss, 112 III. 493. existing at the time of such assignment, Where a partner having sold his in- and they cannot be required to contri- terest permits his name to remain in the bute for t>heir payment to those cou- firm in consideration of an agreement tinning partners who have been re- on the part of the purchaser to pay the quired to pay the same. Savage v. firm debts, such retiring partner is liable Putnam, 32 N. Y. 501. on a note given by one of his former If a partner, after a dissolution of partners, in the old firm name, to one the partnership, assign all his interest who has no notice of the change in the in the partnership property for a valu- firm. Gammon v. Huse, 100 111. 234. able consideration, and take a covenant The retirement of one of the mem- of indemnity against all liability for the bers of a partnership, with the consent debts of the partnership, the covenant 398 €HAP. II., § in.J SUBSTITUTI.ON OF DEBTOES. 241 = The cases which bear upon the question of discharge by virtue of a substitution, by a creditor, of one debtor for another *will r-„^ . . . r 241 be found, notwithstanding some conflict between them, to ^ be all professedly based on the foregoing princi2)les and on a few simple rules, the most important of which are as follows : 1. Creditors not presumed to discharge outgoing partners. — There is no a priori presumption to the effect that the creditors of a firm do, on the retirement of a partner, enter into any agreement to dis- charge him from liability. (6) -15 2. Creditor may agree to look only to continuing partners. — An agreement by a creditor of several persons, liable to him jointly, to discharge one or more of them and look only to the others, is not necessarily invalid for want of consideration, (c) 46 does not coyer a debt wliich does not made without consideration to release appear upon the partnership books, and the retiring partner from liability, is was not made known to the assignee at nudum pactum and not binding. Eagle the time of the contract of indemnity. Case V. Cushman, 3 Watts & S. (Pa.) 544. (6) Such an agreement must be proved. See Benson v. Hatfield, 4 Hare 37. 45. Creditors not presumed to dis- Manufacturing Co. v. Jennings, 29 Kan. 65 ; S. C, 44 Am. Kep. 668 ; Walstrom V. Hopkins, 113 Pa. St. 118. A retiring partner may be discharged from the debts of the partnership by the charge outgoing partners. — A creditor acceptance, by the creditor, of new notes who takes the promissory note of a new of the other partners, as renewals of the ■firm in payment of a debt due him from notes first given, provided the creditor the old firm, in ignorance of the dissolu- agrees to discharge him by the accept- tion and supposing the note to be that ance of such new notes, which is a ques- of the old firm, may sue on the original tion for the jury ; but where the new indebtedness without showing that he notes are signed like those first given, was fraudulently induced to take the and the creditor is ignorant of any note. Buxton v. Edwards, 134 Mass. 567. (c) Lyth V. Ault, 7 Ex. 669. 46. Creditor may agree to look only to continuing partners. — Partners can- not by any agreement affect the rights of creditors. But where, after the disso- chnnge in the partnership, no agreement to discharge can be inferred. Bernard V. Torrance, 5 Gill & J. (Md.) 383. Where, after dissolution, a firm cred- itor, with knowledge of an agreement between the partners that some of them iution of the partnersliip, a creditor should assume and pay the debts of the takes the individual note of one partner firm, takes the negotiable paper of the for a partnership debt, he cannot after- latter in payment of his debt, this will wards hold the other partners responsi- discharge the other partners. Millerd v. ble. Harris v. Lindsay, 4 Wash. (U. S.) Thorn, 56 N. Y. 402 ; Stone v. Chamber- ■98 ; Id. 271. lain, 20 Ga. 259 ; Hoopers v. McCan, 19 A promise by a creditor of the firm. La. Ann. 201. 399 241* TERMINATION OF LIABILITY. [bOOK II., 3. Effect of doctrine that a release of one partner is a release of all. — Except under special circumstances, a creditor who releases one partner discharges all. (d) Consequently, if a creditor dis- charges a retired partner, and acquires no fresh right to obtain pay- ment from the others, either alone or with a new partner, the creditor will be altogether remediless. One test, therefore, by which to determine whether a retired partner has been discharged is to see whether the creditor has obtained a new right to demand payment ; for if he has not, no discharge can possibly be made out by any evidence which fails to establish an extinguishment of the creditor's demand altogether. Classification of cases. — It is proposed now to examine the cases relating to the liability of retired partners for debts incurred before their retirement. They may be conveniently classified thus : A. Cases in which a retired partner has not been discharged. (a) No new partner having been introduced into the firna. (b) Although a new partner has been introduced into the firm. B. Cases in which a retired partner has been discharged. After these cases have been examined, the analogous cases relating to the discharge of the estate of a deceased partner will be noticed. *242] *Class a (a). — Cases in which a retired partner has not been DISCHARGED, J^O NEW PARTNER HAVING BEEN INTRODUCED INTO THE FIRM. Promise to look only to continuing partners. — The strongest cases of this class are Lodge v. Dicas (e) and David v. Ellice. (/) In each of these a partnership had been dissolved, one member retiring and the other continuing the business and agreeing to pay the debts Where, after dissolution, the holder of to accept the liability of a new firm, for a firm note accepts the note of one of the the debts of the old firm, so as to estop firm payable at a future date, retaining him from maintaining his claim against interest by way of discount, and agree- the outgoing partners, see Kegester », ing to release the other partner, this is a Dody, 19 Blatchf (U. S.) 79. payment of the firm note. Athens Bank {d} Ante p. *237. V. Green, 40 Ohio St. 43L («) 3 B. & A. 611. What is sufficient evidence to show (/) 5 Barn. & C. 196, aud 1 Car. & an agreement on the part of a creditor P. 369. 400 CHAP. II., § III.J SUBSTITUTION OF DEBTORS. 242* of the old firm. In each case the plaintiff knew of the arrange- ment, and his debt was transferred, with his consent, to the books of the new firm. In each case, moreover, there was strong evidence to show that the plaintiff had agreed to discharge the retired mem- ber and to look only to the others. But in each case it was held that the retired partner continued liable and that the plaintiff had done nothing to discharge him ; and the fact tliat no person had become liable to the plaintiff, who was not so originally, was relied upon by the court as showing that there was no consideration for the alleged discharge, {g) Observations on these cases. — These two cases have been much criticised, {h) and they certainly went too far, for the proposition that a creditor of a firm cannot, for want of consideration, abandon his right against a retiring partner and retain it against the others, unless they give some fresh security, has been shown to be erroneous and is now exploded ; {i) and there can be little doubt that if simi- lar cases were to arise again and the jury found for the defendant, the verdict would not be disturbed. This appears from Thompson v. Percival, {k) In that case .the defendants, Charles Percival and James Percival, had, as partners, become indebted to the plaintiff. The partnership was dissolved, and it was agreed that the business should be carried on by James, and that he should receive and pay all debts, and assets sufficient to pay debts of the firm were left in his hands. The plaintiff, on ap- plying to James for pay*ment was told that he must look r^24Q to him, James, alone, and the plaintiff accordingly drew a bill on James and the bill was accepted by him. The bill being afterwards dishonored, the plaintiff sued both James and Charles for the original debt and obtained a verdict for the full amount ; but the defendants had leave to move for a nonsuit if the court should be of opinion that Charles had been discharged. The court, without deciding that point, held that the question ought to have been left to the jury, and a new trial was therefore directed. The court held that the facts proved raised a question for the jury {g) See, too, Thomas v. Shillibeer, 1 M. 623; 2 Mees. & W. 493. Mees. & W. 124. (i) Ante p. *241, note (c). {h) See 5 B. & Ad, 933 ; 2 Cromp. & (k) 5 B, & Ad. 925. 401 26 243* TERMINATION OF LIABILITY. [bOOK II., whether it was agreed between the })laintiff and James that the former should accept the latter as his sole debtor, and should take the bill of exchange accepted by him alone by way of satisfaction for the debt due from both. If it was so agreed, the court thought that the agreement and receipt of the bill would be a good answer on the part of Charles by way of accord and satisfaction, (l) It is not unusual to represent Lodge v. Dicas and David v. EUice as altogether overruled by Thompson v. Percival and other eases. This, however, is not quite correct. The three cases together establish (1) that a creditor who treats the continuing partners as his debtors does not necessarily abandon his right to resort to a retired partner for payment ; (2) that whether he does or does not is a mixed question of law and fact which ought to be submitted to a jury ; and (3) that their verdict will not be disturbed by the court upon the grounds acted on in Lodge v. Dicas and David v. Ellice. Treating continuing partners as debtors. — That a creditor who treats the continuing partners as his debtors does not, without more, discharge a retired partner, is shown by other cases, and especially by those in which the continuing ])artners have paid interest on the old debt at a rate or in a manner differently from that previously adopted. An old case on this head, and one often referred to, is Heath v. Percival, (m) in which two partners, indebted to the plaintiff on a bond, dissolved partnership. One of them continued to *carry on the business, and took upon himself the partnership debts, and -^ public notice was given that the creditors of the firm were either to come in and be paid their debts or to look for payment to the continuing partner only. The plaintitf came in, but instead of being paid off, he kept the bond, receiving interest at six per cent, instead of five per cent. It was held that he did not thereby dis- charge the retired partner from his liability to pay the bond with interest at five per cent.47 (/) In Evans v. Drummond, 4 Esp. 47. Treating continuing partners 89, and Eeed v. White, 5 Id. 122, a re- as debtors.— A note given in the firm tiring partner was held discharged on name, after dissohition, for a firm debt, the ground here referred to. See post by a partner without authority to give J,. *247. it, will not extinguish the firm debt (m) 1 P. Wms. G82, and 1 Str. 403. thougli both the creditor and the part- 402 CHAP. II., § III.] SUBSTITUTION OF DEBTORS. 244^ Taking a new security from them. — Moreover, if the continuing partners give a new security for the old debt, this will not operate to discharge the retired partner, unless the creditor intended that ners believed it would have that eflect. Oardner v. Conn, 34 Ohio St. 187. And see Turnbow v. Broach, 12 Bush (Ky.) 455. In Winter v. Innes (4 Myl. & C. 101, 108, 109) Lord Cotlenham said : " The question, therefore, is whether a credi- tor of a firm, who, knowing of the death of one of the firm, continues to deal, as before, with the survivor for any length of time, without requiring payment of the balance due to him from the firm at the time of the death, thereby loses the remedy which he had in equity against the estate of the deceased partner, par- ticularly in a case in which there is not only no evidence of any intention to abandon such claim, and to adopt the individual responsibility of the surviv- ing partner in its stead, but the total absence of any object or consideration for so doing, and conclusive evidence that the principal object of the forbear- ance was not to press upon or prejudice the estate of the deceased, of whose will the creditor was himself a trustee and executor, though he did not prove. It would, I think, be extraordinary if there were authorities to be found in support of the afiirmative of this propo- sition. I will shortly refer to some of the principal cases at law and in equity which bear upon this subject. The cases at law have necessarily arisen where the dissolution of the partnership has taken place by arrangement be- tween the partners, and not by death. It will be found that in some, even where it was clear that the creditor in- tended to take the separate security of the continuing partner in lieu of the joint liability of the dissolved firm, the retired partner was held not to be dis- charged, as in David v. Ellice and Lodge V. Dicas, in which the creditor, with a knowledge that the continuing partner had agreed to pay all the debts, took his personal security for the debt; but it was held that he had not thereby released the retiring partner, upon the ground of want of consideration for his so doing. These decisions have been considered as carrying the doctrine very far, and undoubtedly they do ; and the true ground appears to me to have been acted upon in Bedford v. Deakin, and Thompson v. Percival. In the former it is laid down that to discharge the re- tiring partner it must appear that the creditor accepted the separate security of the continuing partner in discharge of the joint debt; and in the latter case, although the creditor knew that the continuing partner had agreed to pay all debts, and with that knowledge had taken a bill from him, for the payment of which, when due, he afterwards al- lowed two months, yet the court, upon a motion for a new trial, ordered it, that it might be put to the jury whether the plaintiff had agreed to take, and did take, the bill in satisfaction of the joint debt. If, therefore, the cases in equity of clairrrs against the estates of deceased partners are to be regulated by the same principle, there can be no doubt of the right conclusion in the present case, for there was no new security given, and instead of an intention ap- pearing, or any agreement being proved, to release the estate of Mr. Winter, all the evidence proves directly the reverse. 403 244^ TKIIMIXATIOX OF LIABILITY. [book II.^ such should be the case, or unless the new security is of such a nature as to merge the original debt. In Bedford v. Deakin (?i) three partners were indebted to the plaintiff on bills of exchange. They dissolved partnership and arranged between themselves that one of them should pay the plaintiff. The plaintiff was informed of this arrangement and took from one of the partners his separate promissory note, endorsed by a third party, for the amount of the debt, but expressly reserved his right to look to all three partners for payment, and the plaintiff retained the bills already in his pos- session. The notes, when due, were taken up by other bills, and they in their turn were several times renewed. Ultimately the plaintiff sued all the three partners on the original bills, and he It cannot be disputed now that the es- tate of a deceased partner is liable in equity to the creditors of the firm, al- though the legal remedy exists only against the survivors. When, and by what means, is that liability to termi- nate? Sir William Grant, in Vulliamy V. Noble (and he had much considered the question in Sleech's Case in De- vaynes v. Noble), has answered the question. He says : ' The deceased partner's estate must remain liable in equity until the debts which affected him at the time of his death have been fully discharged. There are various ways in which the discharge may take place, but discharged they must be be- fore his liability ceases.' The discharge may be by direct payment, or by deal- ings with the continuing partner oper- ating as payment of the joint debt, or, in the terms of Thompson v. Percival, the dealings may arise from the credi- tors having agreed to take, and taking, the security of the survivor in satisfac- tion of the joint debt; or there may be an equitable bar to the remedy, for (as Lord Eldon expresses it in Ex parte Kendall): 'As the right stands only upon equitable grounds, if the dealing of the creditor with the surviving part- ners has been such as to make it in- equitable that he should go against the assets of the deceased partner, he will not, upon general rules and principles, be entitled to the benefit of the demand.' In the present case there is a total ab- sence of any such equitable defence to the claim upon the estate of Mr. Win- ter, as there is of any intention or con- tract to abandon it. The more modern cases of Cowell v. Sikes, Wilkinson v. Henderson, and Braithwaite v. Britain, in addition to the former authorities,, leave no doubt that in this case nothing has taken place which can bar Mr^ Baillie's claim (admitted to have at one time existed) to compel payment of so much of the debt due to him from the firm as remains unpaid." (n) 2 B. & A. 21-0. See, too, Swire v. Redman, 1 Q. B. D. 536, where the plaintiff had not expressly reserved his- rights against the retired partner. See, also, Featherstone r. Hunt, 1 Barn. & C. 113; Spenceley v. Greenwood, 1 Fost. & F. 297. Compare Evans v. Drummond, 4 Esp. 89, noticed ir^ra, p. *247. 404 CHAP, ir., § III.] SUBSTITUTION OF DEBTORS. 244* was held entitled so to do, never having discharged any of them, either intentionally or other\vise.48 48. Taking a new security from Taylor, 12 La. Ann. 773. continuing partners. — A note given Where a partnership was dissolved by one partner after dissolution, for a and a new firm was formed, consisting debt of the firm, is not an extinguish- in part of the same members, a creditor ment or satisfaction of the original debt, of the old firm with notice of the dis- so as to discharge the other partner, solution, taking, in liquidation of his unless such was the agreement when claim, drafts of the old firm upon the the note was given ; and this is a fact new, accepted by the latter and drawn for the determination of a juiy. Mason by a member of both, cannot, upon lail- V. Wickersham, 4 Watts & S. (Pa.) 100; ure of the new firm, claim payment of Bernard v. Torrance, 5 Gill & J. (Md.) the members of the old, unless he can 383 ; Davis' Estate v. Desauque, 5 Whart. show their assent to the making of the (Pa.) 530 ; Leabo v. Goode, 67 Mo. 126 ; drafts. Paterson v. Camden, 25 Mo. 13. Folk V. Wilson, 21 Md. 538. See, also. Illustrations.— A drew a bill on B, C Tyner v. Stoops, 11 Ind. 22; Bowyer v. & Co., which was accepted, and by him Knapp, 15 W. Va. 278; In re Parker, negotiated to a bank. At maturity the 19 Bank. Reg. 340 ; Hill v. Marcy, 49 draft was paid by a like bill drawn on N. H. 265 ; Townsends v. Stevenson, 4 B alone, the firm in the meantime hav- Rich. (S. C.) 59; Landolfo v. Appleton, ing been dissolved, which last bill A, as 40 N. Y. 533. The rule is the same, endorser, was compelled to take up. even though such note is signed by a Held, that he could not maintain an surety. Varnell v. Anderson, 14 Miss, action against the firm to reimburse the 619. amount tlius paid. Springer v. Shirley, Where a firm consists of one active 11 Me. 204. and one or more dormant partners, and The firm of F. & S. having dissolved, a note is given, the taking of a renewal a creditor refused to accept the note of of such note from the active partner, S. and thereby discharge F. Held, that after dissolution, and without any intent his receiving and retaining what pur- to discharge the dormant partners, does ported to be a note of the late firm of F. not release the firm from the original & S., without knowledge that it was claim. Parker v. Canfield, 37 Conn. 250. signed by S. alone, without authority, in Where a creditor of the former part- the firm name, will not discharge F., the nership drew on those persons who con- creditor not having unduly delayed in tinned the social style of the late firm, enforcing this claim. Adler v. Foster, for account of a balance due him by the 39 Mich. 87. former partnership, and his drafts were A & B, being partners, purchased protested for non-payment, and paid by goods of C for the partnership, and gave the drawer supra protest, a member of each his separate note, with his separate the former partnership, who is sued for surety, for a moiety of such goods. A Buch balance, cannot maintain that there afterwards went out of the concern, and was a novation of the debt. The drafts B agreed to pay both notes. A's was are to be held as having been drawn on therefore canceled, and B gave a new his agents by his authority. Skannel v. note, with the surety who was on his 405 244* TERMINATION OF LIABILITY. [bOOK II., Liability same in equity as at law. — Nor was there any difference, in such cases as these, between the liability of a retired partner at law and in equity. In Oakford v. European and American Steam- ship Company, (o) a partner retired, and the continuing partners in- demnified him against all claims that might be made against him as a member of the firm. Disputes afterwards arose between the con- tinuing partners and a company respecting a contract entered into before the retirement. These disputes were *partly ad- r^^n^r justed. Those unadjusted were referred to arbitration, pur- suant to a clause in the contract. The reference was afterwards revoked, and an action upon the contract wa.s then brought against the continuing partners and the retired partner. The retired part- ner sought to have this action restrained by injunction, upon the ground that his retirement and indemnity had placed him in the position of a surety only for the due performance of the contract, and that what had taken place since the retirement, which was known to the company, had discharged him. But it was held that his liability continued, and his bill was dismissed, with costs. Position of dormant partners. — The principle of the above cases applies to dormant partners even more strongly than to others, for a creditor who has a security of which he is unaware, cannot inten- tionally give up that security. Therefore, if A and B are partners, and the two become indebted to a creditor who knows only of A, and then B, the dormant partner, retires, no dealings between the creditor and A will discharge B from his liability to be sued when discovered, unless those dealings extinguish the original debt, not only as against B, but also as against A. {p) other note. Subsequently, B, failing to of the "debt originally contracted by A pay these debts, received the surety on & B with" C. Held, that this applied his note into partnership in the business, to both the original notes and the note and entered into articles of agreement substituted for A's. Gordon v. Joslin, 4 with him, by which the surety was to Hayw. (Tenn.) 115. receive all debts due to B and the former (o) 1 Hem. & M. 182. partnership, and all produce taken in dis- (p) Robinson v. Wilkinson, 3 Price charge of debts ; and the surety agreed 538. to appropriate the same to the payment 406 CHAP. II., § III.] SUBSTITUTIONS OF DEBTORS. 245* Class A (6). -Cases ix which a retired partner has not been dis- charged. ALTHOUGH A NEW PARTNER HAS BEEN INTRODUCED INTO THE FIRM. Effect of introduction of new partner on the liability of a retired paHner. — The introductiou of a new partner has no effect on the h'ability of a retired partner, unless the liability of the former is substituted by the creditor for that of the latter, which cannot be the case unless the creditor can, as of right, hold the new partner liable for the old debt. This, moreover, he cannot do by virtue of any agreement between the partners themselves ; and even if the new firm adopts the old debt and pays interest on it, this is prima facie only in pursuance of some agreement between the partners themselves, and a creditor who does no more than allow the part- ners to carry out that agreement does not debar himself of his right to look for payment to those originally iudebted to him. ^ -| *A leading case on this head is Kirwan v. Kirwan. [q) ^ There, three partners, C, M. and iST., were indebted to the plaintiff. C. retired, and M. and N. continued in partnership together, and agreed to discharge the debts of the old firm. M. afterwards retired, and I*^. took in a new partner. The plaintiff's account was transferred from the books of the old to the books of the new partnership, and interest was paid, and accounts were rendered to him as before. The plaintiff was informed of the dissolution, and had stated to one of the retired partners that he was aware he had no further claim upon him. But it was held that the three original partners remained liable, as there was nothing to show that the security of the new firm had been sub- stituted for that of the old, and the statement above referred to could not be regarded as an agreement to discharge the retired partner. In Gough V. Davies(?') three persons were partners as bankers, and were indebted to the plaintiff. One of the partners retired ; a new partnership was formed between the continuing partners and other persons ; the plaintiff's debt was transferred to the books of the new firm, and he assented to such transfer. Moreover, the (9) 2 Cromp. & M. 617. (r) 4 Price 200. 407 246* TERMINATION OF LIABILITY. [bOOK II., plaintiff eontiniieJ to deposit money with the new firm, and was paid by it interest on the old debt and new deposits, as if they all formed one debt. But it was held that there was nothinjr in all this to show any agreement by the ])laintitf to discharge the re- tired partner, and he was consequently iield liable for the old debt. Blew V. Wyatt(s) is another case to the same eflPect. A clerk lent money to his employers, who were in partnership as brewers, and took an acknowledgment for it. Several changes took place in the firm, one of the original partners retiring and other persons from time to time coming in and going out. The clerk remained in the employ of the firm notwithstanding these changes, and was aware of them, and was always paid interest by the firm for the time being. He was nevertheless held entitled to sue the two original partners for the money he had lent them. Right to sue new Jinn not inconsistent ivith right to sue the old firm. — Whether, in these cases of Kirwan v. Kirwan, Gough v. *Davies and Blew v. Wyatt, the creditor could have sued |-^..-,,_ the new firm may perhaps be open to doubt. (^) If he ^ could not, it would be absurd to contend that the liability of the new firm was substituted for that of the old ; whilst if he could, the evidence was not sufficient to show an iutgntion on his part to deprive himself of the security afforded by the undoubted liability of the original firm before any change in it took place. It by no means follows that a creditor who assents to an arrangement by which a new person becomes liable to him, consents to abandon his hold on another person clearly liable to him already; and unless a substitution of liability can be established, the old liability re- mains, (w) 49 (s) 5 Car. & P. 397. over of part of the goods to the new (<) See per BoUand, B., 2 Cromp. & firm, instructs the latter to sell the goods M. 628 ; Daniel v. Cross, 3 Ves. 277 ; and remit the proceeds, this, in the ab- Furgusson v. Fyffe, 8 CI. & F. 121. sence of explanation, will discharge the (w) See Harris v. Farwell, 15 Beav. old firm from liability as to the goods so 31. turned over, but not for the balance of 49. What will not discharge retir- the consignment. Hall v. Jones, 56 ing partner, although a new partner Ala. 493. has entered the firm. — Where the con- Where a partnership was dissolved, signer of goods to a firm, being notified and a new firm was formed, including, of its dissolution, and of the turning with one exception, the members of the 408 CHAP. II., § III.] SUBSTITCTKJN OF DEBTORS. 247* Class B. — Cases in which a ketired partner has been evischarged. In all these cases it will be found that the court or a jury has come to the conclusion that the creditor has in fact, either expressly or impliedly from his course of dealing with the continuing partners, adopted them as his sole debtors, and thereby in fact discharged the retired partner, (x) Retired partner may be discharged though no new partner comes in. — That a retired partner may be discharged by the creditor's adoption of the other partners as his sole debtors, although no new partner has been introduced into the firm, is clear from the case of Thompson v. I*erc\va],(y) already noticed. In Evans v. Drummond(2;) a firm of two partners gave a part- nership bill for goods supplied them. One of the partners retired, and the bill when due was not paid, but was renewed by another bill given by the partner who continued the business. The creditor took this bill knowing of the change in the firm. Lord Kenyon held that by so doing the creditor had relied on the sole security ♦o-iQi °^ *^^^ continuing partner, and had dis*charged the other. -^ Reed v. White (a) is a similar case and to the same effect. Effect of introduction of new partner. — The inference that a retired partner has been discharged is greatly facilitated by the circumstance that a new partner has joined the firm and become former concern, it was held that as be- enforce this intention for the benefitof the tween the latter firm and the retiring creditors of the new firm. Dayv. Weth- partner, it would not be presumed that erly, 29 Wis. 363. S. P., Smith v. Peters, debts of the latter firm were contracted 20 How. (N. Y.) Pr. 121. for payment of debts of the former one. (x) Mr. Pollock says, truly, that there Chaffin V. Chaffin, 2 Dev. & B. (N. C.) is nothing to prevent a firm from stipu- Eq. 255. lating with any creditor that he shall A firm of two partners dissolved, look only to the members of the firm organizing again with the addition of a for the time being. Dig. (3d ed.) 30. third partner. The new firm gave a See Hort's Case and Grain's Case, 1 Ch. trust deed of property acquired by D. 307. money contributed by the incoming {y) 5 B. & Ad. 925 ; mite p. *242. partner, to secure money due from both (z) 4 Esp. 89. Compare Bedford v. firms to a bank, the understanding being Deakin* 2 B. & A. 210, noticed ante p. that the new partner's interest should be *244. applied to secure the indebtedness of the (a) 5 Esp. 122. new firm only. Held, that equity would •109 ■ 248* TERMINATION OF LIABILITY. [bOOK II., liable to the creditor in respect of the debt in question. (6) But this is not necessarily conclusive, for there may be circumstances showing that sucii was not the intention of the parties, (c) At the same time, in the absence of any such evidence, the acceptance by the creditor of the liability of a new partner will practically pre- clude him from afterwards having recourse to the retired partner, [d) In Hart v. Alexander (e) the plaintiff, an officer in the East India Company's service, had, in 1813, opened an account with the house of Alexander & Co., of Calcutta, which failed in 1832. The de- fendant retired from the firm in 1822, when a new partner was introduced, and since that time other changes had taken place, some of the old partners retiring and new ones coming in. The defendant's retirement was advertised, and there was evidence to show that the plaintiff was aware of the fact. The new firms from time to time accounted with the plaintiff and paid him in- terest, sometimes at one rate and sometimes at another. On the bankruptcy of the firm in 1832, the plaintiff proved the amount of his debt against its joint estate. The plaintiff afterwards sued the defendant, and the case was tried before Lord Abinger, who is reported to have said to the jury: "To ask you if there was an agreement by the plaintiff to discharge the de- fendant, is to put the case upon a false issue, the agreement, if any, being an agreement raised by construction of law ; the true question being whether the plaintiff did not go on dealing with the new firm, and making up fresh accounts with tliem, so as to discharge the defendant. I take the law to be this: Where a debtor who is a partner in a firm leaves that firm, and any person trading with the firm has notice of it, and he goes on dealing *with the firm and r*24Q making fresh contracts, that discharges the retiring partner, though no new partner comes in. So it is if the creditor draws for part of his balance and sends in more goods; so, if the creditor strike a fresh balance with the new part- ners for a diflerent rate of interest ; so, if a new partner comes in and the creditor accepts an account in which the new partner is made liable for the balance — that (b) See, as to this, ante p. *205, el secj. W. 484. See, also, Wilson v. Lloyd, 16 (c) See infra, p. *254, and Keay v. Eq.60; Oakeley v. Pasheller, 4 CI. & Fenwick, 1 C. P. D 745. F. 207, noticed infra, p. *25L Compare (d) As to the effect of taking a new Commercial Bank Corp. of India and the security when no new partner comes in, East, 16 W. R. 958, and Ex parte Gib- see anle p. *244. son, 4 Ch. 662. (e) 7 Car. & P. 746, and 2 Mees. & 410 CHAP. II,, § HI.] SUBSTITUTION OF DEBTOES. 249* discharges the old firm, as both firms cannot be liable at once for the same debt. This is the law as laid down in several cases in which indeed there is some con- tradiction. However, I believe that what I have stated is the result of them." (/) The jury found for the defendant. A new trial was moved for on the ground that there was no ev^idence to go to the jury to show that the plaintiff had agreed to discharge the defendant from his liability, but the court (^) thought that there was abundant evidence to show that the plaintiff knew of the defendant's retirement, and a new trial was refused. To this class of cases also belong those already noticed, in which the joint liability of old and new partners has been substituted for that of the old partners only. (A) 50 Release by estoppel. — A creditor may so conduct himself as to be estopped from saying that a retired partner is still liable to him. But it is not often that this can be established. A settlement by partners of their accounts on the footing that one of them only is liable to a creditor, will not affect him unless he has been guilty of some fraud, or has done some act or made some statement in order to induce the partners, or one of them, to settle their accounts on the faith that one of them is no longer liable, (i) 51 Discharge of estate of deceased partner. — Closely allied to the subject which has just been discussed, is that which relates to 'the (/) The learned judge was scarcely (N. Y.) Pr. 319; S. C, 17 Hun 600. warranted by those cases in going so far And see J^tna Ins. Co. v. Peck, 28 as he did. Yt. 93. [g) Bolland. B., dissenlienie. (i) See Davison v. Donaldson, 9 Q. B. {h) Ex parte Whitmore, 3 Deac. 365 ; D. 623 ; Featherstone v. Hunt, 1 Barn. & Rolfe V. Flower, L. R., 1 P. C. 27, noticed C. 113, a case of alleged fraud. ante pp. *208, *209. 51. Release by estoppel. —Where the 50. What will discharge retired creditors of a commercial partnership partner. — Where one partner retires make settlement with the liquidating and the others assume the debts of the partner after dissolution, and take his old firm, the retiring partner becomes separate notes in full settlement of their merely a surety in respect to such debts, claim, and it appears that they were at and where the creditors extend the time the time aware that the liquidating part- of payment in such a case, with knowl- ner had assumed all the liabilities of the edge of all the facts, and without the partnership, the retiring partner will not consent of the retiring partner, this will afterwards be held responsible. Hoopes discharge him from liability as respects v. McCan, 19 La. Ann. 201. such debts. Dodd i'. Dreyfus, 57 How. 411 249* TERMINATION OF LIABILITY. [hoDK II., discharge of the estate of a deceased partner from the liabilities to which he was subject as a partner at the time of his death. The position of the estate of a deceased partner, with reference to the question of discharge by reason of a creditor's dealings with the surviving *partners, is very similar to the position of a -• retired partner. The same ])rinciples are applicable to both, and the authorities v/hich are in point as regards the one are so also as regards the other. The parallel between the two would be complete were it not that before the Judicature acts the estate of a partner who died in the lifetime of his copartners was liable for the joint debts of the firm in equity only, (Z;) and there might have been circumstances to induce a court of equity to hold that estate discharged, although the same circumstances would not, in the case of a retiring partner, have operated as a discharge at law, (l) and viae versa, (m) It has been decided in equity that if a creditor of a firm knows of the death of one of the firm and continues to deal as before with the survivors, he does not lose the remedy which he had against the estate of the deceased partner unless there is evidence showing an intention to abandon the right of having recourse thereto for pay- ment ; (n) and an attempt by the creditor to obtain payment from the survivors is not sufficient evidence of such an intention. Thus, ■ if he sues the survivors and obtains judgment against them, this will not necessarily deprive him of his right to obtain payment out of the estate of the deceased, (o) So, proving in bankruptcy against the estate of the new firm is not, per se, sufficient to preclude the creditor from afterwards having recourse to the assets of the dead partner, (p) Still less will any dealing with the surviving partner if induced by his fraud, (q) 52 (k) As to the nature of this liability, (o) Jacomb v. Harwood, 2 Ves. Sr. see ante p. *194. 265 ; and cmte p. *195, and infra, p. *257. (/) See Ex parte Kendall, 17 Ves. 522, ( p) Sleech's Case, 1 Mer. 570 ; Harris 525. V. Farwell, 15 Beav. 31. But compare (m) Jacomb t). Harwood, 2 Ves. Sr. 265. Brown v. Gordon, 16 Beav. 302, and Bil- (n) Winter v. Innes, 4 Myl. & C. 101, borough v. Holmes, 5 Ch. D. 255, infra and see Devaynes v. Noble, Sleech's case, note (s). 1 Mer. 539; Clayton's Case, Id. 579; (q) As in Plumer ti. Gregory, 18 Eq. Palmer's Case, Id. 623 ; Brailhwaite v. 621. Britain, 1 Keen 206. 52. Di-scharge of estate of deceased 412 CHAP. II., § III.] ESTATE OF DECEASED PARTNER. [*251 Liability not discharged by dealing with new persom. — Even where a new partner has been introduced, a creditor of the old firm Mho continues to deal with the new firm as he dealt with the old, and is paid interest by the new firm *as if the debt was its own, does not thereby deprive himself of his right to be paid out of the estate of a deceased member of the old firm, (r) In Harris v. Farwell (.s) a banking firm consisting of three partners became indebted to a customer on a deposit note ; one of them died, and the survivors took his son into partnership with them. The new partnership paid interest on the note for some time and then became bankrupt. The plaintiff proved against the new firm for the amount of his debt, and was paid a dividend out of its estate. It was held that he had done nothing which precluded him from having recourse to the estate of the deceased partner. 53 partner. — Where one of two partners dies, and judgment is recovered against the surviving partner for a partnership debt, and he becomes a bankrupt before the judgment is satisfied, the executors of the other may be compelled in chan- cery to make satisfaction. Storer v. Hinkley, Kirby (Conn.) 147. The efiects of a deceased partner can- not be pursued, in law or equity, while the surviving partner is solvent. Alsop V. Mather, 8 Conn. 584. The partners who continue the busi- ness cannot bind the estate of the de- ceased partner by notes given in the firm name for debts due before his death, to creditors notified of the disso- lution. Citizens' Mutual Ins. Co. v, Ligon, 59 Miss. 305. When a firm creditor compromises with and releases the surviving partner, this violates the rights of the personal representatives of the deceased partner, and releases them from their liabilities as sureties, although by its terms the re- lease purports to discharge only the per- sonal liability of the surviving partner. Murry r. Fox, 39 Hun (N. Y.) 108. 41 Tlie estate of the deceased partner cannot be oliarged with any part of the losses which may result from the carry- ing on of new business, after his death^ by the surviving partners. Tompkins v. Tompkins, 18 So. Car. 1. (r) Daniel v. Cross, 3 Ves. 277. (s) 15 Beav. 31. It does not appear from the report when the customer first knew of the change in the firm. Com- pare Bilborough v. Holmes, 5 Ch. D. 255, a somewhat similar case, where the estate of the deceased partner was held to be discharged. The proof, however, there, was for money lent to the new firm. 53. Liability not discharged by- dealing with new firm. — The fact that a creditor of a firm, one partner in which has died, looked to the survivors for pay- ment of his debt and took interest from them thereon, will not relieve the estate of the deceased partner from liability. If the administrator claims that there was an agreement to accept the liability of the surviving partners constituting the new firm, such agreement must be clearly proved. Fogarty v. Cullen, 49 N. Y. Super. Ct. 397. 3 251* TKRMIXATION OF LIABILITY. [bOOK II., Effect of adininistenng the estate. — On the other hand, if, after the death of a partner, a creditor of the old firm knows of the death and does not take any steps to obtain payment from the estate of the deceased, if the creditor lies by and allows that estate to be administered as if he had no claim upon it, and if he continues to deal with the surviving partners as if they and they alone were his debtors, in that case the creditor will not be allowed to resort to the assets of the deceased. Oakeley v. Pasheller and Brown v. Gordon may be referred to as illustrating this jioctrine. In Oakeley v. Pasheller (^) two partners, A and B, executed three joint and several bonds to the plaintiff to secure repayment of money lent. A died, and B took in C as a partner with him. An agreement was come to between A's executors and B & C that the latter should take the assets and liabilities of the old firm and in- demnify A's estate from those liabilities. Of this the plaintiff had notice, (w) He was paid interest on his bond by the new firm and received accounts from it in which the. old debt and the debts con- tracted by the new firm were blended together. On two occasions the plaintiff' * had agreed to give, and had given, the new -" firm considerable further time to pay the bonds, but A's executors had no notice of this. Ultimately the plaintiff took from B & C an assignment of some policies as a collateral security for payment of the bonds, expressly reserving his rights against A's estate. It was, however, held that A's estate had been discharged from its liability from what had previously taken place. The court thought that A's estate had become, as it were, surety only for pay- ment of the debt, and that it had been discharged by the long indulgence granted by the plaintiff to the other debtors, (x) The A partnership creditor, after the death 207. See, on it, Swire v. Redman, 1 Q. of one partner, may continue to deal with B. D. 543. In Wilson «. Lloyd, 16 Eq. the survivor, and receive partial pay- 60, this case was followed, tliougii no ments from him without prejudice to his new partner joined the firm, but Wilson right to resort to the assets of the de- v. Lloyd cannot be relied upon. See ceased partner ; and he does not lose this Simpson v. Henning, L. E., 10 Q. B. 406. right by delay in calling upon the sur- (m) See 4 CI. &F. 212. The marginal vivor for payment. Hamersley v. Lam- note states that he had not. bert, 2 Johns. (N. Y.) Ch. 508. (x) This qwasi suretyship is surely a (0 10 Bli. (N. S.) 548, and 4 CI. & F. false analogy, unless the creditor has 414 CHAP. II., § III.] ESTATE OF DECEASED PARTNER. 252* true ratio deGldendi, however, was that the plaintiff had accepted B . Whiting, 1 Sm. C. 603. The cases upon the question. Lead. Cas., and the note there. What is a sufficient acknowledgment? (c) See Morgan v. Rowlands, L. R., 7 are inimmerable. The following are Q. B. 493. 425 261* TERMINATION OF LIABILITY. [bOOK IL, 1. Admissions by one partner. — An admission by one of several joint debtors tliat their debt was still due, was not sufficient to take the case out of the statutes as against the others, nor even as against the person making the admission, unless it were in writing, signed by him. {d} 57 2. Promise by one partner. — An actual promise by one of several joint debtors that the debt should be paid, was of no validity against any person except him who made it, and not even against him unless it were in writing and signed by him. (e) 58 3. Payment by one partner. — But as regards payment, (/) it was held that if one of several joint debtors paid any money on account of the principal or interest due from them all, such payment was sufficient to take the debt out of the statute, not only as against the person making the payment, but as against all the others jointly [d) 9 Geo. IV., c. 14, § 1; Hyde v. (S. C.)278; Greenleaf v. Quincy, 11 Me. Johnson, 2 Bing. N. C. 777 ; Bristow v. 11. See, also, Carroll v. Gayarr^, 15 Maxwell, 11 Ir. Law Rep. 461. It was La. Ann. 671. otherwise before 9 Geo. IV., c. 14. See An act or acknowledgment of one Maiiderston v. Robertson, 4 Man. & R. partner will not take a firm debt out of 440. As to admissions by one partner, the statute after dissolution, so as to bind Bee ante p. *128. the other partner, unless the one doing 57. Revival of debt by admissions the act or making the acknowledgment or acknowledgment. — The surviving has become the liquidating partner, partner's acknowledgment of the claim William v. Waugh, 101 Pa. St. 233. will not bind the estate of the deceased (e) See the last note, partner if the claim is barred by statute 58. Promise of one partner.— Where as against the estate. Espy v. Comer, 76 one of ses-eral partners, after the disso- Ala. 501. luticm of the partnership, assumed a After the dissolution of a partnership, partnership debt, but afterwards pleaded an acknowledgment and promise to pay, the statute of limitations, jointly with made by one of the partners, will not the other partners, to an action upon revive a debt against the firm which is such debt — Held, that the promise of barred by the statute of limitations, such partner might be given in evidence. Van Keuren v. Parmalee, 2 N. Y. 523; for the plea admitted that they did once Walsh V. Cane, 4 La. Ann. 533 ; Kauft- assume. Brockenbrough v. Hackley, 6 man v. Fisher, 3 Grant (Pa.) Cas. 302; Call (Va.) 51. Reppert v. Colvin, 48 Pa. St. 248. Con- (/) As to payment by bills, see Gowan (ra, see Smith v. Ludlow, 6 Johns. (X. v. Forster, 3 B. & Ad. 507; Irving v. Y.)267; Ward V. Howell, 5 Harr. & J. Veitch, 3 Mees. & W. 90; Turney «, (Md.) 60; Neal v. Hassan, 3 McCord Dodwell, 3 El. & B. 136. 426 CHAP. II., § III.] STATUTES OF LIMITATION. 