advantage from its use, nor ratified the act of his partner in using it: Dunlap v. Limes, 49 Iowa, 177. Compare Edwards v. Parker, 88 Ala. 356. One partner's use of a trust fund in paying his share of the capital of the partnership, without participation or knowledge of his copartner, does not create a trust on the firm assets in favor of the cestui que trust, for the guilty partner's knowledge in such a case is not the knowledge of the firm: Gilruth v. Decell, 72 Miss. 232. If an administrator, who is a member of a firm, uses the funds of the estate in the firm business, with the knowledge of his copartners, the firm and its members are jointly and severally liable for such funds: In re Jordan, 2 Fed. Rep. 319. Compare Travis v. Milne, 9 Hare, 141. So if a firm borrows money of a recusant trustee, who is a member thereof, it is answerable for such trust fund: Ryan v. Morrill, 83 Ky. 352.

Fraud and Misrepresentation.—It is thoroughly settled that a partnership is bound for a fraud or deceit committed by one partner in the course of the transactions and business of the firm, even when the other partners have not the slightest connection with, or knowledge of, or participation in such fraud or deceit: Chester v. Dickerson, 54 N. Y. 1; 13 Am. Rep. 550; Wolf v. Mills, 56 Ill. 360; Wilson-Obear Grocery Co. v. Cole, 26 Mo. App. 5; Morehouse v. Northrup, 33 Conn. 380; 89 Am. Dec. 211; Locke v. Stearns, 1 Met. 560; 35 Am. Dec. 382; Moorehead v. Gilmore, 77 Pa. St. 118; 18 Am. Rep. 435; Randall v. Knevals, 27 N. Y. App. Div. 146, 154; Guillou v. Peterson, 89 Pa. St. 163; Durant v. Rogers, 87 Ill. 508; Kilgore v. Bruce, 166 Mass. 136, 140; Brydges v. Branfill, 12 Sim. 369; note to Pierce v. Jackson, 6 Mass. 242, 245; Hammond.v. Heward, 11 U. C. C. P. 261; Blair v. Bromley, 5 Hare, 541; Wallace v. James, 5 Grant U. C. 163; Manufacturers' etc. Bank v. Gore, 15 Mass. 75; 8 Am. Dec. 83; Boardman v. Gore, 15 Mass. 331; and receive no benefit therefrom: Hawkins v. Appleby, 2 Sand. 421; Blair v. Bromley, 2 Phill. Ch. 354. Particularly is this true where the other partners have knowledge of the fraud and share in its fruits: Jacobs v. Shorey, 48 N. H. 100; 97 Am. Dec. 586; Durst v. Burton, 47 N. Y. 167; 7 Am. Rep. 428; Sherman v. Smith, 42 How. Pr. 198; Davis v. Gelhaus, 44 Ohio St. 69; Castle v. Bullard, 23 How. 172, 189; St. Aubyn v. Smart, L. R. 3 Ch. App. 646: Stockwell v. United States, 13 Wall. 531; and the statute of frauds presents no obstacle to relief: Chester v. Dickerson, 54 N. Y. 1; 13 Am. Rep. 550. Thus the acts of one partner in effecting a fraudulent purchase of lands at a sheriff's sale is binding on all the partners: Blight v. Tobin, 7 T. B. Mon. 612; 18 Am. Dec. 219. So a partner is answerable for money procured by his copartner from a bank on a forged indorsement, and placed to the credit of the firm: Manufacturers' Bank v. Gore, 15 Mass. 75; 8 Am. Dec. 83. And if a firm is indebted, and one member of it enters into a collusive and fraudulent scheme with a third person to defraud the other partner and the creditor, by having delivered to such third person goods which it was arranged should be manufactured by the firm, shipped to the creditor, and sold in satisfaction of its debt, the defrauded partner may maintain an action

for the creditor's use, against such third person, for the goods thus converted, or their value: Poe v. Ellis, 99 Ga. 235. A firm is also answerable for an act prohibited by law, committed by one of its members in the course of the partnership business, although the other partners had no knowledge of it, as where he made a contract with another, in the course of the firm business, and in its name, for trading for a commission on the board of trade, which was illegal, as relating to option or gaming contracts: Tenney v. Foote, 95 Ill. 99.

If goods are fraudulently obtained for the firm by one partner, and by him fraudulently disposed of, the other members are jointly liable for the fraud: Banner v. Schlessinger, 109 Mich. 262. A partner who receives and participates in the use or sale of goods obtained by the fraud of a copartner will be held to have adopted the fraudulent act, and will be placed in the same situation in reference to the rights of vendors of the goods, as if he had directed his copartner to procure them, or had originally concurred with him in the transaction: Jacobs v. Shorey, 48 N. H. 100; 97 Am. Dec. 586. But in Sherwood v. Marwick, 5 Me. 295, it is held that one partner cannot render another liable for his fraud, without an actual participation. One partner cannot maintain trespass against a purchaser from his copartner of all the partnership goods, though the sale was made in fraud of his rights: Wells v. Mitchell, 1 Ired. 484; 35 Am. Dec. 757.

