Court, upon the strength of the ultimate opinion of Lord Thurlow, in Thornton v. Dixon, and of the opinion of the Master of the Rolls, in Balmain v. Shore, declared, in Coles v. Coles, (c) that the principles and rules of law applicable to partnerships, and which govern and regulate the disposition of the partnership property, did not apply to real estates; and that in the absence of special covenants between the parties, real estate owned by partners was to be considered and treated as such, without any reference to the

partnership. The language of the Supreme Court of Mas* 39 sachusetts, *in Goodwin v. Richardson, (a) is nearly to the

same effect; and it seemed to be considered, that partners purchasing an estate out of the joint funds, and taking one conveyance to themselves as tenants in common, would hold their undivided moieties in separate and independent titles, and that the same would go, on the insolvency of the firm, or on the death of either, to pay their respective creditors at large.

These latter cases, and particularly the one in New York, go to the entire subversion of the equity doctrine now prevalent in England; but the other American decisions are more restricted in their operation, and are not inconsistent with the more correct and improved view of the English law. Their object is to secure the rights of purchasers and encumbrancers without notice, from being affected by a claim of partnership rights of which they were ignorant. In Edgar v. Donnally, (b) a right to land had

Story on Partn. § 119. The partners hold real estate as joint tenants, or tenants in common, as the case may be, and one partner cannot, by virtue of the partnership power, sell for the other. He must be specially authorized. Lawrence v. Taylor 5 Hill (N. Y.) 107.

(c) 15 Johns. 159.

(a) 11 Mass. 469.

(b) 2 Munf. 387. But in Deloney v. Hutcheson, 2 Rand. 183, the appropriation of partnership lands, as assets to partnership debts, in preference to other debts, was denied; and it was held that lands purchased by partners, for partnership purposes, was an estate in common, both at law and equity, and that a surviving partner had no other remedy as a creditor than any other creditor. In Blake v. Nutter, 19 Maine, 16, this was declared to be the rule at law, but no opinion was expressed as to the rule in equity. Other American cases hold a different language; thus, in Winslow v. Chiffelle, Harper (S. C.) 25, it was held, that lands held and used by partners, in the business of a mill, were copartnership property, and subject to be applied, like other partnership property, to the payment of partnership debts, in preference to the claims of separate creditors. So, in Greene v. Greene, 1 Ham. (Ohio) 249, it was held, that lands purchased with partnership funds, for partnership purposes, and under articles that the partnership property should be sold for the payment of debts, were to be considered

been acquired with partnership stock, and a title taken in the name of the surviving partner, and a claimant under the deceased

and applied as personal assets of the partnership as between the partners and their creditors, and were not subject to the dower of the widow of a deceased partner as against partnership debts. And again, in Marvin v. Trumbull, Wright (Ohio) 386, real estate, purchased and held as partnership property, was held to be subjected to the debts of the firm, in preference to the debt of an individual member of it, the creditor having notice. And in Hoxie v. Carr, 1 Sumner, 173, it was declared, that real estate purchased for partnership purposes, and on partnership account, would in equity be deemed partnership property and personal estate, though at law it would be dealt with according to the legal title. The general principle now declared in the English law is, that real estate acquired for the purpose of a trading concern, is to be considered as partnership property, and to be first applied in satisfaction of the demands of the partnership. Fereday v. Wightwick, 1 Russ. & My. 45. The Chief Justice of Massachusetts, in Burnside v. Merrick, 4 Metcalf, 541, says, the prevailing judicial opinion now is, that real estate purchased by partners, with partnership funds, for partnership purposes, though at law it may be held by them as tenants in common, yet in equity it is considered as held in trust as part of the partnership property, applicable in the first place exclusively to pay the partnership debts. Dyer v. Clark, and Howard v. Priest, 5 Metcalf, 562, 582; Divine v. Mitchum, 4 B. Mon. 488, S. P. The prevalence and the correctness of this opinion appear to be incontestable. It is taken to be personal estate, and retains that character as between the real and personal representatives of a deceased partner. Townsend v. Devaynes, Crawshay v. Maule, and Selkrig v. Davies, cited supra, p. 37, note; Phillips v. Phillips, 1 My. & Keen, 649; Story J., in Hoxie v. Carr, 1 Sumner, 183–186. The Vice-Chancellor in New York, in Smith v. Jackson, 2 Edw. Ch. 28, reviews all the conflicting cases on this point; and he follows the Supreme Court of New York, and holds, that though real estate be purchased with joint funds for partnership purposes, there is no survivorship as to the real estate, and the share of a deceased partner, as a tenant in common, descends to his heirs, unless there be an agreement among the partners that the lands so purchased shall be considered as personal property; and that then, upon the foot of that agreement, and not without it, equity would apply the lands to pay partnership debts. Nay, he gives the wife her dower in the partnership share of the husband so descended. The decisions on this side of the question appear to me to be a sacrifice of a principle of policy, and above all, a principle of justice, to a technical rule of doubtful authority. There is no need of any other agreement than what the law will necessarily imply, from the fact of an investment of partnership funds, by the firm, in real estate, for partnership purposes.1 If the partners mean to deal honestly, they cannot have any other intention