262^ ^262] liable with him. {g) But even before the Mercantile *Law Amendment act, payment by a surviving partner did not prejudice the estate of a deceased partner (A) any more than a pay- ment by the executors of the deceased prejudiced the partners wha survived ; {%) for the executors of a deceased partner are not liable jointly with the surviving partners. But if one of the surviving partners was an executor of the deceased, then a question of a dif- ferent nature arose, turning not only on the effect of the payment as such, but on whether it was made by the survivors as surviving partners only, or as to one of them in his character of executor also, (yt) 59 {g) See Whitcomb v. Whiting, 2 Doug, the decisions went the length of binding 652, and i Sm. Lead. Cas. ; 9 Geo. IV., the firm even in this extreme case. See c. 14, \ 1. The doctrine that payment the excellent judgment in Bell v. Morri- by one partner took a debt out of the son, 1 Pet. (U. S.) 351, set out in Story statute as against all, was generally on Part., § 324, note, rested on the ground that the partner {h) Atkins v. Tredgoid, 2 Barn. & C. making the payment acted virtually as 23. the agent for the rest. But the right of {i) Slater v. Lawson, 1 B. & Ad. 396. one of several codebtors (whether they [k) See Braithwaite i;. Britain, 1 Keen- are partners or not) to make a payment 206, where the payment prevailed ; Way on account of the joint debt, is not de- v. Bassett, 5 Hare 55 ; Brown v. Got- rived from any authority conferred by don, 16 Beav. 302, where it did not. the other debtors, for they have no right See, further, Griffin v. Ashby, 2 Car. & to prevent their codebtor from reliev- K. 139 ; Atkins v. Tredgoid, 2 Barn. & ing himself from a liability to which C. 23. he is subject as much as they. More- 59. Part payment by one partner. — over, admitting that the doctrines of A payment made upon a simple con- agency are applicable to payments made tract debt of a partnership, after its dis- hy one of several codebtors, it is impos- solution, by a partner authorized to set- sible to justify, on that ground, the de- tie the concerns of the partnership, and cisions which have just been noticed, before the debt is already barred by the They were all, it is said, based upon statute of limitations, is such an ac- this: that a part payment is evidence of knowledgment of the debt as will take a new promise to pay more (Bateman v. it out of the statute as to all the copart- Pinder, 3 Q. B. 574). But upon what ners. Houser v. Irvine, 3 Watts & S. principle can it be held that after a (Pa.) 345. partnership is dissolved one partner has After a firm has been dissolved, par- any implied authority from his late tial payment on a firm debt, made by partners, to bind them by a fresh promise one partner to a party who has had to pay an old debt? Assuming the debt dealings with the firm, and has had no to be already barred, the question can notice of the dissolution, is evidence admit of no satisfactory answer, and vet against all the partners, to prevent the "427 2G2* TERMINATION OF LIABILITY. [bOOK II., Liability in equity of estate of deceased partner. — The effect of the statutes of limitation upon suits in equity against the executors of a deceased partner was not well settled. In Winter v. Innes (l) Lord Cottenham expressed a doubt whether the executors could set up the statute where the surviving partner continued liable and had a right of contribution against them, but in Way v. Bassett(m) the statute was successfully relied upon as a defence by the executors of a deceased partner, although the surviving partners had by various payments kept the debt alive as against themselves. The law now is in accordance with the latter decision, (n) Alterations introduced by Id and 20 Vict., c. 97. — By the Mer- cantile Law Amendment act, 19 and 20 Vict., c. 97, it is enacted as follows : Section 13. In reference to the provisions of tlie acts of 9 Geo. IV., c. 14, |§ 1 and 8, and 16 and 17 Vict., c. 113, §§ 24 and 27 (Irish), an acknowledgment or promise made or contained by or in a writing signed by an agent of the party chargeable thereby, duly authorized to make such acknowledgment or promise, sball liave the same effect as if such writing had been signed by such party himself. Payments by one of severed codeblors. — Section 14. In reference to the provisions of the acts 21 Jac. I., c. 16, | 3; 3 and 4 Wm. IV., c. 42, § 3, and 16 and 17 Vict., c. 113, I 20 (Irish), when there shall be two or more co-contractors or codebtors, whether bound or liable jointly only, or jointly and severally, or executors or ad- ministrators of any co-contractor, no such co-contractor or codebtor, executor or administrator, shall lose the benefit of the said enactments, or any of them, so as running of the statute of limitations, whether the full amount of his propor- Kenniston v. Avery, 16 N. H. 117. tion of said debt be actually paid or A statute of Rhode Island provides not." The statute also saves the credi- that " whenever any copartnership shall tor's action against the other copartners be dissolved, it shall and may be lawful for the balance due. Held, that a pay- for any individual who was embraced ment and compromise made by any one in such copartnership to make a sepa- copartner is wholly 6n his own indi- rate composition or compromise with vidual account, and is not such an ac- any one or all of the creditors of such knowledgment of indebtedness as will copartnership; and such composition or bind the other copartners in reference compromise shall be a full and effectual to the statute of limitations. Turner v. discharge to the debtor making the Ross, 1 R. I. 88. same of the whole of said debt, and be (/) 4 Myl. & C. 101. taken and considered, in reference to (m) 5 Hare 55. the other copartners, as actual payment (n) 19 and 20 Vict., c. 97, | 14, infra. of such debtor's proportion of the debts, 428 CHAP. II., § III.]. STATUTES OF LIMITATION. 263* to be charge*able in respect or by reason only (o) of payment of any prin- .^.-,^0 cipal, interest or other money, by any other or others of such co-contractors, or codebtors, executors or administrators. Effect of above statute on partners. — The above statute, it will be observed, has materially altered the law as regards the effect of acknowledgments and part payments. An acknowledgment by au agent being now sufficient to affect his principal, acknowledgment by one partner will, it is apprehended, be regarded as an acknowl- edgment by the firm ; and notwithstanding section 14, a part pay- ment by a partner will probably be regarded as a part payment by the firm, {p) But after a dissolution a part payment by a continuing or a sur- viving partner will not prevent a retired partner {q) or the executors of a deceased partner (r) from availing themselves of the statute ; and the same is true of an acknowledgment, (s) (0) See, as to this word, Cockrill v. This, however, was a mistake. In every Sparkes, 1 Hurlst. & C. 699. other respect the case is good law. A» (p) See Goodwin v. Parton, 42 L. T. to the non-retrospective operation of sec- 568; Watson d. Woodman, 20 Eq. 730. tion 14 of the statute, see Jackson v. (q) Id. 721. Woolley, 8 El. & B. 778 ; Flood v. Pat- (r) Thompson v. Waithman, 3 Drew, terson, 29 Beav. 295. 628, in which the surviving partner (s) If in any case it couM be shown was the sole executor of the deceased, that a continuing or surviving partner In this case, section 14 of the act in ques- was in point of fact authorized to act tion was treated as having a retrospective for the late partner or his executors in operation, and as destroying the effect making acknowledgments or payments^ of a payment made before the act passed, the case would be different. 429 264* ACTIONS BY AND [bOOK II., ^264] *CHAPTER III. OP ACTIONS BETWEEN PARTNERS AND NON-PARTNERS. Section I. — Actions by and against Partners, *264. 1. General observations, *264. 2. Actions where no change in the firm has occurred, *273. 3. Actions where a change in the firm has occurred, *284. Section II. — Of Set-off, *290. Section III. — Of Execution against Partners for the Debts op THE Firm, *298. General observations. — In order to complete the subjects discussed in the preceding chapters it is necessary to examine the remedies by which rights and obligations between partners and non-partners can be enforced. It is unnecessary to dwell upon criminal prosecutions, for although partners may be prosecutors or prosecuted in respect of criminal offences, the fact that they are partners has little, if any, effect on their position in a criminal point of view. The remedies which alone are of sufficient importance to require consideration in a treatise like the present are : actions, defences by way of set-off, proceedings to enforce judgments, and proceedings in bankruptcy. The subject of bankruptcy will be discussed here- after, and the present chapter will therefore be confined to actions, set-off and execution. SECTION I. — ACTIONS BY AND AGAINST PARTNERS. 1. General observations. The Judicature acts, 1873 and 1875, and the rules of the Supreme 430 CHAP, in., § I.] AGAINST PARTNERS. 264* Court, 1883, have materially altered and improved legal proceedings by and against partnerships and unincorporated companies. 1 . There is now no distinction between legal and equitable rules as regards parties to sue and be sued, (a) 2. No action can be defeated by reason of the misjoinder or non- joinder of parties ; (6) and pleas in abatement are abolished, (c) If too many or too ^w persons join as plain*tiffs, and the r^^^K defendant can show that he is thereby prejudiced, he can '- apply to have the improper plaintiffs struck out, or the proper plaintiiFs joined, as the case may be. (d) 3. All persons may be joined as plaintiffs, or as defendants, in or against whom the right to any relief claimed is alleged to exist, whether jointly pv severally, or in the alternative, (e) 4. A plaintiff" may, at his option, join, as parties to the same action, all or any of the persons severally, or jointly and severally, liable on any one contract, including parties to bills of exchange and promissory notes. (/) 5. Claims by plaintiffs jointly may be joined with claims by them, or any of them separately, against the same defendant, (^) provided no inconvenience is thereby occasioned. (A) 6. Parties required by a defendant to be joined for his indemnity or relief by way of contribution may be brought before the court. {{) 7. Where there are numerous parties having the same interest in one action, one or more of them may sue or be sued on behalf of all. {k) 8. Any two or more persons claiming or being liable as copart- ners may sue or be sued in the names of the firms of which they were members when the cause of action accrued ;(/) and provision is made for the discovery of the individuals so suing or being sued, (m) (a) See Supreme Court Rules, 1883, (t) Ord. XVI., r. 48, e< se^. See Birm- Order XVI. ingham Land Co. v. L. & N. W. Rail. (6) Ord. XVI., r. 11. Co., 34 Ch. D. 261. (c) Ord. XXI., r. 20. {k) Ord. XVI., r. 9. (d) Ord. XVI., r. 11. (/) Id., rr. 14 and 15. (e) Ord. XVI., rr. 1 and 4. (m) Ord. XVI., rr. 14 and 15, and (/) Ord. XVI., r. 6. Ord. VII., r. 2. See, as to the old law, (g) Ord. XVIII., r. 6. Woolf v. City Steam Boat Co., 7 C. B., (h) Id., r. 7. 103. 431 265* ACTIONS IN MERCANTILE NAME [book II., Actions in the mercantile name. — With reference to this last rule, it is to be observed that the firm's name, when used in any action, is merely a convenient method of expressing the names of those who constituted the firm when the cause of action accrued. The rule does not incorporate tiie firm;(n) so that if A is a creditor of a Ih-m, B, C & D, and D retires and E takes his place, and the name of the firm continues unchanged, A cannot maintain an *action against B, C and E, in tlie name of the firm, un- less B, C and E have become or are content to be treated as his debtors. In the case supposed, an action against the firm would mean an action against B, C and D, i. e., A's real debtors.l ^266] (n) See per James, L. J., in Ex parte Blain, 12 Ch. D. 533. As to the Scotch law from which the rule was taken, see Bullock v. Caird, L. R., 10 Q. B. 276. 1. When firm may sue in the mer- cantile name. — The more prevalent and best settled rule is that partners cannot sue or be sued in their copartner- ship name ; but the individual names of those who compose the firm must be set forth. Barber v. Smith, 41 Mich. 138; Bentley v. Smith, 3 Cai. (N. Y.) 170 ; Blackwell v. Reid, 41 Miss. 102 ; Burns V. Hall, 2 Penn. (N. J.) 984 ; Crandail v. Denny, 1 Penn. (N. J.) 137 ; Davis v. Hubbard, 4 Blackf. (Ind.) 50; Faulkner V. Whitaker, 3 Gr. (N. J.) 438; Holland V. Butler, 5 Blackf. (Ind.) 255; Hughes V. Walker, 4 Id. 50 ; Livingston v. Har- vey, 10 Ind. 218 ; Marshall v. Hull, 8 Yerg. (Tenn.) 101 ; Pate v. Bacon, 6 Munf. ( Va.) 219 ; Porter v. Cresson, 10 Serg. & R. (Pa.) 257 ; Seeley v. Schenck, 1 Penn. (N. J.) 75; Smith v. Canfield,8 Mich. 493. The names of the partners composing th<; firm should be distinctly stated. If the record does not show their Christian names or surnames, nor any- thing else upon which an amendment may be based, to render judgment by default is erroneous. Langford v. Pat- 43 ton, 44 Ala. 584. But this rule is subject to exceptions. Thus, where the individual names ap- pear in the petition, the name of the firm may be used in the citation or writ. Andrews v. Ennis, 16 Tex. 45 ; Tarleton V. Herbert, 4 Ala. 359. In California, where the style of a firm in which they do business does not dis- close the names of the partners, the firm cannot sue in their mercantile name until they have filed the certificate and made the publication required by the California Code, which on this point is explicit. Byers v. Bourret. 64 Cal. 73. And the filing of the certificate being alleged, the allegation must be proved. Sweeney v. Stanford, 67 Cal. 635. In Illinois, the provision in Rev. Stat, (ch. 40, § 7) dispensing, where there is no plea in abatement, with the proof of partnership and of the names of the partners, in a suit brought by a firm, applies as well to suits commenced be- fore justices of the peace as to those brought in the Circuit Court. Evans v. Fisher, 10 111. (5 Gilm.) 569. In Iowa it is best to declare on a note made payable to a firm by its name, in the name of the firm ; but if the indi- vidual names of the partners are set out, it is not necessary to prove them. Gordon 2 CHAP. III., § I.] WHERE THERE HAVE BEEX CHANGES. 266^ Where there have been no changes in the firm. — Where there have been no changes amongst the members of a firm since the cause of action accrued there is no difficulty iu following the rules. The V. Janney, 1 Morr. (Iowa) 182 ; Bernard V. Parvin, Id. 309. In. Nebraska, by Code, I 24, a partner- ship which is not incorporated, may sue in its firm name, but the procedure indicated by sections 25 and 26, must be strictly followed. In particular it must be shown that the company is formed for business purposes, &c., and is not incorporated, and security for costs must be given. Burlington, &c , R. E.. Co. v. Dick, 7 Neb. 242. An attachment by a non- resident partnership, in the name of the firm, is not void. Cady v. Smith, 12 Neb. 628. In North Carolina a judgment in favor of " L. & M.," trading as a firm, is valid, and is competent evidence, in a suit brought by the firm, that the judg- ment was recovered by the partnership, their individual names being set out in full. Lash V. Arnold, 8 Jones (N. C.) L. 91. When hrm may be sued in the mercantile name. — In Alabama a judgment against a partnership in its firm name alone will support an action against an individual member of the firm, to enforce his individual liability for the firm debts. Cox v. Harris, 48 Ala. 538. But the record must show the individual names of the several partners plaintiff; although the statute (Code of 1876, § 3038) dispenses wi-th the necessity of proving them un- less denied by plea verified by affidavit, and also (section 2904) authorizes a suit against a partnership by its firm name. Moore v. Burns, 60 Ala. 269. In Illinois, under the attachment law, partners may be sued in their firm name. U. S. Express Co. v. Bedbury, 34 111. 459. In Iowa, if a partnership is sued in the firm name, the code renders a sci.fa. ne- cessary, in order to reach individual {)roperty. Hansmith v. Espy, 13 Iowa 439; Levally v. Ellis, Id. 544; Davis v. Buchanan, 12 Id. 575. And a partner- sliip may be sued in the individual! names of its members as well as in its copartnership name. Markham v. Buck- ingham, 21 Iowa 494 ; Johnson v. Smith, 1 Morr. (Iowa) 105. S. P., in Ohio, Abernathy v. Latimore, 19 Ohio 286. On the other hand, in Indiana and New Jersey, partners cannot be sued in the name of the firm. Holland v. But- ler, 5 Blackf. (Ind.) 255; Livingston v. Harvey, 10 Ind. 218; Faulkner i>. Whita- ker, 3 Gr. (N. J.) 438 ; while in Ohio a proper construction of section 1 of the " act regulating suits by and against com- panies and partners," authorizing suits by and against companies not incorpora- ted, in the firm name, limits its opera- tion to companies formed for and doing business or holding property within the State. Haskins v. Alcott, 13 Ohio St. 210. Taking advantage of the defect. — T. and W. declare as partners, trading under the firm of T., W. & Co. If there be more than two partners, it can be shown only under a plea in abatement. Garner v. Tiffany, Minor (Ala.) 167. A complaint brought in a firm's name, but not stating the names of the mem- bers of the firm as plaintiffs, is defective and can be demurred to, but the defect cannot be availed of by appeal. Oilman V. Cosgrove, 22 Cal. 356. Where, in an action by partners doing 433 28 266* ACTIONS IN MERCANTILE NAME [bOOK II,, writ may be served either upon any one or more of the pai'tners, or at the principal phice of business of tJie firm, upon any person having the control or management of the partnersiiip business there.(o) Appearances are entered by the partners in their own business under a fictitious name, the com- A summary process in South Carolina, plaint is perfect in all other respects, brought in the mercantile name of a firm, there is no failure to state facts sufficient without setting out the partnership or to show a cause of action merely because the Christian names of the partners, is it contains no statement that a certificate bad upon exception by plea, but not on of partnership had been filed, as pro- motion for nonsuit. ' Martin v. Kelly, vided by Civil Code Cal., U 2466, 2468, Cheves (S. C.) 215. attaching a legal incapacity to maintain Pleading the partnership, setting an action upon any contracts made or out names, &c.— In a suit by the plain- transactions had in the partnership name tiff as assignee of a firm, on a promissory to a failure to file such a certificate ; and note againsit the maker, the declaration an objection that no such certificate has need not state the names of the persons been filed, must therefore be taken by composing the firm. Smith v. Blatch- answer; otherwise, under Code Civil ford, 2 Ind. 184. Pro. Cal., I 434, it is waived ; aflirming In an action by partners or against 13 Pac. Rep. 313. Phillips v. Gold- partners, as such, the complaint must tree (Cal.), 15 Pac. Rep. 451. allege the partnership. Foerster v. Kirk- Where plaintifl', in fact, assuming to patrick, 2 Minn. 210. act, not as a corporation, but as a partner- Suit was brought in the name of "Han- ship, sues by a name importing a corpo- son Gregg, Albert Torrain and Mason ration, the point may be raised by an Gregg, late copartners, under the firm answer alleging want of parties in in- name and style of Gregg, Torrain & Co., terest to the suit. Heaston «;. Cincinnati, plaintifl's." On demurrer the suit was &c., R. R. Co., 16 Ind. 275. held not brought under the provisions Where a non-resident firm is sued in of Gen. Stat. Neb., c. 57, § 24, and it its firm name, and answers, and a verdict was not necessary that plaintiffs should is taken upon the defence set up in the allege that the partnership " was formed answer, without objection to the irregu- for the purpose of carrying on trade or larity, the defendants will be deemed to business, or for the purpose of holding have waived their strict legal right to any species of property in this State." object. Brownson v. Metcalfe, 1 Handy Smith v. Gregg, 2 N. W. Rep. (N. S.) (Ohio) 188. 459; S.C, 9 iNeb. 213. If a partnership be sued by its firm In an action by partners of the same name without naming its members, the surname, it is not error if it is not added defect is cured by verdict ; and if a suit to every Christian name. Chance v. is in the firm name the court will pre- Chambers, 1 Penn. (N. J.) 384. sume it after verdict to be in the name (o) Ord. IX., r. 6. See, as to foreign of real persons when the contrary does firms, PoUexfen r. Sibson, 16 Q. B. D. not appear. Seitz v. Buffum, 14 Pa. St. 792; Baillie v. Goodwin, 33 Ch. D. 604; 69; Pate v. Bacon, 6 Munf. (Va.) 219. and as to lunatics, Fore Street Ware- 434 CHAP. III., § I.] WHERE THERE HAVE BEEN CHANGES. 266* names, but subsequent proceedings continue in the name of the firm.(jj) If all the members of the firm have properly appeared, judgment may be entered up against the firm, {5) but not other- wise, (r) W-here there have been changes. — Where changes have occurred amongst the members of the firm since the cause of action accrued, little, if any, advantage is derived fronn using the name of the firm. If an action is brought against a firm, which the plaintiif knows has been dissolved before the commencement of the action, the writ mu-t be served upon all the persons sought to be made liable, (s) If, as sometimes happens, the plaintiff sues a firm and obtains judgment against it, without having discovered that any changes have occurred in it since the cause of action accrued, he may find himself in a difficulty when he seeks to enforce his judgment. In such a case it may well happen that the person against whom he seeks to enforce it is not one of those mentioned in Ord. XLII., r. 10, and is, in fact, not liable to execution without further proceed- ings, if at all. {t) A debt due from a firm under a judgment recovered against *it in its mercantile name cannot be attached under the r*o/>^ I *2d7 garnishee orders, (w) It frequently happens that there are reasons which prevent the joinder as plaintiffs of all who prima facie ought to be joined ; in such a case those who cannot be so joined may be made defendants. Thus, if a firm has a cause of action, and one member has im- properly released it, the other members can nevertheless maintain the action, joining him as a defendant, so that justice may be done both to the plaintiffs and to their opponents, (x) 2 house Co. V. Diirrant & Co., 10 Q. B. D. (s) Orel. XVI., r. 1 1. 471. (<) See Munster v. Cox, 10 App. Cas. ( d) Ord. XII., r. 15. 680, and infra, § 3, as to execution. (9) lb. Jack.son v. Litchfield, 8 Q. B. (u) Walker v. Rooke, 6 Q. B. D. 631. J) 474 (x) See the cases in the next note. (r) Adam v. Townsend, 14 Q. B. D. 2. Where there have been changes 103; Jackson v. Litchfield, 8 Q. B. D. in the firm.— The general rule is that 474; Munster v. Cox, 10 App. Cas. 680, all the partners must join as plaintiffs affirming Munster v. Railton, 11 Q. B. D. in an action to enforce a partnership 435. As to execution, see tTi/Va, § 3. claim; and this whether the action is 43o 267^ TWO FIRMS [book Il.y Two firms with common partner. — Again, there appears to be no reason why an action should not now be maintained for the recovery of a debt due from one partner to the firm ; {y) nor why, if twa brought before or pfter the dissohition of the partnership. Cochran v. Cun- ningliam. 16 Ahi. 448 ; Dob v. Halsey, 16 Johns. (N. Y.) 34; Gage v. Eoliins, 10 Mete. (Mass.) 348; Gallot v. Mc- Cluskey, 18 La. Ann. 259; Holt v. Ker- nodle, 1 Ired. (N. C.) L. 199; Shiitts v. Chaflee, 48 Wis. 617; Snodgrass v. Broadwell, 2 Litt. (Ky.) 353; Wright v. Williamson, 2 Penn. (N. J.) 978. Where one of the partners refuses to join in an action for the enforcement of a firm claim, he may be made a defend- ant with the partnership debtor, in a suit brought by his copartner. Hill v. Marsh, 46 Ind. 218. A suit on a firm claim may be main- tained in the firm name, thougii one partner may be entitled to the proceeds, if the claim itself has not been applied to extinguish the debt due sucli partner. White V. Savery, 50 Iowa 515. Where, after the institution of suit in the names of the members of a firm, one of them dies, it is not error to file subse- quently a declaration in the names of all of them, and then suggest the death of the deceased member. Byrne v. Schwing, 6 B. Mon. (Ky.) 199. A commercial firm cannot demand in the same suit the payment of two promis- sory notes, although they are dated at the same place and on the same day, and both payable to the firm under its firm name, where it is shown that such firm was composed of diflerent persons, when the indebtedness was created which fornied the consideration of one note, from those persons who composed th« firm when the indebtedness was incurred which formed the consideration of the other note. It would be a case of dis- tinct creditors joining in the same action their separate and distinct demands against the debtor. Dyas v. Dinkgrave, 15 La. Ann. 502. If one partner is omitted as plaintiflT, and made a party defendant with an- other person not a partner, and not rep- resenting the interests of one, the court will not have equity jurisdiction as it respects the latter. Reed v. Johnson, 24 Me. 322. Wiiere there were one hundred part- ners who had executed separate mort- gages to the firm to secure the debts of the concern, and some of the partners were dead, leaving numerous representa- tives, it was held that assignees of such mortgages might foreclose by separate suits against each partner, without mak- ing the others parties. Boisgerard v. Wall, 1 Smed. & M. (Miss.) Ch. 404. Where a note or bill is payable to a firm, strict proof is required that the firm consists of the plaintifTs on the record. M'Gregort;. Cleveland, 5 Wend. (N. Y.) 475. W^here a suit is brought by several as partners, and one of them proves not to have been a partner and not a proper party, a verdict for all cannot be sus- tained. Travis v. Tobias, 8 How. (N. Y.) Pr. 333. After a guaranty had been made to a firm, one of its members retired, and the other partners paid the whole debt that the guarantor had stipulated to re- lieve the firm of. Held, that the late partner was not an improper party to a suit on the guaranty. Brown v. Haven, 37 Vt. 439. (y) Piercy v. Fynney, 12 Eq. 69 j Tavlor v. Midland Rail. Co., 28 Beav. 436 €HAP. III., § I.] WITH COMMON PARTNER. 267* firms have a common partner, an action should be maintained by one firm against the other ; not, perhaps, in their mercantile names, but by those members of one firm which are not common to both against the members of the other firm ; e. g., if there are two firms, A, B & C and A, D & E, an action may, it is conceived, be now maintained by A, B & C against D and E, or by B and C against A, D & E, or vice versa, (z) 3 287, and 8 H.L.Cas. 751, show that suits not bar or defeat proceedings against in equity would lie in these cases in aid them as partners with others in another of legal rights. See, also, Luke v. South Kensington Hotel Co., 11 Ch. D. 121 ; Williamson v. Barbour, 9 Ch. D. 536, per Jessel, M. K. (2) Before the Judicature acts such actions could not be maintained. Bosan- •quet V. Wray, 6 Taunt. 598; 1 Wms, Saund. 291, h. But suits in equity could. See the cases in the last note. See, as to the non-application of this rule at law firm. Ke Jewett, 7 Biss. (U.S.) 328; Id. 473 ; 16 Bank. Keg. 48. A was a member of the firm of A & B, and also of the firm of A & C. Held, that A, B and C could not be joined in one bankruptcy proceeding, even though A & C had undertaken to pay the debts of A & B. Ee Wallace, 12 Bank. Eeg. 191. An action at law cannot be main- to companies, Bosanquet v. Woodford, 5 tained by the members of a firm, on a Q. B. 310. As to estimating damages written obligation for the payment of sustained by one firm by reason of being money to them, where one of the obli- prevented from completing a contract gors is a member of the firm. Tindall made with another firm, some members v. Bright, Minor (Ala.) 103. being common to both, see Waters v. Where two different firms are com- Towers, 8 Ex. 401. posed of the same persons, they may 3. Two firms with common part- be sued jointly or separately, and this ner.— At common law no action will lie, whether they transact business in one or by one copartnership against another co- more firm names, and a judgment may partnership, where one of the partners be rendered against them as individuals, is a member of both firms. Englis v. Hunt v. Semonin, 79 Ky. 270. Furniss, 4 E. D. Smith (N. Y.) 587 ; Under the statute of Mississippi de- Burley v. Harris, 8 N. H. 235 ; Calvin v. daring all notes joint and several, a Markham, 4 Miss. 343 ; Eastman v. member of a firm may be a coplaintiff Wright, 6 Pick. (Mass.) 321 ; Griffith v. in a suit on a promissory note against Chew, 8 Serg. & R. (Pa.) 30; Green v. another firm of which he is partner, Chapman, 27 Vt. 236 ; Graham v. Bar- provided he is not also joined in the ris, 5 Gill & J. (Md ) 489; Haven v. action as defendant. Morris v. Hillery, White, 39 111. 509; Portland Bank v. 7 How. (Miss.) 61. Hyde, 11 Me. 196 ; Eogers v. Eogers, 5 Where three firms, having each a dis- Ired. (N. C.) Eq. 31 ; Denny v. Metcalf, tinct name, keeping separate books and 28 Me. 389. doing a separate business, consist of the An adjudication in bankruptcy against same persons, and upon the bankruptcy persons as members of one firm, does of one firm its claims against one of the 437 267* ACTIONS BY PARTNEIIS. [bOOK II.^ Defences to actions by 2ic<'>'tners foimded on the conduct of one of them. — As a general principle, what a person has no right to do himself he cannot acquire a right to do by associating others with him. (a) Thus, it being a rule that a trustee cannot cbini from his cestui que trud compensation for trouble or loss of time i-n the exe- cution of the trust, it has been held that if one *of a firm -* of solicitors is a trustee, and the firm acts as solicitors in the matter of the trust, the firm cannot claim payment for his ser- vices, the disability of one of its members thus extending to them all. (6) So, if one member of a firm is guilty of fraud in entering into a contract on behalf of the firm, his fraud may be relied on as a defence to an action on the contract brought by him and his co- partners ; for their innocence does not purge his guilt, (c) So, if one partner resident abroad sells partnership goods, and he knows they are to be smuggled into this country, and he is privy to their being so smuggled, then, although his copartners are innocent, the others, also bankrupt, is sold by the Mr. Bell, in his Commentaries (vol. assignee and by the purchaser proved II. (5th ed.) 620), says: "In Scotland against the debtor firm, he cannot after- debts between companies in which the wards proceed by suit for the debt same individual is a partner are every against either of the partners. Buckner day sustained, as quite unexceptionable." V. Calcote, 28 Miss. 432. It is to be lamented that the like rule Where a person is a member of two has not been incorporated into the corn- partnerships, his separate creditors have mon law, treating the firm, for the pur- a preference over his interest in the poses of the suit, as an artificial body, or property of one of the firms as against quasi corporation. It would be highly creditors of the other firm. Weaver v. convenient, and certainly conformable to Weaver, 46 N. H. 188. the common sense of the commercial A judgment obtained by one firm world. Story Part., § 236, n. against another, each of which is con- (a) See, in addition to the cases cited stituted in part of members belonging to infra, ante pp. *116, *117, and Solomons both firms, thus being both plaintiff and v. Nissen, 2 T. R. 674. defendant, cannot be executed by a levy (6) See Broughton v. Broughton, 2Sm. upon the separate property of an indi- & G. 422, and 5 De G., M. & G. 160 ; vidual member of the defendant firm. Christophers v. White, 10 Beav. 523 ; Tassey ^^ Church, 6 Watts &S. (Pa.) 465. Collins v. Carey, 2 Id. 128; Matthison Where the same person is a member v. Clarke, 3 Drew. 3. See the exception- of two firms, his acts, done in the name in cases of litigation, Cradock v. Piper, of one of the firms, cannot be proved in 1 Macn. & G. 664, and Re Corsellis, 34 an action against the other firm, the Ch. D. 675. same persons not comprising both firms. (c) See Kilby v. Wilson, Ry. & M. 178. Kratzer v. L^on, 5 Pa. St. 274. 438 CHAP. III., § I.] CONDUCT OF ONE PARTNER. 268* firm cannot recover the price of such goods. (cZ) So, if one of sev- eral partners draws a bill in his own name, and the bill is accepted upon condition that he will provide for it when due, he cannot, by- endorsing that bill to the firm to which he belongs, entitle himself and his copartners to sue upon it. (e) In Astley v. Johnson one of three partners purchased a bill in the partnership name, and under- took to pay for it at the end of a month. He remitted the bill to his copartners in England, and they sued upon it. The bill, how- ever, had not been paid for as agreed, and it was held that the plaintiffs were not entitled to recover and were in no better position without their copartner than they would have been had he been a coplaintifF in the action. (/) 4 (d) Biggs V. Lawrence, 3 T. R. 454. ship to Alzedo, who was a creditor of (e) Sparrow v. Chisman, 9 Barn. & C. the firm. The second action was to re- 241 ; and see Richmond v. Heapy, 1 cover money drawn by Sykes from the Stark. 202. funds of himself and Bury, and paid into (/) Astley V. .Johnson, 5 Hurlst. & N. the hands of Yates, in further discharge J37 of the balance before mentioned, with- 4. Defences to actions by partners out the knowledge of Bury. Both the founded on the conduct of one of transactions were frauds by Sykes, on them.— Where one partner, in the usual his partner, Bury, and it must be taken course of business, obtains money in the that Yates (at least when the bills were name of the firm, the other partner can- endorsed and the money paid) knew the not defend on the ground that the money bills and money came from the funds of was obtained without his knowledge, Sykes & Bury, without the knowledge and fraudulently converted to his own of Bury. It may be doubtful whether use by the partner obtaining it. Gil- Young was actually privy to either Christ V. Brande, 38 Wis. 184. transaction ; but in our view of the case Lord Tenterden.: in delivering the that point is not material. On behalf judgment of the court in Jones v. Yates of the defendant, it was contended that (9 Barn. & C. 532), said : "These were Sykes & Bury could not (if they had two actions brought by the plaintiffs, as continued solvent) have maintained any assignees of Sykes & Bury. The first action against Yates & Young, in re- was an action of trover to recover the spect of either of these transactions; value of three bills of exchange, which and that, if that were so. the plaintiffs, belonged to Sykes & Bury, and which their assignees, could not sue, they hav- Sykes had endorsed to the defendants, ing no better remedy at law than Sykes with whom he had been in partnership, & Bury would have had. And we are of in part payment of a demand, due from this opinion. It is unnecessary, there- him to the partnership of Sykes, Yates fore, to advert to any of the other points & Young, -and by him again immediate- raised in the argument at the bar. We ly endorsed in the name of that partner- are not aware of any instance in which 439 268* CONDUCT OF ONE PARTNER [bOOK II., Surviving partners prejudiced by conduct of deceased partner. — In such cases as these the inability of the firm to sue is not re- moved by the death of the partner who has created the inability. a person has been allowed, as plaintiff own misconduct, and make that miscon- in a court of law, to rescind his own act diKit the foundation of an action at law. on the ground that such act was a fraud Then, if Sykes & Bury could not sue, on some other person; whether the how could the plaintiffs, who represent party seeking to do this has sued in his them here? It was said, in support of own name only, or jointly with such the argument, that the property did not other person. It was well observed, on pass from Sykes by his wrongful act, but behalf of the defendants, that where one remained in Sykes & Bury. This was of two persons, who have a joint right of ingeniously and plausibly put; but, as action, dies, the right then vests in the against Sykes, the property did pass at survivor. So that, in this case (if it be law, and there was no remedy at law for held that Sykes & Bury may sue), if Bury to recover it back again. He Bury had died before Sykes, Sykes could not do so without making Sykes a might have sued alone, and thus for his party. Further, the right of the as- own benefit have avoided his own act, signees to sue in this case was said to be by alleging his own misconduct. The analogous to the right of assignees to sue defrauded partner may perhaps have a for, and recover back, property volun- remedy in equity, by a suit in his own tarily given by a bankrupt to a particu- name against his partner, and the per- lar creditor, in contemplation of his son with whom the fraud was commit- bankruptcy, in favor of such creditor, ted. Such a suit is free from the incon- and in preference to him, in which case sistency of a party suing on the ground the bankiupt could not have sued, if no of his own misconduct. There is a great commission had issued, yet the assignees difference between this case and that of are allowed to do so. That is a case an action brought against two or more where the representatives could, where partners on a bill of exchange, fraudu- the party represented could not, sue, and lently made or accepted by one partner it is the only instance of the kind men- in the name of the others, and delivered tioned at the bar that has occurred to by such partner to a plaintiff in dis- us. But, if we attend to the principle charge of his own private debt. In the on which the assignees are allowed to latter case, the defence is not the defence sue, we shall find there is no analogy of the fraudulent party, but of the de- between that case and the case before frauded and injured party. The latter the court ; for the principle on which may, without any inconsistency, be per- assignees have been held entitled to re- mitted to say, in a court of law,, that al- cover in such cases is not on the ground though the partner may for many pur- of fraud on any particular person, but poses bind him, yet, that he has no au- on the ground that there has been fraud thority to do so by accepting a bill in on the bankrupt laws, which are made the name of the firm for his own private for the purpose of effecting an equal dis- debt. The party to a fraud, he who tribution of the insolvent's estate among profits by it, shall not be allowed to all the creditors, and which purpose create an obligation in another by his would be defeated if a party on the eve 440 CHAP. III., § I.] FORMERLY A BAR. 268 Thus, in Ex parte Bell, {g) one of a firm advanced money of the firm to a stranger for an illegal purpose, and it was held, after the death of the partner who advanced the *money, that the survivors could not recover it from the person to. whom it L -"""^ was lent. So, if a firm has become bankrupt, its trustee is in general in no better position than the partners themselves would have been in, and is therefore frequently liable to be defeated on similar grounds. (A) But the trustee of a bankrupt partner can disaffirm and avoid such of his acts as are fraudulent as against his creditors, and consequently acts of this nature afford no defence to an action by the trustee and the solvent partner. Thus, in Heilbut V. Nevill, (i) a solvent partner and the assignees of a bankrupt part- ner successfully maintained an action for a bill of the firm, given by the bankrupt to a creditor of his own, under circumstances which amounted to a fraudulent preference. Frauds by one partner oyi the firm. — Owing to the old technical rules relating to the joinder of parties to actions, the principle above discussed was, moreover, applied at law to cases where it produced great injustice, viz., to cases where one partner acted in fraud of his copartners. For example, where a partner pledged partnership property, and in so doing clearly acted beyond the limits of his au- thority, still, as he could not dispute the validity of his own act, it was held at law that he and his copartners could not recover the property so pledged, [h) So, although a partner has no right to pay his own separate debt by setting it off against a debt due from his creditor to the firm, yet if he actually agreed that such set-off should be made, and it was made accordingly, it was held at law tliat he and his copartners could not afterwards recover the debt due to the firm. {I) So, where a firm of tliree partners deposited goods upon of a bankruptcy, and with a view to it, 117. For tliese reasons, we think the could distribute his effects according to plaintiffs are not entitled to recover." his own pleasure among some favorite {g) 1 Mau & S. 751. See, also, Bran- creditors, to the total exclusion of the don v. Scott, 7 El. & B. 237, and com- others. This is mentioned by Lord parelnnest). Stephenson, 1 Moo. &R. 147. Mansfield as the principle of the deci- {h) Jones v. Yates, 9 Barn. & C. 532. sions in the early cases on this subject. (i) L. R., 4 C. P. 354. Alderson v. Temple, 4 Burr. 2235; Har- {k) Brownrigg v. Eae, 5 Ex. 489. man v. Fishar, Id. 2237 ; S. C, Cowp. [l) See Wallace v. Kelsall, 7 Mees. & 441 269* CONTROL OF ONE PARTNER [bOOK II., the terms that they were not to be parted with except on the joint authority of all three partners, and they were nevertheless given up to one of them, it was held at law that the firm could sustain no action for the recovery of the goods. (?n) In such cases, as observed by Lord Tentcrden, in Jones v. Yates, (n) there is no instance *" in which a person has been allowed as plaintiff in a court -I of law to rescind his own act, on the ground that such act was a fraud on some other ])erson, whether the party seeking to do this has sued in his own name only, or jointly with such other person." In such cases as these, however, relief might have been had in equity ; (o) and it is apprehended that the cases at law above referred to can no longer be relied upon, the Judicature acts having re- moved the technical difficultios which led to their decision. If a partner in collusion with a debtor to the firm gives him a receipt for his old debt although no payment or anything equivalent to payment is made, an action for the recovery of the debt is never- theless maintainable by the firm, i. e., by the partner giving the receipt and his copartners, (p) For a receipt does not preclude the person giving it from showing that the money therein expressed to be received was not in fact received, (g) nor does it discharge the debt. Again, a right of set-off which might be pleadable to an action brought by one partner is not pleadable to an action by him and his copartners ;(r) nor, if one partner covenants not to sue for a partnership debt, will this preclude him from joining with his copartners in an action for the recovery of that debt, (s) In each of these cases there is only a right of cross action against the one partner ; and although such right might be relied on as a defence to W. 264 ; Gordon v. Ellis, 7 Man. & G. Midland Counties Rail. Co., 28 Beav. 607. Compare Kendal v. Wood, L. R., 287. 6 Ex. 243, where the technical diffi- (/:>) Henderson u. Wild, 2 Camp. 561 ; cnlty did not arise. Farrar v. Hutchinson, 9 Ad. & E. 641. (m) Brandon v. Scott, 7 El. & B. 234. (7) Skaife v. Jackson, 5 Dowl. & R. (n) 9 Barn, i^ C. 532, and see Rich- 290, and 3 Barn. & C. 421. mond V. Heapy, 1 Stark. 202. (r) See infra, book II., ch. 3, § 2. (0) Piercy v. Fynney, 12 Eq. 69; (s) See Walmsley v. Cooper, 11 Ad. Midland Counties Rail. Co. v. Taylor, & E. 216. 8 H. L. Cas. 751, affirming Taylor v. 442 CHAP. III., § I.] OVER ACTIONS. 270* an action by him alone, it is held not to affect the firm to which he belongs. 5 Result of the deGisions. — The conclusion to be drawn from the foregoing cases appears to be that the conduct of one partner affords a defence to an action by him and his copartners, or by them with- out him, where they are bound by this act, either by adopting and seeking the benefit of it, (^) or upon the ground that it is, on *ordinary principles of agency, the act of the firm, and r^.-,--. binding upon him and his copartners accordingly. But the cases at law which go further than this cannot, it is submitted, be now relied upon. Power of one partner to ad for the firm. — The power of one part- ner to act for the firm in legal proceedings may be conveniently noticed in the present place.6 o. Frauds by one partner. — Where one of two partners makes fraudulent representations, whereby goods are ob- tained and consigned to his partner, re- plevin in the cepit lies against botli. Olmsted v. Hotailing, 1 Hill (X. Y.j 31.7. (0 As in Ex parte Bell, 1 Man. & S. 751 ; Broiighton v. Broughton, 5 De G., M. & G. 160. 6. Power of one partner to act for the firm. — Though partners may bind each other in the course of trade, they cannot compel each other to appear in suits, nor undertake to represent each other in courts of law. Hills v. Ross, 3 Dall. (U. S.) 331. But when a suit is commenced against a firm, one of the partners has power to employ an at- torney to attend to the suit ; and an ap- pearance, entered by such an attorney, will be binding upon the other partners. Bennett v. Stickney, 17 Vt. 531. Partners cannot, by articles of agree- ment between themselves, invest such person as a majority of them shall after- wards appoint with power to sue in his own name for moneys agreed to be con- tributed by each partner to the general fund. Fortune v. Brazier, 10 Ala. 79L A promise to one of a firm, to refund money belonging to the firm, inures to the benefit of the firm, and an action for it should be brought by the firm. Creel V. Bell, 2 J. J. Marsh. V^y.) 309. Where, by the terms of the partner- ship agreement, one of the partners is to provide a certain sort of merchandise for the firm, and he contracts therefor individually, the seller may sue him alone or sue the firm, at his option. Sylvester i'. Smith, 9 Mass. 119. Both partners must join in an action of replevin for property attached on a writ against one of them only ; non- joinder of one in such a case may be pleaded in bar. Fay v. Duggan, 135 Mass. 242 ; Saul v. Kruger, 9 How. (N. Y.) Pr. 569-. Where a debt due a partnership is as- signed to one of the partners, all the partners must be joined in a bill to re- cover the debt. Gaither v. Caldwell, 1 Dev. & B. (N. C.) Eq. 504; Russell v. Swan, 16 Mass. 314. 443 271* CONTROL OF ONE PARTNER [book II., One partner suing in the name of the firm. — A partner may sue in the name of himself and copartners without their consent, (w) but if he sues against their consent he must indemnify them against the costs, {x) So, one partner may defend an action brought against the firm, indemnifv'ing the firm against the consequences of so doing, if he acts against the will of the other partners, (y) 7 (m) Whitehead v. Hughes, 2 Cromp. the claim, of whidi fact the account &M. 318; and see Harwood u. Edwards, contained a recital declaring that he Gow on Part. 65, note, where it was alone was entitled to the benefit of the held by Chappie, J., that the action lien. Jones v. Hurst, 67 Mo. 568. must be considered as brought by all. When a suit is commenced against a See below, note {z). firm, one of 'the partners has power to (x) Whitehead v. Hughes, 2 Cromp. employ an attorney to attend to the & M. 318. suit; and an appearance, entered by (y) In Goodman v. De Beauvoir (12 such attorney, will be binding upon the Jur. 989 and 1037) a solicitor employed other partners. Bennett v. Stickney, 17 by a managing committee to defend a Vt. 531. See, also, Wheatley v. Tutt, 4 suit was held authorized to enter an ap- Kan. 240. pearance for a member of a provisional The entry by an attorney, of his gen- committee, who had made the man- eral appearance for the defendants, in aging committee his agents. See, fur- an action against a partnership, must be ther, as to the authority of one partner construed to be an appearance for the to enter an appearance for his copart- partners as partners, and for the pur- ner, Harrison v. Jackson, 7 T. R. 207 ; pose of defending the action against the Morley v. Stronibom, 3 Bos. & P. 254 ; partnership, and not as an appearance Goldsmith v. Levy, 4 Taunt. 