And this rule, making a partner liable for the fraud of his copartner, applies to false or fraudulent representations, by one partner, in the course of the partnership business and transactions. They will bind the firm and create a liability coextensive therewith, for each partner is the agent and representative of the firm with reference to all business within the scope of the partnership. The rule is thus stated by the supreme court of the United States: "If, in the conduct of the partnership business, and with reference thereto, one partner makes false or fraudulent misrepresentations of fact to the injury of innocent persons who deal with him as representing the firm, and without notice of any limitations upon his general authority, his partners cannot escape pecuniary responsibility therefor upon the ground that such misrepresentations were made without their knowledge. This is especially so when, as in the case before us, the partners, who were not themselves guilty of wrong, received and appropriated the fruits of the fraudulent conduct of their associate in business": Strang v. Bradner, 114 U. S. 555, 561; affirming Bradner v. Strang, 89 N. Y. 300. The following authorities also support this rule: Peckham Iron Co. v. Harper, 41 Ohio St. 100; Patten v. Gurney, 17 Mass. 182; 9 Am. Dec. 141; Morgan v. Skidmore, 55 Barb. 263; Sweet v. Bradley, 24 Barb. 549; Blair v. Bromley, 2 Phill. Ch. 354; Rapp v. Latham, 2 Barn. & Ald. 795.

Thus, if one partner, while acting for the firm, makes an exchange of lands by means of false representations, his copartners are answerable for the fraud, though they took no part in the transaction and were ignorant of the fraud: Stanhope v. Swafford, 80 Iowa, 45. Every partner is answerable for the fraudulent representations of

every other member of his firm made in the sale of partnership property as a means of effecting such sale: Brundage v. Mellon, 5 N. Dak. 72. So, if one of a firm of warehousemen falsely represents to a person who advances money on the faith of such representation that he has on storage with the firm a certain quantity of grain, the innocent partners are bound by such representation, and by the firm receipts, given by the former for such money, and liable therefor, upon the ground that if an agent or partner makes a representation of a fact outside the terms of his power, and which, from its nature, rests peculiarly within his knowledge, upon the faith of which another acts, the principal or firm is precluded from controverting the fact so alleged: Griswold v. Haven, 25 N. Y. 595; 82 Am. Dec. 380. The members of a firm are answerable for a false warranty made by one of such members, in a sale of partnership property, within the scope of his authority: Morehouse v. Northup, 33 Conn. 380; 89 Am. Dec. 211. And where the members of a firm, under their firm name, organize a corporation, each partner is answerable for the misrepresentations and concealments of the others committed while engaged in promoting the enterprise: Walker v. Anglo-American etc. Trust Co., 72 Hun, 334. In Stewart v. Levy, 36 Cal. 159, 165, it is said: "All the partners will be bound by the fraud of one of the partners in contracts relating to the partnership made with innocent third parties. That is to say, all are responsible for the injury occasioned by the fraud, and are liable to an action brought upon the contract, or for the recovery of the property fraudulently obtained, whether they were cognizant of the fraud or not. The rule is the same as it is in respect to the responsibility of the principal for the fraud of his agent, while acting within the scope of his authority; and, indeed, a partner becomes liable for the fraud of his copartner, because of the relation each bears to the other of agent in the partnership business. But such responsibility is essentially different from a liability to a judgment for fraud, upon an issue joined as in this case. The fraud upon which the judgment proceeds is actual, intentional fraud, and implies moral turpitude. It needs no argument to prove that one partner cannot be adjudged to be guilty of a fraud of that character, committed without his knowledge or assent, and which he neither assents to nor ratifies by adopting the act of his copartner, with knowledge of his fraud." But that one partner is liable to arrest for the fraud of his copartner In contracting a debt, see Townsend v. Bogart, 11 Abb. Pr. 355; Sherman v. Smith, 42 How. Pr. 198. Contra, McNeely v. Haynes, 76 N. C. 122.

On the other hand, it is a principle of the law of agency that if an agent commits an independent fraud for his own benefit, he ceases to act as an agent for his principal, and, as it is essential to the very existence or possibility of the fraud that he should conceal the real facts from the latter, the ordinary presumption of a communication between them fails. To the contrary, the presumption is that no communication was made, and consequently the principal is not affected with constructive notice: Bienenstok v. Ammidown, 155 N. Y. 47, 60, per Gray, J. Hence, as the principle of

agency applies to copartners, it is only when it can be seen that a partner is, in fact, acting as an agent for copartners that he binds them. In Bienenstok v. Ammidown, 155 N. Y. 47, Ammidown, the president of an insolvent manufacturing company, was a member of a firm of commission merchants. The manufacturing company was indebted to his firm for advances on goods consigned for sale. Ammidown obtained a loan from a bank for the manufacturing company, upon the pledge, through warehouse receipts, of unmanufac tured material, which had been fraudulently obtained by the company from the vendors, and deposited the proceeds to the credit of the manufacturing company with his firm. The firm had no interest in or liability for the deposit other than to pay it out to the coinpany when drawn upon, but Ammidown did have proprietary interests in the manufacturing company to the extent of owning about ninety per cent of its capital stock. The deposit was soon drawn out by the manufacturing company, and the vendors of the pledged property brought an action to recover the proceeds thereof from the firm. Under these circumstances, it was considered that Ammidown's situation was one so personal in its nature as to remove every support from the proposition that he was at any time acting within the scope of his agency as a member of the firm. It was, therefore, held that in the whole transaction preceding and including the deposit with his firm he acted as the agent of the manufacturing company and for his own personal benefit as a stockholder therein, and not as the agent of his firm; and that his knowledge of the fraud, so acquired, was not imputable to his copartner, and did not make the latter answerable to the company's vendors: Bienenstok v. Ammidown, 155 N. Y. 47, 60, reversing the same case, 31 ADD. N. C. 400.

