3

creditor. (c) This claim of the joint creditors is not such a lien upon the partnership property but that a bona fide alienation to a purchaser for a valuable consideration by the partners, or either of them, before judgment and execution, will be held valid. Upon a dissolution of the partnership, each partner has a lien upon the partnership effects, as well for his indemnity as for his proportion of the surplus. (d) But creditors have no lien upon the partner

attachment against A only, though he could only sell an undivided moiety on execution, and the purchaser would become a part-owner. If the sheriff was to sell the entire property on an execution against one cotenant or partner, he would be a trespasser. Waddell v. Cook, 2 Hill, 47. Again, in Moore v. Sample, 3 Ala. (N. S.) 319, it was held that the sheriff on execution against A might levy on the goods of the firm of A & B, and take exclusive possession, and sell the interest of A therein, and this proceeding could only be arrested by equitable interposition. On this litigious subject Ch. J. Tindall said, in Johnson v. Evans, 7 Mann. & Gr. 249, that the general rule of law was, that the judgment creditor of any partner might take an execution against that partner, as well his separate property as his share or interest in all the personal property of the partnership that was capable of being seized. The sheriff must seize the whole, the shares of two partners being undivided. (Heydon v. Heydon, supra.) This arises from the necessity of the case. But taking possession of the whole does not convey any interest on property in the other part-owner's share. The judgment creditor becomes tenant in common with the other partner. The sheriff can only sell the moiety. Jacky v. Butler, 2 Lord Raym. 871.

(c) Lord v. Baldwin, 6 Pick. 348; French v. Chase, 6 Greenl. 166.

(d) Lord Eldon, Ex parte Williams, 11 Vesey, 5; Story on Partnership, §§ 326, 441. It has been adjudged, on good consideration, in the case of Jackson v. Cornell, 1 Sandf. Ch. 348, that on a general assignment of his separate property by an individual partner, though before a lien attaches by judgment, execution, or creditor's bill, he has no

3 Van Valen v. Russell, 13 Barb. (N. Y.) 590; Brown's Appeal, 17 Penn. 480. 4 Greenwood v. Brodhead, 8 Barb. (N. Y.) 593; Waterman v. Hunt, 2 R. I. 298; Allen v. Centre Valley Co. 21 Conn. 130. But see Ferson v. Monroe, 1 Foster, 462. 5 Bates v. James, 3 Duer, 45; Walsh v. Adams, 3 Denio, 125. In this last case, which was trespass against the sheriff for selling the entire property, the plaintiff was allowed to recover the value of his proportion of the property, without regard to the solvency of the firm or the state of the accounts.

6 In Ohio, a sale by a sheriff will be restrained, until the interest of the partner can be ascertained, which alone can be sold. Place v. Sweetzer, 16 Ohio, 142. So in Illinois. Newhall v. Buckingham, 14 Ill. 405. Whether such sale would be so restrained in New Hampshire, was left undecided in Dow v. Sayward, 14 N. Hamp. 9, 13. But in Newman v. Bean, 1 Foster, 93, and Hill v. Wiggin, 11 Id. 292, it was held that an action may be maintained against a sheriff, who, on an execution for the debt of a single partner, seizes the partnership goods and excludes the other partners. Otherwise in North Carolina. Vann v. Hussey, 1 Jones, 381. And see Latham v. Simmons, 3 Jones, 27. In Pennsylvania, the sheriff, on an execution against one partner, can attach and sell only that partner's contingent interest in the partnership stock and profits after settlement of the partnership accounts. Deal v. Bogue, 20 Penn. 228; Lucas v. Laws, 27 Id. 211.

ship effects for their debts. Their equity is the equity of the part ners operating to the payment of the partnership debts. These are just and obvious principles of equity, on which we need not enlarge, and they have been recognized and settled by a series of English and American decisions. (e)

*To render the dissolution safe and effectual, there must *66 be due notice given of it to the world; and a firm may be bound, after the dissolution of a partnership, by a contract made by one partner in the usual course of business, and in the name of the firm, with a person who contracted on the faith of the partnership, and had no notice of the dissolution. (a)1 The principle

right to give preferences to the creditors of the firm, in exclusion of his individual creditors.8 Nor, on the other hand, can the partnership, by a general assignment of the partnership effects, give preference to the creditors of the individual partners over those of the firm. All such assignments are held to be fraudulent and void.

(e) West v. Skip, 1 Vesey Sen. 456; Ex parte Ruffin, 6 Vesey, 119; Ex parte Fell, 10 Vesey, 347; Ex parte Williams, 11 Ibid. 3; Ex parte Kendall, 17 Ibid. 526; The Master of the Rolls, in Campbell v. Mullett, 2 Swanst. 551; Ex parte Harris, 1 Madd. 583; Murray v. Murray, 5 Johns. Ch. 60; Woddrop v. Ward, 3 Desaus. (S. C.) 203; Bell v. Newman, 5 Serg. & Rawle, 78; Doner v. Stauffer, 1 Penn. 198; White v. Union Insurance Company, 1 Nott & M'Cord, 557; Ridgeley v. Carey, 1 Har. & McHen. 167; M'Culloh v. Dashiell, 1 Har. & Gill, 96; Story J., in Hoxie v. Carr, 1 Sumner, 181, 182.