299. The for the partners individually, severally authority has been doubted in America, and personally, so as to render a judg- See Hall v. Lanning, 1 Otto (U. S.) ment against the partnership, in such 160. action, binding on an individual part- 7. One partner suing in name of ner in another jurisdiction, by whom firm. — The right of a partner to collect such appearance was not authorized, the debts of the partnership, and to Phelps v. Brewer, 9 Cush. (Mass.) 390. commence suits for that purpose, is an After the dissolution of a partnership, incident to the partnership, which sur- one of the parties cannot authorize an vives the dissolution, and is inherent in appearance for the other. Haslet v. either partner. Ward v. Barber, 1 E. Street, 2 McCord (S. C.) 311 ; Loomis v. D. Smith (N. Y.) 423. Pearson, Harp. (S. C.) 470. Any partner has the right to use the One partner has no authority, after firm name in perfecting a mechanic's dissolution, unless specially given, to re- lien for the firm ; and the validity of tain an attorney to defend the other Buch lien is not impaired by the fact members of the late firm in an action that before the filing of the account for brought against them. Bowler v. Hus- that purpose in the firm name, one of ton, 30 Gratt. (Va.) 266. the partners had become sole owner of 444 CHAP. III., § I.] OVER ACTIONS. 271* One partner staying proceedings. — But if i't is competent for one partner to sue for the firm, it is as competent to any other partner to stay proceedings or to put an end to the action altogether by means of a release ; and although the court will not allow this to be done by collusion with the defendant for the purpose of defraud- ing the other partners of their rights (see ante p. *145), a release will be effectual where there is no fraud in the case. In Harwood v. Edwards {z) one of three partners, without the knowledge or consent of the other two, brought an action in his name and theirs for the recovery of a debt due to the firm. The other two afterwards agreed with the defendant that proceedings should be stayed, and the court held that this agreement bound all three, and proceedings were stayed accordingly, although the part- ner who promoted the action disputed the validity of the agree- ment, and, by the partnership articles it had been agreed between the partners that one *of them should not give a release -^ without the assent of the others. Consenting to arbitration. — If an action is brought for the re- covery of a debt due to the firm, one of the partners cannot bind the firm by consenting to a judge's order referring all matters in difference between the plaintiffs and the defendant to arbitration, (a) Consenting to judgment, &g. — In an action against a firm it has been held that one partner has no authority to bind the firm by con- senting to an order for judgment against it, (6) or by giving a cognovit to pay the debt and costs, (c) But a warrant of attorney executed by one partner in the name of the firm, with the consent of the other partners, is not invalid, simply because the others have not executed it. [d] 8 (2) Gow on Part. 65, note. cannot bind his copartners by a confes- (a) Hatton v. Royle, 3 Hurlst. & N. sion of judgment, without their consent. 500. Christy ;,■. Sherman, 10 Iowa 535 ; Ed- (6) Hambridge v. De la Croupe, 3 C. wards v. Pi.tzer, 12 Id. 607 ; North v. B. 742. See, also, Munster v. Cox, 10 Mudge, 13 Id. 496; Crane d. French, 1 App. Cas. 680. Wend. (N. Y.) 311 ; Barlow v. Reno, 1 (c) Rathbone v. Drakeford, 4 Moo. & Blackf. (Ind.) 252; Everson v. Gehrman, P. 57, and 6 Bing. 375. 1 Abb. (N, Y.) Pr. 167 ; Shedd v. Bank, (rf) Brutton V. Burton, 1 Chitty 707. &c., 32 Vt, 709; Remington v. Cum- 8. Consenting to judgment, &c. — mings, 5 Wis. 138. To the contrary. The general rule is that one partner Lahey v. Kingon, 13 Abb. (N. Y.) Pr. 445 272= SERVICE ON ONE PARTXER, [book II., Costs. — If in an action costs are ordered to be paid to one part- ner, payment to another partner is not sufficient, (e) Service on one partner. — One partner is not the agent of his co- 192; 22 How. Pr. 209. Such judgment will bind the partner who confessed it, and be void as to the others. Bennett v. Marshall, 2 Miles (Pa.) 436; Bitzer v. Shunk, 1 Watts & S. (Pa.) 340; Herrick V. Conant, 4 La. Ann. 276 ; Mitchell v. Kich, 1 Ala. 228; Morgan v. Richardson, 16 Mo. 409 ; Sloo v. State Bank, 1 Scam. VIU.) 428; York Bank's Appeal, 36 Pa. St. 458. Tlius, a prior judgment confessed by two of three parti>3rs, for a firm debt, is a lien upon the interest of the two in the firm property, and is superior to subse- quent judgments recovered against the whole firm. Stevens v. Bank of Central New York, 31 Barb. (N. Y.) 290. Where one of the partners of a firm executed a warrant of attorney, under seal, for himself and as attorney for his partner, authorizing the confession of a judgment, the court refused to set aside the judgment on the sole application of the defendant, who had executed the warrant of attorney. St. John v. Holmes. 20 Wend. (N. Y.) 609. A declaration was served on one part- ner only, and he employed an attorney, and authorized him to give a cognovit, which he did for both, in good faith. The attorney being responsible, the court refused to set aside the judgment, but permitted the partner who had not been brought in to contest the validity of the claim. Grazebrook v. McCreedie, 9 Wend. (N. Y.) 437. Otherwise, where the attorney is irresponsible. Groesbeck V. Brown, 2 How. (N. Y.) Pr. 21. Where partners are sued, one of them has no power to offer judgment under the code, on behalf of himself and his copartner, without some evidence that his copartner authorized him to make the offer or assented to it, but the ap- pearance of an attorney for both on the record may make the judgment regu- lar. Binney v. Legal, 19 Barb. (N. Y.) 592. Under Oregon Code 202, | 252, a judg- ment Vw confession of one partner does not bind his copartners in the partner- ship property, unless made in an action pending. Richardson v. Fuller, 2 Oreg. 179. A confession of judgment by one part- ner for a partnership debt, does not dis- charge the other partners from liability for the same debt, since the act of April 6th, 1830. Kauffman i'. Fisher, 3 Grant (Pa.) Cas. 302 But the other partners may ratify the act of the one confessing the judgment. Thus, where a warrant of attorney to confess a judgment was executed in the firm name of the defendants, it was held, on error, that the court would intend that the warrant, although executed by one partner only, was adopted by the others. Bissell v. Carville, 6 Ala. 503. And where a bond with a warrant to confess judgment is executed by one partner, and subsequently all the part- ners revive the judgment by their at- torney, it is a ratification. Overton v. Tozer, 7 Watts (Pa.) 331 ; Cash v. Tozer, 1 Watts & S. (Pa.) 519. So, also, a judgment confessed by one of two co- partners, using a corporate namae, my (e) Showier i;. Stoakes, 2 Dowl. & L. court, see the Sup. Ct. Funds Rules, 1886, 3. But as to payment out of money in r. 63. 446 OHAP. 411., § I.] AVIIEX BINDS THE FIRM. 272* partner, except as to partnership matters ; and if one partner is sued in respect of some private affair of his own, he must be pro- ceeded against like any other individual, and service of writs, &c., must be made accordingly, and they must not be left at the place of business of the firm to be served on the other partners. (/) And even in proceedings relating to partnership matters, although ser- vice on one partner is sometimes held equivalent to service on all. bind the other, if the circumstances cre- ate a belief that he knew of it and in- tended to be bound. Bivingsville Manuf. Co. V. Bobo, 11 Rich. (S. C.) 386. In some jurisdictions one partner may bind the firm by this means. Thus, under N. Y. Laws 1833, 395, ch. 271, judgment against partners may be entered, upon service on and con- fession by one only ; but will be a lien, and can be enforced only against the joint property of the defendants, and the individual property of the defendant served. Kidd v. Brown, 2 How. (N. Y.) Pr. 20; Stoutenburgh V. Vandenburgh, 7 Id. 229. Compare, also, Matter of Lowenstein, 7 How. (N. Y.) Pr. 100. A judgment against one partner is a bar to an action against both partner^, though the new defendant was a dor- mant partner not discovered till after the judgment. Smith v. Black, 9 Serg. & R. (Pa.) 142. A judgment confessed by one partner in favor of his copartner, to secure him for capital advanced to the concern, is valid against the judgment of a private creditor of the partner who confessed the judgment. Purdy v. Lacock, 6 Pa. St. 490. Though one partner cannot confess a judgment against another partner, even for a partnership debt, yet a creditor of the firm cannot be permitted to make objection to the judgment on that ac- count; and a sale of partnership prop- erty, on an execution issuing from such judgment, will pass a perfect title t«> the purchaser ; and, if the first lien, will be entitled to the proceeds of the sale ; but the judgment will not aflect the persons nor the separate property of the other partners. Grier v. Hood, 25 Pa. St. 430 In Ross V. Howell (84 Pa. St. 129) it was held that the interest of all the partners in the firm property may be sold under an execution upon a judgment confessed by a single part- ner in the firm name, and for a firm debt. An injunction issued in a suit by a partner, prohibiting the other partners from meddling with the partnership property, will not prevent creditors of the firm from proceeding at law to re- cover their debts, nor will it restrict any member of the firm from confessing a judgment to such creditors, so as to give them preference in payment. Hewitt v. Patrick, 26 Tex. 326. (/) See Petty v. Smith, 2 You. & J. Ill ; Fairlie V. Quin, 1 Smythe 189. See, as to substituted service, Lees v Martin, 13 Eq. 77, and, as to delivering a solici- tor's bill of costs, Eggington v. Cum- berledge, 1 Ex. 271. 447 272* SERVICE ON ONE PARTNER, [bOOK II., this is not the case where the service is relied on as tlie foundation of process of contempt or of any proceedings of a penal nature, {g)^ ♦Having made these general observations, it will be con- p^^^<, venient to consider, in the first place, the general rules '• {g) Young v. Goodson, 2 Euss. 255; all the defendants, when process was and see Moulston v. Wire, 1 Dowl. & L. served on a portion of them only. 527 ; Re Holiday, 9 Dowl. 1020 ; Grant Shapard v. Lightfoot, 56 Ala. 506. V. Prosser, Sm. & B. 95; Murray v. As to the effect of the acceptance of Moore, 1 Jones Ir. Ex. 129 ; Nolan v. service of process by one partner, see Fitzgerald, 2 Ir. C. L. R. 79; Kitchen Bowen v. Sutherlin, 44 Ala. 278; Clark r. Wilson, 4 C. B. (N. S.) 483. In Leese v. Stoddard, 3 Ala. 366; Demott v. V. Martin, 13 Eq. 77 ; Carrington v. Can- Swain, 5 Stew. & P. (Ala.) 293 ; Bright tillon, Bunb. 107 ; and Coles v. Gurney, v. Sampson, 20 Tex. 21 ; Freeman v. 1 Mad. 187, service of a bill on one part- Carhart, 17 Ga. 348. ner was allowed, the other being abroad ; In some jurisdictions, however, the and in ejectment against a firm, service rule is not strictly applied. Thus, in on an acting partner is sufficient (Doe t;. Iowa, service upon one member of a Roe, 9 Dowl. 1039), and in an action firm is sufiicient to give the court juris- against a firm on its promissory note, the diction over the other members of the order to compute (after judgment by de- firm. Gregory v. Harmon, 10 Iowa fault), need only be served on one of 445 ; Walker v. Clark, 8 Iowa 474 ; the defendants. Fiegins v. Ward, 2 Saunders v. Bentley, Id. 516. Cromp. & M. 424 ; Carter v. Southall, 3 In Louisiana, persons associated to- Mees. & W. 128. gelher for carrying personal property 9. Service on one partner, when for hire in vessels, are commercial part- binds the firm. — The weight of au- ners, and may be cited in the manner thority is to the effect that service of prescribed for the citation of such as- process on one partner, in an action sociations ; but it is only where they are against the firm, is not equivalent to associated together under a title, or as a service upon all. Beal v. Snedicor, 8 firm, that the service of a citation ad- Port. (Ala.) 523; Duncan v. Tombeck- dressed to the partnership in its social bee Bank, 4 Port. (Ala.) 181; Demoss name, made on one of its members only, v. Brewster, 12 Miss. 661; Faver v. is sufficient. Hefferman d. Brenham, 1 Briggs, 18 Ala. 478 ; Rice v. Doniphan, La. Ann. 146. Thus, suit being brought 4 B. Mon. (Ky.) 123; Scott v. Bogart, against R. F. and C. W., as composing 14 La. Ann. 261. And will not be notice the commercial firm of R. F. & Co., and to them. Demoss v. Brewster, 12 Miss, the petition and citation served on R. 661. F. alone, it was held that the service of In Alabama, in an action against a citation was sufficient as to both part- firm, setting «ut the individual names ners. Kearney v. Fenner, 14 La. Ann^ of the several partners, the present stat- 870. ute (Rev. Code, | 2538), unlike the In some other states, also, firm prop- former (Clay's Dig. 323, I 63), does not erty, or the separate property of the authorize a judgment by default against partner served, may be subjected to the 448 CHAP. III., § I.] WHEN BINDS THE FIRM. 273^ which apply to actions by and against partners when there has been no change in the firm between the time when the right sought to be debts of the firm by service of citation on one member of the firm. Alexander V. Stern, 41 Tex. 193; Hale v. Van Saun, 18 Iowa 19; Flannery v. Ander- son, 4 Nev. 437 ; Brooks v. Mclntyre, 4 Mich. 316; Kidd v. Brown, 2 How. (N. Y.) Pr. 20; Stoutenburgh v. Vander- burgh, 7 Id. 229. See, also. In re Low- enstein, 7 How. (N. Y.) Pr. 100. Even after dissolution such service has been held good. Thus, it has been decided that wliere a firm or its sur- vivors are sued, it is not necessary to pray process against all of them, nor is a return of non est inventus necessary to bind the interests in the partnership effects of those not served (Printup v. Turner, 65 Ga. 71), and that a service of notice upon one member of a firm after dissolution, if sued as partners, would be sufficient to give the court jurisdiction of the parties, so far as to authorize a judgment against the firm, as such, to be satisfied out of the joint property, or the separate property of the partner served. Hale v. Van Saun, 18 Iowa 19. But the better opinion is that after the dissohition of the partnership, ser- vice upon one of the partners, in an ac- tion against all as late partners, is not a service upon the others. Beal v. Snedi- cor, 8 Port. (Ala.) 523 ; Faver v. Briggs, 18 Ala. 478. Thus, a service made on one partner after dissolution is clearly insuflScient in a case where the interest of the partner upon whom tlie service is made is adverse to that of the partners who are not served with notice. Stephens V. Parkhurst, 10 Iowa 70. And a judg- ment rendered in a sister state against all the members of a firm after dissolu- tion, does not personally bind a partner not served and who did not appear in the case, although the other partners were served, or appeared and caused an ajipearance to be entered for all. Bow- ler V. Huston, 30 Gratt. (Va.) 266. So, also, where a defendant is sued as silent partner in a commercial firm, service of citation on the clerk of the firm is not sufficient. Eidge v. Alter, 14 La. Ann. 866. Rights of those not served. — Where one only of a firm is served, the judg- ment will bind the firm's real estate and that of the partner served, but will not bind the separate property of those not served. Patten v. Cunningham, 63 Tex. 666. Where a state statute provides that in suits against two or more jointly in- debted, the judgment shall be evidence, as against those not served with process, only of the extent of the plaintifi''s de- mand, the original demand against the parties not brought into court is not merged in the judgment against those who were. Mason v. Eldred, 6 Wall. (U. S.) 231. Two of several mining partners mort- gaged their interest in the mining prop- erty to plaintiff", and subsequently de- fendants brought an action against the partnership for supplies furnished. Two of the partners were not served with summons, and did not appear. The action was not brought under Code Civil Pro. Cal., | 388, which provides for the suing of associates transacting business under a common name, by such name; service upon one being service upon all, and the judgment binding the joint property of all the associates. Held, that under Code Civil Pro. Cal., § 414, providing that "where an action 449 29 273* SERVICE ON ONE PARTNER. [bOOK II., enforced accrued, and the time when proceedings are taken to en- force it; and th.cn to consider liow far those rules apply or have to be modified when a change has taken place. is against two or more defendants, name, and citation was served on but one jointly or severally liable, and the sum- of the two owners, the judgment, though mons is served on one or more, but not rendered against the part owner who on all, the plaintiff may proceed against was cited, and against the steamer itself, the defendants served in the same man- cannot be executed by seizing the whole ner as if they were the only defendants," boat. The part owner who was not the partners not served were not bound cited, and made no appearance, must be by the judgment, and the partners who regarded as a stranger in the proceed- were bound having mortgaged their in- ings ; and he may, by an opposition, terest to plaintiff before the judgment under article 395 e< seg. of the Louisiana was obtained by defendants, such mort- Code of Practice, arrest the sheriff in gage was a prior lien upon the prop- any attempt to seize his share of the boat erty. Golden State and Miners' Iron to satisfy the judgment; and he is not Works V. Davidson (Cal.), 15 Pac. Rep. bound to notice the proceedings until 20. an attempt is made to seize liis share of Where, in a suit against partners on the boat. Hefferman v. Brenham, 1 La. a partnership debt, there is a regular Ann. 146. return of service as to one, and no re- Where a suit is brought against a firm, turn whatever as to the other, the lat- the name of one of the partners com- ter may come in even as late as the reg- posing which is alleged to be unknown, ular trial term, acknowledge due ser- a judgment cannot be rendered against vice, waive copy and previous entry of the firm so far as concerns the unknown service, and consent that the case then partners ; but where the other partner, stand for trial. Judgment rendered at not liaving been personally cited, ap- or after the second term succeeding the peared and filed a general denial, and, entering and signing of such acknowl- upon judgment being rendered against edgment on the declaration will affect the firm, appealed as a partner, it was third persons the same as if the evi- held that he was bound by the decree, dence of service had been complete in Grieff i'. Kirk, 15 La. Ann. 320. the first instance. Oates v. Brown, 59 If firm property has been bona fide (ja. 711. conveyed to one, it cannot be subjected In an action against partners, on only to a judgment against the firm to which a part of whom process lias been served, he was not made a party, U|ion a mere a plea filed for defendants generally, suggestion, on an attempt to levy on the without naming them, will not be coo- property, that he was a copartner, as sidered as the plea of all. Boyce v. that would be to bind him as partner Watson, 3 J. .J. Marsh. (Ky.) 498. without notice of suit, and without any Where, in an action on a claim for regular proceeding against him as such, supplies furnished to a steamer, the pro- Strong ?■. Ilines, 35 Miss 201. ceedings are not in rem, and the owners Incidental matters of practice— If are not shown to have had a social all the partners made defendants in an 450 €HAP. III., § I.] ACTIONS BY PARTNERS. 273* 2. Actions by and againd partners where no change in the firm has occurred. A. Actions in retyped of legal rights. (a) Actions by the Jinn. Actions ex contractu. In order to determine who ought to sue on behalf of a firm upon a contract made witli it, it is necessary to distinguish between 1. Contracts under seal. 2. Bills of exchange and promissory notes. 3. Other contracts. 1. Actions by partners on contracts under seal. — As regards con- tracts under seal, the old rule was that if such a contract was en- action have not been served with pro- individual debt. Held, that he was not cess, the plaintiff may discontinue against a party to the suit, and it was error to those not served. Clark v. Stoddard, render a judgment against him alone. 3 Ala. 366; Earbee v. Evans, 9 Port. Craig ?;. Smith (Colo.), 15 Pac. Rep. 337. (Ala.) 295. But under Tex. Kev. Stat., In a suit against two as partners, art. 1346, authorizing a judgment against where service is made only on one, and a partnership, and against such of the the officer returns non est inventus as to partners as have been actually served, the other, if the one served dies, the and prohibiting a personal judgment plaintiff may, under the act of 1820, against a partner not served, where one make his legal representatives parties, partner only is served, a formal dis- and proceed to judgment and execution continuance as to the other is unneces- against them. Koss v. Everitt, 12 Ga. sary to the validity of a judgment 30. S. P., Wright «. Harris, 24 Ga. 415. against the firm. Burnett v. Sullivan, The declarations of a partner as to 58 Tex. 535. whom the suit was dismissed for want While in an action against partners of service are inadmissible in a suit judgment should not be rendered against against the firm to prove the partnership those not served with process, still such of the defendants as against the other a judgment, though erroneous, is valid partness. Rimel v. Hayes, 83 Mo. 200. as against those served. Davidson v. But in Pennsylvania, in an action Knox, 67 Cal. 143. against partners, if only one has been Suit was brought against a firm to col- served with process, evidence may be lect an alleged partnership debt. Service given by the plaintiff of the declarations was had on one partner only, and judg- of the one not served. M'Coy v. Light- ment was rendered against him as for an ner, 2 Watts (Pa.) 347. 451 273* ACTIONS BY PARTNERS [bOOK II., tered into witii one partner only, he alone eould sue upon it; and that if it was entered into with more than one partner, all those with whom it was expressly entered into must sue upon it, and no others eould, whatever their interest in its performance might be. (/i) But their joinder will now he of no consequence unless the defendant is prejudiced by it. (i) * Covenant with A & Co. — It is apprehended that a cove- ■J nant entered into with A, B & Co. may be sued upon by the persons who, when the covenant was m-ade, constituted that firm.lO 2. Actions by partners on bills and notes. Blank endorsements. — As regards bills of exchange and promissory notes. If they have been endorsed in blank, any person holding them may sue upon them, {k) Spcoial endorsements. — When a bill or note is not endorsed in blank, the proper persons to sue upon it are those named in the instrument as drawers, payees or endorsees, as the case may be. [l) Whether they are partners or not is of no consequence, and there- fore if a bill is drawn in the name of two persons as if they were partners, they ought both to join in an action on the bill, although One copartner cannot authorize an ap- plaintiff, who carries on business as a pearance for another. Haslet v. Sheet, firm using after his name "& Co.," 2 McCord (S. C.) 310. And, if one part- must allege and prove that he alone is ner appears, and the other makes de- interested in the business, or he will be fault, the regular mode of proceeding is non-suited. Ferguson v. King, 5 La. for the plaintiff to get judgment for the Ann. 642. whole debt, against the one appearing, {k) See Ord v. Portal, 3 Camp. 239 ; and to execute the writ of inquiry Attwood v. Rattenbury, 6 Moore 579 ; against the one making default, for the Lowe v. Copestake, 3 Car. & P. 300. whole also. Simpson v. Geddes, 2 Bay See, also. Law v. Parnell, 7 C. B. (N. (S. C.) 533. See Hills v. Ross, 3 Dall. S.) 282, in which the manager of a joint (U. S.) 331. stock bank was held entitled to sue, in (A) See the note to Cabell y. Vaughan, his own name, on a bill endorsed in 1 Saund. 291, i; Metcalf v. Rycroft, 6 blank and given to him by a customer Mau. <5 S. 75 ; Scott v. Godwin, 1 Bos. of the bank on account of advances & P. 67 ; Vernon v. Jeffreys, 2 Str. 1146. made by it to him. Machell v. Kinnear, (i) Ord. XVI., r. 11. 1 Stark. 499, is rendered unimportant 10. Actions by partners on con- by Ord. XVL, rr. 1 and 11. tracts under seal. — In a suit on an ob- (/) See Pease v. Hirst, 10 Barn. & C. ligation payable to himself "& Co.," 122. 452 CHAP. III., § I.] ON BILLS AND NOTES. 274=^ one of them has no interest in it. (m) So it is immaterial whether the bill or note relates to partnership matters or not, for if a debtor to a firm makes his promissory note payable to one of the partners only, such one is the proper person to sue on the note, (n) Bills in name of A & Co. — If a bill is drawn by or in favor of a firm in its commercial name, the persons who composed the firm when the bill was drawn ought to be plaintiffs, (o) But they can now sue in their mercantile name, (p) Bills accepted for honor. — If one partner in his own name accepts a bill drawn on a stranger, for his honor, and pays the bill, when due, out of the funds of the partnership, with the consent of his copartners, the partner who accepted the bill is the proper per- son to sue the drawee for indemnity, {q)^^ (m) Guidon v. Robson, 2 Camp. 302. ^Sed qucei-e now. See Ord. XVI. (n) Ba wdeu v. Howell, 3 Man. & G. 638. [o) McBirney v. Harran, 5 Ir. L. Eep. 428 ; Phelps v. Lyle, 10 Ad. & E. 113. ( p) Ante p. *265. (q) Driver v. Burton, 17 Q. B. 989. 11. Actions by partners on bills and notes. — In a suit by several, on a note payable to a firm, proof that they ■compose the firm is only called for where the title of plaintiffs is put in issue by a plea sworn to. Rees v. Simons, 10 Ind. 82; Hauser v. Smith, 13 Ind. 532; Shepherd v. Frys, 3 Graft. (Va.) 442 ; Bell v. Crosby, 4 Ala. 575 ; Pratt V. Willard, 6 McLean (U. S.) 27 ; Smith V. Davis, 2 Stew. (Ala.) 224; Smiih v. Hunt, Id. 222. But in an action on a ■note endorsed specially to a firm (the plaintiflTs), the partnership must be proved. Boswell v. Dunning, 5 Harr. (Del.) 231 ; Ege v. Kyle, 2 Watts (Pa.) 222. In a suit by a partnership on a note and mortgage executed to the firm, the showing of the copartnership relation of the plaintiffs is not indispensable in 4 the caption, if in the body of the com- plaint it be specifically averred that the plaintiffs are in fact copartners, and it appears, from the facts alleged, that the obligation relied upon is one that has been created in favor of such copartner- sliip. Wise V. Williams (Cal.), 14 Pac. Rep. 204. Where a note payable to order is en- dorsed by the payee, and transferred to two persons, who bring an action thereon as " H. & A. F. Randolph, partners," &c. Held, that plaintiffs, being the lawful holders of the note, if not part- ners, could, in their individual names, maintain an action thereon as " H. & A. F. Randolph." Walgamood v. Ran- dolph (Neb.), 35 N. W. Rep. 217. In Guidon v. Robson (2 Camp. 302), the case being an action by Guidon alone against Robson, upon a bill of ex- change, drawn in the name of Guidon & Hughes (the latter being a mere clerk of Guidon) on Robson, and ac- cepted by him. Lord Ellenborough said : " There being such a person as Hughes, I am clearly of opinion that he ought to have been joined as a partner. He is to be considered in all respects a part- 53 275^ ACTIONS EX CONTRACTU. [book II., 3. Actions by jxirturrs on ordinarj/ contracts. — With respect to other simple contracts, whether written *or verbal, where p^,^„p. intract is entered into with several persons jointly, they ^ a cont should all join in an action upon it. (/■) But if a simple contract, written or verbal, expressed or implied, has been entered into with an agent, it may be sued upon by his principal, even if undisclosed, provided he can show that in point of fact the agent contracted on his behalf, (s) 12 ner, as between himself and the rest of the world. Persons in trade had better be very cautious bow they add a ficti- tious name to their firm for the purpose of gaining credit. But where the name of a real person is inserted with his own consent, it matters not what agreement there may be between him and those who share the profit and loss. They are equally responsible, and the con- tract of one is the contract of all. In this case the declaration states that the defendant promised to pay the money specified in the bill to the plaintiff only, whereas she promised to pay it to the plaintiff jointly with another person. The variance is fatal." (r) 1 Wms. Saund. 291, k, and 1 Chit. PI. 10, 15. Formerly, mistakes in this respect were fatal, but see now Ord. XVI., r. 11. (s) See Phelps i'. Prothero, 16 C. B. 370; Sims «;. Bond, 5 B. & Ad. 389. See, also, Beckham v. Drake, 9 Mees. & W. 79, and 11 Id. 315, noticed ante p. *178, and Trueman v. Loder, 11 Ad. & E. 589, as to suing u-ndisclosed principals on written contracts. Foreign principals, as a rule, do not enter into contracts in this country through agents. The agents here themselves contract as ])rincipals, though acting for others. See Elbinger Actien Gesellschaft v. Claye, L. R., 8 Q. B. 313; Button v. Bullock, L. R, 8 Q. B 331, and 9 Id. .572. 12. Actions by partners on ordinary contracts. — Where partners sue upon a promise, and the general issue is pleaded, the burden devolves upon the plaintiffs to prove every fact necessary to main- tain their action, and they must show a joint promise to all of them. Burr v. Morrison, 8 B. Mon. (Ky.) 131: Roberts V. Atwood, Id. 209 ; Ardley v. Russell, 1 Browne (Pa.) 14') ; Patten v. Whitehead, 13 Rich. (S. C.) 156. But see Heintz v. Cahn, 29 111. 308. All the partners should join in the suit. On this subject Lord Tenterden says: " In the case, however, of an action for the freight of goods conveyed in a gen- eral ship, all the part owners ought to join, or if they do not, the defendant may avail himself of the objection by evidence at the trial, and without plea in abatement, according to the general rule of law and the distinction between contracts and wrongs ; unless, perhaps, some one should have received his own share, or have released his claim to it. The necessity of all the part owners join- ing as plaintifis in the suit, in this case, is founded >ipon the consideration that all of them are partners with respect to the concerns of the ship ; and ui)on this con- sideration, the present Lord Chancellor (Eldon), in a case of bankruptcy, wherein it appeared that the owners of a ship,^ upon a settlement of accounts with the master, who had become a bankrupt, 454 CHAP. III., § I.] ACTIONS EX CONTRACTU. 275^ All may sue, though not named. — This doctrine is constantly ap- plied in partnership cases ; it happens every day that a firm sues on a contract entered into on its behalf by one of its members, and it were indebted to him, and that on the other hand he also was indebted to some of them severally upon separate and dis- tinct concerns, refused to allow the latter to set off their respective demands against the claim of his assignees for their shares of the general debt." Ab- bott on Shipping (5th ed.), pt. 1., c. 3, § 14, p. 82. In an action by plaintiffs claiming as partners, it is a good defence under the general issue to show that the debt is due to one of them only. The statute of Alabama, dispensing with the proof of a partnership, unless put in issue by plea in abatement, does not apply to such case. Kenan v. Starke, 6 Ala. 773. Where parties do not sue as partners, the statute of Illinois does not dispense with proof of their joint interest upon a general denial. Woodworth v. Fuller, 24 111. 109. Where the plaintiffs sue jointly as partners, but not on any contract with the defendant as partners, or on negotia- ble paper, they must prove partnership inter se, and joint right to and interest in the subject of suit. And the question is, where the partnership is put in issue, whether the plaintiffs are partners as between themselves, not whether they have made themselves liable as partners to third parties. Gray v. Gibson, 6 Mich. 300. A firm may sue as such for compensa- tion for what it has done, even though outside the scope of the partnership business. Tiernan v. Doran, 19 Neb. 492. If partners, as partners, are sureties for one who died insolvent, and a judg- ment against them on the note is satis- fied by levy on the separate estate of one of them, the claim against the estate of the deceased principal is correctly made by and in the name of the part- ners. Parker, v. Gregg, 3 Fost. (N. H.) 416. In a suit upon a written contract en- tered into by plaintiff to do certain work, for the price of the work, the de- fendant may show that plaintiff had a partner in the job, and that such part- ner had been paid in full. Shepard v. Ward, 8 Wend. (N. Y.) 542. In an action by a partnership upon a debt due the firm, it is necessary for the plaintiffs to prove that they are the per- sons constituting the firm, unless that fact, being stated in the declaration, is not denied in the aSidavit of the de- fendant. Barnes v. Elmbinger, 1 Wis. 56. Illustrations. — Where a sui't was brought in the name of certain persons, as composing a commercial firm, and the defendant excepted to the petition, upon the ground that all the members of the firm had not been joined in the action, it was held that where it was shown that the name of one of the persons used in the style of the firm was omitted, the burden of proof was on the plaintiffs to show that they alone composed the firm. Kugely V. Gill, 15 La. Ann. 509. Where a vessel was built by several individuals, and advances were made by two part owners, who were partners, out of the partnership funds, the liability of the other owners for such advances is to the firm, and not to the several members of it. Stevens v. Lunt, 19 Me. 70. Four persons formed a partnership in the ice business, under the name of G., 455 275=^ ACTIONS EX CONTRACTU. [book II., is not by any means necessary tliat the person dealing with hiui should have been aware that the one partner was acting on behalf of himself and other people. The question is : With whom was the contract made in point of law? And the true answer to this question does not by any means entirely depend on the answer to be given to the more simple question, With whom was the contract made in point of fact ? Thus, in Garrett v. Handley, (t) all the members of a firm were held entitled to sue on a written guarantee given to one of the part- ners only, there being evidence to show that the guarantee was in- tended for the benefit of the firm. So, where a member of a firm of bankers was asked for a loan, and he made it out of the funds of the bank, it was held that an action for the recovery of the money lent was properly brought by all the members of the firm, although the borrower had not requested any loan from the bank, (u) So, where one partner *sells goods belonging to the firm, (.f) =276] or does work (3/) of the kind he and his copartners under- take, an action for payment may be maintained by him and them jointly, although the person to whom the goods were sold, or for H. & Co, and transacted their business in Charlestown (Mass.) The same per- sons and C, afterwards, by written arti- cles, formed a partnership, under the name of C. & Co., in the business of sliip- ping ice to Mobile (Ala.), and selling it there. By these articles G., H. & Co. were to ship ice to Mobile, consigned to C. & Co., and C. was to devote his per- sonal attention to the sale of the ice there, and C. & Co. were to pay from the proceeds of the sales, to G., H. & Co., a certain price per ton for the ice shipped at Charlestown, and also to pay rent for an ice-house at Mobile, and all freights and expenses on the ice shipped, and all expenses of discharging and transport- ing it from the vessels to the ice-house, and ail other expenses of taking care of and selling it; and the proceeds of the sales, after deducting all said expenses, were to be divided equally between C. and the firm of G., H. & Co. R. made an agreement with the firm of G., H. & Co. to transport a cargo of ice for them from Charlestown to Mobile, but did not fulfill his agreement, and the four mem- bers composing that firm brought an ac- tion against him to recover damages for breach of that agreement. Held, that the action could not be maintained with- out joining C. as a plaintiflT. Gage v. Rollins, 10 Mete. (Mass.) 348. (0 4 Barn. &. C. 664. See the same case, 3 Barn. & C. 462, where an action by the one partner failed. See Hopkin- son V. Smith, 1 Bing. 13, as to actions by attorneys not retained by the defendant. (u) Alexander v. Barker, 2 Cromp. & J. 133 ; Sims v. Britain, 4 B. & Ad. 375, and Sims v. Bond, 5 Id. 389. (x) Skinner v. Stocks, 4 B. & A. 437. iy) Townsend v. Neale, 2 Camp. 189 ; Arden v. Tucker, 4 B & Ad. 817. 456 CHAP. III., § I.] ACTIONS BY PARTNERS. 276' whom the work was done, knew nothing of the other partners. In Cooke V. Seeley {z) a partner had an account at a bank in his own name, but there was evidence to show tiiat it was a partnership account, and was know^n to the bankers to be so, and under these circumstances it was held that all the partners were entitled to sue the bankers for dishonoring a cheque drawn on them by the one partner for partnership purposes.^3 (z) 2 Ex. 746. Court of King's Bench held that as the 13. All may sue, though not named, guaranty was proved to have been in- — Upon this subject, Mr. Gow, in his tended for the benefit of the firm, the treatise on Partnership (ch. 3, § 1, pp. action was properly brought by the sar- 121-123), says as follows: "Partners viving partners; and, under such cir- sometimes seek to enforce a guaranty cumstances, it is not competent to the given to secure the repayment of an partner to whom the guaranty may have advance to be made by the firm. In been addressed, to treat the advance as such a case the action must necessarily one made by himself on his individual be brouffht by all the partners to whom account, and in that character to support the guaranty is given, and by whom the a separate action. This was determined advance is made. And where a contract in a previous action on the same guar- of that description is apparently entered anty, and in which the plaintiff declared into in favor of one partner only, yet in that in consideration that he would ad- fact if it be intended as an indemnity to vance a sum of money to A B, the de- the firm, in respect of an advance to be fendant promised that provision should made by them, a joint action may be be made for paying the plaintiff. At maintained. Thus, in the late case of the trial it apfteared that the defendant Garrett v. Handley, 4 Barn. & C. 664, had given to the plaintiff the guaranty which was an action on a guaranty by stated in the declaration, and that the two, as the survivors of a firm of three latter was a partner with two other per- partners, it appeared that the guaranty sons in a banking-house, and that the was addressed to one of the partners firm had advanced the money; and only ; but evidence was produced which charged A B in account with the same ; established that the advance to secure and it was held that the averment in the which the guaranty was entered into, declaration, that the plaintiff had ad- was made by the firm, and that the vanced the money, was not sustained by guaranty was given for their joint benefit the proof, there being no evidence to and not to indemnify the single partner show that the money had been advanced only. It was objected at Nisi Prius, and to the plaintiff by the firm, and by him afterwards insisted upon on a motion to to A B. It is not to be collected from enter a nonsuit, that there was a mis- either of the two preceding cases, nor Joinder; for, as the guaranty was in was it in fact necessary to determine terms given to one partner, to whom whether the partner to whom the guar- alone the promise could be construed to anty was actually given could have have been made, the action should have maintained a separate action upon it, been brought by him only. But the provided his declaration so truly and 457 276^ ACTIONS BY PARTNERS. [book Il.y Dormant partners. — It follows from the principle on which these cases were decided, and although formerly doubted, (a) it is now correctly stated tlie facts, as not to have been open to the objection of a variance between the allegation and the proof. But judging from analogy to the rule applicable to a policy of insurance, which allows the action to be brought either by the party for whose benefit it was effected or in tlie name of him who effected it, it would seem that that part- ner, as being the party witii whom the contract was made, might have support- ed such an action." In Alexander v. Barker (2 Cromp. & J. 133, 138) Baron Bayley, speaking of the case of Garrett v. Handley, cited above, says : " I have no doubt in this case but that this action is maintainable by the plaintiffs ; and in that opinion I am fortified by the case of Garrett v. Handley. Here D. Alexander stood in the double capacity of an individual and a member of the firm. Barker wanted an advance of money, and to him it was quite immaterial by whom the advance was made, whether by D. Alexander alone, or by the house of which he was a member. He applies to D. Alexander to make the advance. He does not qualify that application and say, ' You may be a member of a firm, and I will deal with you only, ^nd will not be an- swerable to other persons ;' but he makes his application without any qualifica- tion. By thus applying generally, he entitles D. Alexander, if he makes the advance, to place him in the situation of being answerable to him in either of his capacities, according to that in which he makes the advance. From the testi- mony it appears that the advance was made by D. Alexander, not individually, but with the money of the firm. He ac- cepted, therefore, the application for the advance, not as an individual, but in his- capacity as a member of the firm. In Garrett v. Handley the contracting part- ner first brought the action in his own name; but it appeared that the advance was made by the house, and the court said, ' You did not make the advance and cannot maintain the action.' An- other action was then brought in the name of the firm, and the court being of opinion that the guaranty was intended to apply to advances made by the firm, thought that the action was maintain- able. The language of that guaranty was much more pointed than this letter. It was addressed to an individual, and was to this effect : ' I understand from Mr. G., that you have had the goodness to advance £550, &c., upon my assur- ance, which I hereby give, that provi- sion shall be made for repaying jou this sum,' &c. But the advance was not made by the individual alone; and it was holden that the firm by whom the ad- vance was made ought to sue. It appears to me, therefore, that the plaintiffs were the persons who might and ought to sue in this case." And again he says : " I am the less surprised that the learned judge should have considered D. Alex- ander as the person with whom the de- fendant contracted, and who alone could maintain the action, because I remember that it was at one period the impression of Lord Ellenborough that where money was lent by a partner, the action must in all cases be brought by the individual with whom the contract was made. But he was afterwards convinced of what is (a) .See Mawman v. Gillett, 2 Taunt. 325 ; Lloyd v. Archbowle, Id. 324. 458 CHAP. III., § I.] ACTIOXS BY PARTNERS. 276* clearly established that dormant partners may join as plaintiffs in an action on a contract entered into on behalf of the firm of which they are members. (6) But a dormant partner never need be joined as a coplaintiff in an action on a contract entered into with the firm or with one of its members, (c) 14 Position of nominal partners. — Nominal partners, i. e., persons who are not entitled to share the profits of the firm, but whose names appear and are used as if they were, never need join a& plaintiffs in an action on an ordinary contract not under seal, {d) If a partner retires and leaves his name in the firm, it is not neces- sary that he should be a coplaintiff in an action brought by the continuing partners in respect of what has happened since the retirement, (e) doubtless the true rule, viz., that where (N. Y.) 84; Clark v. Miller, 4 Wend. a contract is made by one on behalf of others, the action may be brought in the name of the principals." Where one of several partners, to whom an indemnity is given, is com- pelled by legal proceedings to pay out moneys on account of a demand against his firm, the action to recover back the moneys thus paid may be brought in the name of all the members of the firm. Hill v. Packard, 5 Wend. (N. Y.) 375. (6) Cothay v. Fennell, 10 Barn. & C. 671. See, also, ante notes (s) and {t) ; Robson V. Drummond, 2 B. & Ad. 303, per Littledale, J. (c) Leveck v. Shafto, 2 Esp. 468, ac- tion for work and labor. See Phelps v. Lyle, 10 Ad. & E. 113, as to contracts with the "directors" of a company. 14. Dormant partners as plaintiffs. — Ordinarily, a dormant partner need not join in an action brought in behalf of the firm by the ostensible partner, against a person who dealt with the latter only. Wood v. O'Kelly, 8 Cush. (Mass.) 406 ; Clarkson v. Carter, 3 Cow. (N. Y.) 628 ; Rogers v. Kichline, 36 Pa. St. 293; Curtis v. Belknap, 21 Vt. 436; Desha v. Holland, 12 Ala. 513; Sylves- ter V. Smith, 9 Mass. 119; Wilson v. Wallace, 8 Serg. & R. (Pa.) 55; Hilli- ker V. Loop, 5 Vt. 116; Cleveland v. Woodward, 15 Vt. 302; Blin v. Pierce, 20 Vt. 25; Hagar v. Stone, Id. 106; Waite V. Dodge, 34 Vt. 181. An osten- sible partner may maintain an action in his own name, without joining a dormant partner, although the latter was known to the defendant when the debt was con- tracted, and actually sold him the goods, for the price of which the action was brought. Monroe v. Ezzell, 11 Ala. 603. But a dormant partner must join with his active partner in a suit for work and labor done by the firm. Se- cor V. Keller, 4 Duer (N. Y.) 416. To the contrary, Speake v. Prewitt, 6 Tex. 252. (d) Kell V. Nainby, 10 Barn. & C. 20. See, also, Spurr v. Cass, L. R., 5 Q. B. 656, where the contract was in writing and with the nominal partner. (e) Cox V. Hubbard, 4 C. B. 317. 