1 In Delmonico v. Guillaume, 2 Sandf. Ch. 366, the Assistant Vice-Chancellor held, that real estate purchased with partnership funds, is to be treated in equity as personal property, and that upon the death of one partner, such real estate survives to the other for the payment of the partnership debts.

The doctrine of this decision has been since approved, and the whole law thoroughly discussed and clearly stated by Ch. Walworth. He considers the following to be settled principles:

1. That in equity, such real estate is chargeable with the debts of the copartnership, and with any balance which may be due from one copartner to another, upon the winding up of the affairs of the firm.

2. That as between the personal representatives and the heirs at law of the deceased

partner was held entitled in equity to a moiety of the land, against the purchaser, from the survivor, with notice of the partnership right. This was a recognition of the true rule of equity on the subject.

(3.) As ship-owners.

In Nicoll v. Mumford, (c) it was held, that ship-owners were tenants in common, and were not to be considered as partners,

nor liable each in solido, nor entitled in the settlement of * 40 * accounts, on the principle of partnership. The doctrine of Lord Hardwicke on this point, in Doddington v. Hallet, (a) was considered to be overruled by the modern decisions in chancery; (b) and by the universal understanding in the commercial world. But when the case of Nicoll v. Mumford was reviewed in the Court of Errors, (c) the doctrine of Lord Hardwicke was considered, by the majority of the judges, to be the

than the appropriation of the investment, if wanted, to pay the partnership debts. Mr. Collyer, in his treatise on the Law of Partnership, first published in London in 1832, concludes his review of the cases with holding it to be the better opinion, that although the legal estate in freehold property purchased by partners, for the purposes of their trade, will go in the ordinary course of descent without survivorship, yet the equitable interest in such property will be held to be part of the partnership stock, and distributable as personal estate. Collyer on Partn. 76.

(c) 4 Johns. Ch. 522. See, also, post, pp. 154, 155.

(a) 1 Vesey, 497.

(b) See 5 Vesey, 575; 2 Ves. & Bea, 242; 2 Rose, 76, 78; 1 Montague on Partn. 102, note; Merrill v. Bartlett, 6 Pick. 47. In this last case it was declared, that part ship-owners had no lien upon the part of a bankrupt companion for his proportion of the advances of the outfit. Part owners, or tenants in common, are not answerable for each other's debts.

(c) 20 Johns. 611. In Hewitt v. Sturdevant, 4 B. Mon. 458, 459, the Court of Appeals in Kentucky adhered to the doctrine of Lord Hardwicke, that a joint owner of a ship was entitled to a lien as against the administrator or general creditor, upon the share of his intestate, a co-builder and fitter-out of the vessel for excess of advances over his aliquot part.

partner, his share of the surplus of the real estate of the copartnership, which remains after paying the debts of the copartnership, and adjusting all the equitable claims of the different members of the firm as between themselves, is considered and treated as real estate. Buchan v. Sumner, 2 Barb. Ch. 165, 200, 201; Ibid. 336. See, also, Boyers v. Elliott, 7 Humph. 204; Rice v. Barnard, 20 Vermont, 479; Piatt v. Oliver, 3 McLean, 27; Lang v. Waring, 25 Ala. 625; Matlock v. Matlock, 5 Port. (Ind.) 403. It seems, also, that improvements made on real estate with partnership funds, are partnership property. Averill v. Loucks, 6 Barb. (N. Y.) 19, and note, p. 28; Buckley v. Buckley, 11 Barb. (N. Y.) 43; King v. Wilcomb (N. Y.) 7 Id. 263; Deming v. Colt, 3 Sandf. 284.

