1

to do more than select the leading rules, and give a general analysis of the cases.

In all contracts concerning negotiable 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 partnership account, and to be intended to have a joint operation. But if a note or bill be drawn, or other contract be made, by one partner, in his 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 signature, even though it was made for a partnership purpose, or the money applied to a partnership use. The borrowing partner is the creditor of the firm, and not the original lender, and the money was advanced solely on the security of the borrower. If, however, *the *42 bill be drawn by one partner in his own name, upon the firm, on 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

Mason v. Rumsey, 1 Campb. N. P. 384. In the case of commercial partnerships there is a general authority by the law merchant for each partner to bind the firm in its ordinary business; but partners in other business, as attorneys, for instance, have no such general authority, and cannot bind the firm by negotiable paper, without special authority. Hedley v. Bainbridge, 2 G. & D. 483. Levy v. Pyne, 1 Carr. & M. 453.

In Hall v. Smith, 1 Barnw. & Cres. 40, it was held, that if one partner only signed a note on behalf of himself and the other partners, he was liable at law to be sued singly. But that case is overruled, and the partnership is liable as for a joint note. Ex parte Buckley, 15 Law Journal in Bankruptcy, N. Y. Legal Observer, March, 1847, p. 82.

• Siffkin v. Walker, 2 Campb. 308. Ripley v. Kingsbury, 1 Day's Rep. 150, note. Emly v. Lye, 15 East's Rep. 7. Loyd v. Freshfield, 2 Carr & Payne, 325. Bevan v. Lewis, 1 Simons, 376. Faith v. Raymond, 11 Adolph.

Ellis, 339. Foley v. Robards, 3 Iredell, N. C. Rep. 179, 180. Jaques v. Marquand, 6 Cowen, 497. Willis v. Hill, 2 Dev. & Battle, 231. Pothier, de Societé, n. 100, 101.

Dougal v. Cowles, 5 Day's Rep. 511.

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 actually drawn on partnership account. Even if the paper was made in a case which was not in its nature a partnership transaction, yet it will bind the firm if it was done in the name of the firm, and there be evidence that it was done under its express or implied sanction. But if partnership security be taken from one partner, without the previous knowledge and consent of the others, for a debt which the creditor knew at the time was the private debt of the particular partner, it would be a fraudulent transaction, and clearly void in respect to the partnership. So, if from the subject matter of the contract, or the course of dealing of the partnership, the creditor was chargeable with constructive knowledge of that fact, the partnership is not liable. There is no distinction in principle upon this point between general and special partnerships; and the question, in all cases, is a question of notice, express or constructive. All partnerships are more or less limited. There is none that embraces, at the same time, every branch of business; and when a person deals with one of the partners in a matter not within

the scope of the partnership, the intendment of #43 law will be, unless there be circumstances or proof in the case, to destroy the presumption, that

Van Reims Dyk v. Kane, 1 Gall. Rep. 630.

Ex parte Peele, 6 Vesey, 602.

• Arden v. Sharpe, 2 Esp. N. P. 524. Shirreff v. Wilks, 1 East's Rep. 48. Ex parte Bonbonus, 8 Vesey, 540. Livingston v. Hastie, 2 Caines' Rep. 246. Lansing v. Gaine & Ten Eyck, 2 Johns. Rep. 300. Baird v. Cochran, 4 Serg. & Rawle, 397. Chazournes v. Edwards, 3 Pick. 4. Cotton v. Evans, 1 Dev. & Battle Eq. C. 284. Spencer, J., Dob. v. Halsey, 16 John34. 38. Frankland v. M'Gusty, 1 Knapp's Cases before the Privy Council, 301. 306. Story on Partnership, 194–199–202.

son,

Greene v. Deakin, 2 Starkie's N. P. 347. New-York Fire Insurance Company v. Bennett, 5 Conn. Rep. 574.

account.

he deals with him on his private account, notwithstanding the partnership name be assumed. The conclusion is otherwise, if the subject matter of the contract was consistent with the partnership business; and the defendants in that case would be bound to show that the contract was out of the regular course of the partnership dealings. When the business of a partnership is defined, known or declared, and the company do not appear to the world in any other light than the one exhibited, one of the partners cannot make a valid partnership engagement, except on partnership There must be at least some evidence of previous authority beyond the mere circumstance of partnership, to make such a contract binding. If the public have the usual means of knowledge given them, and no acts have been done or suffered by the partnership to mislead them, every man is presumed to know the extent of the partnership with whose members he deals; and when a person takes a partnership engagement, without the consent or authority of the firm, for a matter that has no reference to the business of the firm, and is not within the scope of its authority, or its regular course of dealing, he is, in judgment of law, guilty of a fraud. It is a well established doctrine.

• Ex parte Agace, 2 Cox, 312. Livingston v. Roosevelt, 4 Johns. Rep. 251. 277, 278. Spencer, J., Dob. v. Halsey, 16 Johns. Rep. 38. Foot v. Sabin, 19 ibid. 154. Laverty v. Burr, 1 Wendell, 529. U. S. Bank v. Bin. ney, 5 Mason, 176. Davenport v. Runlett, 3 N. H. Rep. 386. Thickness v. Bromilow, 2 Cromp. & Jerv. 425-435. The presumption of fraud in the creditor taking partnership security or credit from one partner for his private debt, may be rebutted, but the burthen of proof rests on the creditor. Frankland v. M'Gusty, 1 Knapp's Cases, 315. Gansevoort v. Williams, 14 Wendell's R. 133. Story on Partnership, 202-210. Mauldin v. Branch Bank, 2 Alab. R. N. S. 502. 512.