459 276** ACTIONS EX CONTRACTU. [bOOK II., Where nominal partners must sue. — But if a nominal partner's name is on a bill of exchange or promissory note, he ought to be a party to the action brouglit *upon it; and the same rule p^^-- applies to actions on contracts under seal. (/) '- Actions by one partner. — One partner may sue alone on a written contract made with himself if it does not appear from the contract itself that he was acting as agent of the firm ; [g) and one partner ought to sue alone on a contract entered into with himself, if such contract is in fact made with him as a principal, and not on behalf of himself and others. Therefore, if each of several partners lends money out of his own funds, each ought to sue alone for repayment of his advance, although the loans may have been made in pur- suance of some arrangement with all the partners ; for each loan creates a separate debt to each partner, and the several loans do not together form one debt to the firm. (A) Again, if one partner alone holds a certain office and does work in his official capacity, he alone ought to sue for payment of the work so done, (i) 15 / (/) Guidon V. Eobinson, 2 Camp. 302. name against a debtor of the firm to re- {g) See Skinner v. Stocks, 4 B. & A. cover his shave of the debt. Vinal v. 437, and Cothay v. Fennel!, 10 Barn. & West Virginia Oil, &c., Co., 110 U. S. C. 671. See, also, Cawthron d. Trickett, 15 215. Nor will an account in favor of a C B. (N. S.) 754, as to actions by a mas- firm support a bill in equity by one of ter and part owner of a ship on bills of the partners only, unless it appears on lading, and Agacio v. Forbes, 14 Moo. the face of the bill, either that the other P. C. 160, in the privy council, where it partner is dead, or that he has parted was held that one partner might main- witli his interest. Frost v. Shackleford, tain an action upon an agreement in 57 Ga. 260 ; Hatzenbuhler v. Lewis, 51 writing made with him alone, altliough Mich. 585. And even in that case it the agreement related to the business of must be shown that the debt to the firm the firm, and was, in truth, for its bene- has been extinguished, and a new lia- fit, and the consideration was a release bility assumed to the plaintiff alone : by the partner in question of a debt due and if a new contract be made, it must to the firm. be declared on specially. De Grott v {h) See Tiiacker v. Shepherd, 2 Darby, 7 Rich. (S. C.) 118. Chitty 652; Brand v. Boulcott, 3 Bos. There is no rule of pleading or prac- & P. 235. tice which authorizes a recovery by one (i) Brandon v. Hubbard, 2 Brod. & partner in his own name, on what his B. 11. partners agree is his share of a debt due 15. Actions by one partner— when tlie firm. In all cases of indebtedness one may not sue. — One partner cannot to a firm, the action must be brought by prosecute an action at law in his own the members of the firm ; nor does an 460 CHAP. III., § I.] ACTIONS BY PARTNERS. 277* Covenant ivith one partner. — Again, if a partner enters into a contract under seal for the payment of money and the money is paid out of the funds of the firm, and it then appears that the con- agreement to divide the claims among themselves change the right. American Cent. R. R. Co. v. Miles, 52 111. 174. Thus, an action for goods sold, which belonged to a partnership at the time of the sale, musl be brought in the name of all the partners, although the defend- ant was, at the time of the purchase, igno- rant of the existence of the partnership. Bennett v. Scott, 1 Cranch (U. S.) C. C. 339. And even though the firm busi- ness is done in the name of one partner only. Wilson v. Wallace, 8 Serg. & R. (Pa.) 53. And the rule is not changed by the fact that the partner attempting to sue for a debt due the firm had pre- viously agreed to be responsible to the other partner for the payment of the debt ; there having been no settlement between the partners making the claim a separate one. Cushing v. Marston, 12 Cush. (Mass.) 431. So, also, one part- ner cannot sue in his own name to re- cover property of the firm fraudulently assigned by a copartner to his indi- vidual creditor. Miller v. Price, 20 Wis. 117. Although one partner is not bound, singly, to pay a debt due from him and his partner, if when sued he plead in abatement the omission to join his part- ner in the action, yet he is not entitled to recover, in his own name, a partner- ship debt ; and if he sue singly in his own name, the defendant may take ad- vantage of it on the trial on the general issue. Jordan v. Wilkins, 3 Wash. (U. S.) 110. So, also, where, on the dissolution of a firm, a third person acquires the in- terest of the surviving partner, he can- not maintain a suit in his own name for services rendered individually, and as a member of the firm. Mosgrove v. Gol- den, 101 Pa. St. 605. When one may sue. — Where one partner, by express stipulation in the articles (for the cultivation of a farm for a term of years), has "a lien on the pro- duce of the said farm, and upon the stock and mules on said farm, to secure the payment of" the other partner's notes for a half interest in them, and is au- thorized " to control the crops grown on said farm exclusively, and to sell the cotton," he may maintain detinue for the coiion in his own name. Pierce v. Jackson, 56 Ala. 599. One partner can assign his interest in an open account due to the firm, to his copartner, and the latter may become the reaJ party in interest, so as to main- tain a suit on the account in his own name. Swails v. Coverdill, 17 Ind. 337 ; Cook V. Beech, 10 Humph. (Tenn.) 412. But see Horbach v. Huej, 4 Watts (Pa.) 455. But an endorsement by one partner, in his individual name, to his copartner, of a promissory note payable to both of them or order, will not enable the en- dorsee to sue thereon in his own name. Estabrook v. Smith, 6 Gray (Mass.) 570. One partner may recover his propor- tion of a debt due the firm, if the debtor and all the parties have agreed that the debt be severed and paid to him. Aus- tin V. Walsh, 2 Mass. 401. Thus, where two partners agree to divide a partner- ship debt, and the debtor consents to it, and promises one of the partners to pay a moiety to him, such partner may main- tain an action for his moiety against the debtor. Blair v. Snover, 10 N. J. L. 153. 461 277* ACTIONS EX CONTRACTU. [bOOK TI., tract was invalid on the ground of fraud, the partner who entered into the covenant may sue alone for the recovery back of the money, (k) Lastly, if one partner acting for the firm has repre- sented himself to be acting on his own account only, and has osten- sibly entered into a contract on his own account, he alone ought to sue on it. {I) The Judicature acts and the rules promulgated under them have rendered it comparatively unimportant to consider whether *in any ffiven case all partners who can sue nuist do so, and *2781 ^ '■ . -" whether an action should be brought in the name of one partner or of all ; for mistakes on such matters are no longer fatal to an action. At the same time, mistakes create delay and expense, and attention ought therefore still to be paid to the. points above adverted to ; and if all the members of a firm sue when one only ought to do so, or one only sues wdien all ought to do so, and the defendant can show that he is thereby prejudiced, he can apply to have the improper parties struck out or the proper parties joined, as the case may be. (m) 16 Stronger proof is required to prevent demand due the partnership — Held, that one partner from maintaining a suit in he could not impeach the title of an- his own name than is sufficient to charge other who had, in good faith and without persons as partners when sued as defend- notice, purchased the judgment recov- ants. Bishop v. Hall, 9 Gray (Mass.) ered, from the former, who was plaintiff 132. on the record. McCotter v. McColter, Where two partners were compelled 16 Abb. (N. Y.) Pr. 265; 25 How. Pr. to pay a debt of a third person (the one 478. as surety, and the other as the heir of a (k) Lefevre v. Boyle, 3 B. & Ad. 877. co-surety) from the partnership funds, it (l) Lucas v. De in Cour, 1 Mau. & S. was held that a separate action might be 249. maintained by each against the principal (m) See Ord. XVI., r. 11. foramoietyof the money so paid. G.miM 16. Actions by one— covenant with V. Gould, 6 Wend. (N. Y.) 263. one. — An action for goods mortgaged to One of two partners of a law firm lu.y une partner, to secure an indebtedness maintain an action where the business, to the firm of which he is a member, is respecting which a suit is brought, is rightly brought in the name of the uniformly done in the name of the party mortgagee alone. Trott i'. Irish, 1 Allen suing. A set-off will be allowed in such (Mass.) 481. suit of a demand against the firm. Piatt Where one partner, who was agent of V. Halen, 23 Wend. (N. Y.) 456. his copartners, made a contract in his Where one allowed his j)artner to own name— i7eW, that he might sue on bring an action in his own name on a that contract without joining his part- 462 €HAP. III., § I,] ACTIOX.S BY PARTNERS. 278* Actions ex delicto. Actions by jxuiners for torts. — With respect to actions by part- ners not founded on any breach of contract, or of quasi contract, but on some tort, the general principle is that where a joint dam- age accrues to several persons from a tort, they ought all to join in an action founded upon xt;{n) whilst, on the other hand, several persons ought not to join in an action ex delicto, unless they can show a joint damage, (o) i7 Actions for libel. — These doctrines are well illustrated by actions for libel. A libel on a firm can be made the subject of an action by the firm, (p) If the libel reflects directly on one partner, and through him on the firm, two actions will lie, viz., one by the party libeled, and the other by him and his copartners ; (g) but the dam- age in the first action must not appear to be joint, nor must that in the second appear to be confined to the libeled partner only. (/•) If one partner is libeled, and the firm cannot be shown to have been damnified, an action for the libel should be brought in the name of the individual partner *aggrieved, and not bv the ^ " r*279 firm;(s) and he may sue alone, although the libel more '- ners. Elancy v. French, 1 Blackf. (Ind.) the firm property, on an execution 353. against his copartner. Hughes v. Bor- In an action upon a note payable to ing, 16 Cal. 81. the order of the plaintiff alone, he was Where two sue as copartners for con- non-suited, on the ground that the evi- version of goods, the mere fact that it dence showed that the money for which appears in evidence that plaintiffs are the note was given was advanced, and the not copartners will not entitle the de- note given in pursuance of a contract be- fendant to a verdict. Hine v. Bowe, 21 tween the defendants and a firm of which N. Y. Week. Dig. 558. the plaintiff was a member; and that ( p) See Cook.-? v. Batchellor, 3 Bos. & therefore the plaintiff could not maintain P. 150; Forster v. Lawson, 3 Bing. 452 ; an action alone, even if his partner, as be- Williams v. Beaumont, 10 Bing. 260; tween themselves, had no interest in the The Metropolitan Saloo.n Omnibus Co. note. Held, that the non-suit was error. ?•. Hawkins, 4 Hurlst. & N. 87. Mynderse v. Snook, 53 Barb. (N. Y.) 234. (q) The two actions can now be com- (ji) See 1 Wms. Saund. 291, »>i; Ad- bined in one. See Ord. XVIIL, r. 6. ■dison V. Overend, 6 T. R. 766 ; Sedgworth (r) See Harrison v. Bevington, 8 Car. V. Overend, 7 T. R. 279. & P. 708 ; and Forster v. Lawson, 3 Bing. (o) 2 Wms. iSaund. 116, a. 452; 2 Wms. Saund. 117, 6; Haythorne 17. Generally. — One partner cannot v. Lawson, 3 Car. & P. 196. recover against a sheriff for levying upon (s) Solomons i;. Medex, 1 Stark. 191. 463 279* ACTIONS EX DELICTO. [book II., particularly affects him in the way of his business. (^) Moreover, a general statement not clearly pointing to any particular person, but libelous as to an entire class, may be treated by any individual of that class, who can show that he was in fact intended, as a libel on himself; and this principle is as applicable to libels affecting a firm as to those affecting single individuals. (?t) 18 (<) Harrison v. Bevington, 8 Car. & P. 708 ; Eobinson v. Marchant, 7 Q. B. 918. (m) Le Fanu v. Malcolmson, 1 H. L. Cas. 637. 18. Actions for libel. — In Forster v. Lawson (3 Bing. 452) Best, C. J., said : "An objection lias been made to the declaration in this case, namely, that the action has been brought by three persons jointly, and that they could not properly join in such an action. The general rule of law is, as laid down in the case of Smith v. Cooker (Cro. Car. 512), namely, that where several per- sons are charged with being jointly con- cerned in a murder, each of them must bring a separate action for it; and the reason is that they have no joint inter- est to be affected by the slander. Where, however, two persons have a joint in- terest affected by the slander, they may sue jointly ; and th.e case of Cooke i'. Batchellor is not the first case which has determined this point. In the note in Saunders, to which the court has been referred, the learned editor states that two joint tenants or coparceners might join in an action for slander of the title to their estate, and the form of the declaration in such an action is to be found in Brownlow. This doc- trine has also beem recently considered and confirmed in the case of Collins v. Barrett, in which it was holden that two persons might bring a joint action for a maliciously holding them to bail, if the complaint in the declaration was confined to the expenses which they were jointly put to in procuring their liberty. It has been said that notwith- standing the judgment against the de- fendants in this action, if either of the plaintiffs has sustained any separate damage, he may still maintain a sepa- rate action. I cannot see how there can be any separate damage. The business injured is the joint business, and the libel only affects the plaintiffs through their business. If, however, a copart- nership be libeled, and the libel con- tains something which particularly af- fects the character of one of that firm, I think a joint action may be maintained against the libeler, wiio would have less reason to complain of such pro- ceedings than he woidd have if each partner brought a separate action for the injnry done to the firm. Another objec- tion raised by the defendant's counsel is that the plaintiffs liave not stated the pro- portion of interest whicli each respective- ly had in their joint business. It is not necessary for them to do so ; with their several proportions the defendant has nothing to do. Any compensation they may recover will belong to them gen- erally, and it is nothing to the defendant how it may be divided among them. It has also been urged that the words con- tained in the paragraph are not action- able. I have no hesitation in deciding that to say of any bankers that they have suspended payment, is actionable. For what can be the meaning of such a statement, except that they are no longer 464 CHAP. III., § I.J ACTIONS EX DELICTO. 279* Consequence of non-joinder of partners. — An action for the re- covery of goods of the firm, or for damages for their loss or injury, ought to be brought in the name of the firm or by all its mem- bers; (a;) but if one only sues, he will be entitled to recover dam- ages in respect of his interest in the goods; (a;) and if, after he has done so, another action is brought by one of his copartners, that action cannot be stopped. (2/) Actions ivhere one partner colludes with defendant. — If a person colludes with one partner in a firm to injure the other partners, the latter can jointly sustain an action against such perrson. Tluis, where the bankers of a firm of four partners knew that one of them was in the habit of drawing bills in the name of the firm for his own private purposes, and the bankers colluded with him and kept his (iopartners in ignorance of what was going forward, and paid the funds, when due, out of the funds standing to the credit of solvent? Saying that a banker has sus- pended payment is saying that he can- not pay his debts. A temporary inability to pay debts is insolvency. The charge of suspending payment is a charge of in- solvency. Such a statement will instantly bring all the creditors of a banking-house upon it, and completely stop their busi- ness by preventing any one from taking their bills. But here special damage is stated, and I think correctly stated. It has been objected that the special dam- age is not set out with suflScient cer- tainty. Even if that were so, advantage could be taken of it only by a special demurrer. In my opinion, however, the special damage is clearly and distinctly set out. The plaintiffs state that they had a number of promissory notes out- standing and in circulation, and that in consequence of these libels they were called upon and forced and obliged to pay those notes ; how or when was not material, it being sufficient that they de- clare that they have thereby lost all the benefit and advantage which would otherwise have accrued to them in their trade and business, from the notes re- maining outstanding and in circulation. The declaration goes even further ; it states that the plaintiffs have suffered and sustained a great loss in raising and procuring sufficient money to pay and satisfy their several notes. It appears to me that the declaration is unobjec- tionable, and that the plaintiffs are en- titled to judgment." While a suit for oral slander will not lie against two or more jointly, yet a suit may be maintained against a firm the • members of which have falsely and fraudulently recommended an insolvent person as worthy of credit, thereby in- ducing the plaintiff to sell such person goods on credit, which the defendan(s immediately seized for a debt due from such person to them. Patten v. Gunney, 17 Mass. 182. (x) See Addison v. Overend, 6 T. R. 766 ; Bleadon v. Hancock, 4 Car. & P. 152. See Dockway v. Dickenson, Comb. 366. (2/) Sedgworth v. Overend, 7 T. R. 279. 465 30 279* ACTIONS AGAINST PARTNERS. [bOOK II., tlie firm, it was held that an action lay against the bankers at the suit of the other three partners. (3)19 Actions of ejectment. — An action of ejectment for the recovery of real property belonging to the firm ought to be brought in the names of all those persons in whom the legal estate is vested, (a) If, however, one partner only has made a lease of the partnership property, then, as his title cannot be disputed by the lessee, notice to quit may be given and ejectment maintained *by the -^ lessor alone ; and if he alone has the legal estate, the cir- cumstances that rent has been paid to the firm, and receipts for it have been given by all the partners, will not affect his right to give the notice and bring the action in his own name, (b) (b) Actions against the firm. Actions against partners. — In considering who ought to be sued in respect of a breach of contract committed by a firm, or some or one of its members, regard must be had in the first instance to the persons upon whom that contract is legally binding. This matter has been already discussed at length in the first and second chapters of the present book, and it is needless to repeat what has there been said. Assuming, therefore, the question of liability to be determined, it remains only to consider whether all the persons who are liable ought to be sued jointly, or whether any and which of them may be sued without the others. If there is any doubt on this question, the proper way is to sue them all, for this is now expressly author- ■ ized to be done, (c) In order, however, to save expense, the follow- ing; rules will be found useful.20 (z) Longmau v. Pole, Moo. & M. the firm. Cochrane v. Quackenbush, 29 223. Now, the other partner might Wis. 376. be joined as a defendant. See ante (a) See 1 Chitty on Plead. 74. p. *267, note {y). (6) See Doe v. Baker, 2 B, Moore ]89. 19. Actions where one partner col- (c) Ord. XVI., rr. 1, 4, 6. Honduras ludes with defendant. — Two of three Rail. Co v. Tucker, 2 Ex. D. 301. See, partners may join in an action against also, Ord. XXI., r. 20, abolishing pleas the third partner and others, who, in in abatement. collusion with such third partner, wrong- 20. In general. — Where a suit is fully and maliciously, and without brought against a firm upon a partner- probable cause, attached the property of ship debt, the names of the partners 466 CHAP. III., § I.] ACTIONS EX CONTRACTU. 280* Actions ex contractu. Actions against partners on contracts. — All persons who are jointly liable on a contract ought to be sued jointly, (cZ) unless must be proved ; but slight evidence as Where, in an action against two as to this will authorize the court to leave partners, it appears that there is no the question of partnership to the jury, partnership, and that one of the defend- Varnum v. Campbell, 1 McLean (U. S.) ants only is liable, the action does not 313. abate, but may proceed against the one In an action against the makers of a who is liable. Francis v. Dickel, 68 Ga. note signed "A and B," it is unneces- 255. sary to allege a partnership between the The question of partnership should be makers, although that would be more put in issue by a plea in abatement prop- technical. Davis r. Abbott, 2 McLean erly verified. Shufeldt v. Seymour, 21 (U. S.) 29. 111. 524 ; Warren v. Chambers, 12 111. Where, on the face of the pleadings, 124; McKinney v. Peck, 28 111. 174. the execution of a note declared upon When a proper plea denies the joint as given to the plaintiffs as partners is liability and the partnership, in an action admitted, proof of the partnership of on an apparently joint note, the partner- plaintiffs is unnecessary. Pratt v. Wil- ship must be proved. King v. Haines, lard, 6 McLean (U. S.) 27. See, also, 23 111. 340. Maret v. Wood, 3 Cranch (U. S.) C. C. 2. A defence in assumpsit, good to one Where several are sued as copart- of several copartners, is good to all. ners, the plaintiff may discontinue at Cooley v. Sears, 25 111. 613 ; Gribbin v. any time as to such, if any, as are not Thompson, 28 111. 61. partners. Wheeler v. Bulhird, 6 Port. Under the law of Louisiana, so long (Ala.) 352; Guzzam v. Bebee, 8 Port, as a commercial copartnership exists, (Ala.) 49. the firm must be sued for a firm debt; A creditor may sue one or all of the individual partners can be charged only members of a firm, on a debt contracted through the firm. Liverpool, &c., Nav. in the firm name, and may declare on Co. v. Agar, 4 Woods (U. S.) 201 ; S. C. the demand as the individual liability 14 Fed. Rep. 615. of the partner or partners sued. Mc- Where a party defendant denies that Culloch V. Judd, 20 Ala. 703. he was a member of the firm sued, it is A plea of one sued as a partner on a incumbent on the plaintiff to prove the note, that he was not a partner, and did fact. Atwater v. Colton, 18 La. Ann. not sign, nor authorize any one to sign 226. for him, is a good plea in bar denying If a note. or bond be signed in the the note sued on. Holman v. Carhart, name of a partnership, any one of the 25 Ga. 608. partners may be sued alone. Griffin v. To a suit against A and B, as partners, Samuel, 6 Mo. 50. on a note signed " A," a plea by B that (d) See the note to Cabell v. Vaughan, at the time he was not a partner, puts 1 Wms. Saund. 291, 6; Byers i;. Dobey, 1 the onus on the plaintiff to prove that H. Bl. 236 ; Bonfield v. Smith, 12 Mees. he was. Strauss v. Waldo, 25 Ga. 641. & W. 405. 467 280^ ACTIONS EX CONTRACTU. [book II., some of them are abroad, (e) This rule applies to actions against partners for the recovery of penalties imposed upon them by stat- ute, (/) and to actions in form ex delicto, but founded in substance on a breach of contract, express or implied ;(^) but it is subject to certain real or apparent exceptions which require notice.21 (e) See 3 and 4 Wm. IV., c. 42, | 8; JoU V. Lord Carson, 4 C. B. 249. See, before this statute, Sheppard v. Baillie, 6 T. K. 327. ( /■) Bristow V. James, 7 T. R. 257. [g) Powell V. Lay ton, 2 Bos. & P. N. R. 365 ; Buddie v. Willson, 6 T. R. 369. 2L On contracts, generally. — Or- dinarily, a suit on a partnership debt must be brought against all the part- ners. Bowen v. Crow, 16 Neb. 556. But it is competent for a person having a cause of action against a firm, on a partnership contract, to sue one or more of the partners, at his election. Hicks V. Maness, 19 Ark. 701 ; Johnson v. Byrd, 1 Hempst. (U. S.) 434 ; Hamilton v. Bux- ton, 6 Ark. 24; Burgen v. Dwinal, 11 Ark. 314; Hicks v. Bronton, 21 Ark. 186; Kent v. Wells, Id. 411; Ryerson V. Hendrie, 22 Iowa 480 ; Williams v. Rogers, 14 Bush (Ky.) 777; Yates v. Watson, 54 Mo. 585. See, also, Green V. Pyne, 1 Ala. 235; McCuUough v. Judd, 20 Ala. 703 ; and, in some of the states, judgment may be rendered against less than the whole number sued. White v. Tudor, 32 Tex. 758 ; Finney v. Allen, 7 Mo. 416 ; Williams v. Rogers, 14 Bush (Ky.) 777; Dean v. Savage, 28 Conn. 359 ; Miles v. Von Deyn, 6 N. W. Rep. 39. In an action against partners on an ac- count, the partnership must be proved. Trowbridge i;. Sanger, 4 Ark. 179; Alfred V. Thompson, 5 Ark. 347 ; Teller v. Mnir, 2 Penn. (N. J.) 749. In an action against a partnership for goods sold, where the defence is that goods sold to an individual member of a firm were sold on his private account, it is error for the court to reject letters, ofiered in evidence by the defendant, . which were written by the plaintifi" to a third party, and were to the effect that the account was against the individual member of the firm. Adams v. Eath- erly Hardware Co. (Ga.), 3 S. E. Rep. 430. If one partner promises, individually, to pay a debt, he will not be allowed to show that it was due jointly from him- self and copartners. Conley v. Good, Breese (111.) 96. In a suit upon a copartnership note, either member of the firm, if the note is tainted with usury, may set up that fact in defence, without the consent of the other members ; and one member who has purchased the interest of the others, assuming the partnership debts, and has renewed the note tainted with usury, by the execution of a new one in his own name, may set up this defence. But aliler as to a third party assuming pay- ment of a note thus tainted. Machinists* Bank v. Krum, 15 Iowa 49. If a partnership and an individual are joint makers of a note, when nothing appears to the contraiy, the partnership is liable for one-half the amount of the note. Hosmer v. Burke, 26 Iowa 353. Where (he holder of a note signed with the firm names of two different firms, sues several individuals as mem- bers of said firms, and it appears on the trial that one of the defendants is not liable because not a member of either firm, and also that another of the de- 468 CHAP. III., § I.] ACTIONS EX CONTRACTU. 281* Actions against infant partners. — In the first place, an infant partner, not being bound by any *contract entered into by r;i-f,o-| or on behalf of the firm, ought not to be joined as a de- "- fendant in an action on any such contract. (/;) 22 fendants is not liable, because the person who signed the firm name of one of the firms had no authority to do so, nor any authority to bind this particular defend- ant, the plaintiff may dismiss his action against those two defendants who are not liable, and take judgment against those who are shown to be liable. Silvers v. Foster, 9 Kan. 56. To a joint declaration against part- ners, a plea, by one, that they did not promise within five years, is a good plea. Vallandingham v. Duval, 7 J. J. Marsh. (Ky.) 262. Where a firm holding a lease of premises with the privilege of renewal, dissolves partnership, and one of the former partners claims the right of renewal, the other partner need not be made a party to an action to remove him from such premises. Geheebe v. Stanley, 1 La. 17. To support an action against two as acceptors of a draft in their partnership (h) See 1 Wms. Saund. 207, a; Chan- dler' V. Danks, 3 Esp. 76 ; Burgess v. Merrill, 4 Taunt. 468 ; Jaffrey v. Fre- bain, 5 Esp. 47. Formerly it was thought that an infant partner ought to be made a codefendant. See Ex parte Henderson, 4 Ves. 164; Gibbs v. Mer- rill, 3 Taunt. 307. 22. Actions against infant part- ners. — In Burgess v. Merrill, cited in the text, infancy was held to be a good replication to a plea of non-joinder of an infant partner as defendant ; but that case has not been followed in America. In this country, where one of several defendants in assumpsit pleads infancy and gives it in evidence upon the trial, the jury may find a verdict for the in- fant defendant, and for the plaintiff" against the other defendants, and judg- ment may be rendered thereon. Cutts V. Gordon, 13 Me. 474; Allen v. Butler, 9 Vt. 126; Barlow v. Wiley, 3 A. K. Marsh. (Ky.) 457 ; Cole v. Penneli, 2 Eand. (Va.) 149; Hartness v. Thomp- son, 5 Johns. (N. Y.) 160; Tuttle v. Cooper, 10 Pick. (Mass.) 281; Wams- ley V. Lindenberger, 2 Rand. (Va.) 179 ; Woodward v. Newhall, 1 Pick. (Mass.) 500. Thus, where in an action on a contract defendant pleads non-joinder of his copartner, a reply that such co- partner is an infant is bad on demurrer. Slocum V. Hooker, 13 Barb. (N. Y.) 536. In such a case the plaintiff may enter a nolle prosequi against the infant, and pro- ceed to judgment against the other de- fendants. See Woodward v. Newhall, 1 Pick. (Mass.) 500; Kirby v. Cannon, 9 Tnd. 371 ; Ex parte Nelson, 1 Cow. (N. Y.) 417 ; Mason v. Dennison, 1-5 Wend. (N. Y.) 66. Judgment was rendered in an action against a partnership, for a firm debt, in favor of two of the partners, on the ground of their infancy at the time the debt was contracted, and in favor of the plaintiff against the other partner. Held, that the firm assets could be ap- plied towards the payment of the judg- ment against the adult partner. Whit- temore v. Elliott, 7 Hun (N. Y.) 518. S. P., Gay V. Johnston, 32 N. H. 167. 469 281* ACTIONS EX CONTRACTU. [book II. ^ Actions against dormant partners. — Secondly, as regards dormant partners. It has been seen that they are liable on all contracts en- tered into on behalf of the firm to wliich they belong, and whether name, the plaintiff must prove the part- nership, and tliat one, at least, of the de- fendants accepted the draft. Head v. Sleeper, 20 Me. 314. If the narr. charges (he partnership in the ordinary way, and the affidavit ac- companying it alleges the sum sued for to be due from A and B, copartners, trading as A & Co., upon a note filed with the declaration, that is a sufiBcient allegation of partnership to require de- fendant to deny it in the manner pro- vided by the statute. Thome v. Fox (Md.), 8 Atl. Rep. 667. An action will lie against one partner who makes a warranty on the sale of goods, on the warranty, without joining the other partner. Clarke v. Holmes, 3 Johns. (N. Y.) 148; Cookingham v. Lasher, 38 Barb. (N. Y.) 656. Where, in an action against three de- fendants, sought to be charged as part- ners, only one appears and defends, and there is evidence of his liability, the objection cannot be maintained that there is not sufficient evidence of the liability of the other defendants ; be- cause, if they were not served with pro- cess, a judgment would not affect them, and if they were served with process, and failed to appear, their default is an admission of their liability. Van Eps V. Dillaye, 6 Barb. (N. Y.) 244. Under the code, in an action against three as partners, judgment may go against the two who alone were served and appeared, upon proof that they alone composed the firm. Pruyn v. Black, 21 N. Y. 300. Where separate judgments are ren- dered against the defendants in an ac- tion against a firm on a partnership ob- ligation, instead of a joint judgment against all, the court cannot set aside the judgments on motion made more than one year after their rendition. Judd V. Hubbell, 76 N. Y. 543. It is a good defence to an action, on a draft of a firm, that one of the defend- ants is, in fact, the owner of the draft, and that plaintiff has no title thereto. Stettheiraer v. Stettheimer, 2 N. Y. St. Rep. 358. Where three defendants, partners, have been served with process, and one has pleaded, judgment against him is erro- neous, without first taking an interlocu- tory judgment against the other two. Nelson v. Lloyd, 9 Watts (Pa.) 22. In a suit against several partners, some of whom have not appeared, if the plain- tiff declare against all, he may, after verdict against those who have appeared, have judgment against those who have not. Taylor v. Henderson, 17 Serg. & R. (Pa.) 453. Illustrations. — In an action upon the obligation of a firm, contracted while one of the members was a. feme sole, but who had since married — Held, that her hus- band was properly joined as a party defendant. Keller v. Hicks, 22 Cal. 457. If A, being a partner of B, executes certain notes, procures B to endorse them, and then delivers them to the firm ta enable it to replace money which he owes it, and thereupon the firm offers the notes at a bank for discount, and the bank discounts them, and places the pro- ceeds to the credit of the firm, it is a question for the jury whether or not a partnership liability is not thereby in- curred, and it cannot be affirmed, as matter of law, tlrat the liability is merely 470 CHAP. Ill,, § I.] ACTIONS EX CONTRACTU. 281 = such a contract is written or unwritten, express or implied, it is clear that a dormant partner may be sued upon it. (i) Dormant partners, moreover, ought to be made codefendants in an action on a contract binding the firm. (^) But a person who holds himself out to another as the only person with whom that other is dealing, cannot be allowed afterwards to say that such other was also deal- ing with somebody else, [l) 23 individual. City Bank of New Haven's Appeal (Conn.), 7 Atl. Eep. 548. A partner dealing in the name of his firm was inquired of by the parly with whom he dealt, of what persons the firm consisted, and replied, of himself and another, whose names he gave in writing. In a suit against tlie two as partners, they pleaded that there was another partner not joined, and the promises alleged were made by the three jointly. Upon issue joined, the defendants were held to be estopped to prove the partnership to consist of three. Chase v. Deming, 42 N. H. 274. In a suit against partners, plaintiff declaring especially on a note, with the common counts, failed to allege that de- fendants were partners. Held, that he could recover either on the note, or, under the common counts, on another note signed by the firm name by one only of the partners. Hawley v. Hurd, 56 Vt. 617. In an action against a partnership of B., \V. & Co , W. appeared and pleaded 71071 assumpsit. Afterwards B., against whom the suit had been abated, entered his appearance, and without filing any plea, entered into the trial and defended the suit. It was held that a judgment against B. and W. only was not errone- ous, as they did not discover, by a plea in abatement, that there were other partners, and as B., by appearing and going to trial without a separate plea, had bound himself to abide by the plea 4 of his other partner. Barnet v. Watson, 1 Wash. (Va.) 372. (i) Robinson v. Wilkinson, 3 Price 538 ; Beckham v. Drake, 9 Mees. & W. 79, and 11 Id. 315, overruling Beckham V. Knight, 4 Bing. N. C. 234, and see ante p. *178. Of course, if a person is sued on the ground that he is a dormant partner, that fact must be proved, for otherwise no case will be made against him. See Hall v. Bainbridge, 8 Dowl. 583. [k) See Bonfield v. Smith, 12 Mees. & W. 405 ; Dubois v. Ludert, 5 Taunt. 609, where it was held that a dormant partner ought to be joined. (1) See De Mautort v. Saunders, 1 B. & Ad. 398 ; Stansfeld v. Levy, 3 Stark. 8. Whether a defendant has so held himself out is a question for the jury. Compare the cases in the last note. 23. Actions against dormant part- ners. — Dormant and secret partners furnish exceptions to the rule that in actions on contract against partners all the ostensible and public members of the firm who belonged thereto at the time of the making of the contract sued on must be joined as defendants. Page v. Brant, 18 111. 37; Mitchell ?;. Dale, 2 Harr. & G. (Md.) 159 ; Jackson v. Alex- ander, 8 Tex. 109. Thus, a dormant partner is an allow- able, but not an essential party to a suit. Desha v. Holland, 12 Ala. 513 ; Mitchell V. Dale, 2 Harr. & G. (Md.) 159. In an ordinary action against a com- 71 281* ACTIONS EX CONTRACTU. [book II,, One partner liable if others are not disclosed. — If, therefore, a person carries on business in his own name, and incurs debts in so mercial partnership, to recover a debt due for goods sold, a dormant partner who is not a privy to the contract need not be joined with the ostensible part- ners. Jackson v. Alexander, 8 Tex. 109. In the case of a dormant partnership, an attachment of the stock in trade in the hands of the ostensible partner, in a suit against him alone, has preference to a subsequent attachment of the same goods by another person in an action against the partners. Lord v. Baldwin, 6 Pick. (Mass.) 348. Where a limited and dormant part- nership is carried on by one partner in his individual name, and he borrows money, avowedly for the use of the part- nership, the dormant partners will be lia- ble without further proof that the money wetit to the use of the firm. Otherwise, if when he borrows, he makes such rep- resentation. Etheridge v. Binney, 9 Pick. (Mass.) 272. A person who is held out as a partner, or as a dormant partner, may, although he has not signed the articles of part- ners'hip, be sued and held jointly with those who did sign them. Wood v. Cul- len, 13 Minn. 394. In assumpsit for goods sold and deliv- ered, the plaintifif need not join a merely nominal partner of the purchaser as a defendant. Hatch v. Wood, 43 N. H. 633. A bill against dormant partners, after judgment recovered against the ostensi- ble partners, cannot be sustained with- out showing special cause for relief, as that the plaintiff was kept in ignorance of the partnership by undue means; that he has used due diligence to inform him- self, &c. Penny v. Martin, 4 Johns. (N. Y.) Ch. 566. Under the code, suits for debts of a limited partnership may be brought against the general partners only, and a levy in pursuance thereof on firm property binds the interests of all the partners. Artisans' Bank v. Treadwell, 34 Barb. (N. Y.) 553. The plaintifl' in an action upon an agreement made by a firm need not join as defendant a dormant partner therein, whom he did not know to be a partner when the agreement was made, if there was nothing in the style of the firm in- dicating the existence of any other part- ner. Hurlbut V. Post, 1 Bosw. (X. Y.) 28; Brown v. Birdsall, 29 Barb. (N. Y.) 549. See. also, Farwell v. Davis, 65 Barb. (N. Y.) 73. In order to charge a dormant partner on a firm note, it must be shown either that the loan was on the credit of the firm, or that the money for which the note was given was used in the business or for the benefit of the firm. Fosdick V. Vanhorn, 40 Ohio St. 459. The liability of a dormant partner may be avoided by proof of fraud in forming the partnership, if no part of the funds has been received by such dormant partner. Mason v, Connell, 1 Whart. (Pa.) 381. A failure to name as a party defend- ant, in an action against a partnership, a dormant partner, is immaterial, as a judgment will bind such partner as fully as though made a party to the record. Tynberg v. Cohen (Tex.), 2 S. W. Kep. 734. Although a partnership may be open and notorious in the immediate neigh- borhood of the place of business of the firm, yet, if its existence be not known to the plaintiff, and one member of the 472 CHAP. III., § I.] ACTIONS EX CONTRACTU. 281* doing, he may be properly sued alone for such debts, (m) The same holds whenever a partner enters into a written contract in which he does not disclose the fact that he is acting for other people, for although they may be sued, he cannot insist that they shall be sued, (n) firm make the contract with the plain- themselves out as partners, and that the tiffin his own name, and credit be, plaintiff had dealt witli and trusted them upon reasonable grounds, given by the accordingly— i?e/d, that such special tind- plaintiff to him alone, an action upon ing was not inconsistent with the general the contract may be sustained against verdict, and that judgment was properly him, without joining his copartners as entered thereon for the plaintifi'. Reber defendants. Hagar v. Stone, 20 Vt. 106 ; v. Columbus, &c., Co., 12 Ohio St. 175. Cleveland v. Woodward, 15 Vt. 302; Where a firm consisting of three mem- Blin V. Pierce, 20 Vt. 25. See, also, bers, B., A. and M., did business under Farwell v. Davis, 66 Barb. (N. Y.) 73. the firm name of " B. & A.," and every- where a partnership exists between thing in the apparent mode of transact- two persons, one of whom is a dormant ing their business indicated that B. and partner, and the creditors of the firm A. constituted the sole members of the have obtained judgments against the firm; and there was nothing to signify ostensible partner, founded on debts to ordinary dealers with the firm that M. created on the partnership account, had anything to do with it; and there upon which executions have been issued and returned nulla bona, a bill in equity against both partners will be sustained, upon the allegation that the dormant was an entire omission on the part of B. and A. to communicate tlie fact of such connection to one dealing with them; and actual ignorance by him of such partner has, by fraudulent connivance connection, and apparent good fiiith on with the ostensible one, obtained the his part in treating B. and A. as the only possession of and laid claim to all the parties interested, it was held tiiat the partnership assets, in fraud of the credi- referee was right in regarding M. as a tors; the relief which equity will give dormant partner, and therefore not neces- is to subject the whole assets to the pay- sary to be joined as a codefendant with ment of such debts. How v. Kane, 2 B. and A. North v. Bloss, 30 N. Y. Chand. (Wis.) 222. 374. Illustrations.— Where one or more (m) See, in addition to the cases cited of several defendants, sued as partners, in the last note, Mullett v. Hook, Moo. answered, denying that they were mem- & M. 88; Baldney v. Ritchie, 1 Stark. bers of the firm, or indebted to the plain- 338 ; Doc v. Chippenden, Abbott on tifi" on the cause of action stated in the Shipping 84; Colson v. Selby, I Esp. petition, and on the trial of this issue 452. Dubois v. Ludert, 5 Taunt. 609, is the jury returned a general verdict for the other way, but cannot, it is con- the plaintiff", and also found specially, ceived, be supported, under the direction of the court, that the (n) See Higgins v. Senior, 8 Mees. & defendants so answering were not, in W. 834, where the plaintiff" knew the fact, members of the firm, but had held defendant was acting as agent. 473 281* ACTIONS EX CONTRACTU. [bOOK II., Statutory exceptions to general rule. — Thirdly, to the general rule that all persons jointly liable on a contract ought to be sued jointly,, there are a few statutory exceptions. Thus, by the Carriers' act, a person sued as a common carrier, and not on any special agreement, cannot ^require his copartners to be joined ;(o) and by the -' Companies' act, 1862, members of a registered company, who know that it has carried on business for more than six months ^vith less than seven members, are severally liable for the debts of the company contracted after such six months, and cannot require the other members to be joined, [p) Actions on joint and several contracts. — With respect to joint and several contracts, the rule now is that all persons liable on them may be sued jointly or separately, or in the alternative in one action. (9') 2-i (0) 11 Geo. IV., and 1 Wm. IV., c. individual debt, but if the creditor treat 68 ^§ 5 6. the contract as joint, by suing all the (p) 25 and 26 Vict. c. 89, § 48. partners, he must prove a joint contract (g) Ord. XVI., rr. 1, 4, 6. See, as to as alleged, and cannot amend by discon- the old law, the note to Cabell i;.Vaughan, tinuing as to part of the defendants and 1 Wms. Saund. 291, (7; and as to staying joining a count on a contract by one one action, when the creditor has been only, in order to meet the proof which satisfied in another, see Carne n. Legh, isof such a contract. Miller r. Northern 6 Barn. & C. 124 ; Nesbitt v. Howe, 8 Ir. Bank, &c., 34 Miss. 412. L. Rep. 273. The liability of those composing the 24. Actions on joint and several firm for a firm debt is joint and several, contracts.— The doctrine of courts of and judgment may be rendered against equity that- partnership debts are joint any one or more of the copartners with- and several does not obtain in courts of out the joinder of others. Simpson v. law. Exchange Bank v. Ford, 7 Colo. Schulte, 21 Mo. App. 639. 3]^4 On a firm note, in terms promising The mere fact that the defendants are jointly and severally, the partner who partners in the practice of medicine, does signed the firm name may be sued alone, not render them jointly liable for the Snow v. Howard, 35 Barb. (N. Y.) 55. expenditures of each other having no In Devaynes v. Noble (1 Mer. 529, connection with their partnership busi- 563, 564) the Master of the Rolls said : ness as physicians. Thompson v. How- "It may be proper, however, to observe ard 2 Ind. 245. tliat the common law, though it professes All partnership contracts are declared to adopt the lex mercatoria, has not by statute to be joint and several ; there- adopted it throughout in what relates to fore, in a suit against one partner, counts partnership in trade. It holds, indeed, on a firm debt for which he is severally that although partners are in the nature liable, may be joined with counts on an of joint tenants, there shall be no surviv- 474 CHAP. III., § I.] ACTIONS AGAINST PARTNERS. 282^ Actions on contracts not binding on firm. — The previous remarks have been addressed to th-e case of actions on contracts binding the firm. But a contract may be entered into by a partner and not bind the firm, either because it was not entered into on behalf of the firm, or because if it was, the partner entering into it exceeded his authority, express and implied. In such cases, the old rule was that the partner contracting, and no one else, ought to be sued. If he contracted as a principal, he ought to be sued on the contract ; whilst if he contracted as an agent, he ought to be sued as having done so without authority, (r) If a partner entered into a contract on behalf of the firm, but exceeded his authority, and the contract did not bind the firm, and the firm repudiated it, the partner con- tracting, and not the firm, ought to have been sued for money paid to him under it, and sought to be recovered back, (s) But now in cases of this description, whenever there is any doubt as to wha ought to be sued, the prudent course is to sue all the parhiers, and so to frame the statement of claim as to be able to obtain judgment against the right persons according to the evidence on the trial. (^) 25 orship between them in point of interest, to distinguish them from ordinary part- Yet, with regard to partnership contracts, nership debts ?" it applies its own peculiar rule, and, be- (r) See Lewis v. Nicholson, 18 Q. B. cause they are in form joint, holds them 503. to produce only a joint obligation, which (s) See Hudson i;. Robinson, 4 Mau. consequently attaches exclusively upon & S. 475. the survivors ; whereas, I apprehend, by {t) See Ord. XVI., r. 1. Honduras the general mercantile law, a partner- Rail. Co. v. Tucker, 2 Ex. D. 301. ship contract is several as well as joint. 25. Actions on contracts not bind- That may probably be the reason why ing on firm. — In a suit against part- courts of equity have considered joint ners, if one of them shows that the name contracts of this sort (that is, joint in of the firm was put to the note without form) as standing on a different footing his authority, and that the debt was not from others. The cases of relief on joint a firm debt, and he is discharged by bonds may be accounted for on the the jury, judgments may be entered, ground of mistake in the manner of for him and against his partner. And framino- the instrument ; and it may be in such a case the holder of the note said that equity gives to them no other may bring a several suit against the effect than it was the intention of tlie partner liable and recover a several parties themselves to have given to judgment. Parker v. Jackson, 16 Barb, them. But how is it possible to explain (N. Y.) 33. the cases upon partnership notes, so as 475 283^ ACTIONS EX DELICTO. [book II., *Actio7is ex delicto. r*9,R'\ Actions of tort against partners. — It is not every tort which, though committed by several persons acting together, is legally im- putable to them all jointly ;(w) but supposing a tort to be imputa- ble to a firm, an action in respect of it may be brought against all or any of the partners. If some of them only are sued, they can- not insist upon the other partners being joined as defendants, (a;) and this rule applies even where the tort in question is committed by an agent or servant of the firm, and not otherwise by the firm itself (2/) But there is a distinction between ordinary actions of tort and those which are brought against persons in respect of their common interest in land, for all joint tenants, or tenants in com- mon, ought to be joined in an action for an injury arising from the state of their land; (2) and this rule applies to partners as well as to persons who are not partners.26 (u) See 2 Wms. Saund. 