(a) Le Roy, Bayard & Co. v. Johnson, 2 Peters U. S. 186; Brisban v. Boyd, 4 Paige, 17.

7 Therefore, if the contract of partnership be such that the individual partners can enforce no lien on the partnership effects for the payment of the debts of the firm, the partnership creditors have no preference over individual creditors. Rice v. Barnard, 20 Vermont, 479; Allen v. Centre Valley Co. supra; Snodgrass's Appeal, 13

Penn. 471.

The same consequence follows where there has been a bonâ fide sale of the partnership effects, without the reservation of any lien. Ketchum v. Durkee, 1 Barb. Ch. 480. Reese v. Bradford, 13 Ala. 837.

This equitable principle of paying partnership creditors out of partnership funds, and individual creditors out of the private funds of the partners, applies only where neither the joint nor the separate creditors can reach the property of their debtors by execution at law. Kirby v. Schoonmaker, 3 Barb. Ch. 46, 50; Young v. Frier, 1 Stockt. 465.

8 See, however, the case of Whitely v. May, decided in the Virginia C. C., U. S. Law Mag. p. 442, May, 1850, where a contrary doctrine is strenuously maintained. See, also, pp. 44, 45, ante, and notes. In Wilson v. Bowden, 8 Rich. 9, in Norris v. Vernon, Ibid. 13, it was held, that the assignment by one partner of his interest in the partnership to his separate creditors, was valid as against the creditors of the firm.

1 Merrit v. Pollys, 16 B. Mon. 355; Grady v. Robinson, 28 Ala. 289; City Bank of Brooklyn v. McChesney, 20 N. Y. 240; Martin v. Searles, 28 Conn. 43. But see, also Holdam v. Butterworth, 5 Bosw. 9.

on which this responsibility proceeds, is the negligence of the partners in leaving the world in ignorance of the fact of the dissolution, and leaving strangers to conclude that the partnership continued, and to bestow faith and confidence on the partnership name in consequence of that belief.

What shall be sufficient constructive or implied notice of the dissolution has been a vexed question in the books. A notice in one of the public and regular newspapers of the city or county where the partnership business was carried on is the usual mode of giving the information, and may, in ordinary cases, be quite sufficient. But even the sufficiency of that notice might be questioned in many cases, unless it was shown that the party entitled to notice was in the habit of reading the paper. Public notice given in some such reasonable way would not be actual and express notice; but it would be good presumptive evidence for a

jury to include all persons who have not had any previous *67 dealings with the *firm. As to persons who have been in the habit of dealing with the firm, it is requisite that actual notice be brought home to the creditor, or, at least, that it be given under circumstances from which actual notice may be inferred. (a)1 If the facts are all found or ascertained, the reasonableness of notice may be a question of law for the court, and so it was held in Mowatt v. Howland; (b) but generally it will be a mixed question of law and fact, to be submitted to a jury under the direction of

(a) Vernon v. The Manhattan Company, 17 Wendell, 526; S. C. 22 Wendell, 183; Watkinson v. Bank of Pennsylvania, 4 Wharton, 482; Mitchum v. The Bank of Kentucky, 9 Dana, 166; Mauldin v. Bank of Mobile, 2 Ala. (N. S.) 502; Rowley v. Horne, 3 Bing. 2. The doctrine seems to be, that merely taking a newspaper, in which a notice is contained, is not sufficient to charge a party, for it is not to be contended that he reads the contents of all the notices in the newspapers which he may chance to take.2 The inference of constructive notice from such a source was pretty strongly exploded in some of these cases.

(b) 3 Day, 353.

1 Clapp v. Rogers, 2 Kernan, 283; Devins v. Harris, 3 G. Greene, 186; Johnson v. Totten, 3 Cal. 343; Pope v. Risley, 23 Mis. 185; Brown v. Clark, 14 Penn. 469; Skannel v. Taylor, 12 Louis. 773. And it is not sufficient that the firm took the necessary steps to give notice, if such notice was never received. Johnson v. Totten, 3 Cal. 343; Page v. Brunt, 18 Ill. 37; Mechanics' Bank v. Livingston, 13 Barb. (N. Y.) 458. A single previous dealing is sufficient to give the dealer the protection of the rule. Lyon v. Johnson, 28 Conn. 1.