Detter doctrine; and there is no doubt but that there may be a special partnership in a ship, as well as in the cargo, in regard to a particular voyage or adventure. (d) It was assumed by the court, in Lamb v. Durant, (e) that vessels, as well as other chattels, might be held in strict partnership, with all the control in each partner incident to commercial partnerships. But this must be considered an exception to the general rule; and the parties to property in a ship, however that property may be acquired, are entitled as tenants in common, and each party can sell only his own share, and the right of survivorship does not apply to the case. (f)1

(4.) Acts by which one partner may bind the firm.

*

The act of each partner, in transactions relating to partnership, is considered the act of all, and binds all. He can buy and sell partnership effects, and make contracts in reference to the business of the firm, and pay and receive, and draw and *41 indorse, and accept bills and notes, and assign choses in action. Acts in which they all unite differ in nothing, in respect to legal consequences, from transactions in which they are con cerned individually; but it is the capacity by which each partner is enabled to act as a principal, and as the authorized agent of his copartners, that gives credit and efficacy to the association. The act of one partner, though on his private account, and contrary to the private arrangement among themselves, will bind all the parties, if made without knowledge in the other party of the arrange

(d) See infra, pp. 154, 155.

(e) 12 Mass. 54. So, also, in Seabrook v. Rose, 2 Hill (S. C.) Ch. 555, 556. Ch. De Saussure held, according to the doctrine in the N. Y. Court of Errors, that owning a ship employed in trade by several persons, in distinct shares, constituted a partnership, with all its legal incidents; but the Court of Appeals (p. 558), while they admitted that every species of property might be held in partnership, gave no opinion on the question whether a ship owned in distinct shares, and employed in trade, was, as between the owners, partnership property, or liable to be so regarded by creditors, beyond certain specified limits.

(ƒ) Story on Partn. § 417.

1 Revens v. Lewis, 2 Paine C. C. 202; De Wolf v. Gardiner, Id. 356; Bucknam v. Brett, 35 Barb. 596.

2 Hill v. Voorhies, 22 Penn. 68. The act must be within the scope of the business of the firm. Harman v. Johnson, 18 Eng. L. & Eq. 400; Goodman v. White, 25 Miss.

ment, and in a matter which, according to the usual course of dealing, has reference to business transacted by the firm. (a)1

The books abound with numerous and subtle distinctions on the subject of the extent of the power of one partner to bind the company; and I shall not attempt 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. (6) 2 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. (c) The borrowing partner is the creditor of the firm,

(a) Hope v. Cust, cited in 1 East, 53; Swan v. Steele, 7 East, 210; Rothwell v. Humphreys, 1 Esp. N. P. 406; Abbott C. J., Sandilands v. Marsh, 2 B. & Ald. 673; Ex parte Agace, 2 Cox, 312; Shippen J., Gerard v. Basse, 1 Dallas, 119; Parker C. J., in Lamb v. Durant, 12 Mass. 57, 58; Mills v. Barber, 4 Day, 428; United States Bank v. Binney, 5 Mason, 187, 188; Etheridge v. Binney, 9 Pick. 272, 275; Winship v. United States Bank, 5 Peters U. S. 529; Le Roy, Bayard & Co. v. Johnson, 2 Peters U. S. 186; Pothier, Traité du Con. de Soc. Nos. 96-105; Story on Partn. § 102; Everit v. Strong, 5 Hill (N. Y.) 163; Gano v. Samuel, 14 Ohio, 592. One partner may be restrained by injunction from accepting and indorsing bills, the produce of which is intended to be applied to other than partnership purposes. Lord Ch. Brougham, 2 Russ. & My. 486. An ordinary partnership, under the Louisianian Code, art. 2843, 2845, differs in this respect from commercial partnerships, under the law-merchant, for in that code ordinary partners are not bound in solido for the debts of the partnership; and no one partner can bind the others, unless they have given him power to do so, either specially or by the articles of partnership, though the other partners may be bound ratably, if the partnership was benefited by the act.

(b) 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. & Marsh. 453.

(c) In Hall v. Smith, 1 Barn. & Cress. 407, it was held, that if one partner only

1 A partner cannot discharge himself from an individual liability by showing that

the partnership have assumed to pay it. The Swallow, Olcott Adm. 334.

2 Murphy v. Camden, 18 Mis. 122; Crozier v. Kirker, 4 Texas, 252; Beebe v. Rogers, 3 Iowa, 319.

3 Logan v. Bond, 13 Geo. 192. In New York the doctrine is different. In Pearce