117, b and c ; 1 Chitty on Plead. 96, 97. (x) Sutton V. Clarke, 6 Taunt. 29. iy) Mitchell v. Tarbutt, 5 T. R. 649; Ansel 1 V. Water house, 6 Mau. & S. 385. (2) 1 Wms. Saund. 298,/ and g, and Mitchell V. Tarbutt, 5 T. K. 649. 26. Actions of tort against partners generally. — An attachment may be sued out against one of several partners, without joining the others. Green v. Pyne, 1 Ala. 235. When persons occupying relations to others as partners have obtained undue advantage of the latter by means of false representations and unlawful acts, they are answerable in solido for whatever loss has been incurred thereby, irrespective of their obligations as partners. Baldy V. Brackenridge (La.), 2 So. Rep. 410. A firm is liable for an injury caused by the negligence of one of the partners, or an employee of the firm, while trans- •acting its legitimate business. Linton V. Hurley, 14 Gray (Mass.) 191. Creditors of a firm sued those whom they supposed to be the partners, and attached the firm property, after its con- veyance, by bill of sale in the firm name, to third persons, claiming that the conveyance was fraudulent; and, in replevin brought by the transferees against the attaching officer, the plain- tiffs sought to show by the partnership articles that one of the attachment de- fendants was not a partner in the firm, but that his mother was the partner. Held, that it was open to the defendant to show that the son was the real part- ner, and was held out as such, although he signed the partnership article? in the name of his mother. Bishop v. Austin (Mich.), 33 N. W. Rep. 525. An action on the case for negligence occasioning the loss or destruction of a slave hired by plaintiff to a copartner- ship may be maintained against one of the members of the firm, without join- ing the other partners. So, if the neg- ligence be that of an agent of the co- partnership. White V. Smith, 12 Rich. (S. C.) 595. 476 CHAP. III., § I.] EQUITABLE ACTIONS. 283* B. Actions in respect of equitable rights. Parties to actions in the Chancery Division. — Actions by and against partnersliips for the specific performance or the rescission of contracts, for taking agency accounts, as well as in respect of frauds, breaches of trust, and other matters, are by no means un- usual ; and an action by a creditor of a firm to obtain payment out of the estate of a deceased partner, is a matter of almost daily occurrence, (a) 27 As a general rule, an action in the Chancery Division by or against an ordinary partnership will be defective for want of parties, unless all the partners are before the court. But it was early held that where some partners are abroad, a suit against those who remain may be prosecuted with effect, and a decree be obtained against them for payment of the whole of the amount due from the firm. (6) All the members of a firm ought to be parties to an action *for a general account; (c) and in an action for payment of a -^ partnership debt out of the assets of a deceased partner the surviving partners ought to be parties, {d) But if the ground of action is fraud, it is not necessary to join a partner not impli- cated in it and not sought to be made liable, (e) Actions against agents. — An agent of the firm may be sued for (a) See, on this subject, book IV., the survivors of a partnership to stand ch. 3. in the place of a deceased partner and 27. Actions in respect of equitable to satisfy his demands upon the firm, rights.— Except in case of the death of cannot, in a suit to settle the partner- a copartner, creditors of a partnership ship affairs, object that the representa- can enforce their claims, which are tives of the deceased should have been purely legal, against the property of parties. Waugh v. Mitchell, 1 Dev. & the partnership, only at law. Parish v. B. (N. C.) Eq. 510. Lewis, 1 Freem. (Miss.) Ch. 299. {b) See Darwent v. Walton, 2 Atk One who was a partner when a mort- 510 ; Cowslad v. Cely, Prec. in Ch. 83 gage was given to the firm (but in the and see Orr v. Chase, 1 Mer. 729. name of one partner only), and also (c) Coppard v. Allen, 2 De G., J & S. when advances were afterwards made 173. thereon by the firm, and when the bill [d) Ex parte Hodgson, 31 Ch. D. was filed, ought to be a party to a suit 177 ; Hills v. M'Rae, 9 Hare 297. See,. to foreclose. De Greiff v. Wilson, 3 Stew, also, infra, book IV., ch. 3, 'i 2. (N. J.) 435. (e) See Plumer v. Gregory, 18 Eq. A person who has covenanted with 621 ; Atkinson v. Mackreth, 2 Eq. 570. 477 284* ACTIONS BY AXD AGAINST PARTNERS [bOOK II., an account by all the partners, although he only knew of one of them, and was employed by and has transacted business with that one alone. (/) At the same time, an agent is only liable to account to his principal ; and therefore, if a person has been employed by one partner only as principal, or has been induced by that partner to believe that he alone was the principal, in such a case the other partners have no right to eall the person so employed to account with them.(^) On the other hand, if a person has throughout dealt with some partners only, and has all along treated them as principals, he can be compelled by them to account, and he cannot successfully insist that the other partners ought to be" parties to the action. (A) Actions by surviving partner. — A surviving partner may sue an agent of the firm for an account without making the executors of the deceased partner parties, (i) for the surviving partners are the proper pei-sons to get in and give receipts for debts owing to the iirra. [k) 3. Actions by and against partners where a change in the firm has occurred. Effect of change in firm on actions by and against it. — In the preceding remarks upon the persons who ought to sue and be sued when a rig-ht is sought to be enforced bv or against a firm, it has been assumed that no change in the members of the firm has oc- curred between the period when the right in *question p^.^^.- accrued and the time when the action to enforce it is ^ brought. It is proposed now to consider to what extent the rules above established require modification, when some such change has taken place by reason either of the introduction of a new partner, or of the retirement, death or bankruptcy of an old one.28 (/) See Killock v. Greg, 4 Russ. 285 ; (k) See Philips v. Philips, 3 Hare Anon., Godb. 90. 281 ; Brasier v. Hudson, 9 Sim. 1. (g) See Killock f. Greg, 4 Russ. 285; 28. Effect of change in firm on Maxwell I). Greig, 1 Coop. Cas. in Ch. 491. actions by and against it. — Where (h) Benson v. Hadfield, 4 Hare 32 ; one partner sells his share in the part- and see Aspinall v. The London and N. nership stock to a stranger, and receives W. Rail. Co., 11 Hare 325. payment therefor, and the purchaser be- (i) Haig V. Gray, 3 De G. & S. 741. comes a partner in the concern, such 478 €HAP. III., § I.] WHERE A CHANGE HAS OCCURRED. 285* First, with respect to changes causetl by the introduction of new partners and the retirement of old ones. Alterations made by Judicature acts. — By section 25, clause 6, of the Judicature act, 1873, debts may now be assigned by writing and notice to the debtor so as to entitle the assignee to sue for them in his own name. Consequently, if on the introduction of a new partner, or the retirement of an old partner, the debts due to the old firm are thus assigned to the new firm, the new firm can sue in respect of them, either in its mercantile name or in the names of its members. Again, a new partner may, it is appre- hended, always be joined in an action to recover a debt or enforce a demand in which he has an interest, provided his joinder does not prejudice the rights of the defendants. Further, if an incom- ing partner has agreed with his copartners to take upon himself the debts and liabilities of the old firm, they can require hira to be made a defendant for their own partial indemnity. {I) 'When new partner can be sued. — Except, however, in these cases purchase and payment will not have the or his executor or aflministrator to sue effect to relieve the share of the stock of alone for his share, without the consent the remaining partner from liability for of the debtor to such severance ; but all the debts of the old firm. Nixdorf v. the partners, if living, must join in the Smith, 16 Pet. (U. S.) 132. action ; and if any of them be dead, In a suit by two, as late partners, it the action must be brought by the sur- is admissible for the defendant, on the vivor or survivors. Peters v. Davis, 7 general issue, to prove that no partner- Mass. 257 ; Austin v. Walsh, 2 Id. 405. ship existed at the time of the contract. Where a creditor of a firm which is Starke v. Kenan, 11 Ala. 818. dissolved takes in payment a note of the In an action by several alleging them- successors of the firm, not knowing of selves to be copartners, the general issue the dissolution, and believing the note pleaded does not admit that the plain- to be that of the firm, he may sue on the tiffs were the persons composing that original claim without proving that he partnership when the contract declared was fraudulently induced lo take the ■on was made ; but it is an admission of note. Buxton v. Edwards, 134 Mass. the existence of a copartnership of that 567. name. Norcross v. Clark, 15 Me. 80. Two partners who make a special con- A dissolution of a partnership by the tract to do work for a third peison must death of one of the partners, or other- join as plaintiffs in a suit on the con- wise, and an adjustment of the partner- tract, even though the firm be dissolved ship concerns, will not be such a sever- before the completion of the work. Fish ance of a joint demand in favor of the v. Gates, 133 Mass. 441. partnership as will entitle either partner {1} Ord. XVI., rr. 48, et seq. 479 285^ ACTIONS BY AND AGAINST PARTNERS [bOOK II., an incoming partner can neither sue nor be sued in respect of a liability of" the old firm, unless there is some agreement, express or implied, between himself and the person suing him or being sued by him.(m) As regards negotiable instruments, indeed, any persons who can agree to sue jointly upon them may do so, provided the instrument is in such a state as to pass by deliv'ery; therefore, if a bill or note, endorsed in blank, is given to a firm consisting of certain individ- uals, who afterwards take in a new partner, they and lie, or some or one of them, may sue on that bill or note, (/i) 29 (wi) See, accordingly, Wilsford v. Wood, 1 Esp. 182; Ord v. Portal, 3 Camp. 239, note; Waters v. Paynter, Chitty on Bills 406 (10th ed.), note 5; Vere v. Ashby, 10 Barn. & C. 288; Young V. Hunter, 4 Taunt. 582. See Radenhurst v. Bates, 3 Bing. 463. See ante book II., ch. 2, § 3. in) See Ord v. Portal, 3 Camp. 239, and ante p. *274. 29. When new partner may be sued. — The dissolution of a firm by agreement between the members thereof will not affect the rights of its creditors, though the terms of such dissolution will fre- quently be enforced by the courts, as between the parties to such agreement. Hudgins v. Lane, 11 Bankr. Reg. 462. An incoming partner will not be lia- ble for an old debt of the firm, unless there is a novation of the debt, by a new promise, by the entire new firm, upon a valid consideration, and a discharge of the old firm upon the old debt. Sten- burg V. Callanan, 14 Iowa 251. Where an attorney holds moneys of a dissolved firm composed of three part- ners, he is chargeable in trustee process, in an action against a new firm com- posed of two members of the old firm and a third person, unless some hostile claim be made by the creditors of the old firm. Burnell v. Weld, 59 Me. 423. As to the incoming partner's rights, and his liability to be sued on a firm debt existing at the time of his coming into the firm, see Mores v. Soc. for Destitute Children, 19 N. Y. Week. Dig. 247. Illustrations. — Plaintiff' sold goods to C. & D., who subsequently sold the same goods to C, D. & E. Held, that they could recover against C. & D., who could not change the first contract by their own act so as to charge the third partner. Atwood v. Lockhart, 4 Mc- Lean (U. S.) 350. In 1843 A, B and C were partners, doing business under the firm of A, B & Co. In 1844 A and C formed a part- nership under the firm of A & C. The latter firm were sued, as the firm of A & C, for a debt contracted by the former firm. Held, that A and C were liable only in a suit against the former firm. Fagely v. Bellas, 17 Pa. St. 67. To an attachment suit against two partners for a firm debt, one of them pleaded in abatement. Subsequently the partnership was dissolved, after which the other partner interposed a general denial. Held, that both de- fendants were in court, notwithstanding the plea in abatement. Overmier, 64 Tex. 57. 480 CHAP. III., § I.] WHERE A CHANGE HAS OCCURRED. 286* ^Effect of retirement of old partner. — So, as regards -■ changes occasioned by the retirement of a partner. It has been already shown that the retirement of a partner in no way affects his rights against or obligations to strangers in respect of past transactions. Subject, therefore, to the above observations, a retired partner ought to join as a plaintiff, and be joined as a de- fendant, in every action to which, had he not retired, he would have been a necessary party. This rule holds good even where a contract is entered into before, and the breach of it occurs after the retirement of a partner, (o) In one case, indeed, it was held at Nisi Prius that where two partners sold goods, and they aflerwards dis- solved partnership, an action for the price of those goods was sus- tainable by the one partner who continued to carry on the business of the late firm ; (p) but the propriety of this decision is more than questionable. Whether, however, it is now necessary to join as a plaintiff a retired partner against whom the defendant has no claim,, and who has no beneficial interest in what is sought to be recovered,, admits of some doubt. Sometimes one partner retires and a new partner comes in,, and an agent of the firm, in ignorance of the change which has. occurred, enters into a contract on behalf of the firm ; in such a case the members of the new firm may sue on the contract,, unless the defendant is prejudiced by their so doing, (q) The liability of the retired partner on such a contract will, how- ever, cease if the creditor sues the new firm and recovers judg- ment against it. (r) 30 Fresh contract. — And a new firm may sue or be sued in respect (o) See Dobbin v. Foster, 1 Car. & K. partner does not operate to discharge a 323. debt as against the other. Evans v. (p) Atkinson v. Laing, Dowl. & R. Carey, 29 Ala. 99. N. P. Cas. 16. Three persons being sued as partners, (q) Mitchell v. Lapage, Holt N. P. proof that after part of the account sued Cas. 253. But see Boulton v. Jones, 2 upon was created, and the partnership Hurlst. & N. 564. dissolved, the retiring partner paid the (r) See Scarfe v. Jardine, 7 App. Cas. others a sum of money to cover his re- 345, noticed ante pp. *46 and*197. sponsibility for the firm debts, is irrele- 30. Effect of retirement of old part- vant and inadmissible. Gooden v. Mor« ner. — A parol agreement to release one row, 8 Ala. 486. 481 31 286* ACTIOXS BY AND AGAINST PARTNERS [bOOK II., of a fresh contract entered into by or with it to pay a clel)t owing to or by an old firm. Thus, where A was indebted to B, and after- wards C entered into partnership with B, and A contracted a further debt with both, and then settled an account with both, as well upon what was due to B before his partnership with C, as upon the debt contracted afterwards, it was held that B and *C might join in an action of assumpsit on an account p^^oy stated, and recover the whole debt, (.s) 31 Change in firm may prevent it from suing. — Although a change in a firm, whether by the introduction of a new partner or the retirement of an old one, cannot, except as already mentioned, con- fer upon the partners any new right of action against strangers, or vice versa, as regards what may have occurred before the change took place ; it may, nevertheless, operate so as to discharge a per- son from a contract previously entered into by him. Thus, as was pointed out in the sixth chapter of the first book, (t) a person who is surety to a firm is discharged from his suretyship, for the future, by a change amongst its members, and cannot, therefore, be sued (s) Moor V. Hill, Peake Add. Cas. 10. vances made and to be made by said 31. Fresh contracts. — After the sale commercial house, for the benefit of the of his interest by one partner to the plantation of P. After the execution of other, subsequent contracts for goods the mortgage, the commercial house of bind the purchasing partner only ; at L. & C. was changed by the addition of least, such is the rule in equity, though new parties, and styled L., C. & Co. In the retiring partner may be liable at 1862, P. executed three promissory notes law. McCarthy v. Fitts, 20 N. Y. Week, in favor of the new firm of L., C. & Co. Dig. 225. The holder of the notes brought suit to Where one member of a dissolved recover the amount, and claimed the firm sues a purchaser, from the other, of benefit of the mortgage in favor of the partnership property, denying such old firm, executed in 1857. Held, that other partner's right to convey the entire the addition of another party in the firm interest of the firm, and suing for the dissolved the old firm, in whose favor value of his (the plaintiflT's) interest, the the mortgage was executed, and created partner making the sale is not a neces- a new firm, in whose favor the notes sary party. Hagendobler v. Lyon, 12 were given, and the new firm could not Kan. 276. avail themselves of the mortgage given A mortgage was executed by P., in in favor of the old firm. Abatv. Penny, 1857, for $8000, on real estate, in favor of 19 La. Ann. 289. L. & C, commission mercliants, for the (<) .47iQ- and the bonds in question were on each change assigned by ^ "^ the old to the new firm. The plaintiff had an account with the bank as one of its customers, and when the bank stopped payment a balance was owing to him on that account ; but the bonds had 39. Cases where one partner only Smith, 12 Mees. & W. 405. has been dealt with. — Where one of (»•) Puller v. Roe, 1 Peake N. P. 260. two law partners sues individually for (s) 24 Beav. 163. See, also, Jefferys v. work which has been uniformly done in Agra and Masterman's Bank, 2 Eq. 674; the plaintiff's name, defendant may set and as lo set-off at law as against the off a demand against the firm. Piatt v. assignee of a debt after notice of the as- Halen, 23 Wend. (N. Y.) 456. signment. Watson v. Mid- Wales Rail. iq) Ord. XVI., r. 11. See Stackwood Co., L. R., 2 C. P. 593. V. Dunn, 3 Q. B. 823, and Bonfield v. 501 297* SET-OFF BETWEEN PARTNERS [bOOK II.^ been previously assigned to third parties, without notice, however, to the plaintiff. The question then arose whether, notwithstanding the various changes in the firm, and the assignment of the bonds, the plaintiff was entitled to set off, against the debt due from him on the bonds, the amount due to him as a customer of the bank, and it Avas held tiiat he was. The judgment in this case is pecu- liarly instructive, and the following extract from it is submitted to the reader without apology. Effect of assignments and of changes in firm on right of set-off. — " If a customer borrow money from his bankers, and give a bond to secure it, and afterwards, on the balance of his general banking account, a balance is due to the customer from, the same bankers, who are the obligees of the bond, a right to set off the balance against the money due on the bond will exist both at law and in equity, (t) " If the firm were altered, and the bond assigned by the original obligees to the new firm, and notice of that assignment were given to the debtor, and if, after this, a balance were due to him from the new firm (the assignees of the bond), then no right of set-off would exist at law, because the assignment of the chose in action would be inoperative at law, and the obligees of the bond, and the debtor on the general account would be different persons ; but, as in equity, the persons entitled to the bond and the debtors on the general account would be the same persons, a right to set-off would exist in this court, and the customer would, in equity, be- entitled to set off the balance due to him against the bond debt due from him. " If, after the bond had been given, it had been assigned to strangers, and no notice of that assignment had been given to the original debtor (the obligor of the bond), then his rights would remain the same. Thus, if the assignment had been, made to the stranger before any alteration of the firm, then the right of set-off would still remain at law, where the obligees of the bond and the debtors on the general account would be the same persons, and in equity also, if the matter on account were brought here, as the assignees of the chose in action would be bound by the equities affecting their assignors. " But, if notice of that assignment had been given to the original debtor, no right of set-off would exist in this court for the balance subsequently due by the bankers to the obligor ; because the persons entitled to the bond would, as the obligor knew, be different persons from the debtors to him on the general account with whotn he had continued to deal. "If the assignment of the bond had been made to the new firm, with ♦oqan *notice to the obligor, they would, if debtors on the genera-l account, be liable to the same rights of set-off in equity as if they had been the obligees. " If, after the alteration of the firm, and after the assignment of the bond to the new firm, with notice to the debtor or obligor of that assignment, an assignment (0 Roxburghe v. Cox, 17 Ch. D. 520. 502 CHAP. III., § III.] AND NON-PARTNERS. 298* had been made of the bond to strangers, and no notice of that second assignment given to the obligor, then the rights of set-off would still remain to him in equity as against tlie first assignees, of whose assignment he had notice, and the second assignees would, in equity, be bound by it, because, as I have stated, the assignees of the bond take it subject to all the equities which affect the assignors." The court, after laying down these general propositions, came to the conclusion on the evidence in the case that the plaintiff was informed that the successive firms with which he dealt as customers were his creditors in respect of the bonds, but that he had no notice of their assignment by the firm which stopped payment to the holders of them, and that therefore he was entitled, even as against such holders, to set off what was due to him as a customer of the bank when it stopped payment. The above decisions are sufficient to show that in allowing debts to be set oif against each other, courts of equity went far beyond courts of law, although they did not introduce any new principle of set-off. The truth of this was still more apparent from the cases in which set-off was not allowed, one of the debts being joint, and the other several only. SECTION III. — OF EXECUTION AGAINST PARTNERS FOR THE DEBTS OF THE FIRM. Execution against partners. — If a judgment has been obtained against several persons sued jointly, the writ of execution founded on the judgment must be against all of them, and not against some or one of them only ; for the judgment does not wan-ant such a writ, {u) But, although the writ of execution on a joint judgment must be joint in form, it may be levied upon all, or any one or more of the persons named in it ; for each is liable to the judgment creditor for the whole, and not for a proportionate part of the *sum ^^,=299 for which judgment is obtained, (a;) The consequence of (m) See Penoyer v. Brace, 1 Ld. (x) See per De Grey, C. J., in Abbot Eaym. 244 ; Clarke v. Clement, 6 T. K. v. Smith, 2 Wm. Bl. 949 ; and Herries v. 526 ; 2 Wms. Saund. 72, / ; Bac. Ab. Jamieson, 5 T. R. 556, per Lord Ken- " Execution," G, 1. von. 503 299* EXECUTION AGAINST PARTNERS. [bOOK II., this is that the slieriff may execute a writ issued against several partners jointly, eitlier on their joint property, or on the separate property of any one or more of them, or both on their joint and on their respective separate properties ; and so long as there is, within the sheriff's bailiwick, any property of the partners, or any of them, a return of nulla bona is improper, (y) Of course, if the judgment creditor has had execution and satisfaction against one of the part- ners, he cannot afterwards go against any of the others; (2) but the important point to observe is that the sheriff is not bound to levy on the goods of the firm before having recourse to the separate prop- erties of its members, and that they cannot require the sheriff to execute the writ in one way rather than another. Similar rules are applicable to attachments of debts under the Common Law Procedure act, 1854 (17 and 18 Vict., c. 125, § 61), it having been determined that a judgment creditor of three per- sons can, under the act in question, attach debts owing to any one or more of his judgment debtors. (a) The extent to which the right to levy execution against the effects of a firm is affected by bankruptcy will be examined hereafter. The procedure on a judgment against a firm (6) is regulated by order XLII., rule 10, which is as follows: Execution against partners on judgment against firm. — Where a judgment or order is against a firm, execution may i-ssiie: (a^ Against any property of the partnership ; (6) Against any person who has appeared in his own name under order XII., rule 15, or who has admitted on the pleadings that he is, or has been adjudged tr be a partner ; (c) Against any person who has been served, as a partner, with the writ of sum- mons, and has failed to appear. If the party who has obtained judgment or an order claims to be entitled to issue execution against any other person as being a member of the firm, he may apply to the court or a judge for leave so to do; and the court or judge may give such itonn-] leave if the liability l)e not disputed, or, if such liability *be disputed, may order that the liability of such person be tried and determined in any man- ner in which any issue or question in an action may be tried and determined. (2/) See Jones v. Clayton, 4 Mau. & S. (6) The firm here means the partners 349. when the cause of action accrued, ante (z) See Com. Dig., " Execution," H. p. *265. (a) Miller v. Mynn, 1 El. & E. 1075. 504 CHAP. III., § III.] EXECUTION AGAINST PARTNERS. 300* It is not clearly said iu this rule that execution must first be levied against the joint estate of the firm before having recourse to the separate estates of the members; and, having regard to the previous well-established practice, tiie rule cannot be construed as rendering such a course necessary. The proper mode of entering up judgment has been already con- sidered, ante p. *266. Execution on judgment against firm. — If judgment is entered up against a firm in its mercantile name, execution can only issue with- out leave against the property of the firm (c) or against those persons specially mentioned in order XLII., rule 10; other persons sought to be made liable must be proceeded against in some other way and some judgment or order must be obtained against them establishing their liability before execution can issue against them, (d) An action founded on the judgment may be brought against them, and it is not necessary to proceed by an issue and an order under the rule, (e) But the judgment cannot be made the foundation of a debtor's sum- mons in bankruptcy against them if they dispute their liability ; for, in the case supposed, their liability in respect of the judgment has not yet been established, {f)^^ The mode of taking in execution the share of one partner on a separate judgment against him will be examined hereafter. See book III., ch. 5, § 4. (c) If there is a receiver, application Partnership creditors have no lien an must be made to the court. Kewney v. the partnership effects, until they have Attrill, 34 Ch. D. 345. obtained judgment, in the case of land, id) Davis v. Morris, 10 Q. B. D. 436. or execution in case of personalty. (e) Clark v. Cullen, 9 Q. B. D. 355. Reese v. Bradford, 13 Ala. 837. S. P., (/) Ex parte Young, 19 Ch. D. 124 ; Mayer v. Clark, 40 Ala. 259. Ex parte Blain, 12 Ch. D. 522, where The entire assets of a partnership are, the alleged debtor was a foreigner re- in equity, subject to the payment of its sidino- abroad. debts. Coster v. Bank of Georgia, 24 40. Executions against partners on Ala. 37. judgment against firm.— In the United While the legal title of partnership States courts, partnership property may property remains in the firm, a creditor be held for a partnership debt, though may pursue his remedy against it, at judgment can be obtained only against law, in the same manner as against an one partner, by reason of the other's individual debtor. But when the legal being out of the jurisdiction. Inbusch title has been conveyed to a third person V. Farwell, 1 Black (U. S.) 566. bona fide, the creditor can pursue the 505 300=" EXECUTION AGAINST PARTNERS. [bOOK II., property only by a bill in equity to the levy should be on the pnrtner's marshal the assets and enforce his interest in the joint stock, and a sale equitable lien. Stokes v. Stevens, 40 thereof would give the purchaser a right Cal. 391. ^° ^° account and division. Clagelt «;. An execution against a firm has the Kilbourne, 1 Black (U. S.) 346. preference over one against an individual If an officer attach and take possession partner ; but where property is sold on of personal property of a firm in Massa- an execution against a partner, though chuseits, on a writ against one partner after the delivery of the execution who has no equitable interest in such against both partners, it is a valid sale property, he is a trespasser. Cropper v. if sufficient lime had not elapsed for ad- Coburn, 2 Curt. (U. S.) 465. vertisement and sale under the other Under an execution against one of execution. Fenton v. Folger, 21 Wend, two partners, the sheriff may seize the (N. Y.) 676. goods of the firm, and sell the interest The mere insolvency of a partnership of the judgment debtor, in which case does not, of itself, work such a legal or the vendee will hold the goods in com- equitable appropriation of its effects, in raon with the other partner. United the absence of any proceedings for a States v. Williams, 4 McLean (U. S.) pro rata distribution, as to prevent a 236. judgment creditor from making his debt A purchaser under an execution out of the effects by execution, or to against one partner, in his separate capa- prevent him from removing fraudulent city, becomes a tenant in common with obstructions or assignments intended by the other partners, in an undivided share the debtor to hinder the execution, of the land which he purchases, and Greene v. Breck, 32 Barb. (N. Y.) 73. holds it subject to all the rights of the — on judgment against one part- other partners, and can have no claim ner.— A creditor of an individual part- but upon the separate interest of the ner has only a right to sell what of the individual partner in the residue which partnership property belongs to the may remain after the partnership debts debtor partner, after paying the debts are paid. Gilmore v. North American due by the firm, and his own debt to the Land Co., Pet. (U. S.) C. C. 460. firm. Merrillu.Rinker, 1 Bald w. (U.S.) Upon execution against one partner, 528; Lyndon v. Gorham, 1 Gall. (U.S.) the sherifl^ may levy on that partner's 367. S. P. in state courts: White v. undivided interest in goods, and take the Dougherty, Mart. & Y. (Tenn.) 309; M'Carty v. Emlen, 2 Yeates (Pa.) 190 ; Dower v. Stanffer, 1 Penn. (N. J.) 198 ; Knox V Schepler, 2 Hill (S. C.) 595 ; Knox V. Summers. 4 Yeates (Pa.) 477 ; goods into his exclusive possession, and that though the firm debts exceed the firm effects. Andrews v. Keith, 34 Ala. 722. Before the joint property of a firm can Tappan v. Blaisdell, 5 N. H. 189 ; Pierce be applied to private debts, all debts of V. Jackson, 6 Mass. 242 ; Fish v. Herrick, the partnership must be settled. Chase 6 Id. 271. V. Steel, 9 Cal. 64 ; Collins v. Butler, 14 The levy of an execution against one Cal. 223 ; Burpee v. Bunn, 22 Cal. 194. partner on a piece of land belonging to The sheriff can levy on the interest of the firm gives the execution purchaser one partner in the firm goods, but must no title, legal or equitable to the land ; sell subject to the rights of firm creditors- 506 CHAP. III., § III.] EXECUTION AGAINST PARTNEES. 300" and of the other partners. Jones v. on the property used in the business Thompson, 12 Cal. 191. carried on by B. A claimed the prop- A judgment lien against one of the erty as partnership property. Held, that partners of a firm, individually, consti- the levy was just and legal, the creditor tutes a lien on the interest of that part- C having a right to look to the properly ner in the partnership property, which of A to pay his debt. Van Valen i\ entitles the purchaser of it, when sold, Kussell, 13 Barb. (N. Y.) 590. to possession, divested of liens for firm A judgment was recovered against a debts not reduced to judgments. Green partnership on confession of one of the V. Ross, 24 Ga. 613. partners. Execution was issued thereon, Where partnership property is sold on and the partners paid the amount to the an execution against an individual part- sheriff after a levy on partnership prop- ner, the firm cannot maintain trover erty. Afterwards, the judgment was against the purchaser for the property, reversed as to the partner who was not a The only remedy for the other partner party to it. Held, that the plaintiff in is in equity. White v. Woodward, 8 B. execution was entitled to recover of the Mon. (Ky.) 484. sheriff the amount received by him on An execution against one of two part- the execution. Harper v. Fox, 7 Watts ners may be levied on the partnership & S. (Pa.) 142. effects. Wiles v. Maddox, 26 Mo. 77. S. and T., trading as partners, made A sale of partnership property, under several assignments, each of his private a separate execution against one partner, property and interest in the firm, on operates as a dissolution of the partner- successive days, to the same assignees, ship. Renton v. Chaplain, 1 Stock. (N. who accepted both trusts. Afterward a J.) 62. firm creditor issued execution and levied Illustrations. — A, residing in the upon the partnership property. Held, country, and B in the city of New York, that in the absence of proof to the con- both produce dealers, made an arrange- trary, the assignment of the firm prop- ment by which they carried on their erty to assignees by one of the firm was business in connection, the profits at assented to by the other, and that the both places to be divided between them, partnership property vested in the as- intentionally concealing the arrange- signees, and could not be levied upon ment made. B incurred a debt to C in by the sheriff, after the assignments had the course of his business, confessed a been made and accepted. McNutt v. judgment, and the execution was levied Strayhorn, 39 Pa. St. 269. 507 *BOOK III. [*3oi OF THE RIGHTS AND OBLIGATIONS OF MEMBERS OF PARTNER- SHIPS BETWEEN THEMSELVES. CHAPTER I. OF THE RIGHT TO TAKE PAItT IN THE SIANAGEMENT OE THE AFFAIRS OF THE FIRM. Each member of pai tnership entitled to take part in its manage- ment. — la partnerships, the good faith of the partners is pledged mutually to each other that the business shall be conducted with their actual personal interposition, so that each may see that the other is carrying it on for their mutual advantage, (a) In the absence of an express agreement to the contrary, the powers of the members of a partnership are equal, even although their shares may be unequal ; and there is no right on the part of one or more to exclude another from an equal management in the concern. (6) Moreover, if two persons are in partnership, and one of them mortgages all his share and interest therein to the other, the latter will not be permitted, during the continuance of the partner- ship, to avail himself of his rights as a mortgagee and to exclude his copartner from interference in the partnership, (c) Indeed, speaking generally, it may be said that nothing is considered as so loudly calling for the interference of the court between partners, as the improper exclusion of one of them by the others from taking part in the management of the partnership business. (cZ)l (a) Per Lord Eldon ir Peacock v. (d) See, in addition to the cases last Peacock, 16 Ves. oL cited, Goodman v. Whitcomb, 1 Jac. & (6) Rowe V. Wood, 2 Jac. & W. 558; W. 589; Marshall v. Colman, 2 Id. 266. see, too, Lloyd v. Loaring, 6 Ves. 777. 1. Each member entitled to take (c) Rowe V. Wood, 2 Jac. & W. 558. part in the management. — Where one 508 CHAP. I.] RIGHTS OF PARTNERS INTER SE. 302* * Unless otherwise agreed. — It need, however, hardly be "'-' observed that it is perfectly competent for partners to agree that the management of the partnership affairs shall be confided to one or more of their nnmber, exclnsively of the others, and that where such an agreement is entered into, it is not competent for those who have agreed to take no part in the management, to trans- act the partnership business without the consent of all the other partners. But, as was seen in an earlier part of the treatise, every Hi ' iiher of an ordinary firm \s, prima-facie its agent for carrying on its l)usiness in the usual way ; (e) and persons dealing with a part- ner within the limits of his apparent authority, are entitled to hold the firm answerable for his conduct, unless such persons had distinct notice that his real authority was less extensive than they had a right to assume -it to be. 2 of two partners is insolvent, the solvent tirely foreign to the purposes of the partner has a right to liquidate the association. Gorman v. Kussell, 14 Cal. affairs of the firm, and to take them out 531. See, also. Sweet v. Morrison, 2 N. of the hands of the insolvent for that Y. St. Eep. 781 ; S. C, 4 Cent. Rep. 212. purpose; but this right may be waived (e) Ante book II., ch. 1. by permitting the insolvent partner to 2. Unless otherwise agreed.— The administer the assets. Vetterlein v. assent of any one of the partners to the Barnes, 6 Fed. Rep. 693. But the mere acts of their agent would be good evi- fact that a partnership may happen to dence affecting the rest, unless, by the be in debt, does not give one partner the articles or constitution of- the company, right to prevent the other from taking the whole concern and management possession of the partnership property, should be entrusted to a committee or Carithers v. Jarrell, 20 Ga. 842. board of managers, in which case the While, in law partnerships, either assent must be proved to have been given partner may attend to business entrusted by them, or some of them, pursuant to to the firm, yet if the firm contract with the authority delegated to them by the a client for the personal services of a company. Odiorne v. Maxcy, 13 Mass. particular partner, who fails to perform 178 ; S. C, 15 Id. 39. them, it is a breach of contract. But Evidence, both direct and circumstan- tlie damages for such breach will be but tial, is admissible to prove that the sole nominal, if another party performs the power of conducting the business of a duty with due professional skill, and firm has been given to one partner. Such without injury to the client. Smith v. power may be inferred from the conduct Hill 13 Ark. 173. of the partners for a series of years, as An association or partnership cannot that one has exclusively conducted the exclude or expel a member for refusing business of the firm, and the other part- to do an act not required by the consti- ner has never questioned his acts, or tution or laws when he joined, and en- assumed to conduct the business himself. 509 303* DUTY TO OBSERVE GOOD FAITH. [bOOK III., *CHAPTER IL [*303 OF THE GENERAL DUTY OP PARTNERS TO OBSERVE GOOD FAITH. ■Section I. — Preliminary Remarks, *303. Section II. — Of the Obligation of Partners not to Benefit Themselves at the Expense of their Copart- ners, *305. Section III. — Of the Powers of a Majority of Partners, *313. SECTIOX I. PRELIMINARY REMARKS. High standard of honor requisite among partners. — In societatis contractibus fides exuheret.{a) The utmost good faith is due from every member of a partnership towards every other member ; and if any dispute arise between partners touching any transaction by which one seeks to benefit himself at the expense of the firm, he will be required to show, not only that he has law on his side, but that his conduct will bear to be tried by the highest standard of honor. (6) Thus, if one partner knows more about the state of the partnership accounts than another, and, concealing what he knows, enters into an agreement with that other relative to some matter It is proper to show any reason existing, immediately afterwards repudiates the or expressed by the partners, why it was agreement to become a partner, he is not desirable or desired that the other not entitled to any of the property should conduct the business, as that he bought, nor are his individual creditors, had little interest in the concern, while Kice v. Shuman, 43 Pa. St. 37. the interest of the managing partner (a) Cod. IV., tit. 37, 1. 3. was large. Anthony v. Wheatons, 7 (6) See Blisset v. Daniel, 10 Hare 522, R. i. 49. 536. Compare Cassels v. Stewart, 6 App. Where one permits another to buy Cas. 64, noticed infra, which shows how Block on their joint account, in antici- difficult it is to apply this general prin- pation of forming a partnership, and ciple. 510 CHAP. II., § I.] DUTY TO OBSERVE GOOD FAITH. 303* as to whicli a knowledge of the state of the accounts is material, Buch agreement will not be allowed to stand, (c) 1 And among those about to become partners, and who have ceased to be partners. — This obligation to perfect fairness and good faith is, moreover, not confined to persons who actually are partners. It extends to persons negotiating for a partnership, but between whom no partnership as yet exists ; (d) 2 and also to persons who have dissolved partnership, but who have not completely wound up and settled the partnership affairs ; (e) and most especially is good faith ^„„ .-] required to be observed when one ^partner is endeavoring to get rid of another, or to buy him out. (/) 3 (c) See Maddeford v. Aiistwick, 1 partner, there is no confidential relation Sim. 89. between the parties until the partner- 1. High standard of honor among ship is formed. In such a case, it is not partners. — Where one partner, who is improper to put in the stock and ma- in sound health, was made sole agent of chinery of the old business, at a price the partnership, by another who was fixed arbitrarily between the parties, not, and who relied on him wholly for as one of the conditions of the new true accounts, and the party thus made arrangement. Uhler v. Semple, 5 C. E. agent managed the business at a distance Gr. (N. J.) 288. from the other, communicating to him (e) See Lees t;. Laforest, 14 Beav. 250; no information — Held, that the relation Clegg v. Fishwick, 1 Macn. & G. 294 ; of partnersliip, whatever it may be in Perens v. Johnson, 3 Sm. & G. 419; general, became, under such circum- Clements r. Hall, 2 De G. & J. 173. Btances, fiduciary, and the law govern- (/) Blisset v. Daniel, 10 Hare 493 ; ing fiduciary relations was applicable. Maddeford v. Austwick, 1 Sm. 89 ; Perens Brooks V. Martin, 2 Wall. (U. S.) 70. v. Johnson, 3 Sm. & G. 419; Chandler A and B being partners. A, without v. Dorsett, Finch 431. As to wilhhold- the consent of B, borrowed money at an ing information, see McLure v. Ripley, 2 extra rate of interest, on the credit of Macn. & G. 274. the company, to pay his private debts, 3. And among those who have and credited the company with the ceased to be partners. — Partners are money so applied and the legal interest quasi trustees for one another, even after only. Held, that the excess of interest dissolution ; if one retires, or becomes thus paid by the company beyond the bankrupt, or dies, that one's representa- amount credited to the company was a tives and the other partners still remain proper charge against A. Tomlinson v. quasi, trustees. Hoyt v. Sprague, 8 Rep. Ward, 2 Conn. 396. 616. (d) See Hichens v. Congreve, 1 Russ. & After dissolution, each partner becomes M. 150 ; Fawcett v. Whitehonse, Id. 132. a trustee for the others as to the partner- 2. And among those about to be- sliip funds in his hands, in order to effect come partners. — In the negotiations a fair settlement and just distribution of preliminary to the taking in of a new the effects, and he will not be allowed to 511 304^ DUTY TO OBSERVE GOOD FAITH. [bOOK III., Each must do his duty. — Notwithstanding the universal appli- cation to partners, of tiie rule requii-ing perfect good faith, if one partner repudiates the contract of partnershi{) and will not perform make a bargain with his former copart- ners advantageous to himself; but before dissolution no such relationship exists. Stephens v. Orman, 10 Fla. 9. After dissohition, equity will restrain one partner from publishing the letters of another concerning the business of the firm, unless the purposes of justice, civil or criminal, require their publica- tion. Roberts v. McKee, 29 Ga. 161. The remaining partners, after a disso- lution, are entitled to the possession of the effects for the purpose of settling up the concern, and without interference, unless for good cause shown, on the part of strangers who may have purchased the shares of retiring partners. Reece V. Hoyt, 4 Ind. 169. That upon a dissolution the partners settled on the hypothesis that a firm debt was settled by the note of one, is not to be presumed, but is for the jury to decide. Tyner v. Stoops, 11 Ind. 22. A partner, on dissolution, appointed agent and receiver, altiiough he have an interest, is only trustee for the other partners. Honore v. Colmesnil, 1 J. J. Marsh. (Ky.) 506. After dissolution and an assignment by one partner to th-e other of all his interest in the book debts and demands of the firm, with power to collect them for his own benefit, an attempt by the partner so assigning to control one of those demands against himself, and to direct that it should not be allowed in set-off, can have no effect. Davis v. Briggs, 39 Me. 304. Where the articles of copartnership provide that on dissolution of the co- partnership, its effects shall be divided among the partners, the partners become. on such dissolution, merely tenants in common, and no one of them can set off or sell the share of the other without his consent. Phillips v. Reeder, 3 C. E. Gr. (N. J.) 95. If, after dissolution, either party con- tinues the use of the partnership prop- erty, he may be required to account for such use, although it was only a partner- ship in proceeds, and not in the stock. Pine V. Ormsbee, 2 Abb. (N. Y.) Pr. (N. S.) 375. There is nothing in the relation of partners which makes a mortgage, given by one to the other on dissolution of the partnership, to indemnify him against the partnership debts, fraudulent. Whit- more V. Parks, 3 Humph. (Tenn.) 95. After the dissolution of a firm, one of its members cannot act as the agent of a creditor of the firm, in holding obliga- tions due the firm, as collateral security for a note due from the firm to such creditor, and taking a conveyance of land in settlement of such an obligation ; and, in such a case, the creditor, in an action on the firm note, is not bound to account for the value of such land, or of such alleged collaterals, where it appears they were never in his possession, that he never authorized such alleged agent to hold them for him, and never received any payments thereon, and that the land was not conveyed to him, but to such alleged agent. Pray v. Morse, 41 Wis. 343. The relation of trustees towards each other, if it exists during partnership, certainly ceases, in Illinois, when the firm is dissolved and the business is closed. Pierce v. McClellan, 93 111. 