⚫ Doty v. Bates, 11 Johns. Rep. 544.

Abbott, Ch. J., and Bayley, J., Sandilands v. Marsh, 2 Barnw. § Ald. 673. Dickinson v. Valpy, 1 Lloyd & Welsby, 6. S. C. 10 Barnw. & Cres.

"Nemo plus perés in

"Thongle, queas teaueferre potest to?

43

ners.

OF PERSONAL PROPERTY.

[Part V. that one partner cannot rightfully apply the partnership funds to discharge his own pre-existing debts, without the express or implied assent of the other partThis is the case even if the creditor had no knowledge at the time of the fact of the fund being partnership property. The authority of each partner to dispose of the partnership funds, strictly and rightfully extends only to the partnership business, though in the case of bona fide purchasers, without notice, for a valuable consideration, the partnership may, in certain cases, be bound by the act of one partner.b

But if the negotiable paper of a firm be given by one partner on his private account, and that paper, issued within the general scope of the authority of the firm, passes into the hands of a bona fide holder, who has no notice, either actually or constructively, of the consideration of the instrument; or if one partner should purchase, on his private account, an article in which *44 the firm dealt, or which had an immediate *connection with the business of the firm, a different rule applies, and one which requires the knowledge of

128. Livingston v. Roosevelt, 4 Johns. Rep. 278, 279. Croathwait v. Ross, 1 Humphrey's Tenn. Rep. 23. Story on Partnership, 168. 194, 195—

199.

a

Rogers v. Batchelor, 12 Peters' R. 229. Dob. v. Halsey, 16 Johnson R. 34. Evernghim v. Ensworth, 7 Wendell, 326. The true principle, says Mr. Justice Story, (on Partnership, p. 212, note,) to be extracted from the authorities is, that one partner cannot apply the partnership funds or securities to the discharge of his own private debt, without their consent; and that without their consent, their title to the property is not diverted in favour of such separate creditor, whether he knew it to be partnership property or not. His right depends, not upon his knowledge that it was partnership property, but upon the fact, whether the other partners had assented to such disposition of it or not.

Ex parte Goulding, before Sir John Leach, and confirmed on appeal by Lord Lyndhurst, Collyer on Partnership, 283, 284. Dob. v. Halsey, 16 Johns. 34. Evernghim v. Ensworth, 7 Wendell, 326. Rogers v. Batchelor, 12 Pe ters, 221. Story on Partnership, 205.

its being a private, and not a partnership transaction, to be brought home to the claimant. These are general principles, which are considered to be well established in the English and American jurisprudence."

With respect to the power of each partner over the partnership property, it is settled, that each one, in ordinary cases, and in the absence of fraud on the part of the purchaser, has the complete jus disponendi of the whole partnership interests, and is considered to be the authorized agent of the firm. He can sell the effects, or compound or discharge the partnership debts. This power results from the nature of the business, and is indispensable to the safety of the public, and the successful operations of the partnership. He is an agent of the whole for the purpose of carrying on the business. A like power in each partner exists

Ridley v. Taylor, 13 East's Rep. 175. Williams v. Thomas, 6 Esp. N. P. 18. Lord Eldon, Ex parte Peele, 6 Vesey, 604, and Ex parte Bonbonus, 8 Vesey, 544. Arden v. Sharpe, 2 Esp. N. P. 524. Wells v. Masterman, ibid. 731. Bond v. Gibson, 1 Campb. N. P. 185. Usher v. Dauncey, 4 ibid. 97. Livingston v. Roosevelt, 4 Johns. Rep. 251. 265. New-York Fire Insurance Company v. Bennett, 5 Conn. Rep. 574. Rogers v. Batchelor, 12 Peters, 221.

Fox v. Hanbury, Cowp. Rep. 445. Best, J., in Barton v. Williams, 5 Barnw. & Ald. 395. Pierson v. Hooker, 3 Johns. Rep. 68. It is a point not quite settled, whether one partner, without the knowledge or consent of his co-partner, though under circumstances may not assign over all the partner. ship effects and credits in the name of the firm, to pay the debts of the firm, and where all the creditors are admitted to an equal participation, the conclusion is that he may. Harrison v. Sterry, 5 Cranch, 289. Mills v. Barber, 4 Day's Rep. 428. Lamb v. Durant, 12 Mass. Rep. 54. Pothier, Traité du Con. de Soc. Nos. 67. 69. 72. 90. Robinson v. Crowder, 4 M'Cord's S. C. Rep. 519. Hodges v. Harris, 6 Pick. 360. Deckard v. Case, 5 Watts' Rep. 22. Hitchcock v. St. John, 1 Hoffman's Ch. R. 511. Anderson v. Tomp. kins, 1 Brock. R. 456. He may give a preference to one creditor over another; though, whether it might be made to a trustee for that purpose, against the known wishes of the co-partner, so as to terminate the partnership, was left an unsettled point in Egberts v. Wood, 3 Paige, 517. Same doubt expressed in Pierpont v. Graham, 4 Wash. C. C. R. 232. But that point was afterwards settled in Havens v. Hussey, 5 Paige, 30; and it was