Other cases hold that if a partner commits a fraud, not as a partner, but as an individual, in respect to a matter foreign to the business of the partnership, the other partners are not answerable: Schwabacker v. Riddle, 84 Ill. 517; Gray v. Cropper, 1 Allen, 337; Loftus v. Ivy, 14 Tex. Civ. App. 701; Alexander v. State, 56 Ga. 478; Andrews v. De Forest, 22 N. Y. App. Div. 132. Thus, a firm is not answerable for money fraudulently obtained from the state by one of its members, in a matter having no connection with the ordinary business of the partnership, and from which it receives no benefit: Alexander v. State, 16 Ga. 478. A settlement between a partnership debtor and one of the firm, made collusively in fraud of the other partners, is not binding on the firm whether or not such partner had authority to collect the debt: Loftus v. Ivy, 14 Tex. Civ. App. 701. A fraud committed by a partner while acting on his own separate account is not imputable to the firm, although, had he not been connected with the firm, he would not have been in a position to commit the fraud: Andrews v. De Forest, 22 N. Y. App. Div. 132, 138, holding that a firm of attorneys at law is not answerable for the acts of one member of the firm who is the attorney in fact of a client. So, if one member of a firm prevails upon a third person, by fraudulent representations, to buy the interest of his copartners in the business, those who sell are not answerable for AM. ST. REP., VOL. LXVIL.-4

such fraudulent representations, unless they instigated or approve them, or the guilty partner acted as their agent in making the sale, as the mere fact of their relation as partners does not make them liable: Schwabacker v. Riddle, 84 Ill. 517.

Crimes-Criminal Liability.--As a general rule, one partner is not liable for the willful tort of a copartner, and acts or omissions in the course of the partnership, trade, or business, in violation of law, will implicate those only who are guilty of them, for the willful tort of one partner is not, by virtue of the partnership alone, imputable to the firm: Rosenkrans v. Barker, 115 Ill. 331; 56 Am. Rep. 169; Titcomb v. James, 57 Ill. App. 296, 308.

But one partner is sometimes made, by statute, criminally answerable for the acts of another, in some instances, as for the illegal sale of intoxicating liquors, though he was not present, and did not consent to his partner's violation of law: Whitton v. State, 37 Miss. 379; or the issuing of "change bills," to circulate as money, in contravention of law: Barnett v. State, 54 Ala. 579. In the absence of statute, however, the willful tort of one partner, not committed in the course of the partnership, or for the purpose of transacting its business, is not imputable to the firm: Marks v. Hastings, 101 Ala. 165, 175. In other words, a partner is not, as a general rule, criminally answerable for the acts of his associate, done without his knowledge or consent: Whitton v. State, 37 Miss. 379. For example, if one member of a firm makes a wanton and willful assault upon a woman, he is neither prosecuting the business of the firm nor acting in the interest of his copartner, and the latter is not, therefore, liable for his act: Titcomb v. James, 57 Ill. App. 296. So if one member of a firm, without the knowledge or consent of his copartner, maliciously procures the arrest and imprisonment of a debtor of the firm, and such act fails to be of any benefit to it, the nonparticipating partner, who derives no benefit from the unlawful act, is not answerable for such arrest and imprisonment: Rosenkrans v. Barker, 115 Ill. 331; 56 Am. Rep. 169. And if one member of a firm unlawfully sells ardent spirits, in the absence of his copartner and without his knowledge, the latter is not criminally answerable: Acree v. Commonwealth, 13 Bush, 353. A penalty that an attorney, who fails to pay over money collected shall be stricken from the rolls does not apply to a member of a law firm who did not participate in the receipt or wrongful appropriation of the money. It can be applicable only to the party derelict in duty and personally guilty of the wrong: Porter v. Vance, 14 Lea, 629.

If, however, one partner commits an infraction of the law, and the circumstances are such as to indicate an unlawful trade and guilty knowledge on the part of other members of the firm, they may all be held criminally as well as civilly liable: State v. Bierman, 1 Strob. 256; Stockwell v. United States, 13 Wall. 531; Barnett v. State, 54 Ala. 579; State v. Neal, 27 N. H. 131: United States v. Thomasson, 4 Biss. 99; and a firm cannot recover for contraband goods sold by one of its members: Biggs v. Lawrence, 3 Term Rep. 454. In Alabama, the members of a firm, as partners, may be jointly found guilty, and fined jointly, if they act in that capacity: Lem