245. And, in Massachusetts, a partner is no 512 CHAP. II., § I.] DUTY TO OBSERVE GOOD FAITH. 304* his duty towards his copartners, he cannot justly complain if they in return decline to treat him on a footing of equality with them- selves, [g) A.S observed by Lord Eldon, in Const v. Harris : " A partner who complains that the other partners do not do their duty towards him must be ready at all times and offer himself to do his duty towards them." (A) But if a partner has been set at defiance by his copartners, if they have denied that he is a partner, and that he has any right to interfere in the partnership, they can derive no advantage from the circumstance that he has not performed his duty to them, {i) A partner whose rights are denied should be prompt in asserting them, or he may be seriously prejudiced. This subject mhII be further adverted to in that part of the work which relates to the defences to actions between partners, (k) 4 longer a trustee for his partner after the partnership was dissolved, and an insur- ance broker ceases to be trustee for the underwriters when he leaves his ofiBce ; and a settlement by such a party, with the administrators of his former princi- pal or partner, will be sustained if it is not actually or constructively fraudu- lent, although advantageous to the party ; and in this he differs from one who is strictly a trustee, such a one being scarcely allowed to purchase at all of his cestui que trust. Farman v. Brooks, 9 Pick. (Mass.) 212. Illustrations. — Where one of two co- partners sold out his interest in the co- partnership assets to the other, taking back an agreement that the purchaser would pay the partnership debts, and the latter, instead of paying them, caused them to be brought up in the name of a confederate, and judgment to be obtained thereon, on which the lands of the other copartner were sold to such confederate, it was held that those sales should be set aside as fraudulent and void, on behalf of one to whom the owner had conveyed the lands, and that it was not necessary for the complainant to show that he had purchased and paid a valuable consid- eration for the lands. Reed v. Wessel, 7 Mich. 139. On giving up the business, one partner sold property of the firm and rendered an account for the same at $4000. He had sold the property to another, to re- sell, and divide the profits with him, and the profits were actually divided between him and such other person. Held, that such partner must account for the profits of the resale. Mathewson v. Allen, 10 R. I. 156. (g) See McLure ■;;. Ripley, 2 Macn. & G. 274; Reilly v. Walsh, 11 Ir. Eq. 22. (h) Turn. & R. 524. (i) See Dale v. Hamilton, 2 Ph. 276. (k) Infra, ch. 10, § 3. 4. Each must do his duty. — In an action against a partnership, if process be served on one partner, and judgment recovered, and execution levied on the partnership properly, it is the duty of such partner to give notice of it to his copartners, and a neglect to do so sub- jects him to an action. Devall v. Bur- bridge, 6 Watts & S. (Pa.) 529. 513 33 304* DUTY TO OBSERVE GOOD FAITH. [bOOK III., Principle of r/ood faith the basis of the internal law of partnership. — The foregoing general principles may be regarded as the basis of the law of partnership, so far as it relates to the rights and obliga- tions of partners as between themseh^es, and they will be found to be more or less illustrated throughout the whole of the present book. Those cases, however, which more especially relate to the obligation of partners not to benefit themselves at the expense of their copart- ners and to the riglits of majorities, require to be specially noticed. 5 ♦section II, — OF THE OBLIGATION OF PARTNERS NOT r-^nr^c *<305 TO BENEFIT THEMSELVES AT THE EXPENSE OF THEIR COPARTNERS. No partner allowed to benefit himself at the expense of the firm. — Good faith requires that a partner shall not obtain a private advant- age at the expense of the firm. He is bound, in all transactions affecting the partnership, to do his best for the common body, and One parmer is not entitled to compen- be charged, of course interest upon com- sation from the partnersliip for his mission cannot be charged. The court services in attending to the partnership will, therefore, refer it back to the court affairs, unless there is a contract therefor, below, with a declaration that no corn- express or implied. Gaston v. Kellogg mission could be charged, either for the (Mo.), 3 S. W. Hep. 589. collection of the debts of first or second In Whittle v. M'Farlane (1 Knapp partnership." 311) the Master of the Eolls (Sir John 5. Principle of good faith the basis Leach) said : " It is impossible to main- of the internal law of partnership.— tain the charge for commission, because In determining the respective rights of it is in truth a charge by a partner for partners in a firm, it is proper to con- the collection of a partnership debt, sider, not only their original agreement, How can a partner charge commission but also the manner in which the books against a partner for th-e collection of a of the firm were kept. Alterations or partnership debt, in which both of them constructions made or put on their part- are interested ? It is a misapprehension nership transactions, and acquiesced in entirely, and there does not appear any by all of them for many years, should pretence for saying that there is any have great weight in ascertaining the local usage in the island to sanction equities between them. Southmayd'a such a charge. If commission cannot Appeal (Pa.), 8 ki\. Rep. 72. 514 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 305* to share with his copartners any benefit which he may have been able to obtain from other people, and in which the firm is in honor and conscience entitled to participate. Semper enim non id quod privatim interest unius ex sociis servari solet, sed quod societati expedit. (I) There are two modes in whicli, more especially, partners attempt unfairly to acquire gain at the expense of their copartners, viz. : first, by directly making; a profit out of them; and, second, by appropriating to themselves benefits which they ought to have acquired, if at all, for the common advantage of the firm.6 It will be convenient to advert to each of these modes in turn. (I) Dig. XVII., tit. 2, pro socio, 1. 65, 6. No partner allowed to benefit himself at expense of firm. — A gen- eral rule of partnership law requires that each partner shall devote his time, labor and skill to the benefit of the firm, and not of himself, and that he shall not purchase for his own use articles in which the firm necessarily deals. If he does so, it is at the risk of having the articles so purchased, and the profits arising therefrom, claimed by the firm as belonging to it. American Bank Note Co. V. Edson, 56 Barb. (N. Y.) 84 ; S. C, 1 Lans. 388. To the same gen- eral effect, see Anderson v. Whitlock, 2 Bush (Ky.) 398 ; Bart's Appeal, 70 Pa. St. 301 ; Coursen's Appeal, 79 Pa. St. 220 ; Eason v. Cherry, 6 Jones (N. C.) Eq. 261 ; Gray v. Portland Bank, 3 Mass. 364 ; Herrick v. Ames, 8 Bosw. (N. Y.) 115; Lane v. Carpenter, 30 Ind. 284; Lockwood V. Beckwith, 6 Mich. 168 ; Lowry v. Cobb, 9 La. Ann. 592; Scruggs V Eussell, McCahon (U. S.) 39; Solo- mon V. Solomon, 2 Ga. 18 ; Stoughton v. Lynch, 1 Johns. (N. Y.) Ch. 467 ; S. C, 2 Id. 209 ; Todd v. Rafferty, 3 Stew. (N. J.) 254. One partner cannot purchase an out- standing note of the firm and enforce the same against it. Easton v. Strother, 51 Iowa 506. But the purchase with his own funds, by one partner, outside of the firm business, of a judgment against his copartner, is not improper, and the col- lection thereof may be enforced by levy and sale of the interest of the judgment debtor in the firm assets. McKenzie v. Dickinson, 43 Cal. 119. A judgment upon a warrant of attor- ney, given to one member of a partner- ship to secure a debt due the partner- ship, will be held by him as trustee for the benefit of the firm, and payment of the judgment will satisfy the partnership debt. Chapin v. Clemitson, 1 Barb. (N. Y.) 311. If one partner purchase land to his own use with money taken out of the joint fund, the lands will not be joint stock. Goodwin v. Richardson, 11 Mass. 469 ; Pitts v. Waugh, 4 Id. 424. Contra, Kayser v. Maugham, 8 Colo. 339. Commercial partners who have come into possession of property belonging to the minor heir of a former partner, have no legal right to administer it for the benefit of the minor, and if they do, they become bound in solido for the prop- erty. Fitz v. Reichard, 20 La. Ann. 549. If a member of a partnership enters into a transaction in his own behalf, 515 305* DUTY TO OBSERVE GOOD FAITH. [bOOK III., 1. Deriving profit from dealings loith the firm — sale to firm. — lu the first place, then, it may be laid down as a general rule that one partner is not allowed to derive profit, at the expense of the firm, which is within the scope of the partner- sponsibility. The payment, incidentally, ship business, his copartner may claim out of those funds, of an instalment due the benefits resulting from it ; this right upon an antecedent contract on indi- beloQgs to tlie partner alone ; third par- vidual responsibility, does not raise such ties cannot avail tiiemselves of it, when a trust, or give title to anything but re- no such claim has been asserted, to fix imbursement. Wheatly v. Calhoun, 12 a liability on the partnership. Lock- Leigh (Va.) 264. wood V. Beckwith, G Mich. 168. One partner will not be allowed to Where one partner expends the part- stipulate, clandestinely, for a private nership funds in the purchase of prop- advantage or benefit to himself, to the erty in his own name, he will hold the exclusion of his partners, in matters in same in trust for the partnership. Evans which he has been dealing on behalf of V. Gibson, 29 Mo. 223 ; Smith v. Kamsey, the firm. And though the articles al- 6 111. (1 Gilm.) 373; Coder i). Huling, low ii dissolution at the will of either 27 Pa. St. 84 ; Keeley v. Greenieaf, 3 partner, yet a partner will not be al- Story (U.S.) 93; Croughton v. Forrest, lowed, in equity, to dissolve the firm 17 Miss. 131. for the purpose of securing to himself Where one of three partners refuses to an advantage which he has gained in pay over a sum of money claimed by such dealing ; but the other partners each of the others, he cannot resist the may enforce a right to participate in payment of interest thereon, if it ap- the benefit on contributing to the ex- pears that, pending the adjustment of pense. McMahon v. McCleman, 10 W. the claim, he had used the money for Va. 419. his own purposes. Coddington v. Idell, Where one partner, by a secret trans- 3 Stew. (N. J.) 540. action within the scope of the business If two persons agree to divide the of the firm, obtains a private benefit to profits of a certain transaction, it is fraud the injury of the firm, he will be com- for one to receive any commissions pelled to account therefor. Tolan v. thereon from third parties, apart from Carr, 19 N. Y. Week. Dig. 484. joint profits. Dunlop v. Richards, 2 E. One partner cannot claim a share in D. Smith (N. Y.) 181. the fees received by the other a.s admin- An actual breach of the articles by istrator, merely because the other is one partner may sometimes be aflirmed shown to have intended to share such by the others, who may demand an ac- fees with him. King v. Whiten, 15 connting and share in the benefits de- Wis. 684. rived from such breach. Moritz v. Illustrations. — Where a firm whose Phelps, 4 E. D. Smith (N. Y.) 135. business was "a general produce busi- In order to raise an implied trust in ness, held a mortgage on real estate,, favor of the partnership by a joint pur- which real estate itself the firm was de- chase of real property, the purchase sirous to purchase under the mortgage, must have been made at the time with and entrusted the subject generally to partnership funds, or on partnership re- one of the firm — Held, that the legal ob- 516 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 305* from any dealings between him and the partnership, unless it is clearly agreed that he is to have such profit. For example, if a partner is buying or selling for a firm, he cannot sell to it or buy from it at a profit to himself. ligation of the partner entrusted being S. was to liave four-tenths, T. three- only to get payment of the mortgage, he tenths and B. three-tenths ; and, after a might make an arrangement for his own portion of the land was sold, and the •benefit with a third person, without the purchase money and costs and expenses knowledge of his partners, by which paid, T. and B. terminated the copart- such third person should buy the estate, nership, refused to sell any more land, giving him, the entrusted partner, an and refused to permit S. to have any fur- interest in it ; and if the mortgage debt ther connection therewith — Held, that was fully paid into the firm account, when the deed was executed to B. he that there was no breach of partnership held the property in trust for the co- or other fiduciary relation in the trans- partnership ; and, afterwards, when the action ; or, at least, that no .other part- copartnership was terminated, he held ner could recover from him a share of it in trust for the individual members profits made by a sale of the real estate ; of the copartnership, S. being entitled all partners alike having been origin- to four-tenths thereof. Tenney v. Simp- ally engaged in a scheme to get the real son (Kan.), 15 Pac. Kep. 187. estate by depreciating its value ; by en- The plaintifi" and defendant, being tering a judgment for a large nominal part owners of a vessel, of which the amount and by deceiving or "bluffing defendant was master, and being jointly ofi"" other creditors. Wheeler v. Sage, concerned in a whaling voyage under- 1 Wall. (U. S ,) 518. taken by such vessel, the defendant, in Where S., having the exclusive right, the course of the voyage, landed some by previous written agreement with the prisoners from a privateer, and also owner of a certain piece of land, to pur- saved some articles from a wreck, for chase the same, entered into a parol each of which services he received a agreement with T. and B., in pursuance compensation. On his return he settled of which B. furnished the purchase up the voyage, but without rendering money for the land, T. gave his notes any account of these two items of com- therefor to B., and the deed, by consent pensation. Held, that the plaintiff of the parties, was executed by the might recover her proportion of the owner to B. as a security for the repay- same in assumpsit. Fanning v. Chad- ment of the purchase money to B., and wick, 3 Pick. (Mass.) 420. the land was purchased by S., T. and B. Evidence that the defendant made on speculation, and for the purpose of $2100 during six months that he kept a sale and profits only, and not for perma- boarding-house alone, and that the ex- nent use ; and, after the payment of the penses were more and the receipts less purchase money and of the costs and ex- than when it was kept by the plaintiff penses out of the proceeds of the sale, and himself together, was held not to be the profits were to be divided between admissible to prove that the plaintiff was the partners, S., T. and B., as follows : guilty of a fraud in returning a less sum 517 305* DUTY TO OBSERVE GOOD FAITH. [bOOK III., In Bentley v. Craven (m) one of the several partners was era- ployed to purchase goods for the firm. He, unknown to his co- partners, supplied thera, at the market price, with goods previously bought by himself when the price was lower, and h-e so made a considerable profit. But it was held that the transaction could not be sustained, and that he was accountable to the firm for the profit thus made. The Master of the Eolls, in delivering judgment, observed: "The case is this: Four partners established a partner- ship for refining sugar ; one of them is a wholesale grocer, and from his business is peculiarly cognizant with the variations in the sugar market, and has great skill in buying sugar at a right and proper time for the business. Accordingly the business of selecting and ^ pur*chasing the sugar for the sugar refinery is entrusted to -■ him. He being the person to buy, it is his duty and busi- ness to employ his skill in buying for the sugar refinery at the time he thinks most beneficial. Having, according to his skill and knowledge, bought sugar at a time when he thought it likely to as the profits for six months in which it ting and conveying to market pine tim- was kept by them together. Thayer v. her, and all the pine timber upon certain Barney, 12 Minn. 502. lots of land was purchased, in the name A member of an insolvent firm, while of one member of the firm, for the benefit acting as agent for the creditors, in the of the firm, and paid for from the property settlement of the partnership affairs, of the firm, and the contract contained a assisted another party to purchase from provision that the timber should be cut the creditors their claims, together with and taken from the land by a time their rights to certain pledged assets of specified, which was not done, but the the firm. Held, that the purchase did owner of the land did not insist upon not enure to the benefit of the firm, and any forfeiture, but subsequently con- that the transaction did not come within veyed the land, for the mere price of the the operation of the general rule of land exclusive of the timber, to the equity, that a trustee cannot buy trust member of the firm with whom the property for himself, or act as agent in original contract was made, it was held buying it for another person. Westcott that the timber remaining upon the V. Tyson, 38 Pa. St. 389. land still continued the property of the A conveyance of real estate to "J. L. firm and that the avails of timber sub- S. & Co." vests the legal title in J. L. S. sequently cut upon the land by the one individually, clothed, however, with a who made the purchase, exclusive of trust for the benefit of the partnership, expenses, must be accounted for by him Moreau v. Safiarans, 3 Sneed (Tenn.) 595. as firm assets. Washburn v. Washburn, Where a partnership was formed by 23 Vl. 577. two individuals for the purpose of cut- (m) 18 Beav. 75. 518 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 306* rise, and it having risen, and the firm being in want of some, he sells his own sugars to the firm without letting the partners know that it was his sugar that was sold." Being the agent for the firm for buying sugars, he sold his own sugars to the firm, and made a profit, and the firm was held entitled to that profit accordingly. 7 Purchase from firm. — In Dunne v. English (u) the plaintiff and the defendant had agreed to buy a mine for £50,000, with a view to resell it at a profit. It was ultimately arranged that the de- fendant should sell it to certain persons for £60,000, and that the profit of £10,000 should be equally divided between the plaintiff and the defendant. The defendant, however, in fact sold the mine for much more than £60,000 to a company in which he himself had a large interest. The plaintiff was held entitled to one-half of the whole profit made by the resale.8 7. Deriving profits from dealings the due discharge of that trust or confi- with the firm— sale to firm. — The rule dence. The defendant here stood in re- permitting one partner to sell the firm lation of trust or confidence towards the property and give a good title to a plaintiff, which made it his duty to pur- stranger, does not empower him to sell to chase the lapis calaminaris at the lowest himself. Such a sale is simply void, no possible price; when in the place of right or interest passing ; both the legal purchasing the lapis calaminaris, he ob- and equitable title remaining as before, tained it by barter for his own shop Comstock V. Buchanan, 57 Barb. (N. Y.) goods, he had a bias against a fair dis- 127 ; Nelson v. Hayner, 66 111. 487. charge of his duty to the plaintiff. The A property owner may form an asso- more goods he gave in barter for the elation or partnership with others and article purchased, the greater was the sell the property to them at any agreed profit which he derived from the deal- price, without giving rise to any confi- ings in store goods ; and as this profit dential relation or necessitating any ac- belonged to him individually, and as count of profits realized on such sale, the saving by a low price of the article provided there be no fraudulent repre- purchased was to be equally divided sentations made at the time. Densmore between him and the plaintiff, he had Oil Co. V. Densmore, 64 Pa. St. 43 ; S. C. plainly a bias against the due discharge 9 Am. L. Reg. (N. S.) 96. of his trust or confidence towards the InBurtonv.Wookey (6Madd. 367)Sir plaintiff. I must therefore decree an John Leach, the Vice Chancellor, said : account of the profit made by the defend- " It is a maxim of the courts of equity ant in his barter of goods, and must de- that a person who stands in the relation clare that the plaintiff is entitled to an of trust or confidence to another shall equal division of that profit with the not be permitted, in pursuit of his pri- defendant." vate advantage, to place himself in a {n) 18 Eq. 524. situation which gives him a bias against 8. Purchase from the firm.— In Cali- 519 306= DUTY TO OBSERVE GOOD FAITH. [bOOK III., Full disclosure necessary. — There was in this case some evidence that the plaintiff kiiew that the defendant had some interest in the purchase beyond his share of th-e known profit of £10,000 ; but the plaintiff did not know what that interest was, and the real truth was concealed from him. It was held that the defendant being the plaintiff's partner, and expressly entrusted with the conduct of the sale, was bound fully to disclose the real facts to the plaintiff, and not having done so, could not exclude him from his share of the profits which the defendant realized by the sale, (o) 9 Authority to sell at a given price no waiver of share of higher price. — This case also shows, what indeed is obvious enough without authority, that one partner who authorizes another to sell partnership property at a given price does not thereby deprive fornia, one partner naay purchase, on liis own account, at a public sale, the interest of his copartner in real estate, and will hold the purchased property as a stranger might. Bradbury v. Barnes, 19 Cal. 120. But in Kentucky, on a sale of partner- ship land, under an execution against the firm, one partner cannot, by pur- chasing at such sale, extinguish the title of the other partner. Farmer v. Samueh 4 Litt. (Ky.) 187. But, see, Baird v. Baird, 1 Dev. & B. (N. C.) Eq. 524. If a partnership, upon its dissolution, convey all its effects to one of the firm, and, after such dissolution and transfer, a debtor of the firm promise to pay the individual partner, he may maintain an action in his own name on the promise. Howell V. Reynolds, 12 Ala. 12S. A and B being partners, A, under a power of attorney from B, executed a bond for a partnership debt, with war- rant of attorney to confess judgment. B afterwards sold land bound by the judg- ment, and, upon a subsequent dissolution of the partnership, funds were deposited in the hands of A, for payment of the partnership debts, and especially of the bond aforesaid. Judgment was subse- quently entered upon the bond, and the land sold by B having been sold upon an execution upon the judgment, A be- came the purchaser. Held, that his pur- chase must be presumed to have been made with the partnership funds, and that it would enure to the benefit of B's grantee. Swift v. Dean, 6 Johns. (N. Y.) 522. (o) See, also. Imp. Merc. Credit Assoc. V. Coleman, L. R., 6 H. L. 189. 9. Full disclosure necessary. — Per- sons who have formed, or are dealing in contemplation of forming, an association, stand in a fiduciary relation to each other and to all who may subsequently become members. They cannot purchase prop- erty and sell it to the company at an enhanced price, without a full disclosure of all the facts, without being liable to be called to account for the profits. Densmore Oil Co. v. Densmore, 64 Pa. St. 43 ; S. C, 9 Am. L. Reg. (N. S.) 96-. The duty of one partner to communi- cate to his copartner information re- ceived concerning the business of the firm asserted in a case depending upon particular facts. Sexton v. Sexton, 9 Gratt. (Va.) 204. 520 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 306* himself of his right to share a higher price if a higher price should be realized, (p) *2. Obtaining benefits ivhich in honor belong to the firm. p<,^^ — The same principles apply to attempts made by partners to secure for themselves benefits which it was their duty to obtain, if at all, for the firm to which they belong, (q) Thus, in Carter v. Horne,(r) the plaintiff and the defendant agreed for the purchase of an estate in moieties between them. The estate was subject to several encumbrances, which were to be discharged out of the purchase money. The defendant had abate- ments made to him by some of the encumbrancers of several sums due for interest and otherwise, which they, in consideration of services and friendship, agreed should be to his own use. How- ever, on a bill brought against him by his copurchaser for an account of the rents and profits, the court would not allow the defendant the exclusive benefit of these abatements, but held that he must account for them, the purchase being made for the equal benefit of both parties, and on a mutual trust between them.lO (p) See, also, Parker v. McKenna, 10 destinely stipulate for a private benefit, Ch. 96, and De Busche v. Alt, 8 Ch. D. he will be compelled to share it with 286 ; and see Id., p. 317, as to a custom his associates. But from this rule a authorizing such a practice. partner may be excluded by his own (q) Parker v. Hills, 5 Jur. (N. S.) inequitable conduct. Lowry v. Cobb, 9 809, is not opposed to these cases, for La. Ann. 592. there the money was paid for a lease Where one of a copartnership, by any which was held to belong to one partner means, gets a fund belonging to the QQJy firm, he is not at liberty to appropriate (r) 1 Eq. Ab. 7. See, also, De Bus- it to his own exclusive benefit, but must sche V. Alt, 8 Ch. D. 286 ; Morison v. share it with his copartners. Eason v. Thompson, L. R., 9 Q. B. 480, as to the Cherry, 6 Jones (N. C.) Eq. 261. right of a principal to profits made by One of two partners engaged in the his agent or subagent. Compare Great manufacture and sale of a patented arti- Western Insur. Co. v. Cunliffe, 9 Ch. cle cannot take an assignment from a 525, and Baring v. Stanton, 3 Ch. D. third person of a right or claim as in- 502, where the agent's profits were part ventor of such patented article, and set of his remuneration. it up against his partner ; especially if 10. Obtaining benefits which in he formed the partnership with knowl- honor belong to firm.— A partner can- edge of such alleged title. Kinsman v. not prefer his own interest to the firm's, Parkhurst, 18 How. (U. S.) 289. nor deprive it of a profitable bargain by Where it is agreed that the firm shall taking it for himself; and if he clan- have a joint right in certain inventions, 521 307* DUTY TO OBSERVE GOOD FAITH. [bOOK III.^ Renewing leases — clandestine renewal. — It has been decided more tbau once tliat if one partner obtains in his own name, either dur- ing the partnership or before its assets liave been sold, a renewal the partner to whom a patent for one of Where a bil'l is filed by a partner such inventions is issued cannot claim against his copartner for an account, the exclusive benefit thereof. Burr v. and one of the partners is appointed re- De La Vergne, 102 N. Y. 415. ceiver, and uses the money received as One partner who buys in a paramount such by him, on which he makes a or outstanding title to lands belonging profit, the other partner is not entitled to the firm, does so in behalf of all, and to a share of such profits, the money not the other partners, on contributing to being held as partner, but as receiver, the price, are entitled to the benefit of Whitesides v. Laflerty, 3 Humph, the purchase. Forrer v. Forrer, 29 (Tenn.) 150. Gratt. (Va.) 134. If one partner occupy alone a house A purchase by one partner of prop- belonging to the copartnership, he will erty hired by the partnership, enures to be liable to the firm for rent on account the benefit of all, on payment of their of it, although there was no special shares of the purchase money. Laflfan agreement to that efiect, and no charge V. Nao-lee 9 Cal. 662. was made against him on the books of The purchase of goods by one partner the firm during his lifetime. Holden v, upon his individual credit, but for the Peace, 4 Ired. (N. C.) Eq. 223. See, firm's benefit, which fact he conceals, also, Sloughton v. Lynch, 2 Johns. (N. vests a valid title in the firm, and the Y.) Ch. 209. sellers are not thereby defrauded or in- Illustrations.— Where one partner jured. McNair v. Rewey, 62 Wis. 167. represented to the others that he had Land will not be deemed to have been purchased the interest of a deceased acquired by one partner in trust for the partner, thereby preventing its purchase firm against his own intention and the by them, and afterwards bought such understanding of the other partners at interest, it was held that it should the time. Blachley v. Coles, 6 Colo. 349. enure to their benefit as well as to his Profits made by a partner in the pur- own. Warren v. Schainwald, 62 Cal. 56. chase and sale of merchandise, in which Insurance against fire effected by one his copartners are entitled to share, partner, in the firm name, upon prop- give them no privilege. Shropshire v. erty of the firm, the premium being Russell, 2 La. Ann. 961. paid from funds of the firm, will be for The rights of a firm under a mortgage the benefit of the firm, whatever the in- held by the firm are not affected by the tentions of the member effecting the in- purchase of the equity of redemption surance may have been, notwithstand- by one of the partners for himself, ing the fact that he charged such pre- Gordon v. Tyler, 53 Mich. 629. mium to himself. If he receives the One partner who obtains the exclu- money from the insurance company he sive use of a right in which the firm is must account to the other partner for interested, will be held in law to hold his share of it. Tebbetts v. Dearborn, such use in trust for th« firm. Weston 74 Me. 392. V. Ketcham, 39 X. Y. Super. Ct. 54. One partner purchased from an em- 522 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 307* of a lease of the partnership property, he will not be allowed to treat this renewed lease as his own and as one in which his copart- ners have no interest. This was laid down and acted on by Sir William Grant in the celebrated case of Featherstonhaugh v. Fen- wick, (s) where two partners having obtained, in their own names, a renewal of the lease of the partnership premises, immediately dissolved the partnership and sought to exclude the plaintiff, their copartner, from all interest in the new tease; but, in taking the accounts of the partnership, the new lease was held to be part of the assets of the firm. Clegg V. Fish wick (^) is another case to the same effect. *There ^ the plaintiff was the administratrix of one of several part- ^ ners in a coal mine, and she filed a bill, some years after the death of the deceased, against the surviving partners, for an account and a dissolution, and for a declaration that a renewed lease, which had been obtained by the defendants, might be de- clared subject in equity to a trust for the benefit of the partnership. A twofold defence was set up, viz., first, that the old partnership ended with the old lease, and that the plaintiff could not therefore claim any interest in the new lease ; and secondly, that she had, some time before the filing of the bill, assigned all the share of ployee of the firm a patent right in an firm, more than his sliare, refusing to article of use and value to the firm, and, pay anything— ifeM, that the title taken without disclosing or being requested to by A was taken for the partnership; disclose the terms of the purchase, and that B's refusal to pay a part of the offered to sell it to the firm at an ad- purchase money did not deprive him of ▼anced price, but the firm refused to the right of having the benefit of the buy, preferring to use the article on a purchase, nor was it evidence of a dis-- royalty basis. Held, that under the cir- solution of the partnership. Eakin v. cumstances the firm could not insist, after Shumaker, 12 Tex. 51. dissolution, that the purchase should be (s) Featherstonhaugh v. Fenwick, 17 considered as having been made for its Ves. 298. In such cases tiie other part- benefit. American Bank Note Co. v. Ed- ners cannot restrain the landlord from son, 56 Barb. (N. Y.) 84 ; S. C, 1 Lans. granting the lease to the one partner 588. only. Their remedy is to treat the A and B, owning land in partner- lessee as a trustee for the firm. Alder ship, agreed to purchase an outstanding v. Fouracre, 3 Swanst. 489. title ; A purchased and paid for it, and (t) 1 Macn. & G. 294. See, too, Clem- took the conveyance to himself; B, ents v. Hall, 2 De G. & J. 173, and 24 having then done, or advanced for the Beav 333. 523 308* DUTY TO OBSERVE GOOD FAITH. [bOOK III., the deceased to his children, and that she, therefore, at any rate, had no right to institute proceedings respecting such share. It was, however, decided, first, that the old lease was the foundatioHi for the new one, and that parties interested jointly with others in a lease could not take the benefit of a renewal to the exclusion of those others ; and secondly, that what had been assigned by the plaintiff was the share of the deceased in the partnership, which share had never been ascertained, and that the effect of the assign- ment was merely to constitute her a trustee of the share for the assignees after she had got it in, and not to deprive her of her jiower to call for a realization of the partnership property. Open renewal. — In both of these cases the renewal of the lease ■was clandestine. But that is not an essential feature. In the more recent and very important case of Clegg v. Edmondson, {xi) the partnership was at will ; the managing partners gave notice of dis- solution and of their intention to renew the old lease for their own benefit. They afterwards did so, the other partners protesting, and there was evidence to show that the landlord objected to renew to any pei'sons except the managing partners, {x) It was held, how- ever, that it was not competent for the managing partners thus to acquire for themselves alone the benefit of the renewed lease. (3/) Right to reject renewed lease. — A partner, by renewing a lease against the will of his co*partners, cannot force it on them i-^.^qq and compel them to treat the property comprised in it as acquired for the firm, unless there is some agreement binding them so to do. (2;) 11 (u) 8 De G., M. & G. 787. will, in respect of a renewed lease, be (x) See, as to this, Fitzgibbon v. Scan- held to stand as a trustee for the firm, Ian, 1 Dow 269. where he would not be so deemed in re- {y) At the same time relief against spect of a pwrchase of the reversion, them was refused on the ground of Anderson v. Lemon, 4 Sandf. (N. Y.) laches and delay on the part of the 552. plaintiffs. On this point the case will Where one partner, after the dissolu- be noticed hereafter. See book III., ch. tion of the firm, and prior to the expira- 10, § 3. tion of the lease held by it, which con- (z) Clements v. Norris, 8 Ch. D. 129. tained no provision for renewal, obtains where an attempt of this sort was de- a renewal of the same without the con- feated. sent of his copartner, he must account 11. Renewing leases. — A partner to the latter for the value of the expec- 524 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 309* Benefits derived from use of partner slup property. — The principle which precludes a partner from retaining for himself benefits which he ought to share with his copartners, is applied to cases in which tancy of renewal which pertained to the old lease. Johnson's Appeal (Pa.\ 8 Atl. Hep. 36. Where a lease, taken by a member of a copartnership, is not taken by him ex- pressly for the firm, but demises the premises to him individually, it does not belong to the partnersiiip ; and parol evidence that it was executed for the benefit of the partnership is inadmissi- ble. Otis V. Sill, 8 Barb. (N. Y.) 102. Where one partner is negotiating to buy for the firm real estate, of which the firm has a lease for years, and the other partner secretly purchases it for himself, he will be held lo hold the land in trust for the firm. Anderson v. Lemon, 8 N. Y. 236. The fact that the landlord would not Lave granted the new lease to the other partners or to the firm, is immaterial. Mitchell V. Reed, 61 N. Y. 123. See, also, generally, Chamberlain v. Cham- berlain, 44 N. Y. Super. Ct. 116. Lord Eldon, in Featherstonhaugh v. Fenwick (17 Ves. 311), said: "It is clear that one partner cannot treat pri- vately, and behind the backs of his copartners, for a lease of the premises where the joint trade is carried on, for his own individual benefit. If he does so treat, and obtains a lease in his own name, it is a trust for the partnership ; and this renewal must be held to have been so obtained. Consider what an unreasonable advantage one partner would, upon a different principle, obtain over the rest. In this respect there can be no distinction whether the partner- ship is for a definite or indefinite period. If one partner might so act in the latter case, he might equally in the former. 5 Supposing the lease and the partnersiiip to have different terms of duration, he miglit, having clandestinely obtained a renewal of the lease, say to the other partners: 'Tlie premises on which we carried on our trade have become mine exclusively, and I am entitled to demand from you whatever terms I think fit, as the condition for permitting you to carry on the trade here.' Is it possible to per- mit one partner to take such an advan- tage ? When the application was made for a renewal, no notice of dissolution had been given ; nor had the plaintiff notice of any intention of renewing the lease. It is not true, as has been rep- resented, that the impediment to a re- newal to the partnership arose solely from the indisposition of Mr. Wilkinson to any connection with the plaintiff; as before any objection had been made, on that or any other ground, the defendant goes with the intention and for the direct purpose of obtaining a renewal for him- self and his son exclusively. He makes the application to Murray, who says the proposal was for a renewal for the benefit of the defendants ; expressly excluding the plaintiff, with whom it was repre- sented that George Fenwick was deter- mined to have no further connection in trade ; and, though it may be true that Wilkinson afterwards said he would not have granted a lease to the defendants jointly with the plaintiff, that declara- tion had become quite unnecessary by the resolution, previously expressed by the defendant, not to take a lease jointly with him. This clandestine conduct was very unfair towards the plaintiff. The defendants had not intimated to him that they would not have any 25 309* DUTY TO OBSERVE GOOD FAITH. [bOOK III., unfairness and misconduct are by no means so apparent as in those just cited. A high standard of honor requires that no partner shall derive any exclusive advantage by the employment of the partner- ship property, or by engaging in transactions in rivalry with the firm. Profits of tally shop. — Thus, in Burton v. Wookey, (a) the plain- tiff and the defendant were partners as dealers in lapis calaminaris. The defendant, who was a shopkeeper, lived near the mines in which the ore was got, and he purchased it of the miners. Instead, how- ever, of paying them with money, he paid them with shop goods, and in his account with the plaintiff charged him as for cash paid to the amount of the selling price of the goods. The plaintiff con- tended that the price of the ore ought, as between himself and the defendant, to be considered as being the cost pi*Ice of the goods given in exchange for it, and that the profit made by the exchange ought to be accounted for to the partnership. The court adopted this view, holding that it was the duty of the defendant to buy the ore at the lowest possible price, and to charge the partnership with no more than he actually gave for the goods bartered for the ore. An account of the profit made by the defendant in his barter of the goods was decreed accordingly. Part owners of ships. — Again, in Gardner v. McCutcheon, (6) a ship, of which the plaintiffs and the defendant were part owners and further connection with him, and that of equal value to the plaintiff, who was they intended to apply for a lease on to carry it away, and seek some place in their own account. They ought first to which to put it, as to the defendants, have given him notice, and to have who were to continue it in the place placed him on equal terms with them ; where the trade was already established; and then, if Mr. Wilkinson had thought and if the stock was sold, the same cir- proper to give them the preference, the cumstances would give them an advan- case might admit of a differeni consid- tage over other bidders. In effect they eration. Instead of that, they clandes- would have secured the good will of the tinely obtained an advantage, which trade to themselves, in exclusion of their would enable them to dissolve the part- partner." nership on terms very unfavorable to the (a) 6 Madd. 367. plaintiff; and they evidently had that (6) 4 Beav. 534. See, too, Benson v. object in view. If they can hold this Heathorn, 1 You. & C. C. C. 326, and 2 lease, and the partnership stock is not Coll. 309 ; Miller v. Mackay, 31 Beav. brought to sale, they are by no means 77 ; Shallcross v. Oldham, 2 Johns. & H. on equal terms. The stock cannot be 609 ; and, as to commissions, Holden v. 526 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 310* the defendant was master, was employed for tlie comracn benefit of it^o-iff] ^11 i» ^trading and carrying under charter. The defendant, during the time the ship was thus employed, traded on his own account and made considerable profit. It was held that he was bound to account for the profits thus obtained. He was bound to trade to the best of his ability for the joint interest of himself and co-owners ; he had no right to employ the partnership property in a private speculation for his own benefit ; and although he alleged that the profits were made solely by the employment of his own private capital, and that by custom masters of ships were allowed to trade for their own benefit, the court declined to recognize any such custom, and considered that the profits had been made by the employment of what was not the defendant's exclusively, and that the plaintiffs had therefore a right to share them. Benefits resulting from connection with the firm. — A partner, more- o-ver, is not allowed, in transacting the partnership affairs, to carry •on for his own sole benefit any separate trade or business which, were it not for his connection with the partnership, he would not have been in a position to carry on. Bound to do his best for the firm, he is not at liberty to labor for himself to their detriment ; and if his connection with the firm enables him to acquire gain, he cannot appropriate that gain to himself on the pretence that it arose from a separate transaction with which the firm had nothing to do. This is well exemplified by the cases as to renewed leases M'hich have been already referred to,(c) and by Eussell v. Austwick, which also shows that the same principles apply wherever there is an agreement to share profits. Carriers not partners inter se. — In Russell v. Austwick (d) sev- eral persons agreed to carry on business as carriers between Lon- don and Falmouth, but they expressly stipulated that no partnership Webber, 29 Beav. 117. Compare Mil- case, the note to it in Mr. Belt's edition, let V. Mackay, 34 Beav. 295, where the See infra, ch. 4, § 1. profits were held to belong to him who (c) Ante p. *307. made them. In Moffatt v. Farquharson, [d) 1 Sim. 52. See, also, as to benefits 2 Bro. C. C. 338, a part owner of a sJiip derived by one co-owner of a mine from was held to be exclusively entitled to the use of a shaft situate in his own land, money paid him for his vote in the ap- but used for the mine, Clegg v. Clegg, 3 pointment of a master. But, see, on that GiflT. 322. 527 310* DUTY TO OBSERVE GOOD FAITH. [bOOK III., should subsid betiveen them, aiul that each should have a certain portion of the road over whicli he was to carry. Business was commenced and carried on by the parties to tliis agreement under the name of Messrs. Russell & Co., and they were employed to carry bullion from Falmouth and Plymouth to London. On the ♦issue of a new silver coinage by the Bank of England, r^^.^,-. Austwick, who appears to have been the London agent of '- the carriers, entered into a contract with the master of the mint for the carriage of the new coin to towns on the road between Lon- don and Falmouth. Shortly afterwards he entered into another contract with the master of the mint for the conveyance of more new coin to towns in Middlesex and the adjoining counties. None of these last towns lay on the road leading from London to Fal- mouth, and many of them were only accessible by cross country roads, and in consequence of the increased risk of carriage along these roads, the mint authorities agreed to pay 7s. Qd. per cent, for all the coin sent from the mint, instead of 5s. per cent., which was the remunex-ation agreed on in the first contract. Austwick con- tended that he was entitled to the whole benefit of this second con- tract, because (except as to the extra 2.9. 