2 Hutchins v. Bank of Tennessee, 8 Humph. 418; Conro v. Port Henry Iron Co. 12 Barb. (N. Y.) 27; Pope v. Risley, 23 Mis. (2 Jones) 185.

the court, whether notice in the particular case, under all the circumstances, has been sufficient to justify the inference of actual or constructive knowledge of the fact of the dissolution. The weight of authority seems now to be, that notice in one of the usual advertising gazettes of the place where the business was carried on, and published in a fair and usual manner, is of itself notice of the fact as to all persons who have not been previous dealers with the partnership. (c) Nor is notice, in fact, requisite, when a partnership is dissolved by operation of law. A declaration of war puts an end to the continuance of commercial partnership, between subjects of the two countries, having each his domicile in his own country; and such an official, solemn act of government is notice to all the world of the most authentic and monitory kind, and supersedes the necessity of any other. (d)

68

When a single partner retires from the firm, the same notice *is requisite to protect him from continued responsibility; and even if due notice be given, yet, if the retiring party willingly suffers his name to continue in the firm, or in the title of the firm over the door of the shop or store, he will still be holden. (a) But if the use of the name of the former firm be continued without his authority, and the retiring partner had given due notice of the dissolution of the connection, he is not responsible for the use of his name without his consent or authority, and without any act to warrant it; and he is not bound to take legal measures to have the use of the former name of the firm discontinued. Persons must inquire, and know at their peril, who are truly designated by the firm. (b)1 A dormant partner may

(c) Godfrey v. Turnbull, 1 Esp. N. P. 371; Parkin v. Carruthers, 3 Ibid. 248; Gorham v. Thompson, Peake N. P. 42; Graham v. Hope, Ibid. 154; Leeson v. Holt, 1 Starkie, 186; Jenkins v. Blizard, Ibid. 420; Williams v. Keats, 2 Starkie, 290; Wright v. Pulham, 2 Chitty, 121; Rooth v. Quin, 7 Price (Exch.) 193; Lansing v. Gaine, 2 Johns. 300; Ketcham v. Clark, 6 Ibid. 144; Graves v. Merry, 6 Cowen, 701; Martin v. Walton, 1 M'Cord, 16; Bank of South Carolina v. Humphreys, Ibid. 388; Whitman v. Leonard, 3 Pick. 177; Prentiss v. Sinclair, 5 Vermont, 149; Watkinson v. Bank of Pennsylvania, 4 Wharton, 482; Shurlds v. Tilson, 2 McLean, 458.

(d) Griswold v. Waddington, 15 Johns. 57, 16 Johns. 494.

(a) Williams v. Keats, 2 Starkie, 290; Brown v. Leonard, 2 Chitty, 120; Dolman v. Orchard, 2 Carr. & Pa. 104.

(b) Newsome v. Coles, 2 Campb. 617; Story on Partn. § 160.

• Marlett v. Jackman, 3 Allen, 287.

1 Boyd v. McCann, 10 Md. 118; Wait v. Brewster, 31 Vermont, 516

withdraw without giving public notice of the dissolution of the partnership; for, being unknown as a partner, the firm was not trusted on his account, and he is chargeable only for debts contracted during the time he was actually a partner. (c) If a partner retires without notice, he is not liable for a partnership debt contracted afterwards with a person who never knew he was a partner, and when he was not so notorious as a partner as to raise a presumption of that knowledge. (d) In the case of an infant partner, his acts and contracts are of course voidable; but if on arriving at full age, the infant does not disaffirm the partnership, and give notice of it to those with whom the partnership have had dealings, he will be responsible for subsequent debts contracted on the credit of the partnership. The ground of the rule is, that the infant acted as partner during his infancy, and when he comes of *69 age he neglects to inform the world that * he is not a partner, and suffers it to deal under mistake and delusion. (a) Having thus far collected and reviewed the general principles which constitute the law of partnership, and followed those principles into their practical details, the plan of these lectures will not permit me to go more minutely into the subject, or to consider the legal and equitable remedies which exist between partners, and between them and third persons in relation to the various rights and duties which belong to the association. The questions arising upon those remedies, and particularly in respect to the settlement of the partnership estate, in the various cases of dissolution, and especially of dissolution by bankruptcy, are subtle and numerous. The decrees in equity under this head abound with minute and

(c) Evans v. Drummond, 4 Esp. N. P. 89; Armstrong v. Hussey, 12 Serg. & Rawle, 315; Deford v. Reynolds, 36 Penn. 325; Heath v. Sansom, 1 Nev. & Mann. 104; 4 Barn. & Adol. 172, S. C. It seems to be the doctrine of the case of Evans v. Drummond, and especially of that of Thompson v. Percival, 3 Nev. & Mann. 167, that if a creditor of a dissolved partnership accepts for his debt the negotiable paper of the acting partner who continues the business, and who has charge of the effects and of the settlement of the concern, it is evidence of an agreement to discharge the retiring partner.2

(d) Carter v. Whalley, 1 Barn. & Adol. 11; 1 Lloyd and Wels. 297, S. C.; Story on Partn. § 160, n.3

(a) Goode v. Harrison, 5 B. & Ald. 147.

2 See Harris v. Farwell, 15 Eng. L. & Eq. 70; Yarnell v. Anderson, 14 Mis. 619.

3 Cregler v. Durham, 9 Ind. 375. But see Western Bank of Scotland v. Needell, I Foster & Finl. 461.