6d.) it had nothing to do with the carrying business between London and Falmouth ; and because, as to the 2s. 6d., that sum, although calculated on all the coin carried, whether under the first or the second agreement, was in fact paid by the mint in consideration only of the extra risk attending the carriage to the towns specified in the second contract. On the other hand, it was contended and held that the second agree- ment ought to be considered as made on account of all the persons interested in the first agreement; because, although the common concern had no connection with the provincial roads which were the occasion of the second agreement, yet this agreement was entered into by the officers of the mint as connected with, and a continua- tion of, the first agreement, and in confidence of the responsibility of the parties to it. This case of Russell v. Austwick shows how difficult it is for a partner to benefit himself exclusively by dealings which in honor he ought not to have engaged in except for the common benefit of the firm. 528 CHAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 31]* Distinct businesses. — Lock v. Lynara, which came before the Court of Chancery in Ireland, affords another instructive example of the ap23lication of the same wholesome doctrine. In this case(e) *3121 *^^^ plaintiff *and the defendant had agreed to share the profit and loss arising from contracts taken by the defend- ant for the supply of meat and bread to her majesty's forces in Ire- land. Whilst this agreement was in force, the defendant entered into secret agreements with other persons to share with them the profit and loss accruing in respect of similar contracts entered i-nto and taken by them. The plaintiff claimed a share in the profits made by the defendant under these secret agreements, whilst the defendant contended that he was entitled to retain them for his own exclusive benefit. The Lord Chancellor observed that in all cases of this kind the real question was whether, from the nature of the transaction between the partners, there was any express or implied contract against other dealings of a like character ; and that although there was no engagement not to enter into any other partnership of the same kind, still it never could have been in the contemplation of either of the jjarties that one partner should, in his own name or in that of any other person, adopt contracts to the prejudice of the other's interest. A decree was accordingly made directing an inquiry whether, during the period for which any partnership between the plaintiff and the defendant existed, the defendant, either alone or jointly with any other person or persons, separately from the plain- tiff, entered into or was beneficially interested in any other contract or dealing of the like nature with those in which the plaintiff and the defendant were engaged as partners. 12 (e) Lock V. Lynam, 4 Ir. Ch. 188. different country, in the ordinary course Compare this and the last case with Mil- of the partnership business, the presump- ler V. Mackay, 34 Beav. 295 ; and see tion is that such shipment is made on Somerville v. Mackay, 18 Ves. 382. joint account,. in the absence of conclu- 12. Carrying on distinct business, sive evidence that it was made on the — Beyond the line of the trade or busi- separate account of one partner. The ness in which a firm is engaged, an in- Francis, 1 Gall. (U. S.) 618 ; The San dividual member of the firm may traffic Jos^ Indiano, 2 Id. 268. on his own account. Wheeler v. Sage, 1 A and B entered into partnership, Wall. (U. S.) 518. each engaging to devote his whole time Where one of several partners ships to the business. B subsequently formed goods to another partner residing in a another distinct partnership with C. 529 34 312=* DUTY TO OBSERVE GOOD FAITH. [bOOK III., One partner competing with firm. — After the decisions to which attention has now been drawn, there can be little doubt that a part- ner cannot, either openly or secretly, lawfully carry on for his own benefit any business in rivalry with the firm to which he belongs. (/) But where a partner carries on a business not connected with or competing with that of the firm, his partners have no right to the profits he thereby makes, even if he has agreed not to carry on any separate business. (^) 13 Held, that A could not claim any share Iowa Seed Co. v. Dorr (Iowa), 30 N. W. in the profits of the business of B & C- Rep. 866. Murrell v. Murrell, 33 La. Ann. 1238. (/) See Glassington v. Thwaites, 1 One partner having an individual Sim. & S. 124; England v. Curling, 8 interest adverse to that of his firm, in Beav. 129, in which, however, there was another firm who had dealings and open something more than mere rivalry, accounts with his firm, promised such [g) Dean v. Macdowell, 8 Ch. D. 345. other firm that certain concessions favor- An injunction might have been obtained, able to them would be made by his firm and perhaps damages for a breach of upon the settling of the accounts between covenant. the two firms. Such promise was made 13. One partner competing with without the knowledge of his copartners, firm. — Where, by the partnership con- and was prejudicial to them. Held, that tract, one partner understakes to super- the promise was not binding upon the intend and manage the business, a court other partners, the accounts have been in equity will enjoin him from transact- regularly rendered and the charges in ing the same business at another store them being the same as those against in the same place, for his sole benefit, other dealers with the firm. Goodman even though there be no express cove- V. Einstein, 51 How. (X. Y.) Pr. 9. nant in the articles restraining him from Where a firm, which had built up an so doing. Marshall v. Johnson, 33 Ga. extensive trade and acquired a great 500. reputation as dealers in seeds, grains, In Glassington v. Thwaites (1 Sim. & plants, &c., which were sold with labels S. 124, 131, 133) Sir John Leach, Vice attached bearing the firm name, made Chancellor, said : "All newspapers are an assignment for the benefit of creditors, to some extent rivals. The competition and plaintiff purchased all of the stock, is more immediate between two morning good will, &c., of such firm, and, asso- papers and two evening papers; but there dating with him one of the members of is necessarily some degree of rivalry the firm, conducted the business at the between a morning and an evening pa- old stand — Held, that plaintiff did not per, especially in the country. It might, acquire, by such purchase, any right to therefore, have been made a question restrain another of the old firm, who had whether it would be a due act of man- formed a corporation, from conducting a agement in the partnership concern of a similar business under his own name, morning paper to assist with its property ■which was the original firm name also, and its labor the publication of any other 530 €HAP. II., § II.] BENEFIT OBTAINED BELONGS TO FIRM. 313* Buying share. — * Again, it has been held competent for ^^ . one partner to acquire for himself the share of a copartner in the partnership business, without informing the other partners of the purchase, and without giving them an opportunity of ac- new&paper, so as to enable the majority protect themselves by their contracts ; of the partners in that respect to bind and, accordingly, it is a common cove- the minority. But the question does not nant in such partnership articles, that no arise, because the plaintiff himself is to partner shall be proprietor of any other be considered as a party to the practice, newspaper. In the present case there is before his copartners became the proprie- actually a covenant that the proprietors tors of the evening paper, and because will not be concerned in any other morn- there is evidence that the proprietors ing paper, which by implication affords of other morning papers have adopted the conclusion that it was the intention the same practice with respect to other of the parties that they might engage evening papers, so as to form a sort of in the concern of any evening paper, 'usage in the trade to this effect. And Where there is no such covenant of it is to be considered that the annual restraint, it is clear that at law a partner sum paid by the evening paper for the in one newspaper may be a proprietor accommodation afforded to it outweighs in any other newspaper ; and in this the danger of increased competition, case equity must follow law; and it can- The true question here is whether not be intended that the parties meant it makes any difference that the other to impose a restraint which they might proprietors of the " Herald" have now have expressed, and have not expressed, become the proprietors of the evening and where it is plain their attention was paper ; and I think it does not make a directed to the subject. The principles material difference. It is true that a of courts of equity would not permit that considerable part of the expense of a parties bound to each other by express newspaper is occasioned by procuring or implied contract to promote an un- information ; and if some of the proprie- dertaking for the common benefit, should tors of a morning paper are also the pro- any of them engage in another concern, prietors of an evening paper, they may which necessarily gave them a direct have a stronger interest to promote the interest adverse to that undertaking, success of the evening paper than of the But the argument here is, not that the morning paper, and a strong temptation defendants, by becoming the proprietors to use the information obtained at the of the evening paper, place themselves expense of the morning paper for the in a situation in which they are neces- benefit of the evening paper. This sarily required to betray their duty to temptation forms a powerful objection the morning paper ; but that if their in- in all cases to the partner in the concern terest be greater in the evening paper of one newspaper being permitted to be than in the morning paper, they are ex- a partner in the concern of any other posed to a temptation to be dishonest newspaper. But it is an objection and to betray their duty to the morning founded on the principle of policy and paper. If they act honestly, it is imma- discretion, against which parties may terial to the morning paper whether the 531 313* DUTY TO OBSERVE GOOD FAITH. [bOOK III., quiring it. (/i) The articles of partnership did not forbid such a purchase ; nor was it any part of the business of the firm to buy the shares of its members. 14 Pai'tnership not yet formed. — The same obligation to act with defendants are or not the proprietors of the evening paper. And for this reason it is that it makes no difference in the pres- ent case tliat the defendants have become the proprietors of the evening paper." (h) Oassels r. Stewart, 6 App. Cas. 64. 14. Buying share of copartner. — One partner may sell his interest in the partnership property to his copartner ; and if the sale be fair, he will take the exclusive title thereto. Reese v. Brad- ford, 13 Ala. 837. One partner may purchase the interest of the other in a contract, provided it does not call for the joint personal ser- vices of the two. Love v. Van Every, 18 Mo. App. 196. Such a transfer of in- terest, if bona fide, may be made without writings or vouchers. Ke Great West- ern Tel. Co., 5 Biss. (U. S.) 363. One partner can assign his interest in an open account due to the firm to his copartner, and the latter may become the real party in interest, so as to main- tain a suit on the account in his own name. Swails v. Coverdill, 17 Ind. 337 ; Cook V. Beech, 10 Humph. (Tenn.) 412. But see Horbach v. Huey, 4 Watts (Pa.) 455. Such a transfer of partner- ship effects, if made in good faith, vests the title in the transferee as his separate estate. Matter of Byrne, 7 Am. L. Reg. (N. S.) 499. Where one partner assigns his interest in the firm to a copartner, this passes the exclusive right to use the firm's trade- mark, unless the assignment expressly reserves a right in the assignor to con- tinue to use it. Blackwell v. Dibrell, 3 Hughes (U. S.) 151. The joint and several note of a part- nership is not extinguished by a transfer thereof to another firm composed in part of the same persons ; and the latter firm may negotiate the note to tliird persons. Fulton V. Williams, 11 Cush. (Mass.) 108. Until the firm affairs are wound up the surviving partner occupies a trust position towards the estate of the de- ceased partner, and a purchase by him of the latter's interest in the firm from the administrator, is liable to be set aside at the instance of the heirs-at-law, and cannot be set up as a bar to a bill for an accounting of the partnership assets and business. Kimball v. Lincoln, 5 111, App. 316. On the question of the mental compe- tency of a parly to make a division with his copartner and cctenant, of a large personal and real estate, the degree of injustice and inequality in the division will be taken into consideration, with the proof in regard to incompetency. Doughty V. Doughty, 3 Halst. (N. J.) Eq. 227. In Jefferys v. Smith (3 Russ. 158, 168), Sir John Copley, Master of the Rolls, said : " It is said that the assignment was colorable ; that is, that it was made for the sake of securing the assignor from future liability. Suppose he made it with that view, he had a right so to protect himself from future liability. It is alleged that the assignee was not a re- sponsible person. I^et it be so ; Guppy, for the purpose of securing himself, had a right to assign to a person not respon- sible. The only ground of objection 532 CHAP. II., § III.] POWER OF MAJORITY. 313* good faith exists between persons who hav'e agreed to become part- ners; and if one of them, in negotiating for the acquisition of prop- erty for the intended firm, receives a bonus or commission, he must account for it to tlie firm when formed, (i) He cannot retain it for himself on the ground that it was paid him for personal services rendered to the vendor before any partnership existed. Having obtained the benefit, whilst negotiating for himself and his future partners, he must share such benefit with them, (k) SECTION III. — OF THE POWERS OF A MAJORITY OF PARTNERS. Disputes between partners. — =-Iu the event of a difference arising between partners, it becomes necessary to consider whether there is any method of determining which of them is to give way to the other. It is not uncommonly supposed that the minority of the partners, if they are unequally divided, must submit to the ma- jority. But this is by no means the case ; for, as will be seen presently, the majority cannot oblige the minority except within certain limits. How to be settled. — Tlie first point to determine is whether the partnership articles do or do not contain any express provision ap- plicable to the matter in question ; for if they do, such provision ought to be obeyed. (J) If they do not, then the nature of the n:o-\A-[ *question at issue must be examined; for there is an im- portant distinction between differences which relate to mat- would be that though there was an as- (i) Fawcett v. Whitehouse, 1 Kuss. & fiignment in form, there was an under- M. 132. standing between the parties that the (k) lb. See, also, Kitchens v. Con- assignee should be a trustee for the as- greve, 1 Russ. & M. 150, and other cases signor. Here there is no pretence for of that class, relating to promoters of such a supposition. I must hold, there- companies. fore, that at all events, the assignment, (1) As to the construction of partner- coupled with the notice, freed Guppy ship articles, see infra, ch. 9. from future liability." 533 314* POWER OF MAJORITY. [bOOK III., ters incidental to carrying on the legitimate business of a partner- ship, and differences which relate to matters with which it was never intended that the partnership should concern itself. 1. Disputes on matters arising in ordinary course oj business. — With respect to the first class of differences, regard must be had to the state of things actually existing ; for, as a rule, if the partners are equally divided, those who forbid a change must have their way ; in re communi potior est conditio prohibentis. (in) Upon this principle it is that one partner cannot either engage a new or dis- miss an old servant against the will of his copartner ; (71) nor, if the lease of the partnership place of business expires, insist on renew- ing the lease and continuing the business at the old place. (0) Poioer of majority in such cases. — If, however, in a case of this description, unprovided for by previous agreement, the partners are nuequally divided, the minority must, the author apprehends, give way to the majority. (^3) This is the rule applicable to companies, whether incorporated or unincorporated ; (g) it is the rule adopted in the Indian Contract act, (r) and it is practically reasonable and convenient. The only alternative is to hold that if partners dis- agree, even as to trifling matters of detail, the minority can for- bid all change, and perhaps bring the business of the firm to a dead-lock, for which the only remedy is a dissolution. At the same time the author is not aware of any clear and distinct au- thority in support of the proposition that even in such matters a dissentient partner must give way to his copartners, (s) However, a majority cannot, against the will of the minority, (m) But see, as to the employment of Eobinson v. Thompson, 1 Vern. 465 ; as a ship, Abbott on Shipping {9th ed.) 82 ; to opening accounts, Morgan's Case, 1 and Id. (12th ed.) 58; and as to complet- Man. & G. 235. ing contracts already entered into, Butch- (q) See Stevens i'. South Devon Rail, art V. Dresser, 4 De G., M. & G. 545. Co., 9 Hare 326 ; Simpson v. Westmin- (n) See Donaldson v. Williamson, 1 ster Palace Hotel Co., 2 De G., F. & J. Cromp. & M. 345. 141 ; Kent v. Jackson, 2 De G., M. & G. (0) Clements v. Norris, 8 Ch. D. 129. 49, and 14 Beav. 367. N. B. — The partnership had not ex- (r) Section 253, cl. 5. pired. (s) Pollock's Dig., § 36, adopts the (p) See Gregory r. Patchett, 33 Beav. author's view, but apparently on his 595 ; Const v. Harris, Turn. & R. 518 ; authority. 534 CHAP. II., § III.] MATTERS WITHIN SCOPE OF BUSINESS. 315 ■ *delegate to a manager the right to sign the partnership [*31o name ; (t) and it is doubtful whether a majority can de- cide where the partnership business shall be carried on when the lease of its place of business expires, (w) 15 All partners entitled to be heard. — A very important rule respect- ing the powers and votes of majorities is that a majority, to have any weight, must act and be constituted with perfect good faith ; for every partner has a right to be consulted, to express his own views, and to have those views considered by his copartners. In the language of Lord Eldon, " That is the act of all which is the act of the majority, provided all are consulted, and the majority are acting bo7ia fide, meeting not for the purpose of negativing what any one may have to offer, but for the purpose of negativing what, (i) See Beveridge v. Beveridge, L. E , 2 Sc. App. 183. (m) See Clements v. Norris, 8 Ch. D. 129, but note there the firm consisted of two members only. 15. The powers of a majority. — The general rule is that in directing the business of a partnership, a majority shall govern, notwithstanding the dis- sent of the minority. Peacock v. Cum- mings, 5 Phila. (Pa.) 253; 46 Pa. St. 434; Campbell v. Bowen, 49 Ga. 417; Irvine v. Forbes, 11 Barb. (N. Y.) 587 ; Johnston v. Dutton, 27 Ala. 245 ; Kirk V. Hodgson, 3 Johns. (N. Y.) Ch. 400 ; Livingston v. Linch, 4 Id. 573; Water- bury V. Express Co., 50 Barb. (N. Y.) 157 ; S. C, 3 Abb. Pr. (N. S.) 163 ; West- ern Stage Co. V. Walker, .2 Iowa 504 ; Yeager v. Wallace, 57 Pa. St. 365. The members of a private association, as a telegraph company, are not part- ners. They are tenants in common of the property and franchise belonging to the company, and the majority cannot bind the minority, unless by special agreement. Irvine v. Forbes, 11 Barb. (N. Y.) 587. Whether the acts of the majority are done in bad faith, and in willful viola- tion of the rights of the minority, is a question for the jury under the evidence in each case. Western Stage Co. v. Walker, 2 Iowa 504. A copartnership was established be- tween four persons in order to purchase Cherokee lands, and to work them for mining, &c. One of the specifications in the articles of copartnership was that such disposition was to be " made of their property as a majority should deem advisable." Two of the partners became insolvent, and a third nearly so, and all three abandoned the work and neglected to pay the instalments of the purchase money, leaving the whole bur- den upon the fourth partner. Held, that neither of the first three partners had a right to complain in equity that the fourth partner, in order to relieve his sureties, had disposed of the land at a fair price without the concurrence of a majority, especially as to a bona fide purchaser, and without notice, for value, from such fburth partner; all they could ask being an account from the fourth partner. Ehea v. Vannoy, 1 Jones (N, C.) Eq. 283 ; Id. 290. 535 315* POWER OF MAJORITY. [BOOK III., when they are met together, tlicy may, after due consideration, think proper to negative. For a majority of partners to say, 'We do not care M'hat one partner may say ; we, being the majority, will do what we please,' is, I apprehend, what a court of equity will not allow." (.^•) Majorities at meetings. — Moreover, where powers are conferred on a majority present at a meeting of not less than a certain num- ber of persons, unless such meeting be duly convened and the re- quisite number be present at the meeting, the powers in question cannot be exercised ; and although it may be true that the required number of persons was summoned, and that the absentees could not have turned the scale, this will not render valid the acts of the ma- jority of those actually present, for that is not such a majority as was originally contemplated, (^y) 2. Disputes on matters involving a change in the nature of the business. — Passing now to the second class of differences, viz., those wdiich relate to matters with which the partnership was never in- tended to concern itself, it has been over and over again decided that no majority, however large, can lawfully engage the partner- ship in such matters against the will of even one dissentient partner. One dissentient can forbid a change. — Each partner is entitled to say to the *others, " I became a partner in a concern -^ formed for a definite purpose, and upon terms which were agreed upon by all of us, and you have no right, without my con- sent, to engage me in any other concern, nor to hold me to any other terms, nor to get rid of me, if I decline to assent to a varia- tion in the agreement by which you are bound to me and I to you." Nor is it at all material that the new business is extremely profitable. (2) In companies as ivell as in pai'tner ships. — This principle is ap- plicable to all partnerships and companies, whether great or small, (z) Const V. Harris, Turn. & R. 525, 223 ; Howbeach Coal Co. v. Teague, 5 and see Id. 518, and Blisset v. Daniel, 10 Hurlst. & N. 151 ; Ex parte Morrison, Hare 493 ; Great Western Rail. Co. v. De G. 539. Eushout, 5 De G. & S. 310. [z] Attorney-General v. Great North- (3/) See Re London and Southern ern Rail. Co., 1 Drew. & S. 154. Counties Freehold Land Co., 31 Ch. D. 536 CHAP. II., § III.] MATTERS AVITHIN SCOPE OF BUSINESS. 316* and is evidently one which requires only to be stated to be at once assented to as being just. No cases upon this subject can be re- ferred to with greater advantage than Natusch v. Irving and Const V. Harris, both of which were decided by Lord Eldon. (a) Fire and life insurance company turning into a maritime insur- ance company. — In Natusch v. Irving (6) a company was formed, in the early part of the year 1824, for granting fire and life assurances. The capital was £5,000,000, divided into .fifty thousand £100 shares. The plaintiff was one of the original subscribers, and held fifteen shares, in respect of v/hich he had paid the required deposit, but he had not executed the company's deed of settlement. In conformity with the rules of the company, he had effected a policy with it on his life for £1500. In the summer of 1824, the act of Q Geo. L, prohibiting companies from carrying on the business of marine insurance, was repealed, and shortly afterwards advertise- ments appeared in the newspapers, stating that the company would commence the business of marine insurance. The plaintiff, in answer to an inquiry whether this announcement was authorized by the directors, was informed that it was, and that if he objected to the course about to be pursued, he might receive back his de- posit, with interest, and have his policy canceled and the premium returned. In reply to this, the plaintiff stated that he was ready to execute any deed which was in conformity with the prospectus ; that he conceived it competent for him to insist that the business in which he was a partner should be carried *on accord- ^ ing to the agreement which united the partners together ; '- that he could not think his doing so would entitle the managers of that partnership to pay him out his capital and deprive him of a share in a concern of which he had the highest opinion ; that he therefore required the directors to abstain from any contracts or engagements relating to marine insurance, as not being contem- plated by himself and those who joined the company upon the terms of the prospectus, and that he required an undivided atten- (a) See, too, Davies v. Hawkins, 3 (6) Gow on Partnership (3d ed.), App. Mau. & S. 488 ; Fennings v. Grenville, 398. See, also, The Phoenix Life In- 1 Taunt. 241 ; Glassington v. Thwaites, surance Co., 2 Johns. & H. 441. 1 Sim. & S. 131. 537 317* POWER OF MAJORITY. [bOOK III., tion on the part of the directors to the objects defined therein. The plaintiff afterwards attended at the office of the company to execute its deed of settlement, but finding that it contained provisions en- abling the company to carry on the business of marine insurance^ he refused to execute it, as not being conformable to the terms on which the company was formed. In pursuance of the advertise- ments, the company had commenced, and it was carrying on the business of marine insurance ; but there was no evidence to show acquiescence on the part of the plaintiff, and there was evidence to show continued opposition by him to the carrying on of such business. The plaintiff applied for an injunction to restrain the directors from effecting marine insurances, and an injunction was granted, (c) The judgment of Lord Eldon, as far as it relates to the power of a majority, is particularly valuable, and the follow- ing extracts from it are constantly referred to: Answer to objection that dissentient can retire. — With respect to the liberty given to the plaintiff to retire, his lordship said : "An offer is made to the plaintiff that he may receive back his deposit, with interest from the date of the payment, and he is desired to consider himself as having received notice thereof. But it is not, I apprehend, competent to any number of persons in a partnership (unless they show a contract rendering it competent to them) formed for specified purposes, if they propose to form a partnership for very different purposes, to effect that forma- tion by calling upon some of their partners to receive their subscribed capital and interest and quit the concern ; and in effect, merely by compelling them to retire upon such terms, so as to form a new company. This would, as to partnerships, ^oio-i be a most dangerous doctrine. * Where a partnership is dissolved (even where it can be in a sense dissolved the instant after notice to dissolve is given, if there be no contract to the contrary), it must still continue for the pur- pose of winding up its affairs, of taking and settling all its accounts, and convert- ing all the property, means and assets of the partnership, existing at the time of the dissolution, as beneficially as may be, for the benefit of all who were partners, according to their respective shares and interests ; and the other partners cannot say to him to whom they have given an offer of his deposit and interest, 'Take that, and we are a new company,' keeping the effects, means, assets and property (c) The bill was filed by the plaintiff, effecting marine insurances in the nam) on behalf of himself and all others the and on account of the company, and Bhareholders of the company, against the from using the name, and from apply- directors, and prayed a dissolution, and, ing the capital of the company for such if necessary, a receiver, and an injunc- purposes. tion to restrain the defendants from 538 CHAP. II., § III.] POWER OF MAJORITY. 318* of the eld, as the property of the new partnersliip. The company will indemnify the plaintifF against loss by its transactions already had, or hereafter to be had, not for the specified purposes of the institution. But the right of a partner is to hold to the specified purposes his partners whilst the partnership continues, and not to rest upon indemnities with respect to what he has not contracted to engage in. A dissatisfied partner may sell his shares for double what he originally gave for them. But he cannot be compelled to part with them for that reason ; it may be his principal reason for keeping them, having the partnership concern carried on according to the contract. The original contract and the loss which his part- ners would suffer by a dissolution, is his security that it shall be so carried on for him and them beneficially, and with augmented improvement in the value of his shares and their shares." Ansiver to argument that the change was warranted by statute. — With respect to the alteration of the law enabling companies to carry on the business proposed, his lordship observed : " The repeal of the act 6 Geo. I., which merely made it lawful for societies or partnerships, however numerous their members might be, to insure against marine risks, could not make it lawful for companies or societies, which were formed for specified purposes of insurance upon lives and against fire, to insure against marine risks, unless the contracts by which such companies were formed, either expressly or impliedly (where individual partners did not consent to embarking in new projects, either originally, or subsequently to the formation of the companies), created an authority in some part of the body to bind all the body to the adoption of such new undertakings." Observations on powers of majorities.—With respect to the power of a majority^ his lordship laid it down that if six persons joined in a partnership of life as- surance, it seems clear that neither the majority nor any select part of them, nor five out of the six, could engage that partnership in marine insurances, unless the contract of partnership expressly or impliedly gave that power ; because if this- was otherwise, an individual or individuals, by engaging in one specified concern, might be implicated in any other concern whatever, however different in its nature, against his consent. But if a part of the six openly and publicly professed their intention to engage the partnership in another concern, and clearly and dis- tinctly brought this to the knowledge of one or more of the other partners, and such one or more of the other partners could be clearly shown to have acquiesced in such intention, and to have permitted the other partners to have entered upon, and to have engaged themselves and the body in such new projects, and thereby to have placed their partners so engaged in difficulties and embarrassments unless they were permitted to proceed in the further execution of such projects, if a court of equity would not go the length of holding that such conduct was *consent, it would scarcely think parties so conducting themselves entitled L to the festinum remedium of injunction. * * * Courts must struggle to pre- vent particular members of those bodies from engaging other members in pro- jects in which they have not consented to be engaged, or the engaging in which they have not encouraged, assented to, or empowered, or acquiesced in, expressly or tacitly, so as to make it not equitable that they should seek to restrain them. The principles which a court would act upon in the case of a partnership of six,. 539 319* POWER OF MAJORITY. [bOOK III., must, as far as the nature of things will admit, be applied to a partnership of six hundred. * * * They who seek to embark a partner in a business not origi- nally part of the partnership concern, must make out clearly that he did expressly or tacitly acquiesce." Altering lyrinciple on which profits should he dealt ivith. — In Const V. Harris (cZ) the proprietors of Covent Garden Tiieatre agreed that the profits should be exclusively appropriated to certain definite purposes. Afterwards, the proprietors of seven out of eight shares entered into an agreement to apply the profits in a different manner, but they had not consulted the owner of the other eighth share, and he disapproved of the alteration. It was held by Lord Eldon that the majority had no power to depart from the terms of the original agreement ; and upon a bill filed by the one dissentient partner for a specific performance of that agreement, a receiver of the profits was appointed. In a long and elaborate judgiuent, Lord Eldon distinctly recognized the principle that articles which had been agreed on to regulate a partnership cannot be altered without the consent of all the partners, (e) In modern times the same principle has been constantly recognized and followed. Indeed, it is never now disputed, although its appli- cation frequently gives rise to controversy. The decisions bearing on this subject relate, however, to companies, and are not, therefore, further noticed in the present treatise. (/) (d) Turn. & R. 496. the writer has not felt it necessary to (e) See Turn. & R. 517, 523. The make extracts from it. whole judgment is well worthy of atten- (/) Auld v. Glasgow Working Men's tive perusal ; but being much to the Building Soc, 12 App. Cas. 197, is one same effect as that in Natusch v. Irving, of the most recent cases. 540 CHAP. III.] CAPITAL OF PARTNERSHIPS. 320'' *320] *CHAPTER III. OF THE CAPITAL OF PARTNERSHIPS. Capital of partnerships. — By the capital of a partnership is meant the aggregate of the suras contributed by its members for the purpose of commencing or carrying on the partnership busi- ness, and intended to be risked by them in that business. The capital of a partnership is not therefore the same as its property. The capital is a sum fixed by the agreement of the partners, whilst the actual assets of the firm vary from day to day, and include everything belonging to the firm and having any money value. Moreover, the capital of each partner is not necessarily the amount due to him from the firm, for not only may he owe the firm money, so that less than his capital is due to him, but the firm may owe him money in addition to his capital ; e. g., for money advanced by him to the firm by way of loan, and not intended to be wholly risked in the business. The distinction between a partner's capital and what is due to him for advances by way of loan to the firm, is frequently very material ; e. g., with reference to interest — with reference to clauses in partnership articles fixing the amount of capital to be advanced and risked, and prohibiting the withdrawal of capital ; and, above all, with reference to priority of payment in the event of dissolution and a deficiency of assets, {a) The amount of each partner's capital ought, therefore, always to be accurately stated, in order to avoid disputes on a final adjustment of account j and this is more important where the capitals of the partners are unequal, for if there is no evidence as to the amounts contributed by tliem, the shares of the whole assets will be treated as equal. (6) 1 (a) See, on this subject, infra, book paying it in, may be proved by other III., ch. 8, § 1, on partnership accounts, evidence than the articles of copartner- (6) See, as to the equality of shares, ship. Boyers v. Elliott, 7 Humph, mfra, book III., ch. 5, I 2. (Tenn.) 204. 1. Capital of partnerships. — The A note given by a partner to his co- amount of capital furnished by each partner, as collateral security for the partner in a firm, and the manner of capital advanced by the latter, is with- 541 321= CAPITAL OF PARTXERSHIPS. [book III. "^Increase and diminution of capital. — Wlien the agreed [*321 amount of capital of a partnership has been exhausted and the business cannot ha carried on to a profit, the partnership may be dissolved, as will be pointed out hereafter, (c) A partner cannot be compelled to furnish more capital than he has agreed to bring in and risk, although he cannot, by limiting the amount of his capital, limit his liability for debts incurred by the firm.(cZ) On the other hand, a partner who has agreed to furnish a certain amount of capital is bound, not only to bring it into the firm, but also to leave it in the business until the firm is dissolved. It follows from these considerations that the agreed capital of a partnership cannot be either added to or withdrawn except with the consent of all the members of the partnership, (e) and this rule is perfectly consistent with the obvious fact that the assets and lia- out consideration to support it. Stafford V. Fargo, 35 111. 481. An incoming partner paid the two original members of the firm money as indicated in the receipt : " Received of E. $2000 for and in consideration of one- half interest in one safe, two desks, two pair of scales, one stove and pipe ; also the undivided half of our trade and good will, and the benefit accruing therefrom ; also one-half of the contract of potatoes for future delivery, and the benefits of the same, as per contract of copartnership made this date between H. E. & M." Held, that the money so paid belonged to the two original part- ners, especially if it was credited on the books, in equal amounts, to their stock account. Evans v. Hansen, 42 111. 234. Where, in a suit for a dissolution of a partnership, it appeared that there was a mistake as to the amount of capital put in by the complainants, and it ap- peared that more was put in than was originally stated, but how much more was uncertain, it was held that the burden of proof was upon them, and that they should be restricted to the smallest amount proved, especially as one of the complainants was the book- keeper, and should have kept the books so as to show the true state of the affairs. Moon V. Story, 8 Dana (Ky.) 226. A partnership consisting of four part- ners was dissolved, two assigning their shares to one of the others, and the re- maining two formed a new partnership. ]n their articles they agreed that of the property on hand a sufficient amount should be set apart and appropriated to paying the debts of the old firm, and another amount for improvements made on real estate, and that the remainder should be deemed the capital stock of the firm. Held, that the amount set apart for improvements made on real estate did not make a part of the capital stock. Mathers v. Patterson, 33 Pa. St. 485. (c) Infra, book IV., ch. 1, § 2. {d) Ante p. -200. (e) See Heslin v. Hay, 15 L. R., Ir. 431, where an attempt was made to vio- late this rule ; and see the observations of Lord Bramwell in Bouch v. Sproule, 12 App. Cas. 405. 542 CHAP. III.] CAPITAL OF PAETNEESHIPS. 321* bilities of a partnership are necessarily liable to fluctuation, and that the value of each partner's share of such assets constantly fluctuates also. Borrowing money and increasing capital. — The difixirence be- tween borrowing money on the credit of a firm and increasing its capital has been already adverted to,(/) and it has been seen that although each member of an ordinary trading partnership can pledge its credit for money borrowed in order to carry on its busi- ness, he cannot render it liable to repay money borrowed by him to enable him to furnish the amount of capital which he has agreed to bring in. (^) (/) Ante pp. *132, *133. (g) lb. 543 322* PARTNERSHIP PROPERTY. [bOOK HI., *322] *CHAPTER IV. OF JOINT AND SEPARATE PROPERTY. Section I.— Op Joint Estate, *323. Section II. — Separate Estate, *327. Section III. — Conversion of Joint Estate into Separate Estate, and Vice Versa, *334. Partnership property. — The expressions " partnership propei'ty," "partnership stock," "partnership assets," "joint stock" and "joint estate," are used indiscriminately to denote everything to which the firm, or, in other words, all the partners composing it, can be con- sidered to be entitled as such. («) The qualification as such is important, for persons may be entitled jointly or in common to property, and the same persons may be partners, and yet that property may not be partnership property ; e. g., if several persons are partners in trade, and land is devised or a legacy is bequeathed to them jointly or in common, it will not necessarily become part- nership property and form part af the common stock in which they are interested as partners. (6) Whether it does so or does not, depends upon circumstances which will be examined hereafter. Importance of distinguishing partnership proj)erty from the sepa- rate property of the partners. — It is often a difficult matter to de- termine what is to be regarded as partnership property and what is to be regarded as the separate property of each partner. The question, however, is of importance, not only to the partners them- selves, but also to their creditors ; for, as will be seen hereafter, if a (a) The expression "joint estate" (6) Morris f. Barrett, 3 You. ^S: J. 384, sometimes has a wider signification, and see the judgment in Ex parte The including all property which, on the Fife Banking Co., 6 Ir. Eq. 197; S. C. bankruptcy of the firm, is distributable on appeal, under the name of Ke Littles^ amongst its creditors. See post book IV., 10 Id. 275. ch. 4, § 3, " Keputed Ownership." 544 CHAP. IV., § I.] JOINT PROPERTY. 322* firm becomes bankrupt, the property of the firm and the separate property of each partner have to be distinguished from each other, it being a rule to apply the property of the firm in the first place in payment of the creditors of tiie firm, and to apply the separate properties of the partners in the first place to the payment of their respective separate creditors.l *It is proposed, therefore, to examine the rules by which p^oQ.o to determine what is the property of the firm, and what '■ the separate property of its members. Question determined hy agreement. — It is for the partners to de- termine by agreement amongst themselves what shall be the prop- erty of them all and what shall be the separate property of some one or more of them. Moreover, it is competent for them by agreement amongst themselves to convert what is the joint prop- erty of all into the separate property of some one or more of them, and vice versa.^ The determination, therefore, of the question, \Yhat is and what is not the property of the firm? involves an inquiry into the three following subjects, viz. : Joint estate. Separate estate. Conversion of one into the other. Each of these will be examined in order. SECTION I. — OF JOINT ESTATE. 1. Property of the firm. — Whatever, at the commencement of a partnership, is thrown into the common stock, and whatever has from time to time during the continuance of the partnership been 1. Partnership property distin- net profits, the property is not firm prop- guished from separate property. — erty, and may be seized and sold for the Wliere one partner furnishes all the private debt of the one who contributed capital and owns all the stock, the other it. Stuo^pt i'. Boaur, 76 Ind. 157. contributing his labor and experience, 2. Question determined by agree- and having a "working interest" only, ment. — Three persons agreed to buy receiving for his services a share of the cattle on t4ieir separate account, the cat« 545 35 323* PARTNERSHIP PROPERTY. [book III., added thereto or obtained by means thereof, whether directly by purchase or cireuitously by employment in trade, belongs to the firm, unless the contrary can be shown, (c) 3 Property paid for by the jinn. — The mere fact that the property in question was purchased by one partner m his own name is im- material, if it was paid for out of the partnership moneys, for in such a case he will be deemed to hold the property in trust for the firm, unless he can show that he holds it for himself alone. (cZ) , Upon this ^principle it is held that land purchased in the -^ name of one partner, but paid for by the firm, is the jirop- erty of the firm, although there may be do declaration or memo- randum in writing disclosing the trust and signed by the partner to whom the land has been conveyed, (e) So, if shares in a com- pany are bought with partnership money, they will be partnership property, although they may be standing in the books of the com- pany in the name of one partner only, and although it may be tie so purchased to become partnership out the other partner's authority. Euck- property when all should approve of the man v. Decker, 8 C. E. Gr. (N. J.) 283. purchase. Held, that until such ap- One of two partners cannot commit proval neither of the three was bound larceny or burglary as to the property or for the purchases of the others. Valen- house of the firm. Alfele v. Wright, 17 tine V. Hickle, 39 Ohio St. 19. Ohio 238. (c) See Crawshay v. Collins, 2 Russ. A partner in a firm engaged in pur- 339, as to the patents ; Nerot v. Burnand, chasing live stock on commission, died 4 Euss. 247, and 2 Bligh (N. S.) 415 ; Bone after certain commissions were partly V. Pollard, 24 Beav. 283. See, also, as earned. The surviving partner com- to co-owners of mines not being copart- pleted the transactions and received the ners, Clegg v. Clegg, 3 GifF. 322. As to money. Held, that such commissions outlays of partnership money on the should be treated as partnership assets, separate property of one partner, see but that the surviving partner was enti- infra, § 2. tied to have an allowance for his time 3. Property of the firm, generally. — and expenses in completing the trans- A judgment in a suit by two for a tres- actions. Newell v. Humphrey, 37 Yt. pass alleged to be on firm property, is 265. firm assets. Collins v. Butler, 14 Cal. (d) See per Lord Eldon, in Smith v. 223. Smith, 5 Ves. 193; Eobley v. Brooke, 7 "Where a firm engaged in the planting Bligh 90 ; Morris v. Barrett, 3 You. &, and selling of oysters, closes its business, ,1. 384. See, also, Helmore v. Smith, 35 one partner cannot dispose of the other's Ch. D. 436. share in the planted oysters remaining (e) Forster v. Hale, 5 Ves. 308, and in the beds after the debts are paid, with- 3 Id. 696. 546 CHAP. IV., § I.] JOINT PROPERTY. 324* contrary to the company's deed of settlement for more than ona person to hold shares in it. (/) 4 Ships. — As regards ships, there was often a difficulty arising from the Ship Registration acts. For as it was clearly settled that a ship belonged, both at law and in equity, to the person or per- sons who were registered as her owners, and to no one else, it fol- lowed that if a ship had been bought with partnership money, had been used as partnership property, and had always been treated as such by all the partners, yet if she was registered in the name of one partner only, there was no method by which that one could be prevented from effectually asserting an exclusive right to the ship and depriving his copartners of all their interest in her. {g) The provisions of the present Merchant Shipping acts differ, however, in several material respects from the enactments previously in force, and now, in the case above supposed, the registered partner would be deemed a trustee for the firm. (A) * Cases where property paid for by the firm does not be- r^ooK long to it. — Strong as is the presumption that what is '- bought with partnership money is partnership property, the pre- (/) Ex parte Connell, 3 Deac. 201- ; cle by the author in the Law Magazine Ex parte Hinds, 3 De G. & S. 613. for May, 1862 (vol. XIV., p. 70, N. S.) 4. Property paid for by the firm. — If a ship was registered in the name of Land purchased by one partner, in his two partners, the shares in which they own name, with partnership funds, will were interested might have been shown, not be deemed joint estate in a court of See Ex parte Jones, 4 Mau. & S. 450. law. Pitts V. Waugh, 4 Mass. 424. S. As to the right of one partner to sell or P., Goodwin v. Kichardson, 11 Id. 475. mortgage a ship belonging to the firm, If a person buys goods for a firm of see Ex parte Howden, 2 Mont., D. & D. which he is a member, the goods bought 574. become the property of the firm, though (h) 17 and 18 Vict., c. 104, g§ 37, 43, he does not at the time disclose the and 25 and 26 Vict., c. 63, § 3. Upon name of his partner. Scott v. McKin- the construction of the former act, see ney, 98 Mass. 344. Hughes v. Sutherland, 7 Q. B. D. 160; (gr) See Slacer v. Willis, 1 Beav. 354 ; Liverpool Borough Bank v. Turner, 1 Battersby v. Smyth, 3 Madd. 110; Cam- Johns. & H. 159, and 2 De G., F. & J. den V. Anderson, 5 T. R. 709 ; Curtis v. 502. A ship may be registered in the Perry, 6 Ves. 739 ; Ex parte Yallop, 15 name of a company, though some of its Ves. 60 ; Ex parte Houghton, 17 Ves. members are foreigners. See 17 and 18 251 ; and as to the old law relating to Vict., c. 104, ^ 18 ; and E. v. Arnaud, 9 equitable interests in ships, see an arti- Q. B. 806. 547 325* PARTNERSHIP PROPERTY. [bOOK III., suraption may be rebutted ; e. g., by showing that the money was lent by the firm to one partner, and so was not in fact partnership money when invested, (i) Moreover, it is to be observed that prop- erty which has been used and treated as partnership property cannot be presumed to belong to one partner only, simply because he paid for it, for the presumption in such a case is rather that the property in question was his contribution to the common stock. (J) This sub- ject will be adverted to more at length in the next section. Secret benefits obtained by one partner. — It has been already seen that one partner will not be allowed to retain for his own exclusive benefit any property which he may have acquired in breach of that good faith which ought to regulate the conduct of partnei's inter se. Whatever property has been so acquired will be treated as obtained for the benefit of all the partners, and as being part of the assets of the firm ; and this rule applies to property obtained by a con- tinuing or surviving partner in breach of the good faith which he is bound to exercise towards a retired partner, and the representa- tives of a deceased partner, so long as their interest in the partner- ship assets continues, {k) Money paid to one partner for his exclusive benefit. — At the same time, if an advantage which has been obtained by a partner is wholly unconnected with the partnership affairs, or, being con- nected with them, has been conferred upon him with a view to his own personal benefit, he cannot be called upon to account for it to the partnership. For example, where a ship, belonging to a Frenchman and two Americans, as partners, was captured by a British cruiser, and compensation was made to the Americans, but to them only, the Frenchman being expressly excluded, it was held that the sum awarded to the Americans belonged to them alone, and that the Frenchman had no interest in it. (^) So, if one part- ^ -. ner is *the lessee of property to which the firm is only ■^ entitled so long as the partnership continues, and on the dissolution of the partnership the lease is sold or renewed, the (i) As in Smith v. Smith, 5 Ves. 193. per Sir J. Cross. See, also, Walton v. Butler, 29 Beav. (k) See ante p. *305, et seq. 428; Ex parte Emly, 1 Rose 64. (l) Campbell v. Mullett, 2 SwansL (j) See Ex parte Hare, 1 Deac. 25, 551. See, also, Biirnand t». Rodocanachi^ o48 CHAP. lY., § I.] JOINT PROPERTY. 326* price of the sold lease, or the renewed lease, as the case may be, will belong, not to the firm, but to that partner in whom the lease is by hypothesis exclusively vested, (m) Property acquired after dissolution. — As regards property ac- quired after a dissolution, but before the affairs of a dissolved partnership have been wound up, such property is not necessarily to be considered as partnership property, even though the partner acquiring it has continued to carry on the business of the dissolved firm without the consent of his late partners. This was dedded in Nerot V. Bernand. {n) In that case, in effect, an hotel keeper be- queathed his business to his son and daughter. After the death of the testator, the daughter continued to carry on the business. She afterwards transferred it to a new house in Clifford street, and this house was conveyed to her in fee. She continued to carry on the business there for some time, and ultimately she married. During the greater part of the time which had elapsed since the death of the testator, his son had been abroad, and on his return he insisted that he ought to be considered as a partner with his sister, and that as such he was entitled to have the new house taken by her, and all the stock in trade and effects purchased by her in order to carry on the business, treated as partnership property. The Vice Chancellor decided that the testator's son and daughter had become partners, but that the partnership between them had been dissolved on her marriage. He also held that the new house and all the goods, furniture, plate, linen, china, wines, stock in trade, implements and other effects, being in and about the prem- ises, formed a part of the partnership property. Upon appeal, this decision was affirmed, so far as it related to the existence and subse- quent dissolution of partnership, but was varied so far as it related to what ought to be considered as partnership property, p;;,.,^^ *Upon this head the Lord Chancellor's judgment was as *- "^ follows : 7 App. Cas. 333 ; Thompson v. Kyan, 2 412 ; affirmed on appeal, 4 De G., F. & Swanst. 565, n ; MofFatt v. Farquharson, J. 42. 2 Bro. C. C. 338. See the note on this (n) 4 Kuss. 247, and 2 Bligh (N. S.) case in Belt's edition of Brown's Re- 215. See, too, Payne v. Hornby, 25 ports. Beav. 280. (m) See Burdon v. Barkus, 3 Giff. 549 327* PARTNERSHIP PROPERTY. [bOOK III., "It appears to rae satisfactorily made out, from all the circumstances, that the house in CliflFord street was bought witli the partnership property; bongiit, in the first instance, partly with the partnership property, partly with money borrowed by Miss Nerot and afterwards repaid out of the partnership eflects, and partly upon the credit of the house that belonged to the partnership, and I think tliat part of the Vice Chancellor's decree by which he directs the house to be sold must be aflBrmed. " There is a part of the decree, however, in which I cannot concur. The disso- lution of the partnership took place in September, 1819. The Vice Chancellor has directed all the property to be sold which was in the house in Clifford street at the time when the decree was pronounced, several years after the dissolution of the partnership, as if all the property which at the time of the decree existed in the house was, without inquiry, to be considered as partnership property. Lord Eldon doubted greatly whether that part of the decree could be sustained ; and, in my opinion, it must be varied by directing the master to take an account of the particulars of the partnership property which were in the house in Clifford street at the time of the dissolution, and of the value of the property at that time; and to inquire whether any part of that property still remains in the house." (o) Good will — The good will of a partnership, in so far as it has a pecuniary value, is partnership. property, unless the contrary can be shown. This subject, however, will be more conveniently dis- cussed hereafter, when treating of partnership articles, {p) 5 (o) See, also. Ex parte Morley, 8 Ch. estate. Holden v. M'Makin, 1 Pars. 1026, where a surviving partner con- (Pa.) Sel. Cas. 270. tinued the business, sold the old stock Lord Eldon, in Kennedy v. Lee (3 in trade, and it was held that the new Mer. 441, 452), speaking on this subject, stock in trade formed part of his sepa- used the following language : " Where rate estate. two persons are jointly interested in (p) See infra, book TIL, ch. 9, § 2. trade, and one by purchase becomes sole 5. Good will. — A transfer, by a retir- owner of the partnership property, the ing partner to the other, of " the busi- very circumstance of sole ownership ness connections and patronage belong- gives him an advantage beyond the ing to th-e firm," may be deemed to actual value of the property, and which include the good will of the concern, may be pointed out as a distinct bene- Kellogg V. Totten, 16 Abb. (N. Y.) fit, essentially connected with the sole Pr. 3.5. ownership. In the case of the trade The subscription list of a newspaper of a nurseryman, for instance, the mere published by more than one proprietor knowledge of the fact that he is sole is firm property ; and when one of the owner of the property, and in the sole partners dies it does not survive to the and exclusive management of the con- Burviving partner, but belongs to, or is cern, gives him an advantage which the to be administered as part of the joint other partner, supposing him to carry 550 CHAP. IV., § II.] SEPARATE PROPERTY. SECTION ir. SEPARATE ESTATE. 327* 2. PropeHy of the individual partners. — The preceding inquiry into what constitutes the property of the firm has rendered it un- necessary to inquire at length into what constitutes the separate property of its members. A few additional observations, pointing out the danger of relying too much on circumstances which are often regarded as decisive, may, however, be usefully added. 6 on the same trade, with other property, not the partnership property, would not possess. In that sense, therefore, the good will of a trade follows from, and is connected with the fact of sole owner- ship. There is another way in which the good will of a trade may be rendered still more valuable ; as by certain stipu- lations entered into between the parties at the time of the one relinquishing his share in the business ; as by inserting a condition that the withdrawing partner shall not carry on the same trade any longer, or that he shall not carry it on within a certain distance of the place where the partnership trade was carried on, and where the continuing partner is to carry it on upon his own sole and separate account. Now it is evident that in neither sense was the good will of this trade at all considered as among the subjects of the valuation to be made by either party. It was not so consid- ered by the plaintiff, when he wrote his letter of the 2 1st of October. The words 'concern' and 'inheritance' are used inartificially, and cannot be construed as having any reference but to the actual subjects of valuation. And when the plaintiff offers to take the business him- self, he could not have forgotten that the defendant's own estate of Butterwick lay contiguous to the partnership property, and therefore his introducing no stipu- lation, with reference to the fact of its contiguity, is a clear intimation that when he wrote this letter he had no in- tention, in offering to take tiie partner- ship property, to purchase with it the good will in the sense of restricting the defendant from carrying on the trade in its vicinity. In that sense at least, there- fore, the good will of the trade was not the subject of contract, or treaty even, between the parties." 6. Property of the individual part- ners. — Where one partner takes out a ■patent in his individual name, and never assigns it to the firm, the firm can lay no claim to the patent. McWilliams Manuf. Co. v. Blundell, 11 Fed. Rep. 419. A patent taken out by one partner is not firm property unless assigned to the firm, even though obtained at joint ex- pense. McWilliams Manuf. Co. v. Blun- dell, 22 Pat. Off. Gaz. 177. An entry in the firm books made by one of the p.''.rtners in a firm which runs a saw mill, charging himself with a boat which he had built at the mill, may be introduced by him as evidence inter alia to prove that the boat is his individual property. Reno v. Crane, 2 Blackf. (Ind.) 217. Where land belonging to one partner is used by the firm, but is not put into the actual stock, it does not become partnership property. Gordon v. Gor- don, 49 Mich. 501. A mortgage given by one partner to the other, to secure a balance due, is not 551 328* PARTNERSHIP PROPERTY. [bOOK III., *That ichich produces partnership profits may belong to -* one jyartner only. — It by no means follows that persons who are partners by virtue of their participation in profits are en- titled as such to that which produces those profits. For example, coach proprietors who horse a coach and divide the i)rofits may each make use of horses which belong- to himself alone and not to the firm of proprietors. (5) So, where a merchant employs a broker to buv goods for him and to sell them ag-ain on his account, although it may be agreed that the profits are to be divided, the goods themselves, and the money arising from their sale, are the property of the merchant, and not the joint property of himself and the broker ;(/-) and it not unfrequently happens that dormant partners have no interest in anything except the profits accruing to the firm to which they belong, (s) 7 Property used for partnership pt^iposes not necessarily partner- ship piroperty. — Again, it by no means follows that property used by all the partners for partnership purposes is partnership prop- erty. For example, the house and land in and upon which the partnership business is carried on often belongs to one of the part- ners only, either subject to a lease to the firm, or without any lease at all.(^) So, it sometimes happens, though less frequently, that a partnership asset. Niagara County 401; Meyer i>. Sharp, 5 Taunt. 74 ; Bur- Bank V. Lord, 33 Hun (X. Y.) 557. nell v. Hunt, 5 Jur. 650, Q. B. Where a permanent building is erec- (s) See Ex parte Hamper, 17 Ves. ted on land owned by one partner, who 404, 405 ; Ex parte Chuck, Mont. 373. holds the legal title, it will be presumed 7. That which produces partner- to be his separate property, though used ship profits may belong to one part- by the firm as its place of business, un- ner only. — If partners, by arrangement less it be shown that it was built by the among themselves, own each a separate firm with firm assets, or contributed, by part of the stock in trade on which the the partner who built it, to the capital partnership business is transacted, the stock. Goepper v. Kingsinger, 39 Ohio stock will nevertheless be regarded as St. 429. partnership property for the payment {q) As in Fromont v. Coupland, 2 of partnership debts, at least as to credi- Bing. 170; Barton r. Hanson, 2 Taunt, tors who have no notice that the stock 49, and see Wilson v. Whitehead, 10 is owned in that way. Elliot v. Stevens, Mees. & W. 503, as to an author's in- 38 N. H. 311. terest in paper supplied for his work to {t) See Burdon v. Barkus, 3 Gifi". 412, the publisher. affirmed on appeal, 4 De G., F. & J. (r) Smith v. Watson, 2 Barn. & C. 42, as to a lease of a coal mine ; Ex 552 CHAP. IV., § II.] SEPARATE PPvOPERTY. 328* office furniture, (w) and even utensils in trade, (a^) are the separate property of one of the partners, subject to the right of the others to use them as long as the partnership continues. If, however, a partner brings such property into the common stock as part of his capital, it becomes partner*ship property, and any increase p^ooo in its value will belong to the firm. (?/) Property bought with the money of the firm. — It does not even necessarily follow that property bought with the money of the firm is the property of the firm. For it sometimes happens that prop- erty, although paid for by the firm, has been, in fact, bought for one partner exclusively, and that he has become debtor to the firm for the purchase money, (z) 8 parte Murton, 1 Mont, D. & D. 252; partnership funds is not necessarily Salmain v. Shore, 9 Ves. 500; Eowley partnership property, yet the fact that V. Adams, 7 Beav. 548 ; Doe v. Miles, 1 it was so purchased, especially if it was Stark. 181, and 4 Camp. 373. If there necessary for the ordinary operations of is no lease and the firm is dissolved, the the firm, and was actually so used, will owner can eject his late partners with- be conclusive in equity that it was in- out notice to quit. Doe v. Black, 8 Car. tended to be held as partnership prop- & P. 464 ; Benham v. Gray, 5 C. B. 138 erty, in the absence of controlling evi- (an action of trespass). As to an in- dence to the contrary. But at law, the junction in such cases, see Elliot v. property must ordinarily be dealt with Brown, 3 Swanst. 489, n.; Hawkins v. according to the legal title. Hoxie v. Hawkins, 4 Jur. (N. S.) 1044, Stuart., Varr, 1 Sumn. (U. S.) 173. V. C. Eeal estate contributed to the partner- (w) Ex parte Owen, 4 De G. & S. ship by one partner, at a valuation 351. See Ex parte Hare, 1 Deac. 16; agreed upon, becomes firm property Ex parte Murton, 1 Mont., D. & D. 252. without a conveyance from such part- (x) Ex parte Smith, 3 Madd. 63. ner, and he holds the legal title in {y) Robinson v. Ashton, 20 Eq. 25. trust for the firm as partnership assets. (z) See Smith v. Smith, 5 Ves. 193 ; Wiegand v. Copeland, 7 Sawy. (U. S.) Walton V. Butler, 29 Beav. 428; Ex 442. parte Emly, 1 Eose 64. Compare the Where one partner invested a por- case of the Bank of England, 3 De G., tion of the partnership funds in lands F. & J. 645, noticed infra, p. *330. for his own use, it was held tTiat this 8, Property bought with the money created a resulting trust, and that the of the firm. — Equity treats real estate other partners might follow it and claim owned by a firm and purchased with its their portion of the specific property, funds, as partnership property, for the King v. Hamilton, 16 111. 190. See, purpose of settling the debts of the firm also, Edgar v. Donnally, 2 Munf. (Va.) and distributing its effects. Allen v. 387. Withrow, 110 U. S. 119. Eeal property, bought for partnership While real property purchased with purposes, and paid for with the undi- 553 329* PARTNERSHIP PROPERTY. [bOOK III., Agreement of partners the true test. — It is obvious, therefore, that the only true method of deterraining, as between the partners them- selves what belongs to the firm and what not, is to ascertain what agreement has been come to upon the subject. If there is no ex- press agreement, attention must be ])aid to the source whence the property was obtained, the purpose for which it was acquired, and the mode in which it has been dealt with. The following cases, in which there was' very little evidence to show what agreement had been made, may be usefully referred to on this subject. Stock in tirade and furniture. — In Ex parte Owen (a) one Bowers, vided moneys of the partnership, is them in common, though purchased partnership property, although the con- with partnership funds, and to be used veyance is made to both the partners in for partnership purposes. Smith v. t-heir individual names. Paige Ti. Paige Jackson, 2 Edw. (N. Y.) 28. (Iowa), 32 N. W. Rep. 360. In Fall River Whaling Co. v. Borden If real property be purchased with (10 Cush. (Mass.) 458, 467, 470), lands partnership means, and used for part- were purchased by partners, and the nership purposes, it is treated in equity deed taken to them as tenants in com- as held by the partners in trust for the mon. " Tlie cost of the purchase went firm, subject to the same rules as apply into the partnership accounts. The es- to partnership personal property, and tates were entered into the company liable to the debts of the firm and the books as company property. As por- claims of the partners inter se ; and this tions were sold for profit, from time to is so whether the title be vested in one time, the proceeds were merged in the or all of the members of the firm. Pep- general funds of the copartnership. per V. Thomas (Ky.), 4 S. \V. Rep. These lands were avowedly purchased 297. for speculation." It was held that the Real estate conveyed to all the mem- lands were partnership property. The bers of a partnership, though purchased court say : " In order to afiect lands with the funds of the partnership and with partnership equities, it is not ne- used for partnership) purposes, vests, at cessary that such land should be the in- hiw, in the partners as tenants in com- cident merely of a commercial partner- mon ; and a failure to dissolve an at- ship ; but it may be, in part at least, the tachment of such estate, made in an ac- distinct substratum of a copartnership." tion on a note given by the two partners See infra, note 11. individually, after the dissolution of the (a) 4 De G. & S. 351. See, also, Pil- partnership, will not render the partner- ling i'. Pilling, 3 Dg G., J. & S. 162. ship liable to proceedings in insolvency. As to a lease of salt works belonging Ensign v. Briggs, 6 Gray (Mass.) 329. originally to one partner, but which be- Where land is conveyed to partners came the property of the firm, Parker jointly, without any agreement that it v. Hills, 5 Jur. (N. S.) 809, and on ap- shall be considered as joint stock, it will peal, 7 Id. 833. be treated as real estate belonging to 554 CHAP. IV., § II.] SEPARATE PROPERTY. 329* who was a grocer, provision dealer and wine merchant, and who possessed stock in trade and household furniture at his place of business, took two partners, without any agreement except that they were to participate in tiie profits of the concern. They brought in no capital and paid no premium, and no deed or agree- ment was executed. Bowers bought with his own money, but in the name of the firm, new stock required for the business. Upon the bankruptcy of the firm, the question arose to whom the stock in trade and furniture belonged. The court, coming to the best conclusion it could from such materials as were before it, held that there was an agreement between the three, expressed or implied, that all the stock in trade should become the property of the three, subject to an account, in *which the partnership would be -^ debited in favor of Bowers for the value of the articles which belonged to him or for which he paid. But the court thought there was not the same ground for such an inference as to the household furniture, and that therefore was held to have continued and to remain the separate estate of Bowers. Outlays on property. — Sometimes a firm lays out money on property which belongs exclusively to one partner ; or some of the partners lay out their own moneys on the property of the firm, and in such cases the question arises whether the money laid out can be considered as a charge on the property on which it has been expended, or whether the owners of the property obtain the benefit of the outlay. The agreement of the partners, if it can be ascer- tained, determines their rights in such cases. But where, as often happens, it is extremely difficult, if not impossible, to ascertain what was agreed, the only guide is that afforded by the burden of proof. It is for those claiming an allowance in respect of the out- lay to establish their claim. On the other hand, an intention to make a present of a permanent improvement is not to be presumed. Houses built on partnership property. —In Re Streatfield, Law- rence & Co. (6) two partners bought an estate with partnership money. The land was conveyed to them in undivided moieties to (b) Bank of England Case, 3 De G., as to buildings paid for ont of partner- F. & J. 645. In Pawsey v. Armstrong, ship moneys, but erected on the separate 18 Ch. D. 698, an inquiry was directed property of one of the partners. See, 555 330* PARTNERSHIP PROPERTY. [bOOK III., uses to bar dower, and each partner built a house on the land with money of the firm, but charged to him in his private account. An account was opened in the partnership books, and in this account the purchased estate was debited with all moneys of the partner- ship expended in the purchase. At the time of the purchase the land was in lease, but the tenant surrendered to the partners those portions which they wanted, they reducing his rent. The rents, viz., both that paid by the tenant for what he held, and that paid to him for what he gave up, were treated in the books of the firm as paid to and by it. There was evidence to show that the part- ners intended to come to some arrangement respecting the division of the estate, but *they became bankrupt before doing so. r^^ooi It was held that both the land and the houses on it were '- the joint property of the firm, and not the separate properties of the partners. Appointments. — In Collins v. Jackson (c) two persons were in partnership as solicitors, and one of them held several appointments ; he was clerk to poor-law guardians, superintendent registrar of births, marriages and deaths, treasurer of a turnpike trust, steward of a manor, treasurer of a charity, and receiver of tithes. The question arose whether the profits of these offices belonged to the partnership or not. There was no written agreement specifically applying to these offices, but there was a memorandum relating to some others reserv^ed by the father of one of the partners when he retired from business, and the Master of the Rolls held that all the offices in question were to be treated as held on behalf of both part- ners, and not for the exclusive benefit of the partner who actually filled the offices, (d) 9 Cases ichere co-owners share profits. — The cases, however, which also, Burdon v. Barkus, 3 Giff. 412, and partners agreed with a neighboring post- 4 De G., F. & J. 42, where a pit was master that the post office should be kept sunk by the firm in a partner's property, at the partnership store, the contracting (c) 31 Beav. 645. partner being appointed deputy post- [d) See, also, Smith v. Mules, 9 Hare master; but the business was transacted 556 ; and Ambler v. Bolton, 14 Eq. 427, by the clerks of the store indiscrimin- as to the mode of dealing with such ately, no separate books being kept, and offices on a dissolution. . the money going into the partnership 9. Appointments.— Where one of two funds, and all payments on account of 556 CHAP. IV., § II.] SEPARATE PROPERTY. \SV present most difficulty are those in which the co-owners are part- ners in the profits derived from their common property, (e) Sup- pose, for example, that two or more joint tenants, or tenants in common, of a farm or a mine, work their common property together as partners, contributing to the expenses and sharing all profits and losses equally, there will certainly be a partnership ; and yet, unless there is something more in the case, it seems that the land will not be partnership property, but will belong to the partners as co- owners, just as if they were not partners at all;(/) and the result may even be the same if they purchase, out of their profits, other lands for the purpose of more conveniently developing their busi- ness, {g) Land acquired by devise farmed in common. — In Morris v. Bar- -■ rett(A) lands were devised to two persons *as joint* tenants. ^ They farmed those lands together for twenty years, and kept their money in one common stock to which each had access, but they never came to any account with each other. Out of their common stock they bought other lands, w^iich were conveyed to one of them only, but were farmed by both, like the first lands. It was held that the devised farms were not partnership property, but that the purchased farms were. Joint tenants by devise partners in profits. — In Brown v. Oak- shot (i) a brewer devised his real estates to trustees for a term of five hundred years, upon trust, to pay certain annuities,. anx:l to divide the surplus rents between his sons, and he devised the same estates, subject to this term, to his sons as joint tenants. The sons the post office being made out of such 523 ; and Roberts v. Eberhardt, Kay 159.. funds, it was held that the profits of the See, also, Williams v. Williams, 2 Ch. post office belonged to the firm, especially 294, where the partnership had expired^ as the partners had made several settle- but an agreement to divide the property ments between themselves, without any was held to have been come to. separate claim to those profits having (g) Steward v. Blakeway, 4 Ch. 603,. been set up by the partner who con- and 6 Eq. 479, a case of a farm and tracted for the business. Caldwell v. quarry. But compare Morris v. Barrett, Leiber, 7 Paige (N. Y.) 483. Phillips v. Phillips, and Waterer v. Wa- (e) As to the distinction between co- terer, cited below, ownership and partnership, see anle p. {h) 3 You. & J. 384. Compare Wa- *51 et seq. terer v. Waterer, infra, p. *333. (/) See Crawshay v. Maule, 1 Swanst. (i) 24 Beav. 254. 557 332* PARTNERSHIP PROPERTY. [bOOK HI.. carried on their father's business in partnership together, and used the real estates devised to them for the purposes of the business ; but it was nevertheless held that the reversion in fee continued to be vested in them jointly, and not in common, as would have been the case had it become partnership property. Public houses devised to partners in a brewery. — In Phillips v. Phillips (/;) public houses were devised to two persons who carried on a brewery in partnership, and it was held that such houses did not become partnership property, though used for the purposes of the partnership. In the same case some mortgage debts secured on public houses were bequeathed to the two partners, and they after- Avards purchased the equities of redemption, and paid for them out of the funds of the partnership, but it was held that the property thus acquired did not form part of the partnership property, the equities of redemption following the mortgage debts. But in this very case it was held that other public houses purchased by the partners out of the partnership funds, and used for the purposes of its trade, did form partnership property to all intents and purposes. (J) Devisees of a trade and of land for the purpose of carrying it on. — On the other hand, in Jackson v. Jackson, (m) a testator had *devised to his two sons jointly, his trading business and po.-^q lands used by him for the purpose of carrying it on. The sons took the business and carried it on in partnership ; and it was held that the lands formed part of the partnership property, and did not belong to the sons as mere joint tenants. In this case, not only was there some evidence to show that the sons considered the land as part of their property as partners, but there was also this peculiarity : that a trading business was left to them, and that the land was accessory to that trade ; so that it was very difficult, as observed by the Lord Chancellor, to sever the profits from the land {k) As stated in Bisset on Partnership, the question of conversion would not p. 50. The report in 1 Myl. & K. 649, arise. Compare Waterer v. Waterer, 15 is silent as to the property devised. Mr. Eq. 402, infra. Bisset considers the decision as an au- {I) 1 Myl. & K. 649. thority on the point of conversion. But (m) 9 Ves. 591, and 7 Id. 535. Com- if, as he represents, the court came to pare this with Brown v. Oakshot, 24 the conclusion that the devised property Beav. 254, noticed supra. was not, in fact, partnership property, 558 CHAP, IV., § II.] SEPARATE PROPERTY. 333^ dud to hold the devisees to be partners as to the former, but not as to the latter. Devisees of mines. — Upou this last ground it was held, iu Craw- shay V. Maule, {n) that mines devised to several persons for the ex- press purpose of being worked by them in partnership, and which were worked accordingly, were partnership property. Devise of nursery grounds. — In Waterer v. Waterer (o) a nursery- man who carried on business with his sons, although not in part- nership, left his residuary estate, including the good will of his business, to his sons in common ; they, after his death, carried on the business in partnership, and bought more land for the pur- poses of the business, and paid for it out of his estate ; then one son died, and the others bought his share and paid for it out of money raised by mortgage of the nursery ground, and out of their father's estate. On the death of one of the surviving sons intestate, it was held that all the land thus acquired had become partnership prop- erty, and that the share of such son was to be treated as personal and not as real estate. 10 (n) 1 Swanst. 495. (o) Waterer v. Waterer, 15 Eq. 402. See, also, Davies v. Games, 12 Ch. D. 813, a similar case. 10. Nature of partners' interests in land. — Where real estate is conveyed to copartners, in their individual names, for the use and benefit of the firm, or in payment of debts due to the firm, the grantees become tenants in common of the land ; and upon the death of either, the legal title to his undivided share descends to his heirs-at-law. Buchan v. Sumner, 2 Barb. (N. Y.) Ch. 165 ; An- CHAP. IV., § III.] CONVERSION OP PEOPERTY. 335* oixlinaiy way of business from the partner to the firm, ceases to be his and becomes the property of the partnership, and vice versa^ nership propertv, but can only work out assumpsit as upon an implied promise such a lien through the equities of the to pav the creditors and indemnify the copartners, applicable whilst the copart- grantor, this was a valid consideration ners are administering their own funds, for the deed as against partnership has no application to the case of a copart- creditors of A «fe B. Guild v. Leonard, nership dissolveil by the death of one 18 Pick. (Mass.) 511. of the copartners, especially if the 8ur- When, upon some disagreement be- viving partner be insolvent, or where, tween partners, their differences were though living, one or both the copartners submitted to arbitrators, who awarded have become insolvent or bankrupt, so that all the goods and other assets of that their property is in the hands of the firm should pass to one of the part- assignees for distribution. Tillinghast ners, who should pay all the partnership V. Champlin, 4 K. I. 173. debts, and thereupon such goods and One partner may assign his interest in assets were all attached by private cred- the partnership property to his separate itors of such partner, and subsequently creditor, and the assignment will be good by the creditors of the firm, it was held against the creditors of the firm after- that the creditors of the firm were enti- wards attaching. Wilson v. Bowden, 8 tied to be preferred, even if the award Kich. (S. C.) 9 ; Norris v. Vernon, Id. 13. had been executed by a transfer in ac- If either partner has contracted a debt cordance with it. Tenney v. Johnson, in his own name, in which, as between 43 N. H. 144. themselves, the other partner should Where a partner gave a mortgage on share, that liability is a sufficient con- his separate property, creating thereby sideration as against joint creditors for a a preference in favor of a partnership transfer of firm property, while free creditor, it was held that the mortgage from the operation of insolvent laws, was not thereby void and fraudulent as for the payment of that debt. Marks v. against the separate creditors of the Hill, 15 Gratt. (Va.) 400. mortgagor ; though, on complaint made Illustrations.— A and B being the in their behalf as a class, the mortgage only copartners in one company, and might be declared void as to such cred- being likewise partners with other per- tors. Stewart v. Slater, 6 Duer (N. Y.) sons in two other companies, A made a 83. deed-poll to B of all the grantor's in- Where one of two partners, by a mort- terest in certain real estate and in the gage deed, conveys to the other partner- personal property of the three compa- ship effects, to secure debts alleged to nies, the deed being nominally for a pecuniary consideration, and containing a covenant that the grantee would in- demnify the grantor against all the debts be due from the one to the other, which deed and effects are assigned to bona fide creditors of the mortgagee, to secure debts due from him to such creditors. due from the three companies. The such conveyance was held to be valid deed was accepted by the grantee, but against creditors of the firm who had no was not executed by him. It was held lien. Potts «. Blackwell, 3 Jones (N. C.> that as the grantee would be liable in Eq. 449. 573 335* PAETNERSHIP PROPERTY. [bOOK III., just as if he were a stranger to the firm. This was settled in the great case of Bolton v. Puller, {y) in which there were two banking firms, one carrying on business at Liverpool and one in Loudon. All the partners in the latter firm were partners in the former. Some bills of exchange came, in the ordinary course of business, into the hands of the Liverpool firm, to be placed to the general account of its customers. These bills were remitted by the Liver- pool firm to the London firm, to be placed to the credit of the former in the general account between the two houses. Both houses afterwards becoming bankrupt, it was held that the bills were the property of the London firm and not of the Liverpool firm, or of its customers. Lord Chief Justice Eyre, in delivering judgment, adverted to the question now under consideration in the following terms : " There can be no doubt that as between themselves a partnership may have transactions with an individual partner or with two or more of the partners having their separate estate engaged in some joint concern in which the general ^„„g-| partnership is not interested ; and that they may by *their acts convert the joint property of the general partnership into the separate property of an individual partner, or into the joint property of two or more partners, or S conveiso. And their transactions in this respect will, generally speaking, bind third persons, and third persons may take advantage of them in the same manner as if the part- nership were transacting business with strangers ; for instance, suppose the general partnership to have sold a bale of goods to the particular partnership, a creditor of the particular partnership might take those goods in execution for the separate debt of that particular partnership." ^* See, also, as bearing out the text, Allen St. 511 ; State v. Thomas, 7 Mo. App. V. Centre Valley Co., 21 Conn. 130; 205; Weaver d. Ashcroft, 50 Tex. 428; Beeves v. Ayers, 38 111. 419 ; Case v. White v. Parish, 20 Id. 688 ; Wilcox v. Beauregard, 99 U. S. 119 ; S. C, 1 Woods Kellogg, 11 Ohio 394. (U. S.) 127 ; Field v. Chapman, 15 Abb. {y) 1 Bos. & P. 539. (N. Y.) Pr. 434; Gwin v. Selby, 5 Ohio 14. Dealings between one partner St. 96 ; Locke v. Lewis, 124 Mass. 1 ; and the firm.— A boiia fide mortgage, Majer v. Clark, 40 Ala. 259 ; Miller v. given by a member of a firm to the firm, Price, 20 Wis. 117 ; Pfirrman v. Koch, 1 is valid, and in no sense a mortgage to Cine. (O.) 460; Potts v. Blackwell, 4 the grantor himself. Galway v. Fuller- Jones (N. C.) Eq. 58 ; Rankin v. Jones, ton, 2 C. E. Gr. (N. J.) 389. 2 Id. 169 ; Reese v. Bradford, 13 Ala. Where two of three partners of a firm, 837 ; Robb v. Mudge, 14 Gray (Mass.) engaged in building a mill, bought lum- 534 ; Schmidlapp v. Currie, 55 Miss, ber with their own money, and delivered 597 ; Sigler v. Knox Co. Bank, 8 Ohio it on the ground where the mill was 574 CHAP. IV., § III.] CONVERSION OF PROPERTY. 336* Change of property on change in firm. — Where a change occurs in a firm by the retirement of one or more of its members, nothing is more common than for the partners to agree that those who con- tinue the business shall take the property of the old firm and pay its debts, or that part of the property of the old firm shall become the property of those by whom its business is to be continued, whilst the rest of the property shall be otherwise dealt with. So, again, when a partnership is first formed, or when a new partner is taken into an existing firm, or when two firms amalgamate into one, some agreement is generally come to by which what was before the prop- erty of some one or more only of the members of the firm becomes the joint property of all such members. All such agreements, if bona fide, and not fraudulent against creditors, are valid, and have the eifect of altering the equitable ownership in the property affected by them. {£) In Ex parte Ruflfiu, (a) which is the leading case on this subject, Thomas Cooper, a brewer, took James Cooper into partnership. That partnership was afterwards dissolved by articles, by which the buildings, premises, stock in trade, debts and effects were as- signed to James by Thomas, who retired. James afterwards be- came bankrupt, and, some of the partnership debts being unpaid, an attempt was made to have what had been the property of the partnership applied in liquidation of those debts. But it was held that such property was no *longer the joint property of the r^qQ7 two partners, but had been converted into the separate property of James. Ex parte "Williams (6) was a similar case, only that on the disso- biiilding, and the other partner, who of Bristol v. Westcott, 12 Ch. D. 461 ; had personal charge of the work, took Varley v. Coppard, L. E., 7 C. P. 505. the lumber and applied it to the part- (a) 6 Ves. 119. See, too, Ex parte nership uses as needed, with the knowl- Walker, 4 De G., F. & J. 509 ; Ex edge of the two former, and without ob- parte Sprague, 4 De G., M. & G. 866 ; jection, these facts are enough to prove Ex parte Clarkson, 4 Deac. & C. 56 ; Ex a conversion of all the lumber so bought parte Gurney, 2 Mont., D. & D. 541 ; Ex and delivered into partnership property, parte Peake, 1 Madd. 346 ; Ex parte Fell, Person v. Wilson, 25 Minn. 189. 10 Ves. 348. (2) Such an agreement is not a breach (6) 11 Ves. 3. Compare Ex parte of a covenant not to assign without the Cooper, 1 Mont., D. & D. 358. consent of the lessor. See Corporation 575 337* PARTXERSHIP PROPERTY. [bOOK III., lution no assignment was made. There was not even any written agreement showing the terms on which the dissolution took place. But it was sworn that the partner who continued the business was to take all the stock and effects of the old firm, and it was held that they had become his separate property, and could not be considered as the joint property of the dissolved partnership. These decisions have always been regarded as settling the law upon the subject of conversion of partnership property, and have been constantly followed. They were not, it will be observed, decided with reference to the doctrine of reputed ownership, but with reference only to the real agreement come to between the part- ners. They apply as much to cases of a change of interest on death as on retirement, (c) The case of Ex parte 0\ven,{d) which has been already referred to,(e) shows that similar principles must be applied in order to de- termine what, on the formation of a partnership, has been con- verted from separate into joint estate. (/)^^ Agreement must be executed. — In order, however, that an agree- ment may have the effect of converting joint into separate estate, or vice versa, the agreement must be executed, and not be executory merely. In Ex parte Wheeler, (g) a retiring partner and a continu- ing partner entered into an agreement in writing, by which the re- (c) See Ke Simpson, 9 Ch. 572 ; and when a firm ceases the partners become compare Ex parte Morley, 8 Ch. 1026, tenants in common of the partnership and Ex parte The Manchester Bank, 12 property then undisposed of, yet it is not Ch. D. 917, and 13 Id. 465. These universally true. So long as partnership- three cases turned on the construction debts remain unpaid, partnersiiip prop- of the partnership articles, combined in erty continues such, for the purpose of the last two with the wills of the de- application to the payment of such ceased partners. The wills and the debts. Rice v. McMartin, 39 Conn. 573. articles together prevented a conversion. Where partners own each in severalty {(l) De G. & S. 351. the real estate where the business is- (e) Ante p. *329. carried on, and buildings have been (/) See, too, Ex parte Barrow, 2 Eose erected and improvements made thereon 252 ; and Belcher v. Sikes, 8 Barn. & C. by the firm, the lands, on a dissolution,. 185, for a case where separate estate was will be treated as partnership assets, made joint by a deed of dissolution not Smith v. Danvers, 5 Sandf. (N. Y.) 669. clearly expressed. (g) Buck 25. See, too, Ex parte 15. Change of property on change Wood, 10 Ch. D. 554 ; Ex parte Cooper, of firm.— While it is generally true that 1 Mont., D. & D. 358 ; and the case of 576 -CHAP. IV., § III.] CONVERSION OP PROPERTY. 338* :,tooo-| tiring ^partner assigned the stock, good will, lease, furni- ture, fixtures, books and debts of the firm, to the continu- ing partner, and the latter agreed to pay certain debts of the partnership, for which his father, he said, would be security. The father, however, refused to give any security, and this further act was necessary to be done in order to complete the transfer of the property. The continuing partner having become bankrupt, the court held that the property of the old firm had not been converted into the separate estate of the continuing partner, the agreement being still executory when the bankruptcy occurred. 16 Effect of fraud. — Moreover, an agreement Avhich can be success- fully impeached for fraud will not affect the property to which it may relate ; (A) and it must not be forgotten that in the event of the Bank of England, 3 De G., F. & J. had no eflBcacy to divide the partnership 645, noticed ante p.*330 ; and compare Ex property. Fitzgerald v. Christt, 5 C. E. parte Gibson, 2 Mont. & A. 4 ; Ex parte Gr. (N. J.) 90. Sprague, 4 De G., M. & G. 866 ; Haw- With a view to a dissolution, two part- kins V. Hawkins, 4 Jur. (N. S.) 1044. ners agreed to divide their stock, and that 16. Agreement must be executed. — the machinery which belonged to them A note may be endorsed to a firm of should be given to the party who would which the endorser is a member in the give the most for it. They accordingly same manner, and witii the same effect separated the stock into " two piles," but as if he were not a member of such firm, no delivery was made, and before the Allen V. Mason, 17 111. App. 318. arrangement was completed the parties Under articles of partnership between quarreled, and the settlement was inter- A and B, providing that either party could rupted. One of the parties caused a de- dissolve the partnership upon sixty days' mand to be made for half of the prop- notice in writing, B gave notice, and after erty. Held, that enough had not been the time limited, the parties agreed upon done to vest in the plaintiff a separate, terms of dissolution and a division of the exclusive property in the subject of the property. By this agreement B was in- suit. Koningsburg v. Launitz, 1 E. D. debted to A, which indebtedness was to Smith (N. Y.) 215. be secured to A by mortgage. The agree- Until a partnership concern is closed ment was to be reduced to writing and by a final account, the joint interest in signed by both parties. B, however, re- the whole property remains ; and if one fused to sign the agreement when writ- partner takes out what he deems his ten, or to give the mortgage. The prop- share, and the residue is afterwards lost, erty which was to belong to each was he will be compelled to account with put in separate drawers in a safe, and the other partners for their shares of the each partner had a key of the drawer in amount drawn out by him. Allison v, which his part was put. Held, that the Davidson, 2 Dev. (N. C.) Eq. 79. agreement was not obligatory on A, and (A) Ex parte Rowlaudson, 1 Kose 416. 577 37 338* PARTNERSHIP PROPERTY. [bOOK III. bankruptcy, the trustee, as representing the creditors, may be able to impeach as fraudulent against them, agreements by which the bankrupt himself would have been bound, (i) In a case where both the partnership and the individual partners were insolvent, an agreement by one of them transferring his interest to the others, and thereby converting what was joint estate into the separate estate of the transferee, was held invalid ; for, although no fraurl may have been intended, the necessary effect of the arrangement was to delay and defeat the joint creditors, (k) The firm became bankrupt shortly after the assignment was made. (i) See Re Kemptner, 8 Eq. 286 ; An- 664 ; Ex parte Walker, 4 De G., F, & J. derson v. Maltby, 2 Ves. Jr. 244 ; Bil- 509. See, also, Luff v. Horner, 3 Fost. liter V. Young, 6 El. & B. 40. & F. 480, which seems to have been a. {k) Ex parte Mayou, 4 De G., J. & S. clear case of fraud upon a creditor. 578 LAW LIBRARY UKIVERSITY tF CALIFORNU LOS ANftELM iiiiiiiiiiili R. H. F. V ARIEL UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 728 185 o if*---..